Dell Expands Silicon Valley Footprint

By Sharon Simonson

Dell Inc. has agreed to lease 150,000 square feet in Santa Clara from The Irvine Co., the latest Silicon Valley expansion for the Texas-based information-technology company.

Dell is taking one of three new buildings now under construction in the first phase of the Santa Clara Gateway office project, according to a source with direct knowledge of the transaction who requested anonymity because he is not authorized to discuss the transaction publicly.

The more than 900,000-square-foot Class A campus sits south of state Highway 237 at Great America Parkway. The first three of six planned buildings, which Irvine undertook on a speculative basis, are slated to be complete in mid-2013 including common areas.

An Irvine spokesperson referred a query to Dell; a Dell spokeswoman said in an email that Dell “considers leasing information to be confidential.” Terms of the multi-year lease could not be ascertained.

Dell announced in April 2011 that it planned to open a Silicon Valley Research and Development Center in approximately 240,000 square feet of leased space in two adjacent buildings also in Santa Clara. Those buildings sit across Great America Parkway from the Irvine development where Dell has now agreed to occupy the additional square footage.

Dell opened the research and development center in October, company spokeswoman Emily Dunlop said in an email to The Registry. In announcing a career fair at the center that month, Dell said it was seeking candidates to fill storage, networking software and hardware engineering positions. It directed applicants to 5480 Great America Parkway.

“This facility serves as an innovation hub for local team members,” Dunlop said. “Work in the center supports Dell’s strategic expansion of solutions capabilities, specifically the areas of networking design and development, storage development, mobility and cloud computing.”

Dell has adopted a strategy to become an “end-to-end” information-technology provider, according to the company.

In 2011, Dell anticipated its workforce at the Silicon Valley Research and Development Center would grow to more than 1,500 over the next five years. A statement issued last fall said it expected to reach that level “within the next few years.”

The new facility was to allow Dell to consolidate much of its then-current Northern California operations, including the combination of the operations of several area companies Dell had acquired, including privately held Mountain View-based Zing Systems Inc. announced in 2007; San Jose-based Ocarina Networks in 2010; Scalent Systems Inc. in fiscal 2011; and Fremont-based Everdream Corp., a software services company, also announced in 2007, according to Reuters. The campus also was to include customer-solutions and briefing centers, a cafeteria and fitness center.

Dell has repeatedly said that it is attracted to Silicon Valley by the quality of the local workforce.

“The company has greatly expanded its presence in Silicon Valley in the past few years,” Dunlop wrote in the email to The Registry. “Silicon Valley plays an important role in Dell’s solutions strategy and is home to several of its recently acquired companies including KACE, SonicWall, Wyse and Force 10.”

The company announced in April that it intended to acquire San Jose-based Wyse Technology. Founded in 1981, Wyse is a global provider of client-computing solutions designed to extend desktop virtualization offerings.

Then in May, Dell announced that it had completed its acquisition of SonicWall Inc., a San Jose software company founded in 1991 that offers network security and data protection to small, medium and large companies. SonicWall had approximately 950 employees at the time of acquisition, according to a Dell statement.

Dell acquired San Jose data-center networking company Force10 Networks Inc. in mid-2011.

Mountain View-based Kace Networks Inc., now Dell KACE, is an information-technology systems-management appliance company whose producs are tailored to midsized businesses and public institutions such as government, education and health care.

In August 2011, Dell and Palo Alto-based VMware Inc. together announced the availability of the Dell Cloud using VMware vCloud Datacenter Services “designed to provide a seamless multi-tenant environment for running virtual systems … for enterprise-class, secure, public, private and hybrid clouds.”

Dell announced its first-quarter results for fiscal 2013 on May 22, reporting net income of $635 million on revenue of $14.4 billion.

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