Digital Disruptors hustle, innovate and execute leaving legacy IT behind

Hustle is a word that means a range of intentions in different countries. But the core theme of moving quickly and getting it done (sometimes “it” may be ambiguous or up to generous interpretation) is central to how capioIT views the requirements of organisations who will drive the shift towards a true digital future.

The ability to capture innovation, and execute on change may be less ambiguously defined, but is of equal criticality. For those companies that are creating the digital world, and by extension, those that will define the future for enterprises, government and consumers the ability to provide leadership in innovation, execution and the ability to drive change with speed, aka hustle, is absolutely essential.

That leads to the need to understand who is providing this leadership, and pointedly, who isn’t. Independent emerging technology research and advisory firm capioIT undertook an at times overwhelming but always independent study to rank 60 vendors on the basis of their ability to innovate, execute and hustle in the new world of the Digital Economy. These 60 technology based companies ranged in size from Bluewolf to Apple and originated in 12 countries. All have been leaders in their field at one stage in their lifecycle, be it in the modern economic era, or in the age of the typewriter and electronic calculator. Some have yet to fully reach potential, for others the glory days may have past them by.

The fifty companies included in the study were classified into five different types of organisations as follows (% indicates proportion of total companies)

  • Disruptor (20%)
  • Diversified (25%)
  • Legacy Services (30%)
  • Software (12%)
  • Telco (13%)

Each firm was ranked based upon global capability based on a weighted list of 10 variables. These variables or capabilities were split between Innovation and execution. Both are critical for transformation, and both require hustle.

 

Innovate  
Attribute Weighting
Internal Innovation 15%
Ecosystem Innovation 10%
Customer Centricity 30%
Hustle 20%
Digital Investment 25%
Total 100%

 

Execute
Attribute Weighting
Client Outcomes 30%
Global Integration 20%
Workforce Engagement 20%
Partner Investment 15%
Hustle 15%
Total 100%

Disruptors lead across virtually every metric. They are able to innovate and execute better.  It is not surprising that the ability to innovate is even proportionally stronger than the execute rating. That is the upside of being a disruptor, innovation leads execution. At the same time execution is essential. If you cannot execute on innovation you will not last long.

Of the legacy firms, the best placed are software firms. The successful software firms (and software components of the diversified technology providers) have been able to innovate in particular. There is a lag in execution, but unlike some of the other vendors the base has established.

Key Strengths of Disruptors

  • Seed and create change
  • End to end culture of innovation
  • Creation and significant enhancement of emerging business models
  • Ability to fail and rebound
  • Understand processes where value is created and those that are less valuable
  • Employee empowerment
  • Knowledge that the market is never won
  • Hustle Hustle Hustle
  • Passion Passion Passion

Key Weaknesses of Laggards

  • Organisational silos
  • Culture of holding onto what used to work
  • Inability to evolve at speed
  • Management by control
  • Lack of hustle
  • Follow not lead

Top 60 Vendors

The sixty vendors are highlighted in the chart above. Clearly with 60 vendors this is a busy  chart. But what it does highlight is that being a disruptor and a legacy vendor is difficult. Disrupters make new markets, fail fast and have ample passion and the ability to hustle. Twitter, Facebook, Amazon and Apple have created new markets. Salesforce, Google et al did not create markets as much as revoutionalise and democratize existing innovation at scale other entrants cannot match.

The disruptors are also differentiated within and between their ecosystem. Overwhelmingly the traditional vendors included in the study are basically clumped in undifferentiated glue. Escaping is difficult. Arguably, only Microsoft has escaped the wrath of the legacy bear trap.

Why has Microsoft escaped? – It acquired what it needed, it had a hustle culture, embraced passion and regained the ability to seed and create change. Compare this to a firm such as HP who has struggle to shift beyond organisational siloes, operate at speed and is following the market.

In general, Indian based services providers are reinforced as part of the legacy, not as the disruptors they once were.  They have failed to shift onto the next big plays in the market, and are heavily reliant on labour based activities, and acting too slowly in the shift to automation. CSC, CGI, Fujitsu et al are even more challenged as they have not properly adopted services to the Indian provider market game, let alone the newest challenge of automation and as-a-service services.

IBM is a company struggling with a dual identity. On one hand, investments in Bluemix, Watson, Analytics and Cloud make it a clear innovator and market creator. Balancing this out is challenges with legacy services and software business that are driving so many internal and client challenges. HP is struggling on many fronts, but has the hope of a breakup presenting the best structure for it to hustle.

