back to article Industry vet Khosla kicks Dell-EMC in the innovation crotch

Billionaire, venture capitalist guru and Sun Microsystems co-founder Vinod Khosla thinks the merged Dell-EMC will result in a rusty innovation pipeline. Unsurprisingly, EMC CTO John Roese says Khosla's all wrong. Khosla passed his judgement during an interview at a Structure Conference in San Francisco last month. The $67bn …

  1. a_yank_lurker Silver badge

    Innovation is...

    Innovation is playing to win by taking risks while most companies are playing not to lose.

  2. Cloud, what..... Sorry... Um... - you just made that up.

    Innovation is purchased

    Load of old Tosh. The small new companies innovate and the older larger ones buy them.

    Think :

    Equallogic

    Complellent

    Lefthand

    3Par

    Those larger publicly traded companies almost never innovate as that would mean RandD dollars rather than share holder cash.

    They then

    1. MityDK

      Re: Innovation is purchased

      Some more acquisitions that turned into multi billion dollar LOBs post acquisition.

      VMWare

      XtremIO

      Data General

      Kalpana

      and a new one,

      Solidfire.

      Large companies buy, integrate distribute and support with incremental improvements on existing tech.

      Small companies, startups, innovate and create--and take all the risk for failure with investor capital. I think it's a good model that works pretty well all in all.

  3. joemama

    Dell Has a History of Being Stagnant

    This article is a bit difficult to follow. Of course the purchase of EMC by Dell will create stagnation and a lack of innovation. That is what Dell has always been about per their acquisition strategy. Acquire, gut, commoditize, and then promote as being superior and at lower prices. The EMC/VMware duopoly was a beautiful creation, and not one that Dell has even come close to achieving. I give credit where credit is due. Dell makes things cheaper, and sometimes good enough. EMC created an entire universe of high profit margin sales and they innovated to a level to where they spun out a major innovator in VMware.

    Dell's track record is the opposite. With this huge megalith, it will definitely squash competition at the startup level where innovation DEFINITIVELY does and has been occurring for decades.

    This deal is good news for Michael Dell and a handful of others. It's generally bad for the planet. Especially for those that care about enterprise quality and performance.

  4. Anonymous Coward
    Anonymous Coward

    Propagating a False Thesis Again & Not Checking the Facts

    Interesting how the Media keeps propagating a false thesis without checking the facts.

    Nearly every El Reg article and most of the financial and tech media continue to talk about Dell's MASSIVE DEBT BURDEN.

    But compare bond debt of a private company to the expense a publicly traded company incurs.

    A publicly traded company's profit incurs up to a 40% corporate federal tax, various state taxes, stockholder dividend payouts, along with stock buybacks.

    A private company financed with bonds gets a tax deduction for bond interest, and depending on organization can avoid profit tax at the corporate level, and doesn't have to do stock buybacks.

    Perhaps before calling something a massive debt burden, it would be fairer to compare the cost of financing and tax advantage to: taxes, dividends and stock buyback programs. Knowing that would be interesting reporting, and would highlight the perversity of the US tax system that really hinders innovation.

    1. Anonymous Coward
      Anonymous Coward

      Re: Propagating a False Thesis Again & Not Checking the Facts

      "would be fairer to compare the cost of financing and tax advantage to: taxes, dividends and stock buyback programs"

      Go on then edumacate us, give us the facts and figures so we can compare......

      1. Anonymous Coward
        Anonymous Coward

        Re: Propagating a False Thesis Again & Not Checking the Facts

        @AC my points were that El Reg has reported several times that Dell will incur a massive debt burden without identifying any details or how they arrived at the conclusion. I believe it was Ms. Whitman who made the statement first as a FUD ball and now it gets repeated over and over again as gospel. Seems like lazy reporting to repeat a competitor's FUD. As far as educating you, I have no inside knowledge to ID the details.

        2nd point is that America's tax system puts its public companies [organized as C-Corps] at a competitive disadvantage against other companies in the world economy. The US has the highest corporate tax rate in the world. To escape the crazy system, several once US firms merged with non-US ones and reincorporated elsewhere; AON did it with a Brit firm; other variations to beat the taxman include Accenture re-incorporating in the Bahamas, and recently GE announced it was moving it's headquarters out of Connecticut in favor of a lower tax climate in Massachusetts.

        Related point is that a private company that pays off bondholders by a tax deduction of interest; and if there were no interest payments to make, the money would be a profit to be taxed, whereas a public company that pays dividends from profits has to first pay tax on the profit, and then the receiver of the dividend pays tax again. A dividend or interest feels the same in the pocket. Just seems perverse, and not a fair treatment for the other players in the system.

        I posit that Mr. Dell may be a genius who has figured out how to take a massive entity private and escape the taxman along the way.

  5. Anonymous Coward
    Anonymous Coward

    "Innovation" does not equal "Forced at gunpoint by Wall Street to spend money buying startups that pretend to have a solution to a problem that Wall Street insists that publicly traded companies must address".

    Ponzi schemes are not an innovation.

  6. Magellan

    The law of big numbers

    Dell/EMC will have very large revenue dollar numbers, and very large gross profit dollar numbers. They can take a small slice of those dollars and direct them at R&D, and that small slice will dwarf any start-up's venture funding.

    The question is not IF Dell/EMC will spend on R&D, it is HOW it will spend. Spending on maintaining existing code and hardware, spending on iterating existing code and hardware, spending on generating new code and hardware, all must be done, but in what mix?

    EMC has some good technology, much of it derived from its own and acquired technology. EMC seems to do best by purchasing a nascent product, and adding considerable product development to it. XtremIO today is a very different product than the original version EMC acquired. Yotta Yotta's technology found its way into VPLEX.

    Yes, there is fair concern looking at Dell, especially in Dell's enterprise offering, and being concerned. But if all of Dell's data center business is put under EMC's management, it might actually improve the Dell product side of the line card.

    1. Anonymous Coward
      Anonymous Coward

      Re: The law of big numbers

      @Magellan, interesting thought on Dell Enterprise hardware improving under EMC's leadership. Having spent time in the comercial software world, EMC, and NetApps, I can say one thing about EMC compared to the others; and that is that Tucci has an almost manical focus on quality. Hopefully David Goulden would continue the same.

  7. MojoRizin

    An Innovation Expert from Sun?

    I have no horse in this race, but the ex-founder of Sun Microsystems has no credibility when it comes to innovation - Sun(set) rode their lack of innovation right out of the market! Please...

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