EMC’s Unusual Corporate Structure Fosters Independent Innovation, but Isn’t Without Risks

By | May 9, 2014

Complex Financial Relationships and Often Competing Alliances Make the Company Harder to Value and Susceptible to Product Overlap and infighting

A key theme at this week’s EMC World conference, the company’s annual event showcasing its business strategy, technology innovations and new products, was what the company calls the federation: its corporate structure of four quasi-independent business units and associated product lines. This column analyzes the company’s strategy, structure and business valuation. It may come as a surprise to those not closely following the IT business that still associate EMC with the big iron storage arrays that made it famous, but the company’s ambitious acquisition activity over the past decade means it is now a major player in five key areas of IT: storage, server and network virtualization (VMware), cyber security (RSA), cloud software platforms(Pivotal) and application software (Documentum with associated content management add-ons and Syncplicity).

Yet EMC goes further than most in providing a substantial degree of autonomy to its business units. The column, dives into EMC’s strategy, it’s fascinating business structure and how trying to apply U.S.-style federalism to a large enterprise has drawbacks.