Business Strategy

Why mega-mergers won’t save tech’s walking dead

Why mega-mergers won’t save tech’s walking dead

In the immediate wake of the Dell-EMC merger, Cade Metz, a senior writer for WIRED, reflected on the market shift brought on by enterprise cloud computing. His article, “Dell. EMC. HP. Cisco. These Tech Giants Are the Walking Dead,” likely hit home with many readers; he gave a cogent characterization of shifting market dynamics. Large hardware-driven businesses (i.e., Dell, Cisco and HP) are increasingly finding themselves out-maneuvered by small cloud-based companies that free the buyer from costly hardware and server purchases. They do so by leveraging open-source computing and networked storage that’s nimble, scalable and relatively inexpensive.

Metz’s prognosis? These large companies are the “walking dead”: their time as technology giants is waning.

The market’s not-so-hot reaction to the Dell-EMC merger and subsequent spin-off of EMC subsidiary VMware promises more drama. A big shift is playing out across the tech industry.

“Nimble” and “open” are more than buzzwords; they’re absolute critical requirements for success. Successful companies are nimble because they must pivot on a dime in response to new and evolving customer needs. They’re open because they realize that customer co-creation and adaptation are must-haves to stay fresh and relevant. A company can’t be nimble and open without thinking about its customers.

Regarding the Dell-EMC merger, there are two key points to note:

  1. Customers, large and small, must have a voice.

It’s tempting for enterprise providers to limit attention to enterprise customers. But customer-centricity must be inclusive, giving voice to customers who might traditionally have gone unheard. Amazon has done this by listening to the needs of small businesses and sellers, opening its stores to competitors. Some might argue that this is just window-dressing, but the principle is there: it’s increasingly difficult to stay fresh in the market without widening your field of view to include a broader range of customers.

  1. Organizational diversity allows for enterprise-wide nimbleness. 

A diversified organization goes against the enterprise’s tendency to react slowly to market changes. Google parent Alphabet is a great example: the new structure allows for Google to focus on what it does best (ads, search, Android, etc.) while freeing up the rest of the company to try new things and invest in new technologies.

Organizational structures that emphasize the autonomy of flat, smaller operating units allow for quick shifts in strategy in response to customer needs. Dell has Dell Research group, which is focused on identifying trends and developments in technology across the enterprise. This is a positive sign. The challenge for large enterprises will be continuing to expand such units and empowering them to listen to both the technical market and the consumer.


“The increasingly important challenge for traditional technology companies is to maintain a laser-like focus on the shifting and evolving customer.”


Companies that open and maintain a dialogue with customers and the market are more likely to be on the forefront of the changing market landscape. The increasingly important challenge for traditional technology companies (indeed, any established player in any industry) is to maintain a laser-like focus on the shifting and evolving customer, and maintaining a structure that enables quick and effective responses to those customers’ needs.

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