Dell: We'll have to step up R&D spending

Dell's CFO says the company has toned down its R&D spending on PCs to redeploy dollars elsewhere.

Dell CFO Brian Gladden said the company will have to spend more on research and development to be more competitive with rivals.

Gladden explained R&D spending in context of the company's transition to more of a software and technology partner instead of one tethered to PC sales. Gladden was asked about innovation at a talk at a Morgan Stanley investment conference.

He said:

I would look at it in three chunks. R&D could be acquired assets, in some cases things like Compellent, EqualLogic, we more than doubled R&D investment in a number of resources focused on new products and bringing together that storage portfolio. And I would say we're very aware of the kinds of investment benchmark that competitors would have in that space and we're ultimately going to have to be competitive and have similar levels of investment and we're well on track for that.

Dell has specialists for enterprise accounts that focus on selling innovation and productivity. The big question here is when Dell will step up its R&D spelling. To wit:

  • IBM spends roughly 6 percent of revenue on R&D without fail.
  • HP spent 2.6 percent of revenue on R&D in the quarter ended Jan. 31.
  • Dell spent 1.5 percent of revenue on R&D for the year ended Feb. 3, up from 1 percent a year earlier.

Indeed, Dell will have to step up its R&D spending. Gladden added that the company has toned down its R&D spending on PCs to redeploy dollars elsewhere.

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