Feb. 29 (Bloomberg) -- Dell Inc. is seeking to hire a chief technology officer for its business-computing divisions, aiming to shore up the company’s technical credentials and expand in higher-margin markets for data storage and corporate software.
Lonergan Partners, a recruiting firm in Redwood City, California, confirmed that it’s handling the search, without elaborating on potential candidates. Three people with direct knowledge of the effort say Dell is looking for someone to shape its data-center product strategy and serve as a public face for customers and the press.
Chief Executive Officer Michael Dell is personally involved in the search, which has come down to four candidates and could be completed in the next two weeks, said Mark Lonergan, the founder and managing partner of the recruiting firm. Dell is under pressure to craft more technologically sophisticated products that can help it compete with Hewlett-Packard Co. and International Business Machines Corp.
“You have a massive American company that made its reputation dealing with consumers,” Lonergan said in an interview. “For the first time in a long time these guys are beginning to create an authentic challenge to HP and IBM and spread their wings.”
Michael Dell, who founded the company in his dorm room in 1984, is taking steps to lessen its reliance on desktop and laptop PCs, which make up most of its sales. Hiring a technology chief would help it challenge Hewlett-Packard and IBM by setting technical direction and promoting Dell’s products. The company hasn’t had a CTO in more than three years, and the new job would expand on the duties of the position.
Silicon Valley Footprint
Dell, based in Round Rock, Texas, is already boosting research-and-development spending and trying to raise its profile in Silicon Valley. That includes opening a new office in Santa Clara, California, last year.
David Frink, a spokesman for the company, declined to comment on any recruiting or hiring efforts.
Dell, once the world’s No. 1 PC maker, lost that crown to Hewlett-Packard in 2006. More recently, Apple’s Macbook laptops and iPad tablets have cut into the company’s PC sales. Chinese computer maker Lenovo Group Ltd. is now the world’s second-largest supplier, pushing Dell into third place. The company also has struggled to produce a successful tablet computer or smartphone.
A new technology chief for Dell’s so-called enterprise products -- the servers, data storage, networking gear and software that run companies’ operations and websites -- would fill a position that has been vacant since CTO Kevin Kettler left more than three years ago. In the interim, Dell has had an “office of the CTO,” with no single person in charge.
Relying on Partners
During his tenure, Kettler would hold presentations for the CEO and other top managers several times a year to keep them abreast of technical developments from Intel Corp. and software suppliers, said a person who attended the meetings. The briefings weren’t a forum for discussing Dell technology because the company relied on partners for most of its innovation, according to the person, who declined to be named because the information isn’t public.
The new CTO would be tasked with changing the company’s culture to emphasize its own engineering, said an executive who’d been contacted by a recruiter about the position. Dell has interviewed candidates from companies such as EMC Corp., Oracle Corp. and NetApp Inc., said another person with knowledge of the search.
‘Transform the Company’
“We’ve been on a mission at Dell the last few years to transform the company,” Michael Dell said this week at an event in San Francisco to unveil new servers and other products. “We’re investing at all-time high levels in research and development.”
Dell spent 1.5 percent of revenue on R&D in the fiscal fourth quarter, which ended Feb. 3, up from 1.1 percent a year earlier. The level is still lower than that of rivals: Hewlett-Packard devoted 2.6 percent of sales to R&D last quarter, while IBM spent 5.3 percent. Dell’s revenue rose 1 percent to $62.1 billion last year.
Acquisitions are broadening Dell’s product line. The company purchased storage maker Compellent Technologies Inc. last year, making it less dependent on reselling products from EMC. It also bought Force 10 Networks Inc., providing it with more networking gear. That curbed its dependence on Brocade Communications Systems Inc. and Juniper Networks Inc.
Spotlighting Dell’s new innovation ability is going to be a big part of the new CTO job, Lonergan said. His firm also recruited former CA Inc. CEO John Swainson to head a new software group at Dell earlier this month.
“Whoever ends up in the CTO role will be a tremendous business person,” he said.
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