Palestra EMC Gestão da Inovação

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Gestão da inovação para a 
competitividade empresarial
Estratégia de Aquisições
Descentralização da Inovação
Renato Machado Costa
29/03/2016
Mini CV – Renato Machado Costa
• Acadêmico
• Engenheiro Mecânico, EESC/USP (Universidade de São Paulo)
• Mestre e Doutorando em Administração de Empresas, FEA/USP
• Professor no Centro Universitário Senac e na IBS (International Business School)
• Orientador e professor assistente na FIA (Fundação Instituto de Administração)
• Pesquisador na FEA/USP, com publicações nacionais e internacionais, nas áreas de 
inovação, internacionalização, modelos de negócio e servitização.
• Profissional
• 8 anos em empresas de manufatura (Romi e Bosch)
• 22 anos em consultoria, gestão de projetos e desenvolvimento de negócios no setor de TI
• Parcerias com empresas multinacionais estrangeiras de software
• Responsável pela implantação de mais de 60 projetos de sistemas de TI, em grandes 
empresas de diversos segmentos: 
• Manufatura, Telecom, Óleo e Gás, Utilities, Siderurgia e Mineração, Farmacêutico, 
Financeiro e Seguros.
E-mail: rmcosta@usp.br
LinkedIn: http://br.linkedin.com/in/renatomcosta/
ResearchGate: https://www.researchgate.net/profile/Renato_Costa2
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Estratégias empresariais para inovação
• Estratégia de aquisição de empresas
• Descentralização do processo de inovação
• Estudo de caso apresentado no IAMOT 2011:
Strategy of company acquisition for technological innovation: Critical success factors 
and management practices to coordinate R&D.
Renato Costa, Marcos Bruno & Eduardo Vasconcellos.
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Research Questions
1- What are the key factors that must be considered, in order for 
the acquisition strategy to be successful in producing sustainable 
and competitive technological innovation?
2- What management practices are best suited for the integration 
of R&D units in companies which use this type of strategy?
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Reasons for selecting EMC
• Large U.S. multinational IT corporation
• Innovation is a high priority
• Company adopted the acquisition strategy 
to grow and to develop technological 
innovations, strengthening its competitive 
position
• Personal contacts 
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Case Study: EMC
• Founded 1979, Hopkinton, Boston area, MA
• Richard Egan (Intel) & Roger Marino (& Cunningham?)
• Memory boards for IBM mainframes - 1981
• NYSE: 1988 / Fortune 500: 1994 
• Factory in Cork (Ireland) – 1989
• Global leader in Storage – 1995
• Growing with profit
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50% of Prime’s
price
($ 36k per Mb) 
Year Revenue (US$) Net Income (US$) Net Income (%)
1992 386 M 30 M 7.7
1999 5 B 1 B 20
2011 20 B 2.46 B 12.3
2014 24.4 B 2.71 B 11.1
EMC at a glance
Video: The EMC Story (https://www.youtube.com/watch?v=KrUYTmJLA-E) 3’10”
Product categories
Industries
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EMC at a glance (2)
Platforms
Services
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Case Study: EMC
Acquisitions started in 2003
• US$ 17 billion invested in acquisitions
• More than 70 technology companies integrated
• Cumulative investment of US$ 20.4 billion in R&D in this period
• Nowadays: 86 countries and 60,000 people (40% outside US)
• Manufacturing facilities: USA, Ireland and Brazil
• R&D Centers: Brazil, China, France, India, Ireland, Israel, the 
Netherlands, Russia, Singapore, and the U.S.
• Revenue record in 2014: US$ 24.4 billion (almost half from outside US)
• Revenue growth: year average of 11.8% (2004-2014)
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Acquisitions strategy at EMC
• Market repositioning
• Only HW  HW + SW + Services
• New Corporate Message
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Video: How do you see EMC? 
