Michael Dell must have known what he was doing when he chose Columbus Day to make technology history.
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It was a holiday, with banks, schools and many businesses closed, so the news that Dell planned to buy EMC for a gargantuan $67 billion would get a good share of the coverage. There was also little risk of upstaging a hallowed national moment, given the recent protest against honoring the Italian explorer as America's discoverer.
And there's the symbolism: A visionary embarks on an exploratory voyage and discovers a new land ripe with opportunity. There couldn't be a grander analogy for the merger of the midmarket PC maker and high-end vendor of storage and myriad other technology jewels -- notably, VMware virtualization software and the Pivotal cloud platform.
Indeed, many industry watchers see the tech deal -- and the potential integration of computing, virtualization and cloud capabilities -- as a part of a greater shift from owning hardware to subscribing to IT as a service, all the better for companies making the transition to digital business. And that's already forcing a change in the role of the CIO -- as forward-thinking IT execs turn from a focus on commodity technology to software that will make their business more competitive.
"That's one hell of a shift of pressure on the CIO," said Bobby Cameron, analyst at Forrester Research. Going digital, he said, entails how companies use technology to better serve customers who have come to expect speed and ease of use in every digital interaction with the companies they do business with.
"The things that don't differentiate me or legacy stuff that I don't have any reason to spend a lot of time on," Cameron said of the CIO, "I want to get those out of my hair."
What the Dell deal represents is a service-based model that can take away the hassle of configuring storage, servers and networks. The resulting technology can wrap up things like VMware's virtualization capabilities -- letting companies spread workloads across servers -- and the cloud computing capacity that Dell's servers offer. That potential to scale and respond to demand can make the business -- and the CIO -- far more agile in a shifting and sometimes inclement business climate.
"EMC and Dell now as a combined group have both the muscle in terms of just revenue and customer base -- but also now the technologies to compete in that world," Cameron said. "And from a CIO's perspective, that means this is even more attractive than the two of them as separate companies."
Cameron means, of course, the CIO with responsibilities he or she has never had before: taking the business headlong into a new era with strategic moves, such as offering customer service on multiple communication channels, like the Web and mobile devices. "It goes back to digital businesses," Cameron said. "Invest there -- stuff that really differentiates the firm."
For IT leaders, the deal was a reminder to do as Cameron advised -- spend money on innovation, just as Dell is doing by taking on EMC. Andrew Horne, IT practice leader at consulting company CEB said in this week's SearchCIO story on the merger that CIOs need to tap small vendors, many of which have inventive software the big guys may be lacking. His reaction, though, also serves as a call to action in what the soon-retiring EMC CEO Joe Tucci called "the most disruptive time" in the history of IT. It's no wonder CIOs have to train their eyes on new targets.
"Certainly, as we change the IT structure, it is going to change the job of the CIO," said Jerry Luftman, a former CIO and managing director of the Global Institute of IT Management. "The job at the high level is still going to be there, I think, but IT organizations need to understand how to leverage IT, and as IT becomes more ingrained in the business, responsibilities will be redefined."
The Dell deal will not be the last of partnerships forming to package together IT as a service, Cameron and other observers said -- it's the way the industry is trending. So execs who adapt to the shape-shifting role of the CIO will be all the better for it. But not all are excited about it.
"If I don't how to deal with it, I'm scared to death," Cameron said. "If I don't have the business acumen to understand a business services point of view and I'm locked into the detailed technology point of view, then I'm going to be uncomfortable. So it's very interesting to me how that does play out."
CIO news roundup for week of Oct. 12:
The Dell deal claimed a lot of the coverage this week, but not all:
- Twitter is aflutter with change -- and it's not just the Moments feature, introduced this month, which aggregates tweets about popular news events. Newly reinstated CEO Jack Dorsey announced the company would cut about 8% of its workforce -- that's 336 jobs out of 4,100 -- in an effort to rekindle growth, as the social media company has seen its business and stock rise and fall since going public last year. Thursday, it swooped down on Google, picked up the search giant's chief business officer, Omid Kordestani, and appointed him executive chairman. Kordestani is credited with ushering Google into the black for the first time. Twitter is doubtlessly hoping the move isn't a flight of fancy. And is that former Microsoft chief Steve Ballmer expressing more than approval in a tweet? It wasn't certain at first whether the post was authentic, but the owner of the LA Clippers confirmed he bought 4% of Twitter's stock, which leaped following the report.
- The PC slump that helped nudge Dell toward this week's megadeal took a 6% bite out of Intel. The company makes most of its money from the chips that make personal computers run, but consumers are spending more on smartphones and tablets than laptops and desktops. The news was better than analysts were expecting, however, because Intel began shipping its new, higher-priced Skylake computer chips to PC makers. The company is hinging its hopes for a PC revival on the retooled chip, which it says will boost performance and cut down on the amount of power computers need to operate.
- Great Scott! As grounded "hoverboards" gain popularity in the U.S. and get banned in the U.K., Silicon Valley startup Arx Pax is set to release a real levitating transport device next week. Oct. 21, 2015 is the future Marty McFly fast-forwards to in the 1989 film Back to the Future Part II, when he flees a band of bullies on a floating skateboard. But for Arx Pax CEO Greg Henderson, the real destination is Elon Musk's Hyperloop, the conceptual high-speed transportation system that has capsules zooming along in pressurized tubes. Musk's SpaceX has approved the gadget's underlying magnetic levitation technology for use in a competition to build prototype pods next summer.
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