Weekly Tech Commentary – SunTech EP.3

1. Singapore Post test mail delivery through drones

SingPost made headlines with their test flight of their Unmanned Aerial Vehicle (UAV) jointly developed with Infocomm Development Authority (IDA). In short, it was a 2km flight from mainland to Pulau Ubin that took 5mins, delivering a packet that included a letter and a T-shirt.

This development comes shortly after the new drone laws were passed in the country. While firms like Amazon in the US have faced difficulties in getting permission to operate drones, SingPost seems to be getting some support as the government pushes for Singapore to be a “Smart Nation”.

SingPost has actually done quite a fair job of re-inventing itself to avoid the doomed fate of the postal industry which is slowly reaching its twilight years. The only major source sustaining the postal industry is the government, which relies on post (or snail mail as we know it) to pass information down to Singaporeans.

SingPost plans to eventually sustain its existing operations like mail, logistics and retail services but expand its eCommerce arm to be a regional leader. With that, it has diversified through many key acquisitions and its intent is no clearer from its recent acquisition of US eCommerce provider TradeGlobal just last week.

In comparison to mail service providers all over the globe like Deutsche Post and USPS, SingPost, over the past 5 years could be seen to be pretty current in terms of innovative industry practices. Almost every new trend woud be picked up by SingPost in a short time, from its sorting facility to the automated mail collection service, POPstations. It now has one foot forward in being the first postal service provider to trail drone services.

Granted, it is not the first company to trial drone deliveries. Amazon has demonstrated its Amazon Prime drone delivery system in 2013. Perhaps less publicized is Project Wing by Google (but now a project under Alphabet) which has also went through its own trail flights and is showing great promise. Postal Companies are not that far behind too. UPS announced its investment in a drone startup just last week, although it claimed that it was to explore opportunities in humanitarian aid efforts. Apart from flying drones, some like Israeli designer Kobi Shikar have played with the idea of grounded drones, in the form of the Transwheel delivery robot which is still in its conceptualization phase.

2. Dell’s acquisition of EMC

This $67 billion deal has made headlines all over the business and tech world, both because of the size of the deal and the number of analysts left shaking their heads in disapproval. I can’t stop feeling that there are more who are just surprised that the deal actually made it through after so much talk then the ones who are just surprised at the deal itself.

Perhaps some background:

Dell is an American company offering mainly personal computers (PCs), servers, storage hardware as products and consulting, product related support as services. The most interesting thing about Dell is that in 2013, Michael Dell (founder) brought out the whole company, making Dell the largest company in terms of revenue to turn from public to private.

EMC is also American, with a focus on data storage under EMC II (which is currently the market leader). Under EMC are a network of other companies dealing with data center infrastructure to information security and a whole slew of other business functions that link together to provide a comprehensive data management solution.

The deal:

$67 billion – in cash and stocks. It has gone down as the biggest acquisition in the tech industry between 2 relatively old tech stalwarts (Dell – founded 1984 and EMC, 1979). The deal has attracted a lot of press. Analysis from all angles, be it in terms of cultural fit or strategic fit, from all sources including Forbes to Fortune, you name it, you have it. Most of it has been negative. Some likened it to “dinosaurs” merging. Some have come out and foretold the failure of the acquisition.

Here’s my take:

The loudest voice of dissent out there is that in terms of storage, cloud is coming up in a big way and the Dell-EMC deal in no way indicates a step towards that direction. I refuse to declare that it is the future because of longstanding issues (information security, politics) that will limit the extent to which cloud based services can expand on a truly global scale. Amazon with AWS as well as Microsoft, Google are the 3 lions as of now. It seems as though the combination is a horizontal integration, across the same industry and to make things worse, it is a declining industry on paper, despite efforts to revive the PC industry.

I think that most of the analysis is right to a certain extent. But analysis is exactly just that – its based on research, experience and judgment. What can people really research and tell what Dell is doing? We seem to forget that Dell is a private company and its long term plans are anybody’s guess. Dell can be unpredictable and it has the leeway to make innovative breakthroughs at a faster rate or ignore short term losses for a more concrete end goal in Michael Dell’s mind.

One of the potential area that might work out of this deal is in information security. EMC owns RSA, which is essentially the backbone of most secure data transmission systems. The potential for a strategic fit in this area seems promising, and a company with the flexibility of Dell could make things happen in an age where cyber security is often an afterthought.

In other words, despite what anybody can say about Dell, we will never know for sure what this partnership might bring.

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