SDI Wars: EMC must FORGET ARRAYS, adapt or disappear
Can the storage giant overcome a lack of necessary leadership?
Sysadmin blog Register storage supremo Chris Mellor has recently been reporting on EMC's slow descent into corporate depression due to a combination of activist investors and recalcitrant internecine political strife.
There's nothing surprising here, I've been hearing the same things all across the EMC federation, though I've no inclination to be anywhere near as polite about the affair as Mellor.
Taking the kid gloves off, EMC, VMware – and to a lesser extent Pivotal – appear to be in the middle of a self-induced political battle, the super special variety that can only be fuelled by the rare combination of the Silicon Valley echo chamber, Wall Street idiocy and billions upon billions of dollars on the line.
Pretty much the only way it gets worse is if Carl Icahn gets involved.
Everyone seems to be making wild predictions about the whole affair and it seems as good a time as any to put some of my own in print. This way I can either be right about this in public and mock Gartner even more than I already do, or you lot can wave it all in my face a few years down the line and have a right good laugh.
Suck it up
In explaining why EMC appears to be freaking out about picking a direction and then going forth and making incalculable gobs of cash, Mellor writes "there is no potential storage array acquisition which would not damage VMAX/VNX/Isilon interests".
I find this a horrible rationale for hobbling the growth of your own company. As the much-venerated Steve Jobs said: "If you don't cannibalize yourself, someone else will." That's a truism no matter who you are in the technology industry.
If EMC's executives can't understand that simple fact of business, it's time to fire the lot of them. Burn the management structure to the ground and raze the sales department with a cleansing fire that would make even Mark Hurd feel too many pink slips had been handed out.
Arrays are no longer a growth industry. Like mainframes, they'll be around for at least the next 25 years but they are past their prime. It is time to accept this and move on; line up the old guard inside EMC that can't let their precious babies go, and push them out the door.
Don't drag along these arrays like ageing bar stars increasingly desperate for someone — anyone — to notice them. Don't keep around staff who can't cope with change. Put arrays in maintenance mode, keep them moving forward incrementally, but handle growth/innovation in the array space through M&A + rationalisation.
Bring in younger, less risk-averse innovators into the executive level at EMC. Get them churning out tomorrow's technologies.
Adapt or die.
Not the victim here
EMC is a goliath. It is huge, well-resourced and possessed of some of the smartest people on the planet. It has bought some great companies filled with other smart people, many of whom have demonstrated an ability to innovate. EMC has all the tools it needs to pivot and embrace growth opportunities adjacent to its traditional businesses.
EMC's problems aren't that the mean old startups have come along and kicked it in the shins. EMC's problems are being caused by internal politics, if recent media reports are anything to go by.
EMC appears to possess no unit cohesion, and the executives are trying to defend a fixed business plan against a mobile and increasingly seasoned attacking force.
Hiding behind the castle walls doesn't work. EMC's enemies are many and they have the resources to simply wait and slowly starve EMC out. EMC needs a strong cavalry force to harry and distract its opponents whilst its regulars secure the supply lines.
The problem is that this requires innovation, constant adaptation, clever – even vicious – thinking and an appetite for risk that the current leadership have demonstrated plainly they absolutely do not have.
Amongst EMC's rivals are its own offspring: VMware and Pivotal. The EMC Federation is the Lannister family and the complex Game of Thrones-style incestuous relationships involve as much dislike as they do love and cooperation.
That's perfectly fine – business is business – but it means EMC needs to be a lot more aggressive with ScaleIO than it has been. ScaleIO needs to go head to head with VMware's VSAN team. Get some bitter rivalries going between the development and sales teams. Drive innovation and between the two companies leave competitors in the dust.
Where'd EMC go?
What we're talking about here is no less than the final commoditisation of the x86 market. It's servers into smartphones and there's no coming back from that. Margins will shrink. The weak will perish. Those with an inability to overcome a lack of necessary leadership (or a failure of vision) will be swept aside.
If Cisco doesn't do anything too stupid, it is going to take the high end by virtue of inertia. Dell is probably going to take the mass market. HP will self-destruct in spectacular fashion.
VMware could be the next Microsoft: capturing enterprise and mass market alike, but it would require such radical changes in corporate culture I'm not sure it'll pull through. That leaves it being little more than a neutral arms dealer. If that happens, its star will fade. Of course, Huawei, Lenovo and others may have a few things to say about this being an all-West list of companies. Lenovo in particular seems able to execute where others have proven incapable.
So where's EMC in all of this? It has the beginnings of an SDI play in the form of ScaleIO, a massive existing logistics and support operation and quality backup software. It has experience in the immediate precursor technology to SDI in the form of VCE.
EMC has the goods to be a credible major IT player in the SDI wars. When all the M&A is said and done, EMC could well be one of the last companies standing in what is about to be a very bloody, very vicious, ultimate showdown-class battlefield.
Can EMC adapt? Does it have the leadership, the vision and the ability to execute? If not, what will happen to it? Will it fade away – an array vendor selling less and less fibre channel every year until eventually it just winks out? Thoughts, as always, in the comments. ®