Capture Point

Transforming organisations is difficult. Only a small number of firms can have the culture, opportunity and gravitas to really transform an industry and be a true disruptor.  IT related firms are struggling significantly with the global shift towards a Digital environment. Whilst some are enjoying more success than others the path is exceptionally difficult and competitive across all parameters.

 

If you require further information, please contact Phil Hassey,  Founder capioIT. capioIT is an advisory firm focused on helping organisations to understand emerging technology as the world becomes Digital. Phil may be contacted by email below,

phil@capioit.com

Please see below for details of methodology, definitions etc for this study.

Included Vendors

The following vendors were included in the report.

Disruptor

  • Amazon
  • Apple
  • Bluewolf
  • Facebook
  • Google
  • McKinsey
  • Netsuite
  • Rackspace
  • Salesforce
  • TenCent
  • Twitter
  • Workday

Diversified

  • Cisco
  • EMC
  • Fujitsu
  • HP
  • Intel
  • Huawei
  • IBM
  • Juniper
  • Lenovo
  • NEC
  • NetApp
  • Oracle
  • Dell
  • Samsung
  • Siemens

Legacy Services

  • Accenture
  • ADP
  • Atos
  • Capgemini
  • CGI
  • Cognizant
  • CSC
  • Deloitte
  • Genpact
  • HCL
  • Infosys
  • Pactera
  • PwC
  • TCS
  • Unisys
  • Wipro
  • Xerox

Software

  • CA
  • Informatica
  • Microsoft
  • SAP
  • SAS
  • Tableau
  • Vmware

Telco

  • AT&T
  • BT
  • Deutsche Telecom
  • NTT
  • Singtel
  • Telefonica
  • Telstra
  • Verizon

Vendor Selection

The sixty vendors were selected for a range of factors. The majority “self-selected” as being legacy vendors or clear innovators. Some such as Tableau (analytics) and Bluewolf (Cloud based Services) were chosen to highlight the leading providers in emerging markets.

The telecommunications providers were chosen to represent both regional and global providers.  Tencent was selected as a leading disrupter from China.

Disrupter (20%) – Typically a comparatively new company, not always aligned as an enterprise IT company, but providing true disruption to the sector

Diversified (26%) – Legacy IT company offering a range of capabilities such as hardware, services, software etc

Legacy Services (28%) – Pure play services firms, either from an IT, BPO, Applications and consulting perspective

Software (12%) – Enterprise software provider

Telco (12%) – Telecommunications services provider

Methodology

Due to the extensive nature of the research and the inclusion of 60 global vendors, clearly data and process integrity is a critical component of a report of this type. It is fundamental that the data be valid and untarnished. To help ensure this, all information for the measurement and assessment of these attributes comes from a range of sources to ensure a range of opinions. Sources of information include clients of firms included, partners of the firms included, regulatory and government bodies, vendor briefings and meetings, media sources, the IT ecosystem and any other relevant source.

Ranking Variable Definitions 

Innovation

Internal Innovation – This is research undertaken within the organisation, or under the direct control. It included such functions as product development, research labs and other sources of IP

Ecosystem Innovation – This primarily relates to innovation driven by the ecosystem external to the selected vendor, be it partners, clients or other relevant groups.

Customer Centricity – The ability to act in such a way to ensure that the customer is the centre of engagement and activity

Hustle – Ability to move with speed urgency and purpose as a corporate entity

Digital Investments – Direct investments in digital capabilities, across the spectrum from legislative to security and social media.

Execution

Client Outcomes – Focus on executing to ensure client outcomes are met, directly, or by partners

Global Integration – The ability to offer similar levels of capability across global marketplaces, without a reliance upon small numbers of markets.

Workforce Engagement – To act as an employer of choice, and provide capacity for a globally empowered workforce

Partner Investment – Direct investment in new and existing partners, in addition to transformation of partner ecosystem to enable ecosystem to meet changing requirements.

Hustle – Ability to move with speed urgency and purpose as a corporate entity Continue reading

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Think the Digital Economy is just a Technology Play – Prepare to fail

The rise of the digital economy is of course an era of global development that will transform all. Nothing new or controversial with that. It will also lead to the overwhelming and never ending pervasiveness of technology in all that society does as consumers, enterprises and governments.

capioIT has long been concerned that the most commonly accepted definition of Digital based around SMAC (Social, Mobile, Analytics and Cloud, for some, security) is a technology based construct.

