Published: June 27th, 2016

LAS VEGAS – Mark Leslie took the stage on the last day of the Nutanix .Next Conference to talk about the Arc of a Company Life. As a company Nutanix is just in its infancy as a decade old vendor and many of its channel partners – those in the main 40 – are also born-in-the-cloud solution providers.

Leslie has spent 50 years of his illustrious career in the high tech field. He joined IBM in 1966 and worked his way up the ladder to become the CEO of Veritas Software (the first Veritas).

To give you some perspective 1966 was the year before Canada celebrated its 100 year anniversary as a country. In his speech Leslie said sometimes companies endure and some don’t. The question is how does someone build a company that can sustain itself over a lifetime?

At the Nutanix event, Leslie, now Lecturer at the Stanford Graduate School of Business, outline the five stages of the company arc. They are:

  • Start-Up;
  • Growth phase;
  • Peak;
  • Decline; and
  • Ultimately death.

ArcLife2Across all five stages there is one common factor and that is time.

Leslie said that time is a contributing factor as some die in the early stages, while some last more than 100 years. Take for example the tobacco companies their decline began because of politics (voters demanded a ban on cigarette smoking).

Others such as Kodak, which lasted well over 100 years, missed popular trends in digital and mobility. “Do you remember the kiosks everywhere? Kodak figured out digital photography 30 years before it became a trend. They held all the patents and still died. Polaroid’s calling card was instant photography and they still died because of digital.”

Sustaining a company for a lifetime requires some sort of business transformation, Leslie told the audience at the .Next Conference. That transformation can be strategic and it can be risky.

Take for example Nokia. Nokia has transformed itself several times. They initially started-out as a paper mill in Finland back in 1871. Then they transformed themselves during the automobile craze into a rubber making business. Nokia started making tires for cars. And, then they went into telecom. Prior to their current decline Nokia dominated the mobile cell phone business. “This company has a deeply embedded culture of transformation and I would keep an eye on them,” Leslie said.

He added that companies today should create a business transformation strategy. Oracle is a high-tech example of a vendor with a business transformation strategy in place. Oracle started as a software development company. Then they did relational databases. Oracle then developed apps. After vanquishing its competition they did client server and declared war on SAP, PeopleSoft and Siebel.

“It was an extraordinary thing to do. And, risky! Oh and they won. The hostile takeover of PeopleSoft was a first for Silicon Valley. Before that they never bought anything,” he said.

According to Leslie, Oracle took an important step in the growth phase of its arc by transforming itself with apps. This was a risky move and upset companies such as SAP, PeopleSoft and Siebel which considered themselves alliance partners of Oracle. But the move helped Oracle create better sustainability as it began to reach the peak stage.

After PeopleSoft, Oracle acquired Sun Microsystems and began to drive cloud solutions. “They did five transformations and kept relevant, while Sun too transformed into a software company, but missed their opportunity which would have made Linux irrelevant.”

The company arc of Amazon is another recent example of a business that is transforming at a rapid pace. Amazon started as a book dealer. They moved to produce the Kindle and then the Kindle Fire tablet and now they have Amazon Web Services.

In his own experience with Veritas, that company too was transformative and began a restart in 1997 with back-up software. Veritas was a pure UNIX company and switch gears to Windows NT. That move made the vendor a billion dollars. “It took Veritas seven years to reach $36 million in revenue and then five years to reach a billion.”

Back to the Oracle example, the company embraced transformation after transformation moving from databases, to apps, then to middleware and to many the shocking move of adding hardware to its portfolio. Oracle added transformational arcs to its company arc.

LEADERSHIP

Company leadership is a crucial determining factor. Leslie says there are two types of CEOs. There is the one who has operational excellence, but they’ll have a short window at the top. They are usually groomed for the job and last no more than five years.

Larry Ellison
Larry Ellison

Then there is the opportunity driven leader such as Oracle’s Larry Ellison. Ellison thought Oracle was a lifetime vendor.

“These leaders are creative risk takers and they want to build a legacy. They want their name in lights,” Leslie said. Certain Ellison accomplished that during his career.

The Microsoft leadership arc started with Bill Gates the entrepreneur. It moved to Steve Ballmer with was a professional manager. Now Microsoft is resurgent with Satya Nadella.

Death does not have to be the end of the company arc. There is no finish line. But…

“It’s never too late to make a difference,” Leslie said.

One quick hit before I go.  BitTitan has hired Frank Johnson-Suglia, the former CTO and co-founder of Strategic SaaS. Johnson-Suglia will be part of BitTitan’s executive team as ‘MSP-in-Residence’ to help shape the company’s partner program and drive global adoption of MSPComplete.