EMC’s Big Innovation Day

10/19/07Follow @bbuderi

Innovation sure is a big deal at EMC. At least it was on Tuesday, when I drove some 45 minutes southwest from Boston to Franklin, MA, for the opening day of EMC’s inaugural Innovation Conference. The lot was full (this was Franklin), forcing me back across the road to park, and inside some 400 EMC employees, many from as far away as Shanghai, Sao Paolo, Bangalore, and St. Petersburg, Russia, had jammed into a big conference room for the event.

The two-day summit sought to set the stage for a new innovation push at Hopkinton, MA-based EMC (NYSE: EMC)—in short, the aim was to make innovation big every day. Partly to that end, the company had solicited its 33,000 employees for ideas for new inventions and business concepts. All told, more than 400 proposals had poured in from 25 countries. Judges had culled that down to 31 semi-finalists, who were also in attendance. (I was the only journalist there.)

The event underscored the fact that EMC considers itself at a crucial juncture. It’s a world leader in storage and information management, expecting close to $13 billion in revenues this year, and it didn’t get to that position without having some great products that embody lots of innovations. But as Mark Lewis, president of EMC’s Content Management and Archiving Division, said in his conference keynote, the innovation landscape had changed dramatically for companies like EMC in recent years. It used to be, he said, that big corporations had the advantage over smaller companies and entrepreneurs because they were organized for R&D. Now, Lewis said, given the Internet, the global nature of competition, social networking, mashups, and more, it’s not unusual to find “the edge out-innovating the core.” As a result, he said, “we not only have to compete with companies, now we have to compete with non-companies.”

Doing that successfully, he said, will take even more internal innovation. And despite its successes, the company is hardly known for innovation in the way, say, its top corporate competitor, IBM, is. In fact, EMC is probably better known for its acquisitions, which include RSA Security, Documentum, VMware, and, most recently, online backup service Mozy (which I wrote about on Wednesday, drawing on what I learned at the summit). But this was almost the anti-acquisition meeting.

Lewis said that while acquisition would remain a key tool for EMC, he worried that unless the company produced a steady stream of home-grown innovations, some of them disruptive ideas that even threaten the core business, it would not be able to maintain its leadership position for years to come. “The overarching objective,” he told the crowd, “is to establish a culture within EMC for innovation.” He then added, “If we fail to do this, then things are going to look good for a while, maybe better.” After all, he said, the company could maximize revenue and profitability in the near term “by not doing any of this.” But, Lewis warned, “When you’re climbing a cliff, the view is the nicest before you step over.”

Largely under Lewis’s stewardship—in his role as chief development officer before taking the Content Management and Archiving reins in September—the company has been quietly working for a year or longer on strengthening its internal innovation engine. I wrote about some aspects of this push in early August, when I profiled the new Technology Ventures Group, now 100-plus strong, which is tasked with incubating disruptive ideas from inside and outside the company. EMC has also created what it calls the EMC Innovation Network. This is essentially an umbrella group under which the company is expanding and organizing collaborative research with its own staff members, universities, and partner companies. Lewis called collaboration “the secret sauce for driving our innovative behavior forward.”

The Innovation Conference was about explaining all this in more detail to key staff members, who could then bring the push for innovation to the rank and file of EMC’s employees. And the high-level view of innovation was interesting—I’m always intrigued by the ways big companies seek to innovate. But also intriguing were the ideas employees had submitted. Execs said they expected 50 submissions to come in, but instead were deluged by 410 ideas. The 31 semi-finalists all set up posters that were displayed around the cafeteria, downstairs from the main conference room. After the first-day keynoters, the whole crowd moved down there for refreshments and conversations with the presenters.

I was free to roam around and peruse the posters on ideas in information security, using Web 2.0 technology for customer support, next generation portable computing devices, and even environmentally friendly data center cooling methods. The only restriction on my attendance was that I couldn’t go into much detail on any of these ideas, because they are proprietary. It probably didn’t matter too much, since—as an astute reader might have already detected—I didn’t understand the technical details anyway.

The next day, the prizes were announced—an unspecified combination of cash, internal recognition, and the chance for the projects to become real efforts that EMC would support. And the winner was…the Web 2.0 approach to customer support, which was advanced largely by members of EMC’s China development team.

Lewis stressed in his talk that EMC wasn’t just looking for new technologies, but also for new business models. Of course, it’s one thing for a company to announce that innovation is important. It’s another thing to put in place the infrastructure to harness it successfully. Officials said that creating that framework was a main point of the changes introduced over the last year, and that EMC is serious about increasing corporate-level investment in internal innovation, but it’s still early days.

The biggest challenge for EMC, Lewis said, is to provoke a cultural shift “toward the bias of not fearing change.”

Bob is Xconomy's founder and editor in chief. You can e-mail him at bbuderi@xconomy.com, call him at 617.500.5926. Follow @bbuderi

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