Quite simply until the impact of a governance and regulatory framework, and consumer behaviour is included in the definition of Digital, the benefits and value cannot be fully realised.

The importance of the regulatory environment should be clear to all that are looking to transform or innovate from the business model level through to basic employee level. Governments have not been able to catch up with legislative requirements across the board, from inadequate Privacy and Metadata legislation, to consumer rights, IP, and data location considerations. As a result technology based solutions that work in one jurisdiction may be illegal in another. This even occurs within a countries border. New consumption options such as Uber are illegal (if not tolerated) in some states within a country and legal in others. The total industry needs to strive for consistent (and fair) legislative and regulatory environment. Without the environment too much innovation will be caught short.

In this context we are defining consumer, as the beneficiary or user of the ecosystem. This can be an individual or communities of customers, employee or other “users” of the service provision.

Building a “Digital Ecosystem” without understanding, engaging and including the consumer is another rapid path to failure. Change is difficult for many individuals and communities; failure to account for this is clear in a range of industries, from fashion retail, personal accounting, banking and internet services. At the same time, many organisations have quickly learnt that the consumer is able to hijack and come together using mobile and social media to form a rapid and highly influential view on the provider of the services.

Just ask airlines, governments and other groups who have naively asked for an opinion on their customer satisfaction, services or other related and visible failures to understand how their consumer will operate. Reliance on a build it and they will come approach is also another doomed to failure, you need to have the consumer on side from day 1 regardless of the audience.

Capture Point

Whilst technology is the central driver for the global transformation that is impacting every facet of our professional and personal lives, this shift is more than technology. Legislative and consumer responses will ultimately drive the success or failure. Organisations cannot just rely on technology alone, nor can technology capabilities live outside the organisation.

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capioIT March Newsletter – Was 2006 equal to 1962 for the digital era, technology and referees and why compliance, regulatory and consumer environments matter for digital

What’s News….

Was 2006 equal to 1962 for the digital era, technology and referees and why compliance, regulatory and consumer environments matter for digital

Clearly the global economy is being transformed by the Digital era of commerce. New market opportunities, synergies, economic systems and more are being created and redefined at what is frankly an unprecedented rate.

Traditionally (if the digital world is mature enough to use the word), the focus on Digital is orientated around Social Media (or security) (S), Mobility (M) Analytics (A) and Cloud Computing (C). Whilst these are all critical for the success of any digital investment it is a narrow definition of digital created by technology biased stakeholders. The non-technology based elements that are missing are governance and consumer or stakeholder behaviour. These are as critical the the success or failure of any digital investment. Just ask Uber, airbnb and any number of others who failed to understand the role of a regulatory environment that can constrain innovation and a consumer response that can work for you or against you.

In the second half of 2014, a significant amount of capioIT time was spent focused on the compliance and regulatory aspects of Digital investments for the accounting sector.  The professional services industry is being pressured from a regulatory and compliance point of view as well as the never ending disruption of SMAC. This clearly affects the ability to respond to client mobility requirements. Typically legislation is not keeping up with enough aspects of digital, mobility, and identity let alone cloud requirements. The broad and loosely defined participants in the digital Economy must take a more structured approach to regulatory and compliance issues. Failure to do so will result in the investments repeatedly disappointing. It is a significant opportunity for the often disparate silos of the organisation to work with each other as well as in their industry.

1962 was a massive year in retail. Amazingly Target, Walmart and Kmart were all established in the US in 1962  as the post war consumer and suburban boom accelerated a shift in retail and spending patterns.  Technology has not had a year quite like that, though the number of fundamentally ground changing organisations established in the past 10 years. In 2006, AWS, Twitter and Wikileaks were all formed. Whilst not a retail triple play as happened in 1962, all have been disruptive and transforming. Each year will continue to produce such dramatic changes as the shift towards digital accelerates.

A lot is made of the state of the US healthcare market and the fundamental technology issues that drive it. Technology cannot fix the culture. The often cited fact that the average US 65 year old has 8 prescription medicines is   Fact that avg. US 65 yr old takes 8 prescription drugs highlights depth of healthcare issues  will require a fully integrated solution and approach.

Unfortunately the narrow and lazy definition, hence the focus on Digital is orientated around Social Media (S), Mobility (M) Analytics (A) and Cloud Computing (C). Whilst these are all critical for the success of any digital investment, this is such a limiting approach. Clearly there is more to it. The most often cited extra SMAC variant is of course security. This is Omni present, the dollars and scale around requirements of identity management alone is boggling particularly with growth companies, the expansion  of multiple devices and more loosely defined but integrated business ecosystems.