(https://www.youtube.com/watch?v=_u5puOmfXtY) 1’30” 
Acquisitions strategy at EMC (cont,)
• More than 70 companies acquired
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Documentum (1,7 bi)
Legato (1.3 bi)
VMWare (625 mi)
Captiva (275 mi)
RSA Security (2.1 bi)
Avamar (165 mi)
Valyd Software (India)
X-Hive (Netherland)
Iomega (213 mi)
Data Domain (2.1 bi)
Isilon (2.25 bi)
Greenplum (400 mi)
NetWitness (500 mi)
Recent acquisitions – Cloud technology:
2014, Oct: Cloudscaling, Maginatics, Spanning
2015, Jul: Virtustream
R&D Expenditures at EMC
12Source: Reuters 
www.reuters.com
Item 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Total /
Average
Gross Revenues (US$ million) 8,229 9,664 11,155 13,230 14,876 14,026 17,015 20,008 21,714 23,222 24,440 177,579
Yearly Revenue Growth (%) - 17.4% 15.4% 18.6% 12.4% -5.7% 21.3% 17.6% 8.5% 6.9% 5.2% 11.8%
Investments in R&D (US$ million) 848 1,005 1,254 1,527 1,721 1,627 1,888 2,150 2,600 2,761 2,991 20,372
R&D (% of revenues) 10.3% 10.4% 11.2% 11.5% 11.6% 11.6% 11.1% 10.7% 12.0% 11.9% 12.2% 11.5%
Net Income (US$ million) 871 1,133 1,228 1,599 1,275 1,088 1,900 2,461 2,733 2,889 2,714 19,891
Net income (% of gross revenues) 10.6% 11.7% 11.0% 12.1% 8.6% 7.8% 11.2% 12.3% 12.6% 12.4% 11.1% 11.2%
Analysis of results - Research Question 1
What are the key factors that must be considered, in order 
for the acquisition strategy to be successful in producing 
sustainable and competitive technological innovation?
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Technological Innovation
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Increase Competitiveness and Growth
by hiring people and buying equipments
Increase Competitiveness and Growth
by Acquisition
+ Acquired company already has an operational
innovation system (faster start up)
+ Innovative products and patents might come along
+ Trained innovation team
+ It is possible to evaluate innovation effectiveness
+ Acquired company already has links with clients, 
partners and suppliers
- More difficult to adapt to EMC culture and processes
- Potential duplications with EMC activities, personnel 
and infrastructure
Successful Technological
Innovation
Value to clients
Value to other stakeholders
Sustainable
Relevant success factors in innovating through 
acquisitions
1- (a) Emphasizing the positive aspects of acquisition; and 
(b) Reducing the impact of the negative aspects
2- Selecting companies to acquire based upon the 
innovation strategy of the company (corporate strategy, 
products/services/markets, identification of technological gaps etc.)
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1- (a) Emphasizing the positive aspects of 
acquisitions
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Acquired company already has operational innovation system (faster start up)
Yes, R&D and Innovation systems were integrated to EMC innovation network
Innovative products and patents might come along
Yes, most companies had products and patents that were incorporated by EMC, 
expanding its offer portfolio
Trained innovation team
Yes, most companies had mature R&D operations, with trained integrated teams
It is possible to evaluate innovation effectiveness of the company to be 
acquired
This factor was not conclusive
Acquired company already has links with clients, partners and suppliers
Yes, most companies already had a mature operation, with established 
customers, partners and suppliers
1- (b) Reducing the impact of the negative aspects 
of acquisitions
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More difficult to adapt teams to EMC culture and processes
Yes, it was specially hard on companies with consolidated markets, like 
VMWare, Documentum and RSA Security
 EMC’s culture introduced gradually
 However, in some cases, acquired companies cultures and processes 
brought contributions to EMC (diversity was positive )
Potential duplications with EMC activities, personnel and infrastructure
It was not possible to conclude
2- Select companies to acquire based on the 
innovation strategy of EMC
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Segment Company Location
Storage
Astrum Software Boston (MA)
Kashya San Jose (MA), R&D in Israel
FastScale Technology Santa Clara (CA)
Kazeon Systems Moutain View (CA)
Isilon Seattle (WA)
Backup 
and 
recovery
Data Domain Santa Clara (CA)
BerkeleyData Systems Utah
Dantz Development Co. Walnut Creek (CA)
NearTek Westborough (MA)
Legato Systems Mountain View (CA)
Security
RSA Security Bedford (MA)
Network Intelligence Westwood (MA)
Avamar Technologies Irvine (CA)
Valyd Software Hyderabad (India)
Verid Florida
Tablus San Mateo (CA)
Virtualization
VMWare Palo Alto (CA)
Rainfinity San Jose (CA)
Outside 
MA / CA
Outside 
USA
2- Select companies to acquire based on the 
innovation strategy of EMC (cont.)
