NEWS ANALYSIS: EMC's decision to go with a federated business structure as it builds a stack of mobile, social, big data and cloud services will require careful management.
What does a federated EMC bring to the enterprise party? Potentially a lot, as EMC and its extended family, including VMware, Pivotal and RSA, cover the enterprise front from servers through software. However, creating a stack of services from a coalition of independent-minded companies is not an easy task.
Even EMC Chairman Joe Tucci acknowledged the difficulty of creating an organized approach from a group of companies that have, in some cases, overlapping services and, in other cases, embrace business affiliations with EMC competitors.
“If you don't overlap you leave a seam. So overlap is good, but a lot of overlap is not good,” Tucci said at an EMC World press event. Although the comment may have sounded a bit too much like one of those Zen Koans you are supposed to meditate on for a couple of years before understanding the meaning, Tucci faces the challenge of organizing a group of entities which supports OpenStack on one level, data storage competitor NetApp on another and mobile device management and security from VMware instead of the RSA security division.
It is a big undertaking, but Tucci arguably has the best track record in the tech industry at discovering great companies, buying them and incorporating them into the corporation.
The driving force behind EMC's decision to go with a federated corporate structure is the emergence of applications built around the trends of mobile, social, big data and cloud computing. Those oft-repeated trends form what EMC describes as a third evolution of computing, replacing the client-server model upon which formed the basis of EMC’s success since in selling storage and virtualization technology to enterprise customers.
As several EMC execs mentioned, IT is approaching the end of its role as the sole guardian of the data center and the application development process that follows the well-worn trail of requirement lists followed by months (sometimes years) of app development. The rise of cloud computing is being driven in part by the promise of automated provisioning while application development is becoming a real-time process measured in hours.
In this newer world, the role of software is supreme. This supremacy would make the newest member of the EMC clan—Pivotal—the key player. Pivotal, under former VMware CEO Paul Maritz, is only about one year old but has made significant strides in creating a platform-as-a-service business that allows for rapid application development using its open-source Cloud Foundry software stack.
Cloud Foundry has also signed up EMC competitors in support of the foundation set up to support the software service. "Our partners for the initial governance of that foundation are IBM, SAP and Rackspace along with EMC with VMware,” Maritz told the audience at EMC World.
In recognition of software's supremacy, EMC introduced its ViPR 2.0 storage management offering. The concept is to virtualize storage and abstract the storage hardware from the management layer much like what happened in server virtualization and in networking. With EMC storage options now including Atmos, Isilon and VNX2 as well as the Elastic Cloud Storage appliance along with the purchase of DSSD, the flash storage corporate acquisition announced this week, EMC will need to federate its storage offerings to avoid customer confusion.
Federating the companies that make up the EMC empire makes sense. But figuring out how to strike a balance between presenting a single face to the customer while also allowing those individual entities to fight it out on their own market turf is a significant undertaking.
If any traditional tech company is up to the task of redefining (the theme word for this year’s conference) itself to a world of mobile, social, big data and cloud, it is EMC. However, that redefinition is not going to be a quick or seamless process.
Eric Lundquist is a technology analyst at Ziff Brothers Investments, a private investment firm. Lundquist, who was editor-in-chief at eWEEK (previously PC WEEK) from 1996-2008 authored this article for eWEEK to share his thoughts on technology, products and services. No investment advice is offered in this article. All duties are disclaimed. Lundquist works separately for a private investment firm which may at any time invest in companies whose products are discussed in this article and no disclosure of securities transactions will be made.