Thanks for taking the time to continue to read the newsletter. We have linked to some of our key content for the month. As always, please let us know if there is any way we can support you and your business requirements, and please provide us with feedback on the newsletter to Phil Hassey.

 Short insights

  • The subsequent investments and focus on cloud proves that SoftLayer was the best $2B that IBM has spent. Now it faces the not so simple task of execution to expand this investment.
  • Post EDS acquisition in 2008, HP Services revenue was $39B. Last 4 quarters HP services revenue is  /- $30B. Splitting HP is a long way from being the full cure for HP issues.
  • If you have the wrong information from the wrong sources, you will alienate customers and maximise poor outcomes – regardless of big data investments.
  • According to Airbus the largest issue in plane turnaround is maintenance – (clearly not cleaning or loading catering for most airlines). Technology will drive improvements in turnaround time and create an as a service ecosystem for airlines.
  • China announced greater regulations for internet users. Clearly it limits social engagement when the biggest brother is watching.
  • Digital is impacting every profession. Professional services such as accountants and lawyers are amongst the most transformed.
  • Uber and AirBNB issues that are faced with expansion highlights that the digital economy overlooks regulatory and legislative environments at its own risk.
  • The eBay, HP and Symantec proposed breakups highlight how hard tech sector mergers are to keep together. At the same time CSC is rumoured yet again to be a potential split candidate.
  • Google is valued more as an individual firm than the Russian stock exchange.
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IBM Interconnect – Disruption dictates digital enablers embedded in all IBM does

In late February 2015, IBM held their first global Interconnect event in Las Vegas. All major software brands were bought together (with analytics in a support role) to highlight the future of IBM from a software perspective. Clearly given the difficult nature of key aspects of the overall business for IBM, Interconnect represented the future if IBM is to be successful, not just software products.

The key strategic take away from capioIT’s perspective was the level to which IBM has embedded cloud, and analytics into every software product and solution that IBM and its (still) often overlooked partners will take to market.

It is clear that when talking cloud, IBM is heavily betting on the hybrid cloud model as the future. Alongside cloud and analytics, mobility (both with, and without, the benefit of the Apple relationship) and security is increasingly embedded in all that IBM will do.

A note on security, IBM needs to make more noise about security. Clearly the overall IBM portfolio is so vast (and often can be cumbersome) that it is not hard for even an offering as deep as security to get overlooked. Expect more attention from IBM towards promoting security capability through 2015 and into 2016.

The most critical enabler for the IBM shift to embed traditional definitions of digital into all that it offers is the acquisition in June, 2013 of SoftLayer. Without underestimating the billions that IBM has historically spent on acquisitions, or more recently, earned through asset disposal, this was the best $2 billion that IBM has invested in several years.

As part of the $1.2B investment in cloud capabilities IBM has significantly increased the number of data centre locations in the 20 months since the acquisition to approximately 40. These have included new nodes in Australia, Canada, India and Italy in 2015. Clearly the IBM localised approach is designed to differentiate from other IaaS and PaaS providers who have taken a more centralised location approach. Despite IBM’s recent struggles with internal scale and complexity, the localised data centre location ability is one area where the scale of IBM provides clear benefits.

The other key investment that IBM is integrating to drive support clients efforts with digital disruption is Bluemix. Bluemix is the IBM PaaS that it has been positioned as “The Digital Innovation Platform”. With a strong IBM focus and investment in the Cloud Foundry, it is driving the Bluemix platform to attract enterprise alignment and developer support

The Bluemix centred engagement between IBM and Citibank has been designed to accelerate Citibank’s ability to compete with new disruptive banking platforms. Citibank also gains the ability to augment an innovative culture within its digital and competitive ecosystem.

The innovation on show from IBM at Interconnect is not a panacea to the ills that have impacted IBM for the past couple of years. Whilst it is arguable that IBM has been countering the decline of the legacy vendor better than cross country rival HP, it is still a company with several challenging elements that will take time to unwind at a level that satisfies the market. For every Watson, (the IBM innovation benchmark) there is a heavily burdened legacy infrastructure outsourcing business and a limitations provided by the failure to address emerging market opportunities eg salesforce.com solutions.

Unfortunately, IBM has still not nailed the partner ecosystem. This aspect needs to be genuinely and mutually enhanced particularly from the software point of view.

