Bigger is better in the tech industry. Manhandling rivals and getting customers to spend more is easier for behemoth companies.
Or at least that’s the argument until business slows down and then, suddenly, CEOs praise the benefits of small. Being nimble, focused, and innovative is easier for slimmer companies, they say.
The latest tech executive to preach small is Meg Whitman, CEO of business technology giant Hewlett Packard Enterprise. This week, she announced that her struggling company would unload its software business in a nearly $9 billion deal with U.K. software developer Micro Focus.
Of course, HPE’s forerunner, Hewlett-Packard, had spent more than a decade and billions of dollars bulking itself up through acquisitions under a series of leaders who insisted that big was beautiful. Now, under Whitman, the company is on a diet that has also included offloading its tech services business earlier this year after splitting with its sister company, HP Inc.
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Will the machinations revive HPE? Who knows.
Dell Technologies, led by Michael Dell, is taking the polar opposite path from HPE. On Wednesday, it closed a $63 billion acquisition of business technology giant EMC that is intended to turn the combined companies into more of a one-stop shop for corporate customers.
I have no idea whether Dell’s plan will succeed either.
But what’s certain with both Dell and HPE—or any company in the big-small spin cycle—is that the armies of investment bankers and business consultants involved will cash in. Oh, and don’t forget the multimillion-dollar year-end bonuses for the executives who heed their advice.
