In really thinking through the EMC versus Oracle piece last week, it hit me that there is a fundamental change going on at EMC that could result in a new class of vendor: the symbiotic vendor. Most vendors, and Oracle is the poster child, are more parasitic in that they focus on bleeding cash from their clients and largely measure executive and sales success against financial goals. This is partially the result of MBA 101 layered with Financial Analyst 101, both of which preach the value of quarterly financial performance, which focuses firms excessively on quarterly reporting and away from more strategic goals like the health and success of their customers.
EMC recognized that while this was great tactically, strategically it leads to the massive swings that companies often experience as over-harvested customers revolt or fail. EMC is coming around to the idea that long-term strategic success can be better assured by equipping its customers, which should tie EMC and its customers more closely together around common goals rather than more traditional "lock in" strategies.
I've already made my point on Oracle (and apparently IBM is taking advantage this week). Oracle can hardly be blamed for excelling at a common model, and rather than go over where EMC is again, let's look ahead to where I think it and the world may be going.
The Birth of the Symbiotic Vendor
Both a parasite and a symbiote feed off their host, but while the parasite provides little or no return value, the symbiote earns its keep by making the host more than it otherwise would be. But to create true symbiosis between a vendor and a customer, there needs to be a deep understanding by at least one for the needs of the other. In short, in a symbiotic relationship, the symbiotic vendor needs to have a deep understanding of the current and future needs of its client and be in a position to adjust its offering and pricing to best meet those needs while assuring its own success. This isn't giving away products for free or even cheaply; the concept is more one of a team whose assets are interchanged optimally to ensure the success of both members equally. It is an ideal that I don't believe currently exists in the private market and often requires enforcement in the public sector.
EMC is currently in the process of equipping its customers to better understand what they value in EMC in order to make better decisions. As an example: Given a fixed resource, it may be more beneficial to the customer and EMC for EMC to improve a process rather than a product, or marketing a benefit of doing business with EMC may provide better results than marketing an individual offering. These measurements should initially help with these tactical decisions.
However, over time, because this kind of constant measurement rarely happens inside of businesses, EMC should gain a deep and unique understanding of its customers and be able to not only build to those customers' future needs, but design marketing programs and create relationships that better fulfill them. But, the path appears to lead to one of better mutual understanding where trust, mutual respect for each other's needs and loyalty define the relationship more than price and the cost of moving to another vendor. This is one where both the customer and the vendor strive to ensure the other's success and where the natural adversarial aspects of the relationship, while not eliminated, are minimized.
Wrapping Up: Benefits of a Symbiotic World
I'm convinced that this potential new model will result in stronger companies. This is because the firm and its clients are held together by a common goal, and rather than focusing on finding ways to lock in the customer or better ensure that all of the customer's budget is successfully consumed, the focus would shift to understanding the customer and ensuring that success drives higher budgets. Done right, it is my belief that this model could result in stronger revenues for the vendor and higher value to the customer, along with a relationship that is vastly stronger. You see, if someone wants to be someplace, you don't needs iron bars to lock them in. We've equipped every part of the business from supply channels to employees, why not equip the customer and ensure their success as well?
As a race, we've thought up some crazy things that never made the light of day over the years. Tying vendors and customers together in symbiosis could be one of the most lasting and magnificent.