Dell to promote Salesforce software to PC customers

By Clare Baldwin and Jim Finkle

SAN FRANCISCO/BOSTON (Reuters) - PC maker Dell Inc has agreed to promote Salesforce.com Inc software products to its U.S. customers, as it tries to expand revenue from higher-margin services business.

The tie-up, announced Friday, will allow Salesforce.com to reach Dell's small- and mid-sized U.S. corporate customers, a market it wants to expand its presence in, while Dell shores up its services offering.

Dell will sell Salesforce products and provide services integrating them with customers' existing software. Financial details of the deal were not disclosed.

PC hardware is a low-margin business and Dell has suffered as the financial crisis has hammered PC sales, which account for roughly 60 percent of its business. Dell is trying to grow its profits on services, typically higher-margin, but which currently only account for about one-tenth of sales.

The overall market for sales management software is worth $9 billion a year and is among the fastest growing sectors in tech. Sales of Web-based sales management software will more than double from $1.9 billion in 2008 to $4 billion in 2013, according to research firm Gartner.

Salesforce spokesman Bruce Francis would not say how many sales people Salesforce has in the United States, but said the company has 3,500 employees worldwide. Dell said it has 10 million small and medium business customers worldwide, but also declined to give U.S.-specific figures.

Dell is pushing aggressively into the services business and in September said it plans to buy technology services company Perot Systems Corp for $3.9 billion. The deal will be the largest ever acquisition by the No. 2 PC maker and will help it better compete with Hewlett-Packard Co and International Business Machines Corp.

(Reporting by Clare Baldwin and Jim Finkle; Editing Bernard Orr)