EMC’s Innovation Steward: CTO Jeff Nick Talks Company Strategy Amid Soaring Profits, Rumors of Big Acquisition

10/21/10Follow @gthuang

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touch points to look at the market as a whole and where it’s trending,” he says, pointing out that EMC is on the lookout for “consolidation opportunities” and “new adjacencies to grow into and new areas of integration of our existing capabilities.” Interestingly, Nick also says, “We meet regularly with venture capitalists and talk to companies that manage the incubation of companies.”

All of that feeds into EMC’s evaluation of companies it might form partnerships with—and eventually acquire, if things get that far. “When you’re a whale you’ve got to eat a lot of fish to make a meal,” Nick says. “From an EMC corporation perspective, we like to see the growth and maturity of startups to something more substantial and proven in order to get it onto our typical radar screen. But the place to tie it back to brand new startups, that’s where we’re leveraging our R&D and university collaborations.”

So one persistent question is, how does the company weigh doing mergers and acquisitions versus innovating organically from within? Nick calls it a “continuing balance.” For example, he says, EMC would look to acquire a company if it could help establish a front in a new market quickly, versus taking a longer time to build out a product internally. “If we’re playing in a growing space, we tend to do that more through investment with more than one company, to seed the landscape…and have an aperture on the growth of the market,” he says. “But let’s not forget the importance of strategic partnerships where we may have gaps, but we don’t need to own a control point.”

Lastly, I asked Nick to compare and contrast the cultures of EMC and IBM, his previous longtime employer (which has been on a buying spree in Massachusetts as of late). He ended up bringing the discussion back to EMC’s evolving R&D model. IBM is a much bigger company, Nick says, with a long history of doing pure research in fields as diverse as materials science and electromagnetics. “That’s certainly not what EMC does,” he says. “We are an applied technology company. Innovation to us is not through traditional pure research lines. What’s interesting is, I think IBM and other well-established firms in our market have also been adopting the [Web 2.0 research] model more and more.”

Nick is biased, of course, but he thinks this model is better at “capturing the more elemental nature of innovation, being able to put a lens on that, and bringing [ideas] forward,” which is more crucial in the “much more fluidly dynamic world today than it was in the past.” We’ll be watching to see how well all of this pays off in the future.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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