Dell, EMC, HP, Cisco are the walking dead

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.

So two things:

1. Cloud providers are making it easy for legacy businesses to take baby steps. You don't have to use a NoSQL solution with AWS Dynamo, you can use Postgres with RDS. Or if you're hyper-conservative/stuck with legacy stuff, you can run Oracle with RDS. Or get an EC2 instance and install your own personal copy of Oracle on it. You don't have to jump to full modernity right away, you can take the easy wins of hosted infrastructure first, and only later move up to the bigger wins of hosted platforms.

2. Yes, legacy stuff takes forever to disappear. There are still businesses running VMS inside of VAX emulators with COBOL apps on them. But once you're in that "super-conservative businesses won't move away from you anytime soon" area, you're in a declining market. New businesses unencumbered by legacy won't go down that road -- small businesses starting today will never buy an on-site server to start with (thanks to Office 365/Google Apps/etc.), and as they grow there's no reason for them to change that policy anymore. EMC might never get a new customer, and even if they keep their old ones for some time, it's just a question of how fast their decline is.

And then there is Elon Musk who told his CIO to build their own manufacturing planning system because he refused to give that much money to SAP or Oracle.

Ps. Having migrated an SAP off of AIX, I'd say you'd be better served with something like a VBlock or even VirtuStream or Amazon cloud to run it. There also are price and performance incentives to run R/4 on HANA than on Oracle.

Facebook and Google and Amazon do not use Cisco networking equipment, nor do they use Dell servers:

http://www.wired.com/2014/11/facebooks-new-data-center-bad-n...

That's basically the point of the article: These companies that actually had to get up to that kind of massive scale quickly discovered that the way hawked by these big expensive "enterprise" companies didn't work. It was expensive and insufficient. So they've developed their own custom stuff (often built on open source; sometimes open sourced back out) that works a lot better while also being massively cheaper.

AWS isn't just a bunch of Dell servers hooked up to EMC SANs and Cisco switches. The only people who still use that stuff are people who a) have a ton of money and a desire to spend it freely, plus b) don't have really serious demands, which would mandate something better.

That's not a good place to be.

True of nearly every company I've worked at or for.

The old joke was "no one ever got fired for buying IBM".

It's not even about what the best technology is for a solution but rather the intersection of what's the best I can buy that isn't gonna get me fired if it goes wrong.