Entrepreneur Extraordinaire

Building an American Success

At IBM, Mr. Perot became a top computer salesman. He did so well, that IBM considered cutting back his sales territory. To keep the territory, he offered to cut his commission rate instead. Then IBM decided to cap commissions. In 1962, his fifth year at IBM, he made his entire year’s quota in just 19 days.

Admittedly impatient and bored, he became intrigued with the idea of servicing computer software, noting that companies leasing from IBM sometimes had trouble learning how to use the technology. He saw a need for a service to design, install and operate data processing systems on a contract basis. He knew there was a market for building and running customized computer systems.

"What I gleaned from my customers was that they were desperate for more than the hardware. They wanted a finished product. They wanted the hardware, the software, the programming and operations, all optimized for their particular businesses, all at a predetermined price," he said.

He pitched the idea to IBM executives. They rejected it, apparently content to stick with its near-monopoly on the hardware market.

One Who Persevered

In 1962, Margot - who agreed with the efficacy of his idea and motivation - loaned him $1,000 from her teacher savings. Mr. Perot, with his wife and sister as charter directors, started Electronic Data Systems (EDS). With that check, EDS was incorporated on June 27, 1962 – his 32nd birthday.

He soon set out to secure customers. He traveled the country, making 77 in-person or telephone sales calls before landing his first client: Collins Radio, a communications company in Cedar Rapids, Iowa, that supplied radar and radio equipment to the commercial airline industry and the Air Force.

Behind in its orders, the company hired EDS to process weeks’ worth of data. With no employees, Mr. Perot recruited two computer experts to moonlight for EDS after working for their full-time jobs. Together, they processed Collins Radio’s data in just six weeks, finishing in late 1962. Payment meant that, for the first time, EDS had enough capital to hire a real staff.

Mr. Perot tirelessly worked to expand the company’s reach. "Failures are like skinned knees," he once said, "painful but superficial."

Flashback #3

Margot gave Ross Perot $1,000 from her teaching savings to start EDS.

"Failures are like skinned knees, painful but superficial."

- Ross Perot

Sustaining Success Through Growth

By the end of 1962, he had hired a small staff, including engineers and a sales team. In 1963, EDS secured a multi-year data-processing agreement with snack food manufacturer Frito-Lay. The company was off and running. By 1968, EDS had 323 full-time workers and made $1.5 million in profits.

The growth in data processing and services continued throughout the 1970s, and EDS began to win state Medicare contracts to administer programs. As the business grew, EDS outperformed competitors and earned positive customer feedback.

"If I had to write a handbook for the American entrepreneur and put everything in one sentence I’d say, ‘Persevere, no matter the pain, persevere,’" Mr. Perot said.

In 1974, EDS signed its first credit union client, a toehold that would grow into a large presence in the banking sector. In the mid-1970s, EDS went international, with clients in Saudi Arabia, Singapore, Iran and Pakistan. In 1980, it had more than 10,000 employees.

In the early 1980s, General Motors was looking to improve operations. A more efficient computer system was high on the list, so the auto manufacturer approached EDS. Mr. Perot, intrigued by the possibility of expansion, agreed to a $2.5 billion sale, with EDS becoming a wholly owned subsidiary of GM.

Flashback #4

Special K cereal was a tradition at Perot Systems meetings.

Launching Perot Systems Corp.

As part of the deal, he remained at EDS headquarters in Dallas while serving on the GM board of directors. Two years later, in December of 1986, he split from GM and, by extension, EDS. It was the end of an era.

In 1988, Mr. Perot, his son, Ross Jr., and eight associates formed a new technology services company headquartered in Dallas: Perot Systems Corp.

Executives included many EDS "alumni," and the company cultivated clients from industries that included consumer products, manufacturing, insurance, government and health care. Services included custom applications, business intelligence and virtual/cloud integration.

While clients represented many different fields, Perot Systems gradually developed a specialty in health care. The company was a pioneer in digitization and automation of medical records.

Setting the Stage for Others to Succeed

Perot Systems grew quickly. Just seven years after its founding, it was 25% larger than EDS had been at the same benchmark. At its peak, in the early 2000s, it employed 24,000 people and maintained offices in 25 different countries. A Fortune 1000 corporation, it began offering public stock shares in 1999.

"Business is not just doing deals; business is having great products, doing great engineering, and providing tremendous service to customers. Finally, business is a cobweb of human relationships," Mr. Perot said.

In 2004, Mr. Perot became chairman emeritus, and Ross Jr. assumed the dual roles of CEO and board chair.

In 2009, computer manufacturer Dell acquired Perot Systems for $3.9 billion to expand its global IT services capabilities.

Along the way, Mr. Perot also embraced the entrepreneurial spirit of others. He was the first major outside investor in NeXT, the computer and software company Steve Jobs founded after leaving Apple in 1985.

Business is not just doing deals; business is having great products, doing great engineering, and providing tremendous service to customers. Finally, business is a cobweb of human relationships.

Flashback #5

Ross Perot invested in NeXT, founded by Steve Jobs.

Putting People First

Mr. Perot called it the safest investment he ever made. Mr. Jobs said that without Mr. Perot, who served on the NeXT board, there probably wouldn’t be an Apple, as NeXT became the core of Apple’s comeback when Jobs returned.

"The thing that impressed me most about Ross was that, while most people focus on the bottom line – which he certainly did – what Ross looked at first was what I call the ‘top-line’ – which is the people and the strategy," Mr. Jobs told The Dallas Morning News.