Currently, we are living in what Steve Jobs and others have called the post-PC world. With Hewlett-Packard pressured to divest its PC business, IBM exiting it over a decade ago and Apple driving an iPad stake into it, there is a lot of support for this concept.
One of the leading companies driving the counter-trend is Lenovo, which merged from the components of the most powerful Chinese technology company and the division of IBM that created the PC. The result of the merger is the fastest growing PC company in the world, thanks to its ThinkPad brand, and the only pure-play PC company that is dominant in China and has both solid consumer and business offerings.
EMC, on the other hand, has been driving unique and powerful partnerships in what I'm arguing is the fifth age of computing-one built around the model of a virtual company made up of independent, market-leading firms. (As I see it, IBM, Sun, Microsoft and Google defined the first four.) The most powerful example of this new model is the Virtual Computing Environment, or VCE, which is made up of Cisco, EMC, VMware and Intel and has subordinate partners such as BMC. Together the companies complete a solution set that is in the class of solutions from more traditional companies such as HP and IBM.
Add Lenovo and you suddenly have the virtual capability that closely maps to what IBM had in the late 1990s and may be unmatched today. Interestingly, it may be the ThinkPad that gives the consortium the edge.
Examining EMC's Class of Partnership
EMC is pioneering a different class of partnership, one in which the vendors behave more like divisions within a company. In a traditional relationship, like the partnership HP and Oracle used to have, there are commitments and expectations between the partners suggesting that they will behave in each other's best interests-but as that partnership showcased, things can come apart in an ugly way. Plus, they often seem to be a dime a dozen, with the majority of the effort focused on the announcement and very little effort actually put into assuring and maintaining the result-like how a marriage based on the desire for a great honeymoon night probably won't last long.
On the other hand, EMC's massive focus on customer loyalty has taken it down a different path showcased by partnerships such as VCE and VSPEX, with the first targeted at large enterprises and the second at the mid-market (as well as bringing resellers such as Ingram Micro into the mix.) Most recently, EMC created a unique variant around SAP HANA, utilizing much of the VCE partnership.
EMC's partnerships perform more like virtual companies, with clear delineation of responsibilities, defined ownership of the solution and, in the instance of VCE, its own CEO (Michael Capellas). This causes them to stand out as different-and a sharp alternative to the umbrella structure over divisions with which IBM currently leads and HP is struggling. For decades, HP has tried to build a better IBM by using IBM's structure, and EMC may have done that in a few short years using this different method.
Lenovo Brings Best-of-Class Products to the Table
What makes Lenovo a power player is the ThinkPad product line, long believed to offer the highest quality business products on the market. Here Lenovo succeeds where other best-of-class systems typically fail in the market. Historically, bundles have trumped this approach; while IT has traditionally driven best of class, no single vendor has had the clout to really get the individual companies to cooperate well.
EMC's partnership with Lenovo directly addresses this shortcoming. The result is true "best-of-class" solutions that function more like those from an integrated vendor. ThinkPad and ThinkCenter, along with Lenovo's high-volume server products, now fill out a near-complete product suite from companies that include EMC, Cisco, SAP, VMware and BMC.
Even Intel is an intimate partner in these efforts. It even provides an advantage that may exceed HP's strategic relationship with Intel, since HP plays AMD and Intel off each other. At the partnership level, EMC's efforts are pure Intel.
EMC Making Mergers, and Partnerships, Work
Dell, EMC and more recently Intel stand out as companies that make acquisitions without destroying the firms they acquire. Of the three companies, only EMC has also moved to create deep partnerships with huge firms that are too expensive to buy. In doing so it gains most of the advantage of an acquisition with virtually none of the catastrophic risk associated with a massive acquisition failure.
I think the end concept of a virtual company might even have more long term potential than IBM's model. The virtual construct can more easily swap components than an umbrella company can buy/integrate or sell/disentangle divisions. In effect, as the market changes, the EMC components are more easily increased or exchanged, given that each is already self-sufficient, and the related agility should be a tough strategic advantage to match with traditional methods.
In short, I think we are seeing the birth of the fifth age of computing, and EMC is driving that birth.
Rob Enderle is president and principal analyst of the Enderle Group. Previously, he was the Senior Research Fellow for Forrester Research and the Giga Information Group. Prior to that he worked for IBM and held positions in Internal Audit, Competitive Analysis, Marketing, Finance and Security. Currently, Rob writes on emerging technology, security and Linux for a variety of publications and appears on national news TV shows that include CNBC, FOX, Bloomberg and NPR.
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