EMC is a powerful player in the storage business, but the storage business in general is defined by relatively slow-moving companies that largely focus on customer relationships and generally treat each other surprisingly well. Intel, by comparison, is far from slow moving or "nice" and is more a of fast-moving shark in its segment.
I had dinner with EMC President and COO Pat Gelsinger earlier this week. along with a number of others, and he spoke about what EMC could learn from Intel (his old company), Intel could learn from EMC and how he was working to turn EMC into a vastly more capable company. Given EMC already does a number of things like customer satisfaction and acquisitions better than any other company in its class, the mental image I got was a process by which EMC became a shark, and that perhaps made Intel even more powerful. Let's chat about that.
What Intel Could Learn From EMC
Every new executive coming into a company should catalog what isn't broken, with particular focus on things that are different than in the previous company. Pat came from Intel and his first big surprise was how much better EMC did with customer care.
He shared a story in which EMC's chief counsel was sitting across the table from Intel's CIO and Pat. During the discussion, the EMC executive recounted a recent meeting with each of the large customers with whom he was responsible for maintaining a relationship and advocating for. He could explain the customer environment, the issues the firms were having with EMC products and what was being done to correct the problems. The Intel CIO was described as being utterly surprised that an executive without direct responsibility for customers was so involved in protecting and working with them directly. You don't see this kind of customer focus at Intel -- or most technology companies for that matter -- and this is why EMC enjoys both the strongest customer loyalty, some of the lowest sales costs in the industry and a relatively high rating in this down market.
OEMs tend to be relatively upset with Intel on a regular basis, suggesting Intel could improve a lot here.
What EMC is Learning From Intel
On the other hand, a lot of technology companies' products are developed without much regard for future customer needs, long-term competitive or environmental changes. EMC is no exception to this unfortunate rule, according to Pat. This means that strategically and with regard to external exposures, EMC doesn't do as well as Intel, which puts a deep focus on competitive risks and environmental changes while creating products. Intel works hard to anticipate risks and then either mitigating them or eliminating them strategically. Granted, it sometimes goes too far.
Intel is, by all means, a shark in its own pond, a skill that has allowed the company to fully dominate its market. Pat already is working to cross-pollinate this aggressive and strategic skill into EMC and its subsidiaries, RSA and VMware.
Wrapping Up: Risks and Rewards
Gelsinger was mentored by the legendary Andy Grove and it shows. He seems to have a grasp of what needs to be done and is out doing it. He has even started bouncing ideas off his friend, the legendary Intel ex-CMO Dennis "Intel Inside" Carter, for help. However the danger he and every executive transplant also faces is fixing what isn't broken and not knowing the difference between practices that don't apply to the new company or that actually were damaging in the previous one. I questioned him about this and didn't see the trend to take practices that I knew worked poorly at Intel into EMC. But we are early into his tenure at EMC, and it's way too early to know whether he will make this mistake.
Obvious, he should avoid using competitive analysis to cover up or rubber-stamp bad products or decisions (typically this happens when you make it a marketing function), constructive confrontation (the biggest asshole at the table wins), and the tendency to sometimes forget what business you are in. Still, as I've said before, Pat is one of the best and brightest to ever come out of Intel, and he is expected to be a huge asset for EMC. It looks like the company already is learning a lot from him, and he a lot from it. The process, at least initially, appears very beneficial to both parties.