 Capture Point

Whilst IBM still has to deal with internal and external issues, it is clear that IBM will innovate to drive success. That is the approach that IBM has always attempted and it rarely knows any other way. All it has to go now is to get customers, clients and the ecosystem on board to provide the market with the tools to drive the digital disruption that is the new normal.

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Technology is like a sports referee or umpire – It works best when you don’t notice it

Anyone who has watched any amount of sport knows the role that the umpire or referee plays. My father taught me early that the best referee is the one you do not notice. Today this still holds true whether one is watching basketball, cricket, rugby or tennis. If you finish watching, or better still, participating in a game and you have not ended up frustrated, concerned, or even aware of the impact of the umpire then you have most likely had a positive experience.

Technology implementation and usage needs to remember the referee.  Technology struggles to provide the same experience of being seen and not heard. Clearly this is a cause of extreme frustration. Technology is increasingly embedded into everything we do personally and professionally.

The shift in technology to constantly updating apps on devices, seamless wireless integration, and data sets that simply work has significantly widened the gulf between good technology which works without even realising it, and bad technology that creates a handbrake on productivity.

Most sporting matches do not last 3 years (test match cricket can seem to), but SAP implementations, or data centre upgrades can. The experience has to be quicker, less obtrusive and simply in the background, at the same time it has to transform. That is where technology will continue to be challenged.

Next time you watch a sporting event, realise how good it is to forget that the referee or umpire exists, apply that to technology and life becomes much easier.

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September capioIT Newsletter – Millennials, Baby Boomers and the Cloud, salesforce.com services and Happy 4th Birthday to capioIT

The past month has been one in which the impact of cloud has been reinforced more than ever before. As early adopters of cloud mature, it is clear that success in the cloud will not occur with a static and singular  strategy or approach by either buyers or sellers. An increasingly visible example of this relates to age of the target buyer of cloud services.

Research by capioIT highlights an increasingly significant disconnect between the approach of Millennials and Baby Boomers to the cloud. The pivotal age has an over/under of approximately 50 years old. Our research has shown that a significant number of Baby Boomers (who also often tend to be cheque signers) have not yet fully crossed the chasm to widespread cloud adoption. Millennials on the other hand have not only leapt the chasm they are typically at the front end of innovation across PaaS, SaaS and IaaS and want more.

Of course these are generalisations and some of the most aggressive cloud adopters are Baby Boomers but it does highlight that a one size fits all approach no longer works for the cloud. The way an enterprise or agency sells cloud to its internal stakeholders has to take the age of stakeholders into account. Likewise a vendor must consider age when framing a selling and marketing approach to enterprise and agency customers in addition to the consumer market. For example, don’t bother selling the “Why Cloud?” to a millennial born in the cloud audience. They have moved well past needing to know why.

salesforce.com has been the most successful and important cloud and SaaS vendor to date. It has paved the way for considerable innovation and helped create new markets and was almost singularly responsible for the shift towards business dominating spending on technology and actively attempting to bypass the IT department.

It did not surprise that the services market for salesforce.com took a while to mature. Various vendors have struggled to create the most appropriate structures to drive sustained growth. As a result of this it is still an emerging market.

Not surprisingly with capioIT’s emerging market focus we have released our first ever Global Capture Share report on the salesforce.com SI and Services marketplace. Clearly there are results of interest across the analysis, but the key outcomes for capioIT were the following:
Successful legacy services firms in the salesforce.com Services and SI market have created a structure that aligns salesforce.com with growth and resources. Accenture leads in this respect followed by Deloitte and Cap Gemini.

  • The SaaS services providers, notably Blue Wolf, Cloud Sherpas and Appirio have been particularly successful in this space. They collectively live in the cloud and are creating an ecosystem. Customers align to this cloud based culture.
  • Overall the laggards include many of the Indian based IT services vendors (HCL, Infosys) and legacy IT vendors such as Fujitsu and IBM who have not been able to, or not chosen to,  make the shift towards the SaaS services opportunity.

Whilst there is a lot of visibility and excitement for this report, if you have any questions please let us know.
For the first time in our short history capioIT has chosen to sponsor an event and support the Analyst Relations Forum in London this month.  This event is helping to showcase analyst firms who like capioIT, are looking to disrupt the analyst environment step by step and to remove some of the Stockholm Syndrome features that legacy vendors have inflicted on both the vendor and buy side.

