Greg Knieriemen

Hitachi is on a different path

Blog Post created by Greg Knieriemen on Oct 13, 2015

smart-city.jpgNo one who has been following the enterprise tech industry for the last few years should be surprised that the largest tech companies are experiencing the very same challenges and transitions that users of enterprise technology are going through. It has been clear for awhile that EMC was going to have to go through some changes as a result of internal and external pressures but I don't think anyone thought Dell could put together a bid to acquire them. I’m still not certain that Dell will be the only suitor for EMC and I wouldn’t be shocked if one or two other tech companies or private equity firms jumped into the mix.

 

Dell’s bid for EMC is simply the most recent reflection of the changes the whole industry is experiencing. HP has been going through a very public split between its consumer and enterprise divisions. A few years ago IBM shed itself of its x86 server business while Cisco dumped much of its consumer business. The Economist has called the EMC deal and these transitions “emblematic of a divide running through the IT sector”.

 

Conversely, IDC is forecasting that cloud infrastructure spending will grow by 26.4% this year (16.8% for Private Cloud and 32.2% for Public Cloud) while non-cloud IT infrastructure will decline by 1.4%. The change in traditional enterprise technology has never been more obvious.

 

Hitachi is not immune to these transitions, although we do benefit from a different business model than the traditional IT infrastructure players. With our global legacy in energy, healthcare, rail systems, urban planning and industrial products, our transition has gone down a different path.

 

At Hitachi, we’ve embarked on an aggressive strategy to capitalize on our deep industrial heritage in some of the most critical areas where technology can be most impactful, what we call the Internet of Things That Matter. Whether it is searching for safer and more effective cancer treatments with the Hitachi Proton Beam Therapy System, building water treatment systems where natural water supply is limited, or supporting high speed rail systems in the UK, we are innovating differently than the traditional IT infrastructure vendors.

 

We’re accelerating our Social Innovation strategy through recent acquisitions that extend our IoT lead, with the collection and acquisition of data that drive intelligent decision engines. In February we acquired Pentaho delivering open source software for Big Data analytics that is redefining how businesses build intelligent information systems. Next we acquired oXya which hosts over 200,000 SAP users around the world driving critical business insights. Finally, late last year we also acquired Pantascene, which is revolutionizing public safety through next generation analytics. Just last week, the Wall Street Journal touted our public safety technology as it relates to mass shootings in the United States:

 

The project, called Hitachi Visualization Predictive Crime Analytics, culls crime records, map and transit data, weather reports, social media and other sources for patterns that might otherwise go unnoticed…

 

While some might lament that the Dell acquisition of EMC signifies the decline of traditional IT companies, we have been fortunate not to be included in that club. We are on a different path and it’s not just about acquisitions, it’s also about investing in research and development. Hitachi has nearly 2x as many patent applications as IBM and 2x as many as Oracle and Microsoft combined in critical Big Data technology categories.

 

While we will still compete with Dell, EMC, IBM and HP in some areas, our true competitors now look more like GE.

 

In the last week I can’t count how many times I’ve mentioned that these are interesting days for IT and we should expect many more changes and disruptions. But these changes and disruptions don’t all look the same. For some companies, this will mean consolidation. For others, it will mean divesting. And for a few, like Hitachi, it means evolving and accelerating our innovation across our entire portfolio.

 

Interesting times indeed.

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