OEM Dinosaurs

Curtis Franklin Jr., Executive Editor | 2/16/2013 | 18 comments

Curtis Franklin Jr.
When the Cretaceous climate changed, whole families of dinosaurs went extinct. Cloud computing could have the same effect on OEMs unwilling to shift their thinking.

Scores of OEMs, ranging from rather small to quite large, have lived quite comfortably supplying components, sub-systems, and complete white boxes to vendors with well-known names -- vendors that then sold finished systems with software to the final customer. When cloud computing came along, bringing with it a voracious cloud-provider appetite for new systems, things changed dramatically. Suddenly, large customers were writing detailed specs for their own servers and going directly to previously anonymous OEM suppliers for their hardware fix. Think of it as a market meteor.

Now, it would be a mistake of brontosaurean proportions to think that the large, established vendors would take this sort of change lying down. Major vendors have moved aggressively to launch cloud-hardware offerings as well as cloud services of their own. Still, many traditional OEMs find themselves in an interesting dilemma: refer interested customers to their vendor partners and risk turning away valuable business, or accept what amounts to retail sales orders and take on the integration and support responsibilities those sales bring.

This is the sort of question and decision pair that has an impact on much more than the quarterly sales numbers. To an extraordinary extent, this strikes at a company's understanding of what it is. In recent weeks, I've spoken with several companies faced with the decision, and I've seen answers that fell across a broad spectrum.

On one hand, there are companies forced to offer their products to a general market because of market immaturity -- companies now eagerly awaiting the day when they can revert to selling their technology through nothing but traditional OEM channels once again. On the other hand are companies that have decided to accept the broader sales that can come with a broader market, even though they know that their business model becomes intrinsically more complex because of the shift. The thing that binds both types of companies is that their management has made a decision about their preferred type of customer and market strategy: They have decided not to sit passively and allow a market to happen to them.

It's the companies taking the passive approach that we're likely to find fossilized in the annals of failed OEM organizations. As a CIO with a seat at the executive table, you should bring an understanding of what this kind of decision will do to your systems, and how current systems can be modified or expanded to cope with the new challenges. Have you seriously thought about what it would take to change your sales model? Have you rehearsed a response if asked for an opinion by the CEO? If not, perhaps it's you and your career who will be joining the triceratops in the list of those who didn't respond when the climate changed.

View Comments: Newest First | Oldest First | Threaded View
Page 1 / 2   >   >>
WaqasAltaf   OEM Dinosaurs   3/4/2013 10:09:01 AM
Re: Why only the CIO
@ Lufu
"Risks occur when the CIO is the lone technology guru in decision making, planning, and implementation. In that case CIO better truly earn the "Chief" part of their title."

You have a point. However, that is the most likely scenario that CIO is the only well-informed person about technology on the executive management team unless you are technology company.
batye   OEM Dinosaurs   3/3/2013 9:45:10 PM
Re: Why only the CIO
I think it should be this way but not always in real life... as a lot of the time CIO did play the game follow the wind... and only see what he/she want to see... also the other factors could be in play... as example HP and fire-sale of touchpad...destroying channel sales... What was CEO/CIO thinking...???
LuFu   OEM Dinosaurs   2/24/2013 12:52:16 PM
Re: Why only the CIO
@ WaqasAltaf - Uh-huh, should be. The executive management team will logically turn to the CIO for technology questions and issues. Risks occur when the CIO is the lone technology guru in decision making, planning, and implementation. In that case CIO better truly earn the "Chief" part of their title.
WaqasAltaf   OEM Dinosaurs   2/24/2013 11:10:47 AM
Re: Why only the CIO
@ lufu

Yeah. It can be argued that for technology trend shifts, the CIO can be and should be the most informed person in the executive management team.
WaqasAltaf   OEM Dinosaurs   2/21/2013 9:50:33 AM
Re: Change management
@ Curt


In my opinion, Apple is the company that can be stated as an example when it comes to taking that tough middle path. Not only its personal computers (the old business) are liked by users but also it is doing satisfactory in the cloud business (the new business).
CurtisFranklin   OEM Dinosaurs   2/19/2013 12:36:29 PM
Re: Why only the CIO
@LuFu, that's precisely the sort of scenario I had in mind. We've seen a push by CIOs to have a "seat at the table" in the executive suite, and I believe we're seeing a much greater willingness from the board to have them there -- as long as they can prove that they understand the business issues as well as they understand the technology.
CurtisFranklin   OEM Dinosaurs   2/19/2013 12:25:45 PM
Re: Change management
@Waqas, I think your idea of the company being customer-focused is exactly right. Once again, it has to be tempered just a bit by the company's better understanding of what their technology and strategies can do for the customer, but an organization that fears what customers want and need will have a very limited future.
CurtisFranklin   OEM Dinosaurs   2/19/2013 12:20:42 PM
Re: Change management
That's really the critical point, isn't it, @Waqas: To be able to draw upon the strengths you've developed as an organization without being so tied to the past that you can't adapt to changing circumstances.

I think we've all seen organizations that swung to either extreme -- either following every fad that comes along, or being so stuck in the past that they never change. Figuring out the middle path is the tough part, and yet the strategy that gives the best chance for long-term survival.
sohaibmasood   OEM Dinosaurs   2/19/2013 12:02:45 AM
Re: Change management
Zaius, change is difficult to manage but since it is bound to happen we must prepare ourselves for it. The IT has to step up to the challenge and embrace it with open arms. 
Zaius   OEM Dinosaurs   2/18/2013 9:10:42 PM
Re: Change management
Anytime when any transitions takes place, is a vulnerable time. And, at any given time, at least, there are more than one changes go on. There is time to rest and take a deep breathe in IT.
Page 1 / 2   >   >>

The blogs and comments posted on EnterpriseEfficiency.com do not reflect the views of TechWeb, EnterpriseEfficiency.com, or its sponsors. EnterpriseEfficiency.com, TechWeb, and its sponsors do not assume responsibility for any comments, claims, or opinions made by authors and bloggers. They are no substitute for your own research and should not be relied upon for trading or any other purpose.

