Channelnomics

EMC Begins Extended CEO Transition Process

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EMC Corp. is sending a strong signal to the channel and customers as it begins a long and thorough chief executive succession process: It’s business as usual and will remain so for the foreseeable future.

Yesterday, EMC reported to federal regulators that longtime CEO Joe Tucci would remain with the company through at least 2015. During that period, Tucci will turn over his managerial responsibilities to a to-be-named successor, and he will transition to solely serving as chairman of the board of directors.

Tucci’s retirement has been the subject of speculation for some time. Many industry observers believe Tucci would turn over the reins of the storage company to a new generation of leadership as his age advances and the marketplace changes. Reports earlier this year indicated Tucci was just months away from calling it a career.

The dynamics of the EMC hierarchy changed in July when one of the leading succession candidates, Pat Gelsinger, was moved to the CEO role at subsidiary VMware Inc. EMC had VMware chief Paul Maritz moved to the mother ship to oversee product development and cloud services strategies. And Tucci said he would stay at the helm through 2013.

“I’m will not overextend my welcome by any means, but as long as I’m enjoying it, providing value, they want me, the board wants me – I’m very energized so I’m not putting any firm end date in the sand,” he said in July.

The announced transition plans are a good thing for partners and customers who abhor disruptions to continuity and sudden changes in strategic direction. Hewlett-Packard Co., for instance, is looking to repair its tarnished reputation and regain partner loyalty following last year’s management meltdown that culminated with the firing of short-lived CEO Leo Apotheker. Symantec Corp. is going through a similar scenario with the sudden dismissal of longtime CEO Enrique Salem. In both cases, solution providers were taken aback by the suddenness of the executive removals and their long-term impact on market perceptions and channel operations. Even when there’s minimal change, the impact on confidence is enough to have partners seek alternative suppliers than can provide stability.

In contrast, EMC is clearly looking to maintain its stability as it continues to enjoy success expanding beyond its core storage legacy to broader ventures in cloud computing, virtualization, systems management and applications. Its ownership of VMware is a huge leg up on the rest of the market, but also contributing to its evolution are relationships with other companies such as Cisco Systems Inc. in private cloud and data center development and the recently announced server development alliance with Lenovo. A sudden change in leadership, EMC basically acknowledges, would be too disruptive.

EMC is not alone in launching an extended CEO search and transition. In June, CA Technologies announced a year-long effort to find and install a replacement for retiring CEO Bill McCracken. As with EMC, the intent is ensuring CA’s strategic direction remains whole and disruptions are kept to a minimum.

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