UPDATED 20:41 EDT / MAY 08 2013

NEWS

EMC’s David Goulden Explains Federation vs. Conglomerate : One is for Smart People | #emcworld

David Goulden, sitting down “in the hot seat” to talk to theCube hosts John Furrier and Dave Vellante, showed incredible confidence. In his own words, it stems from the tremendous positive response from the customers, whose feedback has been fantastic.

Goulden noted that this event was all about themes. The focus revolved around ViPR, Pivotal, and the innovation of storage arrays.

Talking about the company’s philosophy, Goulden shared some insight into the way EMC is run. The internal perception is not of a conglomerate, but of a federation. There is a big difference between the two. A federation has businesses that are interdependent and connected. EMC is interested in creating businesses that are independendent in their own right but that can work together very seamlessly to provide customers with complete solutions. EMC is focused on giving customers choice, that being a very important issue on the customers’ agenda.

Playing for the big stakes, with the right talent

 

“EMC is a technology company; the innovation around the governance and the business model was just a way to foster that innovation around the technology”, said Goulden. EMC operates in a market where it’s playing for the big stakes and it’s all coming down to the right people and getting the right talent. The secret of EMC’s success is creating an environment where the smartest people want to work.

This type of governance model clearly has some inherent additional complexities, but the benefits surpass the shortcomings. The Federated approach allows for development and the ability to attract and retain talent, and that outweighs the problems related to capital structure, cash management or balance sheet structure.

Federation vs Conglomerate

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A conglomerate owns distinct businesses, and its value is crate value. A federation is different. EMC is building interconnected business. They maintain control over them, but that’s just about it. The business model is unique and is not going to change any time soon. Conglomerates might make more money, but federations have better synergies.

See Goulden’s entire segment below:


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