For those living under a rock …
It’s hard to say what layoffs at EMC mean for Documentum. Where does EMC expect the greatest shrink in revenue: hardware or software? The lion’s share of their business is still disk, but I can come up with arguments both ways. That won’t matter if the process is politically driven which would be bad for smaller, acquired former-companies like Documentum.
Here’s a horrible thought: Another way to improve the bottom line is to sell off assets. Maybe we’ll finally see Documentum end up in the hands of Microsoft, a player that still has plenty of cash and a hunger for acquisitions. EMC is big enough and the economy bad enough that I don’t see Microsoft going all boa constrictor and swallowing it whole, but it’s a strange time. Just rumor-mongering here, mind you.
Optimists out there might imagine EMC being inspired by Jason Calacanis and his well-reasoned preemptive layoffs at Mahalo. It’s superficially apples and oranges, comparing a large public company to a small startup, but everybody needs vision and adaptability to survive the next 2-3 years. Calacanis makes a solid case for his layoffs in “How to Handle Layoffs” by explaining it in terms of managing burn rate and building the core product. Will EMC give us a similarly candid rationale?
A company that flails around to meet arbitrary expectations set by a market of speculators (instead of actual investors–a vanishing breed) is going to fail in these tough times. Will EMC be another casualty of a knee-jerk response to the Market Fundamentalism at the heart of the current crisis?