It didn’t take long for Yahoo’s Marissa Mayer to fall off her perch as Silicon Valley’s glamour-girl CEO and become the blogosphere’s piñata du jour. (In fact, I’ve beaten on that piñata myself.) Her real sin, though, wasn’t wasting billions of dollars on ill-conceived acquisitions or bungling the company’s mobile strategy or managing like a martinet -- it was that she simply couldn’t pivot.
Mayer is hardly alone in that failing. Hewlett-Packard Enterprise's Meg Whitman, Dell's Michael Dell, and Mozilla's Charles Roberts haven't been able to pivot, either, despite serious attempts to do so. And their companies all risk fading into irrelevancy.
True, it's easier for a nimble little startup to pivot -- Silicon Valley lingo for radically shifting a business plan or product focus -- but very hard for an established, multi-billion-dollar enterprise to pivot. Major technology innovations -- notably the cloud, the proliferation of powerful smartphones, and the availability of broadband -- have shifted the ground under all those companies so much that likely no CEO could keep his or her footing.
Apple and IBM are examples of companies that have successfully pivoted, and Microsoft seems to be doing so now, but that doesn't mean Yahoo, HP Enterprise, Dell, and Mozilla can.
Dell: Clobbered by the cloud
Perhaps because she's facing a similar existential threat (and split her company into two as a result), Hewlett-Packard Enterprise chairwoman Meg Whitman has a succinct analysis of exactly what’s wrong with the Dell-EMC merger: "They're getting bigger, leveraging up, and doubling down mostly on legacy technology," she said during HP’s last earnings call.
Big tech mega-mergers almost never work, and this one has unsettling echoes of the disastrous unions that started with Compaq’s acquisition of Digital Equipment and ended with Compaq’s sale to HP. Those mergers failed because they represented a doubling down on old technology -- and, worse, at a very high price.
Michael Dell is nothing like HP's self-aggrandizing Carly Fiorina, the architect of HP's disastrous Compaq merger, and I give Dell credit for taking his company private, an attempt to pivot away from the past. But Dell, his company, and EMC are competing with a trend they can neither join nor defeat: the cloud.
As Cade Metz pointed out in a scathing piece in Wired, Internet giants Google, Amazon.com, and Facebook built businesses so large that they couldn’t satisfy their computing and storage needs by buying commodity products from HP, Dell, and EMC or networking gear from Cisco. Instead, they built their own.
Amazon of course, realized it could rent out space and computing time on that hardware -- in what became Amazon Web Services, the behemoth public cloud today. And because bandwidth is cheap, working in the cloud makes nothing but sense. As a result, companies large and small stopped buying servers and storage space from Dell and EMC.
The decline of the PC is an oft-told tale, so what’s left for Dell/EMC aside from a mountain of brand-new debt? Not much.
Dell was never a technological innovator. It built, and still builds, commodity products. Its genius was in pioneering build-to-order and just-in-time manufacturing techniques and facilities. That got the company through three decades of change. But it won’t get Dell through a fourth.
Can Dell successfully pivot to something else? Maybe, but it first has to actually try.
Firefox: The enfant terrible is now a doddering relic
Back in the days when Internet Explorer was king of the Web, savvy surfers -- not to mention the legions of users who hated Microsoft -- couldn’t wait to find a better browser. Mozilla, a foundation dedicated to open source, stepped up and touched off a browser war that lasted for years.
Sure, there’s still some skirmishing, but the real fighting is long over -- because users simply don’t think much about their browser anymore. (And most have chosen Google's Chrome where they had a choice.) People don't think about their browser much because using it is almost like turning on a light switch: They don't care about the switch (the browser) but the light (the Web).
Even the Web is increasingly less important to users, because more and more online activity is conducted via apps and non-browser services like Google Now, Siri, and Cortana. That means the browser is less important.
Add to that bad overall trend the fact that Mozilla refused of years to deliver Firefox on iOS devices, where much of that online activity now occurs. With Safari the default on iOS and Chrome on Android, Mozilla's decision to withhold Firefox out of notions of open source purity almost guaranteed Firefox's long-term irrelevance. (Estimates of market share vary widely, but almost no one believes Firefox controls much more than about 10 percent of the browser market, no matter how many downloads Mozilla brags about.)
But Mozilla’s problem is more fundamental than Firefox’s plummeting market share. The foundation doesn’t know where to go next -- that is, what to pivot to.
Mozilla ended its entry into the smartphone race last week, saying it will stop offering Firefox OS phones through third parties. I wasn’t surprised. Competing with Android and iOS, which control almost all of that market, is a Sisyphean task that would take many times the resources of a Mozilla. Ask Microsoft how tough it is.
Meanwhile, Mozilla has decided to let go of Thunderbird, the long-in-the-tooth email client with roots going all the way back to Eudora.
I’ll ask the same questions I asked about Dell: What’s left? And where can it try to pivot?
Yahoo, HP Enterprise, Dell, and Mozilla may not be able to answer these questions. And their answers, if they have them, may not translate to success. But without answers, they're sure to fail.