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They're the walking dead because they pursued scale over innovation. Once they had achieved scale, they found themselves with too much momentum to innovate. So because they couldn't innovate, they built an army of consultants to hawk their wares to customers who also valued scale. But that consulting business never really took off because its existence was predicated on a model of dumping obsolete (but "enterprisey"!) hardware/software onto customers already suffering from vendor lock-in. When those customers start to struggle (as they inevitably will, because the tech industry is far from the only one where scale can impede your ability to innovate) the market has moved on to a different place, and the company never kept up. Then you see a death spiral of layoffs and divestitures that destroys 50-90% of shareholder value.

Sound familiar? This fate awaits all these companies:

- Dell: I don't even know what Dell makes anymore. I guess they sell PCs, servers and consulting services to small businesses that don't know any better. But this market is being eroded by an army of local MSPs and resellers, and it's not a model that benefits from scale.

- HP: HP has been a disaster for a while, but they will probably endure since their hardware is generally pretty good and reasonably priced. But servers and printers are not a very high-margin business, and that's caused their leadership to be constantly on the hunt for a newer, higher-margin revenue stream.

- EMC: Storage is increasingly distributed, and EMC's centralized storage solutions really are a dinosaur in today's market. They just make the wrong product and never found anything to replace it.

- Cisco: By all rights, Cisco shouldn't be on this list given that the Internet still largely runs on their hardware. But they convinced themselves they were a consulting company, and that ran off all their good engineers. Cisco today is a shadow of its former self.




All of your examples seem to lack a lot of context. Yes, these companies are all under pressure. But most of them are still in slow growth and working hard at it. There is also quite a bit of innovation in these places. The problem is the market model is changing - that innovation (cloud) undermines everything else.

Their biggest liability is their customer base that IS NOT changing and continues to pay for these products. I see guys everywhere trying to cajole customers down the cloud path because they'd rather be at the seat of that inevitable transition than pushed out. Many customers don't want to. So they're stuck doing the old thing that's dying and the new thing is being done by smaller customers that wouldn't even consider them.

The story of if/how they fail or rise again will be a lot more complicated than you are suggesting. Keep in mind Apple was near bankruptcy 18 years ago.

Example - EMC. I'm not sure what you're talking about, there are a lot of products. Isilon is distributed storage and selling like mad. ScaleIO is free for anyone to use unsupported and a distributed Elastic Block Store. VxRack is scale out compute and storage. XtremIO sells more and is growing at pace with Pure (which just went public). Dell in swallowing them up which seems like the least worst option given Elliott is at their back and HP would be a death sentence. (I don't work at EMC, but a subsidiary and have some knowledge of how they work and sell.)


Apple is a different beast... try not to think of them as a technology company. The Apple that was a technology company died 18 years ago and was reborn as a consumer products brand that is backed up by a hell of an engineering org. But marketing/branding makes all the decisions and sets the direction; engineering just helps move the needle of what's possible.

EMC is generally just fucked because their potential customer base is shrinking. While I don't think everyone everywhere will move everything to the cloud, enough migration is heading in that direction that storage appliances seem like a risky business (especially considering the big cloud providers just roll their own rather than buy from EMC).

Don't get me wrong -- I fight the same battles with big companies about how their stupid new $50million data center can't hope to compete with AWS on cost, reliability, security or functionality. AWS runs datacenters at the billion dollar scale. CIOs/CTOs have the mindset of "it'll be better if we control it" -- but then don't realize how expensive it is to replicate all the niceness that you get from AWS like management interfaces, workflow control, etc. All those systems have to be grafted on later, and are naturally behind the curve.


What would be your opinion on Oracle?

I find it strange that the Author didn't include Oracle in the title although he talks about it at some length in the article body.


I gave my opinion on Oracle elsewhere in this thread. Basic just is that Oracle will be fine because they're a business software company -- all the companies on this list are manufacturers of technology infrastructure products. The model through which companies acquire tech infrastructure is changing from a product model where infrastructure companies build/design differentiated products to a services model, where a much smaller number of companies are buying increasingly commoditized infrastructure hardware and selling access to it as a service.

Oracle doesn't do this; the bulk of their value comes from software that is much more difficult to replicate.




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