Dell Will Open Engineering, Research Center in Silicon Valley

Dell Inc. (DELL), the third-largest maker of personal computers, plans to consolidate four Northern California offices into a new research and development center that will employ as many as 1,500 people within five years.

Operations of four companies bought by Dell since 2007 will move into the 240,000-square-foot office in Santa Clara, Dell said today in a statement. They are Zing Systems Inc., currently in Sunnyvale; Ocarina Networks in San Jose; Scalent Systems Inc. in Palo Alto; and Everdream Corp. in Fremont.

Dell is seeking ways to expand its data-center business, where it aims to double revenue to $30 billion within three years. The company plans to make more acquisitions and increase spending on research and development to boost sales from areas such as data storage and services for specialized industries, Chief Financial Officer Brian Gladden has said.

About 700 people will work in the new facility by the end of this year, and several hundred people will be hired for new engineering, sales, marketing and services positions, Dell said.

Opening the Silicon Valley office will let the company recruit more engineers from the area to support its growth in data-center computing, David Frink, a spokesman for Round Rock, Texas-based Dell, said in an interview.

“It’s both a consolidation and a commitment to attracting new talent,” Frink said.

Dell spent 1.1 percent of sales on research and development during its most recent fiscal year, which ended in January, compared with an average of 6.7 percent for comparable technology companies, according to data compiled by Bloomberg.

Hewlett-Packard Co. was the top PC maker worldwide in the fourth quarter, followed by Acer Inc. and Dell, according to research firm Gartner Inc. in Stamford, Connecticut.

Dell rose 18 cents, or 1.3 percent, to $14.43 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have gained 6.5 percent this year.

To contact the reporters on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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