Dell, EMC, and Hewlett Packard Enterprise Face Challenges

November 18, 2015, 11:11 PM UTC
EMC CEO Joseph Tucci and Dell CEO Michael Dell.
EMC CEO Joseph Tucci and Dell CEO Michael Dell.
Photographs by Getty Images

Technology giants like Dell, EMC, and Hewlett Packard Enterprise are so busy with corporate restructurings that they may be falling behind companies like Amazon and Microsoft in selling and developing cutting-edge enterprise technologies.

That’s the view of Adrian Cockroft, a technical fellow with venture capital firm Battery Ventures, who said on Wednesday that many big legacy technology companies aren’t moving fast enough to compete in hot new technologies used in data centers. As a result, their growth is suffering.

Cockroft made his comments in San Francisco at the Structure business technology conference, with which Fortune is a media partner. He is a respected figure in the business technology world who once worked at Netflix, where he helped move the streaming video company’s infrastructure to Amazon Web Services, Amazon’s cloud-computing arm.

Cockroft aimed his comments at a handful of tech giants that are in the midst of huge change. Dell and EMC are working on a blockbuster merger while Hewlett Packard Enterprise (GOOG) is forging ahead as a newly independent company after splitting from its PC and printer sibling, HP, Inc. (HPQ).

The companies have lost focus on technology while they deal with the challenges of managing their sprawling business structures, Cockroft explained. He pointed to emerging technologies like containers, which let coders build software programs faster while cutting down on the cost of running data centers.

Meanwhile, Amazon, whose roots lie in e-commerce, is making major strides in its newer cloud-computing business. Cockroft referenced Amazon’s last quarterly earnings in which its cloud business grew over 80% to $1.8 billion from the $1 billion it brought in during the same period last year.

“I wouldn’t be surprised to see them grow more than 80%,” said Cockroft about Amazon’s future growth in cloud computing.

Of course, Cockroft may be biased considering he helped move Netflix to Amazon’s cloud infrastructure. But he also mentioned Microsoft, a senior citizen in business technology, as also growing quickly. The company’s cloud business unit―which contains the Azure cloud computing service, Windows Server operating system, and database services―took in $5.9 billion in sales in the company’s latest quarter. This was an 8% jump in sales from the $5.5 billion it brought in during the same period last year.

Both Microsoft (MSFT) and Amazon (AMZN) have been building data centers across the globe so they can more easily sell cloud-computing services overseas. The United Kingdom, India, and Korea are just some of the locations planned.

But Google, which also sells cloud-computing services, is not building data center facilities in these regions is instead choosing to build in “lower-cost” areas like North Carolina and Belgium.

“Google is basically not playing that game,” said Cockroft.

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