April 7, 1999
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Dell Makes First Investing Foray,
Buying Part of Red Hat Software
By a WALL STREET JOURNAL Staff Reporter
ROUND ROCK, Texas -- Dell Computer Corp. has chosen a developer of a commercial variety of the Linux operating software for its first-ever investment in another firm.
The personal-computer maker said it acquired a minority stake for an undisclosed amount in Red Hat Software Inc., a Durham, N.C., software developer that has previously sold stakes to Intel Corp., International Business Machines Corp., Compaq Computer Corp. and Oracle Corp., among others.
Dell, which also said it is selling Red Hat's software on its PCs, workstations and server computers, recently formed a venture-capital group to make investments in other companies. The investment team is headed by Vice President Alex C. Smith and will explore investments in software, e-commerce and storage companies, the company said.
Corporate venture-capital operations have long been a staple of technology firms, including Microsoft Corp., Intel, Compaq and IBM. Last year, Dell Chairman and founder Michael S. Dell launched his own private-equity fund to personally invest in or acquire companies.
Red Hat develops a version of Linux, which is seen as a rising competitor to Microsoft's Windows operating software. Dell already offers Linux on its PCs, workstations and network server computers. The company said it has already sold Linux on its machines to companies such as Burlington Coat Factory Warehouse Corp. and Amerada Hess Corp.
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