The world's third largest PC maker
) sealed two government deals yesterday.
Under the $100.0 million contract awarded by the National
Institute of Allergy and Infectious Diseases (NIAID), Dell will
provide information technology (IT) support to researchers. The
institute is an agency of the United States Department of Health
and Human Services and is responsible for conducting researches to
detect and prevent various infectious and allergic diseases.
Dell's technological support will ensure uninterrupted research
work, the upgradation of the institute's network infrastructure,
supporting high performance computing and ensuring secure data
exchange. It will also facilitate the adoption of cloud computing
across the institute's IT network for smooth IT management.
In a similar development, the National Institute of Health's
(NIH) Information Technology Acquisition and Assessment Center
(NITAAC) opted for Dell's services for a period of 10 years. NITAAC
is responsible for acquiring various products and services in the
IT, defense and health care areas for provision to different
This Indefinite Delivery/Indefinite Quantity (ID/IQ) contract
has a ceiling value of $20.0 billion. Under this contract, Dell
will help in software development, management of IT operations,
security of critical infrastructure, as well as other general IT
Dell's service deal-winning spree is likely to continue. Dell's
Service segment performed well in the last quarter (up by 4.0% year
over year) with the company reporting a solid backlog growth of
15.0% year over year.
We are encouraged by Dell's recent cost cutting initiatives,
opportunities in healthcare, cloud computing and the ramp up of
Ultrabooks. But concerns over Dell's ability to continue dividend
payouts, uncertainty regarding the acquisition of software vendor
Quest Software and fears of losing PC market share to
) have led to our bearish view for the short term.
Currently, Dell has a Zacks #4 Rank, which implies a short-term
APPLE INC (AAPL): Free Stock Analysis Report
DELL INC (DELL): Free Stock Analysis Report
HEWLETT PACKARD (HPQ): Free Stock Analysis
To read this article on Zacks.com click here.