.......a journey called life

Last week, I read a Mckinsey Quarterly article "Unbundling the Corporation". It talks about the competing commitments which three kinds of businesses : a customer relationship business, a product innovation business, and an infrastructure business generates. The role of a customer relationship business, for example, is to find customers and build relationships with them. The role of a product innovation business is to conceive of attractive new products and services and to figure out how best to bring them to market. The role of an infrastructure business is different again: to build and manage facilities for high-volume, repetitive operational tasks such as logistics and storage, manufacturing, and communications.

When the three businesses are bundled into a single corporation, their divergent economic and cultural imperatives inevitably conflict. Scope, speed, and scale can’t be optimized simultaneously; trade-offs must be made. Sooner or later, companies come up against a cold fact: the economics governing the three core processes conflict. Bundling them into a single corporation inevitably forces management to compromise the performance of each process in ways that no amount of reengineering can overcome.

This week, I read two things:

1) The email from Michael Dell and Executive Leadership Team to the Dell Employees: One part of the email especially caught my eyes: "Throughout our history, we have worked as a team - as One Dell - and we have made quality PCs affordable. Now Dell plans to make information technology affordable for millions of customers around the world. We will do this by simplifying IT where others perpetuate complexity and innovating beyond harware into solutions."

2) An FT Article, "Hewlett-Packard comes back fighting": "HP hopes to build on its position as a leading provider of the systems management software that helps optimize the performance of big corporate IT systems. Long an obscure technology confined to data centers, the need to manage and secure the flow of digital information all the way to an individual user's PC or BlackBerry is set to become a software market as important as the business applications market dominated by SAP and Oracle", Mr Hurd argues.


From what I understand from these two statements coming from none other than men on the top of Dell and HP, they are looking beyond hardware. What is puzzling though is which way are they headed. It is clear that such software businesses have huge economy of scope & scale and consolidation would leave only bigger fish intact. But if Mr Hurd is to be believed with his prediction, are HP and Dell preparing themselves for the new SAP-Oracle fight? Well, in that case, who will supply our computers? If they plan to do both this and that, what would happen to the unbundling efforts and need so well explained by the Mckinsey Quarterly article?