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Segment Company Location
Infrastructure 
Management
SMARTS (Sys. Mgmt Arts) New York
nLayers San Jose (MA), R&D in Israel
Voyence Richardson (TX)
IT Services
Internosis Greenbelt (MD)
Interlink Group Englewood (CO)
Geniant Dallas (TX)
BusinessEdge Solutions New Jersey
Infra Corporation Sydnei (Australia)
Conchango London (UK)
Consumer
PI Corporation Seattle (WA)
Iomega San Diego (CA)
ECM, BPM
Software and
Services
Documentum Pleasanton (CA)
Acartus Fort Collins (CO)
Captiva Software San Diego (CA)
Authentica Lexington (MA)
ProActivity Sw. Solutions Newton (MA), R&D in Israel
X-Hive Netherland
Document Sciences Carlsbad (CA)
Outside
MA / CA
Outside 
USA
Analysis of results - Research Question 2
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What management practices are best suited 
for the integration of R&D units in 
companies that use this type of strategy?
Analysis of results
• First 25 years  R&D and Innovation was centralized 
• Global products strategy
• Initially R&D concentrated only at main office in Hopkinton, MA
• After 2003 included Silicon Valley, CA
• World centers of Technology Excellence, acquisitions were all close
• USA concentrated the Storage markets
• 54% of revenue still comes from US market
• Since 2005  dispersion of R&D and innovation
• Fast diversification of products and market segments
• New emerging technologies centers (US and abroad)
• Acquisition of companies with mature R&D facilities in other places
• Integration of the new centers to the global innovation network
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EMC Globalization
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Source: Innovation at EMC around the world (EMC 2008 Annual Overview)
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R&D Decentralization
creates a strong need to 
Integrate and Coordinate !
R&D internationalization of technology-based 
companies (1994-1997)
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Gassmann; Zedtwitz (1998).
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3M Decentralized R&D units
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Brazil
China
India
Japan
Germany, 
France, UK
Poland
Russia
Korea
Singapore
USA
3M R&D Decentralization
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Brazil
China
India
Japan
Germany, 
France, UK
Poland Russia
Korea
Singapore
Coordination theory
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Coordination
Luís F. A. Guedes
“The act of managing interdependencies between activities 
performed to achieve a goal.” (MALONE and CROWSTON, 1990; p. 6)
IntegrationSimultaneity Resource sharing Precedence
 
 
Four main types of coordination among activities
Critical Coordination Dimensions
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Strategy
Structure
COORDINATION
PROCESSES
INFRASTRUCTURE
CULTURE
AND
BEHAVIOR
Management Practices to Coordinate 
Decentralized R&D units at EMC (1/2)
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Staff 
Meeting
Executive forum, quarterly, CTO participation
Discuss acquisition issues, try to avoid duplication
Evaluate complementarities of companies with EMC
Innovation 
Network
“Expand knowledge locally; transfer it globally”
Extend EMC knowledge in advanced technologies
Transfer knowledge to product development teams
Beijing, Shangai, Santa Clara, Seattle, Cambridge, Hopkinton 
Strong CTO 
(Senior VP)
Monitor technology evolution, evaluate trends
Define directions, align with EMC strategy
EMC 
Community 
Network 
(ECN)
Empowering customers and partners, link with EMC 
employees
40 communities, 81,000+ members, 84% customers/partners
Stakeholders together to solve problems, share perspectives, 
co-innovate, and connect
John Roese
(2012-)
(former Huawei)
Jeff Nick
(2004-2012)
(former IBM)
Management Practices to Coordinate 
Decentralized R&D units at EMC (2/2)
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Customer 
Business 
Review
Customer feedbacks, half-day meetings with EMC Executives
Information sent to CTO that distributes R&D portfolios
Helps to prioritize innovation projects and technologies
Regional 
Excellence 
Centers
China, Egypt, Ireland, India, Israel, Russia, N. Carolina, Utah.
