The Potential And Difficulty Of This Pivot Is Off The Chart
Dell just had a lot of analysts and reporters to their IQT day event in New York (IQ is a reference to making this incredibly broad concept smart, thus IQ). This is Digital Convergence on steroids, and the solution is potentially to take a company based on technology of last century and turn them into a company based on technology that most firms won’t be able to pivot to until the 2030s building what likely will become the standard for much of this century. On paper, this is one of the most powerful pivots I’ve ever seen in a company and it likely wouldn’t be possible if the firm weren’t huge, led by Michael Dell, and private.
This is because it requires someone with vision to make the pivot and companies that are public are simply too tactical to take the risk of a broad move into an emerging market like this. But I’ve seen two other big pivots over the years, well three if you include EMC’s VCE, and two were successful, at least initially, and one failed badly. The failure was while I was at IBM early in my career and it reminded me that good on paper doesn’t always mean good in fact.
Let’s talk about all 4 pivots.
Dell’s IoT Massive Digital Convergence Pivot
This is a cross company effort involving not only major parts of the old Dell and old EMC but RSA, VMware, and Pivotal as well. No company has this kind of breadth outside of Dell now suggesting they could drive the next Industrial Revolution towards extreme automation and maximum efficiency. This is potentially as big as the original IBM mainframe and could set Dell up to become a power like IBM was and possibly even exceed Google and Amazon. At the heart of this is a new division, some of the most talented people in the company, and the clear personal backing of Michael Dell, one of the most powerful Tech CEOs on the planet. In terms of technology this involves every part of Dell Technologies and likely the largest pool of active partners, not just partners on paper, ever considered.
As noted above the resulting solution will, if it completes the process, will be Digital Convergence at a level never before considered. Effectively allowing a Dell client to update decades ahead of their peers to a fully automated, IoT, AI level of technology. So, while the resources on this effort appear massive, the degree of difficulty is off the chart. Success of an effort like this, much like Steve Ballmer while at Microsoft learned repeatedly, isn’t about investing at a record level, it is about doing whatever needs to be done regardless of the cost.
So, will Dell execute? Let’s reflect on some past successes and failures.
Perhaps the most pertinent example was EMC’s VCE. This was a unique effort that created the most powerful enterprise platform in its time. What made it different was that VCE was a company within a company, fully and adequately resourced. And, although it was made up of components from VMware, Cisco, and EMC the unit could dictate terms to the various partners and the result was the largest cookie cutter enterprise appliance at scale. However, EMC didn’t seem to know what they had and prior to the Dell acquisition the central power that made VCE what it was got eliminated and while the solution continues as Dell Converged Systems it doesn’t have the massive unique power, focus, or potential it once had.
Microsoft’s Internet Tidal Wave
Perhaps the most powerful pivot like this was Microsoft’s pivot to the web. After being surprised by Netscape Bill Gates wrote the Tidal Wave memo and got the entire Microsoft company so focused on countering Netscape that they went from zero browser market share to nearly eliminating all other browsers and Netscape failed during this process (though largely by self-inflicted wounds resulting from extremely inexperienced management. This memo and Bill’s leadership, Bill had similar power at Microsoft to Michael Dell’s power at Dell, had everyone so focused on the web ending with their .NET effort in 2001 that I’m pretty sure the bathrooms had .NET after the names at one point. It was the same pivot that Steve Ballmer should have made when the iPhone emerged as a threat and he clearly tried but he just didn’t have the vision or the ability to get his folks to follow his lead that Bill did. This goes a long way to saying that were it not for Michael Dell, I’d doubt Dell could pull this off.
The IBM effort that stuck in my memory was called AD/Cycle. It was an effort to change how IBM developed software to address what at the time was unacceptably low levels of quality and high levels of failure with a comprehensive and consistent development process which assured quality. Backed by one of the best-connected people in IBM, Earl Wheeler (SVP of Programing eventually replaced by Steven Mills as head of IBM Software), and IBM’s then CEO this effort seemed to be a no brainer and executes in public expressed their full support for the effort. But, in private, subordinates made fun of Wheeler’s effort championing the effort. And, despite the fact that IBM had quality problems that were killing the company, the changes were never fully implemented and the resulting quality issues contributed strongly to IBM’s near failure in the 1990s though, ironically, parts of this effort existed well into this decade.
Wrapping Up: Can Dell Become The King Of Digital Convergence?
What Dell is attempting makes everything I’ve listed above look like Child’s play. I doubt there is any other existing company that can do this, it requires Dell Technology’s breadth to get this done and they pretty much stand alone at the moment . This breadth coupled with Michael Dell’s leadership and the fact Dell Technologies is private give them the best shot of any company in their class of getting this done. However, an effort like this requires massive focus, control, and an unprecedented cross company effort. VCE would be a great template but that unit was deconstructed before Dell took EMC over. The level of focus is in line with Microsoft’s .NET but with far more moving parts. In short, the degree of difficulty is off the chart.
While I think Dell technologies certainly can do this an early indicator would be a major site with the kind of implementation Dell demonstrated on stage. On stage, they showcased the possibility of a branded electric car made to order in a day, I think Tesla, who unintentionally provided the car example in the film that proceeded Michael Dell’s talk, would be happy if they got this down to a quarter given they are typically 6 months to over a year out today). Doing one major showcase site would force the kind of gap analysis in both technology and leadership that will need to be done to fully assure this solution is complete and operational. It would be a crucible allowing Michael Dell and his team to assure the process and thus not only assure the effort but provide a solid external proof point that it works.
Given Dell’s work with Jaguar and the iPace my hope is that this is where they make their showcase, not the least of which is because I have one on order.
In the end, this has far more potential than .NET did but it could end up like AD/Cycle, the next few months will define which way this effort goes.