Each age of technology has a company that defines it. As each age emerged, it was disruptive. For example, when computing was established as an industry, firms in related areas like NCR began to decline. With each major change there was massive upheaval and often the firm initially driving the change, Netscape for instance, didn’t survive it themselves.
With the Lenovo/EMC partnership I think it is becoming clear that a new age of computing may be emerging, which is defined by unique partnerships or acquisitions that are more like partnerships. Dell and EMC are standing out as variants of a common model — one where the problems of the traditional umbrella company are addressed by unique structures and because EMC is driving this with much larger firms. It, not Dell, is defining the result but both are leading in the related acquisition model.
Let’s discuss the fifth age of computing.
The first age of computing was defined by IBM, second by Sun, third by Microsoft and fourth by Google. The fifth age of computing may be defined by EMC’s partnerships. The core of my selections is the fact that each company redefined the industry in some significant way. I would argue that while firms like NCR and RCA preceded IBM, computing hadn’t really been defined as an industry prior to IBM and then it owned it.
Sun’s age was actually very short, but it shifted us from a heavy server to a client/server balance and helped eliminate IBM’s dominance. Microsoft flipped the power between hardware and software and suddenly hardware was subordinate. Google flipped revenue and created a major industry segment based on ads.
You’ll note that I don’t mention Apple and that is largely because I see Apple as coming out of the IBM age of computing. It made computing more affordable, but, in the end, it was Microsoft that drove the industry change. Apple did reform itself into a consumer electronics company and does still represent the latest age of consumer electronics and, even if Samsung eventually displaces Apple, it will likely do so on the model that Apple founded. Companies that might represent the next age of consumer electronics might be firms like OnLive, Sonos or Aha Radio, but none have gained enough power to drive a market change yet and Apple still holds. The biggest potential right now to transform this market is Google, though Microsoft could step in and steal, and Apple could still block. But this is for another time and another column.
EMC’s age is defined by a very different class of partnership as highlighted by this latest with Lenovo. Rather than acquiring firms, partnership constructs built the most powerful are represented by VCE and VSPEX. The first brought together Cisco, VMware, EMC and Intel into a virtual company, the second created a tighter partnership with resellers like Ingram Micro, which operated more like a dedicated salesforce might and could better utilize EMC’s development resources (actually define the product) and testing facilities to create differentiated targeted products, as well as test and implement them. Even the way EMC did major acquisitions like RSA and VMware was unique and designed to preserve both independence and value — this is the method now mirrored and showcased as successful by Dell in its similar, but smaller, moves.
Also, the model appears flexible in that EMC has been able to add partners at various levels after the fact. Intel was added as a primary to VCE, then BMC was added as a subordinate partner later in the process to flesh out the solutions. The end result is that VCE, on paper, was arguably a peer to IBM and HP in the large enterprise space.
And now EMC has most recently added Lenovo.
All of the initial EMC efforts lacked a heavy client component and most of the solutions, particularly the VCE ones, were very largely enterprise-focused. But EMC and its partners play down into the midmarket and while that is where VSPEX is targeted, they were weak on volume servers and PCs.
Now, with the addition of Lenovo, EMC has created a flexible series of partners that rival old IBM, and given Lenovo’s business lines (ThinkPad/ThinkCenter) were acquired from IBM, EMC now has a brand that IBM established and that is connected solidly into mid-range and enterprise markets as a tier one for clients.
In addition, there is little or no overlap with any of the rest of EMC’s primary partners. Lenovo isn’t in storage or networking and its systems management software (ThinkVantage) is designed to work with the more comprehensive systems like those BMC sells. In servers, Cisco is focused on large data centers, while Lenovo is focused on high volume, making the two complementary and if the partnership works out, the end result will likely drive Cisco to double down on large enterprises and Lenovo to do the same on the volume categories rather than stretch up or down into areas that currently neither company is well designed to address.
IBM was built to last forever and after 100 years it remains the gold standard for an umbrella company. Currently, HP is visibly struggling with the same model, showcasing how difficult it is to build or change a structure like this quickly. EMC, using a revolutionary new partnering method, has in, well, less than a decade been able to grow a virtual company that can rival and perhaps even exceed IBM’s breadth with more focus in each division/company than it appears the umbrella model can or will allow.
The fifth age of computing may be defined by the virtual mega company and EMC, along with its partners, most recently Lenovo, is the primary driver of this new age.