TECHnalysis Research Blog Extra

September 9, 2016
Traditional IT Companies Announce Major Changes: Dell, HP Enterprise, Intel

By Bob O'Donnell

Though most of the world was focused on the relatively hum-drum announcements that Apple made this week regarding their new iPhone 7 and Apple Watch Series 2, there were several very important announcements from the large, traditional IT companies this week. Dell announced they completed their merger with EMC to form Dell Technologies; Intel sold off its McAfee security arm to investment firm TPG, and HP Enterprise unloaded its software business to little-known Micro Focus International, a British-based software company that typically focuses on applications that work with older computer systems.

Individually, each of these announcements was definitely newsworthy, but collectively, they demonstrate that what many consider to be the “boring” old part of the tech business is very much alive and eager to make important strategic changes. Interestingly, the HP Enterprise and Intel deals reflect a desire to slim down and specialize, whereas the Dell EMC merger represents the complete opposite. Chairman Michael Dell’s vision is to build a powerhouse of key hardware and software technologies, under a single collective perspective, in order to control all the tools necessary to build and deploy comprehensive solutions to today’s leading tech problems.

Throw in the fact that HP (both Enterprise and Inc.) remain public companies, while the vast majority of Michael Dell’s empire remains private, and you have a nearly perfect lab experiment of opposite strategic approaches to compare. It will be several years before we truly know which solution proves to be the most successful, but the dichotomy between the two approaches couldn’t be more distinct.

From a big picture perspective, the announcements reflect some strategy readjustments that were long overdue. Arguably, the Intel deal is the most obvious in the sense that there never seemed to be a great fit between the Intel and McAfee, nor was their much cross-fertilization between the two companies. For HP Enterprise, their deal gives them the opportunity to fix the widely-recognized blunder of their $11 billion Autonomy purchase.

For Dell Technologies, it’s clearly more of a bet that owning several key components necessary to drive changes—like the transition to public and hybrid clouds, and the move towards IoT Internet of Things) in business environments—will be key to driving successful deployments. Frankly, I like the potential of what this Dell-EMC combination has to offer, but executing on the core principles will be key to long-term success.

Here's a link to the column: https://techpinions.com/unpacked-for-friday-september-9th-2016/47106

Bob O’Donnell is the president and chief analyst of TECHnalysis Research, LLC a market research firm that provides strategic consulting and market research services to the technology industry and professional financial community. You can follow him on Twitter @bobodtech.