Enjoyment: 16 Oct 2015

Where Michael Dell Is Back, Baby

October 16th, 2015 / by Tom Krazit

This week, we'll talk about Wal-Mart's lock-in picker, Intel's datacenter dollars, and the historic merger of Dell and EMC.

STRUCTURE NEWS

STRUCTURE REWIND: TWITTER ON AUTOMATION AND SCALING

One of the hallmarks of our Structure events over the past seven years has been a focus on scaling: whether you're a cloud-native company or one that runs its own datacenters, scaling effectively and efficiency is one of the most important things you can do as a tech company. After some initial fits and starts, Twitter has figured this out with aplomb, but there's a human cost to scaling efficiency.

Twitter's decision to lay off eight percent of its staff this week -- with the cuts hitting engineering particularly hard -- was likely possible because of the work the company had done over the years becoming a more efficient engineering organization, as former Twitter VP Raffi Krikorian (now at Uber) explained at Structure 2014 in this week's edition of Structure Rewind. While a desire for renewed focus might have been the major impetus behind new and former CEO Jack Dorsey's move, the confidence that the lights would remain on allowed the move to happen.

Remember, Structure 2015 takes place November 18th and 19th in San Francisco. Buy your tickets here.

Photo Credit: ed and eddie via Compfight cc

INDUSTRY NEWS

WAL-MART WANTS TO HELP UNCHAIN COMPAINES FROM THEIR CLOUD

Wal-Mart is not exactly the first name you think of in cloud computing, but the company is working on technology that could help make it easier for cloud customers to move workloads between different public clouds. Fortune reports on Wal-Mart's OneOps technology, which it developed internally to manage multiple public cloud workloads and plans to release later this year.

ZENDESK ACQUIRES CLOUD BUSINESS INTELLIGENCE STARTUP BIME ANALYTICS FOR $45M

Continuing on the theme that cloud services companies are more focused on feature enhancement than evangelism or price cuts these days, Zendesk has added busiess-intelligence features to its help desk product with the acquisition of We Are Cloud. Venturebeat reports that the company behind BIME Analytics was snapped up for $45 million and will help Zendesk compete against Salesforce.com.

BRACKET RAISES $45 MILLION TO MAKE CLOUD COMPUTING EASIER

Bracket Computing, which makes a sort-of sandbox for cloud computing users, has raised an additional $45 million in funding from Fidelity and Goldman Sachs, according to the Wall Street Journal. Bracket's technology, called the Computing Cell, lets a company interested in cloud computing surround its workloads and data with a protective layer that can run across multiple public clouds.

INTEL'S RESULTS REFLECT MOVE TO CLOUD COMPUTING

A few years ago, Intel appeared to be in deep trouble as the PC market began its steady decline and the mobile market exploded with Intel outside. However, led by Structure 2015 speaker Diane Bryant, Intel's Datacenter Group is picking up some of the slack, with revenue from datacenter chips helping to offset continued declines in PC chip revenue. “If you zoom out, we’re not a PC company anymore,” Stacy Smith, Intel's CFO, told The New York Times after reporting earnings results this week.

THE CUSTOM GEAR INSIDE AMAZON'S CLOUD

Last week's Re:Invent show dominated the cloud discussion, and it also shed some light on some of the new technologies Amazon is deploying inside its cloud service in hopes of staying on top of the market. The Platform has one of its customary deep-dives into some of the things Amazon revealed last week.

SAP BESTS ORACLE, OTHER RIVALS IN SHIFT TO CLOUD COMPUTING

The giants of the early days of enterprise software have had a tough time adjusting to this whole cloud thing, but Bloomberg reports that longtime Oracle nemesis SAP is making better progress than some might have thought. SAP saw a increase in new license sales during its last quarter, compared to the decrease Oracle experienced, which suggests customers with datacenters are still finding a reason to deploy SAP while also taking advantage of new SAP cloud services.

BIG PICTURE

Sun co-founder Scott McNealy, a survivor of the pre-social media era of Silicon Valley in which technology executives weren't afraid to say what they thought in public, often described the pending merger of rivals HP and Compaq in the mid-2000s as "a slow-motion collision of two garbage trucks." Near as I can tell, nobody tracked down McNealy to get his thoughts on what his old nemesis Michael Dell is up to with the historic purchase of EMC, but I'll go out on a limb and suggest cargo ships might have been invoked this time around.

We've all known change was coming to the EMC Federation, but the largest merger in tech history? Dell's record $67 billion purchase of EMC, which won’t officially close until next year, is a clear sign of the impact that cloud computing has had on IT's old guard, forcing two historic giants into a megamerger at a time when nimbler competitors are running circles around them.

It's not yet clear what impact this merger will have on VMware and Pivotal, the more cloud-friendly members of the former federation, although nothing will change for quite some time. In a statement, EMC CEO Joe Tucci -- who will finally retire once the deal is complete to make way for Dell as the CEO of the combined operation -- vowed that VMware will stay a public company and that Pivotal is likely headed that way itself.

It is quite difficult, however, to understand how a merger of this size is going to play out to the benefit of anyone but shareholders, bankers, and lawyers. The track record of megamergers in the tech industry is not very good; ten years removed from the Compaq deal, HP is actually splitting itself up to deal with the impact of the cloud at the same time Dell and EMC are getting bigger. Merging two technical organizations and sales forces will take a lot of time, time which will be spent by their rivals creating good old FUD (fear, uncertainty, and doubt; the kids call this "shade" these days) regarding the combined entity's ability to serve its customers' needs.

There is certainly an argument that if the cloud is going to turn into the future of IT, there will always be a market for big tech conglomerates that can serve big non-tech conglomerates. But there is a counterargument that nothing changes as fast as the tech industry, and that the bigger the battleship, the slower the turn.

Michael Dell turned the PC industry on its head fifteen years ago by focusing on cost and customization. If he's going to change the cloud market in similar fashion, this is an interesting way of going about it.