Dell names new CFO, focuses on investments

Dell Computer has named James Schneider chief financial officer, taking the place of Thomas Meredith, who will focus exclusively on Dell's efforts to invest in young companies.

The Dell Ventures fund will expand its efforts so it will take equity investments in young companies, Dell said. Meredith, who had been CFO for more than seven years, will join Alex Smith to run the ventures program.

Venture funds are increasingly popular with established companies as they seek a way to gain influence and profit from a business world lavishing attention on start-up companies. Intel, Sun Microsystems, Microsoft, IBM, Hewlett-Packard, Compaq and numerous other companies are becoming ever more similar to venture capitalists, investing hundreds of millions of dollars in start-ups.

The payoffs can be big. Shares bought cheaply early in a company's history can be worth hundreds or thousands of times as much when the company goes public or is acquired.

In the expanded strategy, Dell will offer start-ups not just funding but also professional services and help with setting strategy. The effort resembles parts of Sun's iForce initiative or HP's Garage program as well as efforts to woo start-ups by IBM and Compaq.

Though chief executive Michael Dell himself has invested in several companies, it wasn't until April 1999 that the Dell corporation began investing in companies. At that time, Dell took a stake in Linux seller Red Hat.

Recent Dell investments have ranged from storage outsourcing firm Storage Networks to Chinese Web portal Sina.com.

Schneider, the new CFO, previously was senior vice president of finance. Before working at Dell, he was senior vice president of finance at MCI Communications.