THE WALL STREET JOURNAL.

WSJ Blogs

By Shira Ovide

Dell may be in Wall Street’s doghouse for its reliance on sales of unloved hardware like personal computers. But the company sees a bright future in software.

At an event Wednesday in San Francisco, Dell executives outlined ongoing efforts to stitch together software and tech services the company has scooped up in a recent-years acquisition spree, as Dell seeks to morph into a mini-IBM with a range of software products and other corporate technology boasting better profit margins and loftier growth prospects.

Dell executives discussed software to help companies that are struggling to keep tabs on the smartphones, tablet computers and other personal devices they take from home, and expect to use for workplace tasks. Dell also talked about a new version of a service CA called Toad Business Intelligence–one Dell executive joked about the odd name–for mining company databases for useful information.

At the event, Dell software boss John Swainson described software as the “glue” that holds together the hardware parts of the company, and newer information-services products. (Swainson also apologized for wearing a suit and tie–not a typical wardrobe in the software industry, or in San Francisco. He explained the formal wear was for a Visa board meeting.)

Dell says its software businesses are on track for more $1.5 billion in annual revenue, though the company hasn’t detailed when that figure would be reached.

The product focus comes at a key time for Dell, which is seeking to keep its employees and corporate customers focused amid the noise around a proposed $24.4 billion offer to buy out the company’s public shareholders. That offer, led by private-equity firm Silver Lake Partners and Chief Executive Michael Dell, has faced opposition from some large shareholders.

In an interview, Mr. Swainson said Dell’s customers haven’t really been asking about the buyout deal. He said the buyout doesn’t change Dell’s approach to products, nor its relationship with customers.

Mr. Swainson, asked what people would find surprising about Dell’s efforts to become a software-and-services company, singled out the speed of the company’s transformation. “I think it’s further along than people would think,” he said.

That wasn’t the opinion of officials at Blackstone Group. The private-equity firm last week dropped its efforts to put together a rival buyout bid for Dell. Blackstone officials reviewing Dell’s financials and strategy worried it would take too long for Dell’s software and corporate-technology offerings to get to the size and scope needed to compete effectively, people familiar with Blackstone’s position have said.

Mr. Swainson, a veteran of IBM who also helped software company CA Inc. recover from an accounting scandal, had stepped away from operating roles when he retired from CA at the end of 2009. Then Mr. Dell last year swooped in to ask if Mr. Swainson would help build Dell’s software business from scratch.

Mr. Swainson said he didn’t need too much arm twisting. “This was something new and exciting and different – and frankly hard,” he said.