More Blogs from Curtis Franklin Jr.
Curtis Franklin Jr.   5/30/2014   10 comments
A good community can teach you a lot. And Enterprise Efficiency has been one of the best.
Curtis Franklin Jr.   5/26/2014   41 comments
Today is Memorial Day in the US, a day for remembering those who gave, in the words of Abraham Lincoln, "the last full measure of devotion" for their country and its citizens. It is a ...
Curtis Franklin Jr.   5/22/2014   35 comments
You're about to know precisely where your customers are and what they're doing. Are you ready for Big Data Advertising Everywhere?
Curtis Franklin Jr.   5/6/2014   19 comments
PHP is a great tool for building web pages that access databases. It's pretty nifty for pwning an enterprise site, too.
Curtis Franklin Jr.   4/30/2014   36 comments
BASIC turns 50 this year. Many IT pros wrote their first line of code in the venerable language, but is the ability to write code even important at the top of the IT ladder?
E2 IT Migration Zones
IT Migration Zone - UK
Why PowerShell Is Important
Reduce the Windows 8 Footprint for VDI
Rethinking Storage Management
IT Migration Zone - FR
SQL Server : 240 To de mémoire flash pour votre data warehouse
Quand Office vient booster les revenus Cloud et Android de Microsoft
Windows Phone : Nokia veut davantage d'applications (et les utilisateurs aussi)
IT Migration Zone - DE
Cloud Computing: Warum Unternehmen trotz NSA auf die „private“ Wolke setzen sollten
Cloud Computing bleibt Wachstumsmarkt – Windows Azure ist Vorreiter
Like Us on Facebook
Twitter Feed
Enterprise Efficiency Twitter Feed
Site Moderators Wanted
Enterprise Efficiency is looking for engaged readers to moderate the message boards on this site. Engage in high-IQ conversations with IT industry leaders; earn kudos and perks. Interested? E-mail:
A Video Case Study – Translational Genomics Research Institute
e2 OEM Video

On the Case
TGen IT: Where We're Going Next

7|11|12   |   08:12   |   10 comments

Now that TGen has broken new ground in genomic research by using Dell's storage, cloud, and high-performance computing solutions, the company discusses what will come next for it and for personalized medicine.
On the Case
Better Care Through Better Communications

6|6|12   |   02:24   |   11 comments

The achievements of the TGen/Dell project could improve how all people receive healthcare, because they are creating ways to improve end-to-end communication of medical data.
On the Case
TGen IT: Where We Are Now

5|15|12   |   06:58   |   6 comments

TGen is breaking new ground in genomic research by using Dell's storage, cloud, and high-performance computing solutions.
On the Case
TGen IT: Where We Were

4|27|12   |   06:45   |   10 comments

The Translational Genomics Research Institute wanted to save lives, but its efforts were hobbled by immense computing challenges related to collecting, processing, sharing, and storing enormous amounts of data.
On the Case
1,200% Faster

4|18|12   |   02:27   |   12 comments

Through their partnership, Dell and TGen have increased the speed of TGen’s medical research by 1,200 percent.
On the Case
IT May Improve Children's Chances of Survival

4|17|12   |   02:12   |   8 comments

IT is helping medical researchers reach breakthroughs in a way and pace never seen before.
On the Case
Medical Advances in the Cloud

4|10|12   |   1:25   |   5 comments

TGen and Dell are pushing the boundaries of computing, and harnessing the power of the cloud to improve healthcare.
On the Case
TGen: Living the Mission

4|9|12   |   2:25   |   3 comments

TGen's CIO puts the organizational mission at the heart of everything the IT staff does.
On the Case
TGen Speeding Up Biomedical Research to Save More Lives

4|5|12   |   1:59   |   6 comments

The Translational Genomics Research Institute is revamping its computing to improve speed, storage, and collaboration – and, most importantly, to save lives.
On the Case
Computing Power Helping to Save Children's Lives

3|28|12   |   2:13   |   3 comments

The Translational Genomics Institute’s partnership with Dell is enabling them to treat kids with neuroblastoma more quickly and save more lives.
Curtis Franklin Jr.
OEMs Change Roles

1|18|13   |   1:55   |   3 comments

OEMs can change markets – here's why IT should have a say in the decision.
Tom Nolle
The Enterprise Side of Amazon Fire

9|29|11   |   2:04   |   6 comments

Amazon Fire’s split-browser model hosts some of the GUI in the cloud, which could have a major impact on virtual desktop thinking.
Curtis Franklin Jr.
The OEM Relationship

9|13|11   |   02:02   |   1 comment

The growth of OEM relationships means that enterprise IT execs must pay closer attention to who's responsible for support and development.
Pablo Valerio
Can't Land on the Runway Behind You

8|15|11   |   1:36   |   1 comment

One lesson from aviation also applies to big IT projects: Give yourself plenty of leeway and have room to maneuver.
Ivan Schneider
Flecksequence Explained

7|28|11   |   2:46   |   3 comments

How to use the term in a sentence and, more importantly, how flecksequence can help manufacturers.
Sara Peters
E2 Has a New Look!

7|20|11   |   2:53   |   6 comments

E2's gotten a makeover. Take a tour through some of our new features.