Dell Inc aims to raise its target on dividends and share buybacks to 20 to 35 percent of free cash flow, saying its corporate software and services business is on track to grow by an average of 10 percent annually until fiscal 2016.

The No. 2 PC maker, which previously set a target of 10 to 30 percent, said in a statement on Tuesday it expects an "initial" dividend rate of 32 cents a share annually.

CEO Michael Dell will tell investors at its annual analysts' conference in Texas that the company is delivering on a strategy of supplying everything from hardware to software for corporate customers, beefing up margins.

The company has tried to expand beyond a consumer arena dominated by mobile devices such as Apple Inc's iPad.

Shares of the company, which now derives more than 30 percent of its revenue from corporate solutions, services and software, climbed more than 3 percent to $12.35 in after-hours trade.

"We continue to build out our data center, software and services capabilities," Dell said. "We have changed the conversation we`re having with our customers. We are a solutions company first, vertically focused."

Dell said it generated $4.9 billion in cash flow from operations over the past four quarters, and ended fiscal 2013's first quarter with $17.2 billion in cash and investments.