said Wednesday that its
subsidiary would begin providing management services for early-stage private companies in an effort to identify technologies that could later be adopted by Dell.
"These investments give us access to products and technologies that will allow us to expand," said Deborah Cromer, a Dell spokeswoman. She added that the company would be particularly interested in start-ups that are involved in developing the technologies designed to improve the Internet's infrastructure as well as online commerce.
Until now, Dell Ventures has only made equity investments, which have totaled some $700 million in more than 90 companies since the unit's founding in April 1999. Dell Ventures has invested in such companies as Linux software distributor
Thomas Meredith, Dell's chief financial officer, has been appointed managing director of Dell Ventures. James Schneider, a senior vice president at Dell, will succeed Meredith as the company's chief financial officer.
Cromer would not comment on whether Dell intended to step up its investments in Dell Ventures or say how much of a return the subsidiary had generated through its investments to date.
Louis Mazzuchelli, an analyst at
Gerard Klauer Mattison
, said Dell's decision to become more involved in start-ups created a certain amount of risk for the Round Rock, Texas-based company, which is still new to the business of identifying and developing promising early-stage companies.
"This is certainly a trend that the bull market affords," said Mazzuchelli, who rates Dell a buy and whose firm has not done any underwriting for Dell. "Everybody's doing this. You could even argue that they are late to the party."
Dell closed down 2 1/16, or 4%, at 53 13/16.