Expensive dowry

 

Well, after the love-hate story, or eventual re-marriage between Dell and EMC will come with quite a dowry.

Good for the second-timer newlyweds, good for the sector, that has seen some optimism in the share value in general, and some more gossip to talk about, like all other weddings.

The matter with this dowry, however, is that despite benefitting Dell indirectly, it does not really empower them against HP, who already beat them at 3Par.

The big winner: EMC. Half winner, HP… and Dell weakens a bit, relatively speaking.

 

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The Greater Evil

 

In an obvious reference to justifying an open alliance with Iosif Stalin, Sir Winston Churchill dared to publicly state that “If Hitler invaded hell I would make at least a favorable reference to the devil in the House of Commons”.

Quite a bold statement, indeed, for it was pretty much inconceivable at that time that the British people would find themselves friends with the arch-enemy, Bolshevik Soviet Union.

If we review Winston Churchill’s memories, we can even find traces of personal friendship (at least to Sir Winston’s perception) at the same level of the one the author declares for Franklin D. Roosevelt.

Of course, the situation in Europe and the rest of the world at that time more than justified such strange friendship, beyond a simple political and military alliance, and what Sir Winston really meant was that if Stalin was bad, Hitler and Nazism was even worse. He was choosing to oppose the Greater Evil.

However, we are not so unfamiliar to seeing weird friendships every now and them in areas such as war or politics, aren’t we? And, should we accept the thesis that business is not much different of war and politics, we should be used to seeing strange partnerships at different levels in this environment too. Like the case of the HP merger with Compaq, or the sudden reconcilement of Dell and EMC.

Furthermore, sometimes strange friendships in business go beyond mergers or alliances and reach individuals. The most recent case we have learned about has to do with Mark Hurd’s hiring by Oracle.

One of the most frequent reasons quoted to justify or explain Hurd’s acceptance of a job below the ranking of a CEO was that Oracle CEO Larry Ellison and Mark are friends, buddies, pals and other synonyms, besides the fact of playing tennis together every now and then.

Leaving aside that tennis matches by these two individuals would probably be similar to watching a Jane Fonda’s remake of one of her honeymoons (Ellison being 66 and Hurd being 53 is no sophomore match despite how gallant their sports style was thirty years ago), their so-called friendship still has a lot to go through to be understood or simply trusted. 

After all, Hurd was still leading the HP armies when Larry Ellison started a de-facto war by stepping into the hardware business after having purchased Sun Microsystems. A Sun in the Twilight was no match to Hurd’s hordes, of course, but backed by the power of the Oracle, it could quickly turn into a serious threat.

In such situation, it could not possibly be a part of the Oracles’ wildest dreams to get Hurd on board…but then mysterious Fate in the form of a non-sophomoric (Jodie Fisher is 50) scandal struck the industry, forced Hurd’s way out of HP, and opened the opportunity for the Oracle, who simply ignored everything after Hurd’s ouster and quickly got him into the ranks.

Hurd did probably not hesitate much, and soon was presented as co-President of the Oracle, reporting to Larry Ellison, in hail and praise. He succeeded Charles Phillips, who, by the way, was not precisely candidate to sainthood himself.

From bitter foes to intimate friends in a matter of days? Difficult to believe, despite whatever business HP and the Oracle might have done in the past, and despite how many “alliances” they formed.

Was not Ellison “making at least a favorable reference to Hurd in front of his own particular House of Commons”? We believe he did. And then, naturally, the next question is sort of obvious: Who is then the Greater Evil? Well, we think that Ellison is so proud of himself that he could eventually believe himself a sort of Hercules fighting against an Hydra or IBMs, SAPs, HPs and a portion of the rest of the Universe.

Going forward, we as well see deeper parallelism with Sir Winston’s case, if we look to the personal level of this weird friendship. As in the Churchill-Stalin case, there is probably a love-hate and fear-attraction mutual feeling between the two. In our opinion, Hurd wants to become CEO again, and should Oracle get to the dominant position Ellison wants it to be, hitting the CEO job by then would be a more than acceptable settlement for him to cool down his testosterone…

On the other hand, Ellison would crave the execution ability that Hurd demonstrated at HP, and keeping Safra Katz as the gatekeeper, just in case, at least while Hurd proved he would not screw up again, and returned part of his cost in results for the Oracle.