Short insights from August

  • Clearly IBM is gambling their future on softlayer cloud. Sydney launch was at the casino. Will they beat the house? The Indian launch was perhaps less prophetic but still successful
  • Nike, Starbucks and Fitbit are all examples of firms that are truly disrupting multiple industries. Nike is now as much an analytics firm as a lifestyle experience.
  • Data3 announced a profit margin of just  1% on A$833M in sales. It is failing to shift to a higher level of client engagement. This is not unique for Australian based IT firms.
  • In speaking with millennial households their consumption of content transformation is still evolving. Forget no landlines, they have no TV as they just download or stream on devices.
  • Always frustrated when online engagement is optimised for a browser with a 20% market share. This is not a digital centric experience and users simply  switch off.
  • Key challenge for technology departments and vendors is to identify and retain leaders who can drive customer satisfaction.
  • A New York State hotel threatened to charge guests $500 ‘bad review fee’ was suitably hammered and Yelp was perhaps the biggest loser. Winning in social media is hard, and not helped by greed or stupidity
  • Idea from a popular post last year -> In the Customer Centric Organisation, Should the CFO Report to the CMO?
  • Tech vendors cannot be relying on Russia for growth. capioIT forecast that the technology growth will be negative through 2015, beyond that, no-one can make a genuine call.
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HP attempts to merge with EMC – Have most legacy IT vendors run out of ideas?

EMC was a very successful vendor in redefining the storage space, but its business is being impacted on all angles from changing buying patterns, competitive shifts, Infrastructure as a Service, price pressure and of course an internal inability to shift the business model quickly.

Cut to the core and EMC has publicly been considering its long term future financial position. It has one piece of gold, in the form of the 80% of VMware that it owns. The fact that VMware is the redeeming feature of EMC speaks to the failure of EMC to continue to transform in front of the market rather than reacting to change. (One of the major takeaways for capioIT at EMC World was that EMC was following the market in reaction mode, rather than making things happen out in front through innovation).

The EMC scenario is reflected at HP, albeit in the case of HP, the breadth of the business means that the scale of the challenge is even larger. Furthermore, the legacy of the executive dysfunction prior to Meg Whitman taking over as CEO and Chairman has had a massive negative impact.

For EMC, along comes HP, still not burnt from the failed acquisitions of EDS and Autonomy, willing to merge/acquire EMC. Put simply if this happens, it has every indication of adding to the mess of $19B in write-downs that HP has undertaken in recent years.

It is the marriage of two vendors who are struggling to find their identity in a nimble, evolving world. The rationale for two already cumbersome vendors forming a much larger entity with the ability to be flexible, reactive to customer evolution and part of the new order of technology is difficult to identify.

There are so many implications of this. Front and centre, the impact on Cisco, VMware and the VCE enterprise is worth scrutinising. Cisco and EMC always have had a degree of competitive tension in their relationship and it would not surprise that in the longer term Cisco looks to EMC as more competitor than deep partner and increases the enhanced relationship with NetApp amongst others.

The other investment option for EMC is to invest in analytics providers such as Qlik, Tableau et al particularly in alignment with Pivotal. This would solve some of the problems for the future but cannot create the revenues of the storage business in the long term. In addition the potential integration issues and the ability to keep the real IP of these companies, the developers, within EMC does not have a clear resolution. If EMC were to do anything in the analytics space, it would have to be as part of Pivotal. The challenge is that Pivotal has reinforced an agnostic approach to the platform of choice for the user of analytics.

The challenges that HP and EMC face, and the risk that they are willing to make in order to maintain relevance highlights how difficult it is to be a legacy vendor. The transformation required to stand still is at such a level that very few will survive, whether they are a hardware, software or services based legacy vendor. Consider that the biggest challenges for these vendors’ revenue streams are yet to come. The shift to a subscription model for the procurement of technology has only just begun. So far in broad terms revenue and earnings have held up, but long term options are increasingly difficult.

The vendors who are comparatively successfully transitioning to the new technology environment have to be measured on potential rather than execution, but IBM and Microsoft have made tough decisions and embraced changing business models to be in a better place in late 2014 than they were at the beginning of the year. Cisco and Oracle are in the balance, but it is hard to argue that HP, Dell, EMC and Fujitsu are in a better position now than at the beginning of 2014 in light of a rapidly changing future.

Focus Point – A merger of HP and EMC may have been a great idea in 2004, but in 2014, it just reinforces the view that most of the legacy vendors have simply run out of ideas to execute a long term future around.

If you require further information, please contact Phil Hassey,  Founder capioIT. capioIT is an advisory firm focused on helping organisations to understand emerging technology in emerging markets. Phil may be contacted by email below,

phil@capioit.com

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