Each center in charge of a set of technologies and products
CTO keeps na integrated global R&D and Innovation plan
Innovation 
Conference
Focal point for innovation virtual communities
Prize for best ideas, participation onsite or videoconference
26 business units, 5,200 proposals, 32 countries, 10,000 people
In 8 years 17,533 creative ideas in EMC innovation pipeline
ICT 
Technologies
Virtual communities, social media, tele and videoconference
Technologies are employed in all managerial practices at EMC
Help to integrate disperse R&D teams of acquired companies
EMC India
Excellence Center 
EMC Innovation Conference 2014
16 locations
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2014 
Innovation
Conference
Locations
Number of Ideas
33
EMC Innovation Conference 2014
Video: 2014 Innovation Conference: Redefine Breaktrough (até 2’30”) https://youtu.be/fvKT1ovVYIQ
Mobile Edition  https://community.emc.com/docs/DOC-40495
Key Factors for the acquisition strategy to 
support technological innovations (1 of 2) 
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Key Factors Strategy Adopted 
Management 
Instrument 
Implemented 
Result Obtained References 
Definition of 
Technological 
Gaps 
Closer contact with 
clients and 
emerging-technology 
production centers 
CTO, Customer 
Business Review, 
Regional Excellence 
Centers, Academic 
Alliance 
Greater coverage of 
the portfolio, 
successful 
innovations, great 
complementarity 
with acquired 
companies 
Laamanen & 
Autio (2000), 
Rothwell (1983) 
Identification of 
Acquisition 
Opportunities 
Executive discussion 
forum (Staff 
Meeting), with 
participation of the 
CTO, direct channels 
to indicate 
opportunities 
Staff Meeting, 
establishment of ad-
hoc groups in specific 
cases 
Greater corporate 
coherence, assertive 
choices, successful 
innovations 
Sanchez (1997), 
Christensen & 
Foss (1996) 
R&D 
Organization 
and 
Coordination 
Decentralization and 
internationalization 
from 2005 onwards 
Strong and active 
CTO, who coordinates 
Innovation; 
partnerships and 
incentives 
Greater utilization 
of the innovation 
capacity of acquired 
companies 
Prahalad & Doz 
(1987), Frederick 
& Vasconcellos 
(2008), 
Chiesa (1996) 
 
Key Factors for the acquisition strategy to 
support technological innovations (2 of 2) 
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Key Factors 
Strategy 
Adopted 
Management 
Instrument 
Implemented 
Result Obtained References 
Integration of 
Acquired 
Companies 
Utilization of 
mature R&D 
facilities 
Virtual communities, 
teleconferencing, 
social media 
Fast integration of 
acquired companies 
into R&D network 
- 
Knowledge 
Management 
Modern IT tools, 
coordination 
conducted by CTO 
CTO, Innovation 
Network, Community 
Network, Innovation 
Conference 
Efficient process of 
creation, absorption 
and sharing of 
knowledge produced 
- 
Cooperation for 
Innovation 
Coordinated Global 
Network of 
Innovation, open 
innovation, 
partnerships with 
universities and 
research centers 
Geographically 
dispersed virtual 
teams; use of IT tools, 
regional excellence 
centers 
Fastimplementation, 
radical innovations, 
accelerated 
diversification of the 
portfolio 
Chesbrough 
(2003; 2006), 
Chiesa (1996), 
Vasconcellos et al 
(2009), 
 
Final Remarks
• High technology companies, global context
• R&D and innovation strategies and decisions: complex, dynamic
• Acquisitions of technology-based innovative companies
• Trend in IT segment
• Essential for EMC to grow and expand its portfolio
• Leverage radical innovations, in new technology fields
• Gradual geographical dispersion, better coordination
• Collaboration and knowledge management, “virtual teams”
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EMC acquisition by Dell (1/2)
http://fortune.com/2016/02/29/eu-clears-dells-blockbuster-emc-acquisition/
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EMC acquisition by Dell (2/2)
http://www.betaboston.com/news/2016/03/01/emc-dell-identify-top-leaders-of-combined-company-as-deal-moves-ahead/
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Recent news about EMC acquisition
• Two big risks could torpedo Dell-EMC deal
• http://www.theregister.co.uk/2016/01/21/two_big_risk_torpedoes_could_screw_dellemc_deal/
• Dell struggles to raise $45bn to complete EMC acquisition
• http://www.theinquirer.net/inquirer/news/2446920/dell-struggles-to-raise-usd45bn-to-complete-emc-
acquisition
• Mergers: Commission clears acquisition of EMC by Dell
• http://europa.eu/rapid/press-release_IP-16-444_en.htm
• Dell-EMC Lays Out Its Future Braintrust
• http://fortune.com/2016/03/01/dell-emc-braintrust-of-the-future/
• EMC, Dell identify top leaders of combined company as deal moves ahead
• http://www.betaboston.com/news/2016/03/01/emc-dell-identify-top-leaders-of-combined-company-as-deal-
moves-ahead/
• Meg Whitman Says EMC-Dell Merger Is Good for HP Enterprise
• http://fortune.com/2016/03/04/emc-dell-is-good-for-hpe-says-whitman/
• EU Clears Dell's Blockbuster EMC Acquisition
• http://fortune.com/2016/02/29/eu-clears-dells-blockbuster-emc-acquisition/
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Muito Obrigado!
Renato Machado Costa | rmcosta@usp,br
http://br.linkedin.com/in/renatomcosta/
https://www.researchgate.net/profile/Renato_Costa2