Forced equilibrium in any case between these two heavy weights (and heavy egos) that we do not really believe will last for ever and will potentially end up in a burst similar to the breaking of Stalin and the Western Powers at the dawn of the Cold War.

Both of them, Ellison and Hurd, will have to pay a price for it should it happen… Being the 6th richest man in the world would allow Ellison to afford it. In the case of Hurd, lets hope this time he goes for more mature toys, and does not pay the Fisher-Price.

A real life marriage

 

It seems that there are marriages that can resist any sort of shaking…

When we see the romantic turning in Dell’s and EMC’s love story, it comes to our minds the illustrative Clintons’ affair. Sort of an automatic link, we suppose, probably natural in our feverish minds.

Of course, we mean the most famous affair in the Clintons’ whole story, say, the Lewinski case. We understand the readers could be confused if we are not precise, so many affairs Bill Clinton was credited for.

Hard times for America, those years, when their Supreme Leader was pushed to the limit of potential impeachment, if we recall correctly… Unofficial accounts report him addressing American people right at the lectern, asking them to “prepare for hard and difficult times; times for Americans –not you, Monica, to grind your teeth and hold on tight”.

Surprisingly, at least in front of public audiences, Hillary stood by him all over. Admirable.

Years later, a declining Bill has left Hillary the stage, and he is more and more being known as The Secretary of State’s consort, while Hillary solves the world’s problems and enjoys the limelight.

Dell used to be, too, the Master of the IT industry some years ago, when its fragile business model of bringing cheap PCs, together with some Intelgate thing delivered short term results that outshone the marketplace. They were a kind of Supreme Leader market-share-wise.

Here and there they partnered around with EMC, who supplied the Storage solutions and capabilities Dell lacked. (As a side note, we could imagine that should Dell have had appropriate storage of its own, they would have recorded better the funding they got from Intel between 2001 and 2006).

So the IT industry had this nice couple, Dell + EMC, living a sort of honeymoon…

But then temptation happened to appear. The “younger” and less expert 3Par stepped up. Huh, this was indeed interesting for Dell. It was about novelty, it was about youth, it was about new practices.. it was sexy!

EMC held on. They kept cool head while considering their chances. “Don’t blow it!”, they said, “keep holding on!”.

In front of public audiences, EMC kept its head high, ignoring gossip. Dell kept on promising the earth and the moon to 3Par (couldn’t possibly promise the Sun too, as Larry Ellison was already building his own Solar System), but…

There was a big “but” in this story… Notice we wrote “but” with one “t” only, as there was a big “butt” too, though it was something different that HP would kick out later).

And the “but” was that Dell’s attempts where finally frustrated by the “big butt”, who, before it was turning to a fishy Fisherman, promised a bigger moon and a bigger earth plus assorted stars to dear 3Par.

Defeated, Dell turned back to heal its wounds, and, like Bill Clinton (unofficially) has been reported to tell Hillary after making love (“I’ll be home in 15 minutes, Hil”), they begged pardon from their former partner.

Hillary kept solemn silence in public, and as she had broader and certainly more ambitious goals of her own which Bill still could be some use for, she decided to pardon him and play again the respectable role of a respectable, reasonable and forgiving loyal wife.

EMC’s Tucci, CEO, is probably as well considering the use Dell can be of for the dollar revenue stream, despite Dell’s declining path in the last years… and probably will end up forgiving the sinner.

In a relatively short time from now, the once almighty Dell Inc will be known as just one of the guys that provided PCs for EMC deals… while the latter enjoys the sweet limelight its recent performance at Wall Street is showing.

As an Epilogue to the story… 3Par as well got its fifteen minutes of fame that according to Andy Warhol everybody deserves, and will be soon diluted among tins, crystal jars and pharmacist wares in Apotheker’s workshop. Same as formerly famous Lewinsky, who after fifteen minutes of embarrassing fame and another fifteen to clean up Bill’s DNA free samples, quietly disappeared in the shades of indifference.