EMC World Wrap: New Corporate Structures, Listening to Customers

Rob Enderle

Earlier this week, I posted my first impressions from EMC World. Throughout the event, I thought about Acadia, a new type of corporate construct (EMC/Cisco/VMware) that could redefine how large corporations are born and built this century. Finally, at the end, I was told a story of how EMC hadn't listened to Dell, which resulted in Dell buying a storage company and partially fracturing what otherwise had been a strong partnership. This story had a lot of similarities with what just happened between HP and Microsoft when HP bought Palm.

 

In short, I saw some rather big messages in the presentations this year. Let's talk about each.

 

Acadia: Rethinking Umbrella Corporations

 

Umbrella corporations like IBM, HP, GE, GM and others really became the norm nearly 100 years ago and the organizational structure is far from perfect. You have common shared resources and corporate burdens that the divisions, which otherwise mirror independent companies, fight over, and rather than lots of synergy you seem to get lots of bureaucracy. Sony is probably the worst current example of that structure.

 

Since the justification to create these umbrella companies is to create synergy across the unit but the result seldom meets that justification's intent but rather results in divisions that are held back by the corporate structure, why not flip the model? That's what Acadia basically is -- a structure focused solely on the synergy part leaving the separate companies fully capable of competing in their primary market.


 

You don't see innovation in corporate structure very often. This could, be a big one, if it turns out to be successful.

 

Dell/EMC-HP/Microsoft Lesson

 

I generally use EMC as the gold example of customer care. However, it shared a story with me about Dell that was telling because of what happened and the fact that the company shared it. What happened was that Dell, for years, asked EMC to build a storage product that fit Dell's model. For years, EMC said no. Eventually, Dell got frustrated, bought a storage company, and created the product it wanted. HP, by buying Palm, just pretty much did the same thing for Microsoft and Intel. For years, HP had asked both firms to allow HP the flexibility it needed to compete with Apple and, for years, both Intel and Microsoft have said no. HP addressed the problem by buying Palm.

 

This is a bigger problem for Microsoft and Intel than it was for EMC, because much of their profit directly, or indirectly, comes through the OEMs. If the OEMs separate from these firms, they are going to get a lot smaller really fast.

 

What was unique was that EMC used this as a learning event. Up to the highest levels, it didn't hold Dell accountable for what happened. It accepted the responsibility to fix the relationship with Dell and was working to do just that. Making mistakes like this isn't uncommon; having the nerve to admit the mistake and try to make up for it is.

 

Death of Tape: Dead or Living Challenged?

 

Like mainframes, we started talking about the death of tape decades ago and one of the running jokes is that both are doing surprisingly well for "dead technology" decades later. As I stated in my last piece on EMC World, the large-scale side of the IT market doesn't move quickly, but it can be made to move. I recall a meeting at IBM where I was raising concerns that we were about to bleed a lot of business and was kindly told that I didn't "get" it, that IBM sold "air," and that customers would buy whatever we sold because they had no choice. Well, we should all remember how that turned out. IBM bled customers like a stuck pig and pretty much replaced all the executives who thought customers couldn't move. The mainframe is one of its most profitable businesses and enjoys some of the IBM's most loyal customers.

 

When customers start openly complaining about an entrenched technology, it signals a move. After that last EMC World post, I was taken to task by a blogger who called me a "tool" of EMC, evidently missing that the source of my comments wasn't EMC, but four CIOs who had been hurt by nasty recovery experiences. At our Midmarket CIO Forum in Orlando a few weeks ago, I was struck by how upset one CIO was with a similar tape recovery solution. (By the way, we have a nice post on the 10 ways to improve data backup here).

 

Well, the blogger on DrunkenData.com clearly missed that I based the post on four powerful CIOs' serious problems. He also implied that AT&T bowed to pressure from EMC and pulled his proof that tape was better. I'm not aware of AT&T bowing to any other corporation, particularly not a vendor.

 

Granted, tape is deeply entrenched, but it is gone from the consumer market, mostly gone from entertainment, and likely should be gone from IT. If CIOs keep having nasty recovery surprises, either it, or they, will be gone shortly, and CIOs are pretty good at making sure that choice goes in their favor.

 

Maybe I am a "tool of EMC," but if it looks like this is in the best interest of my clients, I don't really mind.

 

Wrapping Up: Important Lessons

 

There were at least three important lessons from EMC World that go far beyond EMC.

 

Just because a structure has been used for a century doesn't mean you can't come up with something potentially better, like Acadia.

 

Whether it is a personal or corporate relationship, if you say "no" enough times, your partner will likely do something you don't like to get a yes.

 

No matter how entrenched a technology is, if the customers get upset enough, they will move.

 

Oh, and finally, I guess, if you make a mistake, 'fess up and work to correct it. That last one I wish stuck in my own head more deeply.



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