Top 10 Strategic Technology Trends for 2016
I’ve been looking at the EMC/Dell merger very closely and I see two parts of the soon to be combined company that together should make Dell and EMC stronger. They have nothing to do with products, supply chain, executive leadership or organizational structure, which is where we typically look for synergies. They have to do with two unique and little talked about aspects of both firms which, together, could provide a level of focus that is unmatched in the industry.
EMC: Customer Loyalty and Analytics
The part of EMC that continues to stand out for me is the company’s efforts surrounding customer loyalty and analytics. If we support the idea that more and better information about any topic leads to better decisions, then the massive and unique effort that EMC sustains in this area goes to the heart of its success. EMC aggressively measures its customers and analyzes the information to determine at a very granular level what makes these customers more loyal and to create a tiered structure of customers based on that loyalty. This allows the company to make decisions, more successfully than its peers, with regard to funding and resources that have the highest positive impact on customer retention.
Specifically, this allows EMC to take limited resources and target them across the broad spectrum of services and products on areas that will provide the greatest strategic return. Applied properly, this should over a long period make it nearly impossible to compete with, primarily because loyal customers are nearly impossible to steal and become powerful advocates for new customers.
However, offsetting this effort is the problem all public companies have, which places tactical quarterly performance in front of strategic efforts. Currently, this is what is limiting the effectiveness of this incredibly powerful tool.
Dell: The Positives of Being Private
Dell is private. One of the most interesting conversations I’ve had with Michael Dell was when I asked him when he thought he would go public again. His response was, “why would I do that?” You see, being private has allowed Dell to operate and think strategically. If it has to sacrifice quarterly performance in order to dominate a market in 10 years, it can now do that. Executive management is not torn between assuring positive short-term valuation growth and customer satisfaction. In short, a lot of the conflicts that make decisions like the ones EMC’s tool suggests difficult go away if you are private.
Early in the film Forrest Gump, the boy is in leg braces and he needs to run; the braces fly off and we discover that they weren’t helping but hindering his efforts. Being public is significantly limiting EMC’s efforts to make full use of this market leading tool. Dell taking it private will remove those braces. But Dell now gets access to EMC’s tool, so while it never had the braces, it didn’t have EMC’s uniquely strong legs, either.
As a result of being private, taking this one step further, Dell also has one of the strongest forward-looking organizations in the business. It is aggressively now looking 10 years out for what is coming. Resources that were focused on keeping investment companies happy appear to now be focused on assuring that Dell is well positioned a decade out.
Wrapping Up: EMC and Dell Looking Forward
So, on paper, once merged, and assuming the EMC tools move to Dell and the Dell strategic organization embraces EMC (the “going private” thing is a given regardless), suddenly you have a huge organization that has a better view of the present, through the eyes of its customers, and has a better view of the future, because both are resourcing this effort. If you can see the present better than your competitors, and can see the future better than your competitors, and assuming executives use these better views (which sometimes isn’t a given), don’t you become effectively unbeatable? Something to noodle on this weekend.
Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+
