Joseph Tucci has been at the helm of storage giant EMC Corp. (EMC), based in Hopkinton, Mass., since 2001. Before that, he was at pioneer computer maker Wang. He has lived through plenty of tech's ups and downs. And while he still believes Silicon Valley is "an impressive place," he offers an East Coast perspective on the state of the industry these days. BusinessWeek's Faith Arner recently spoke with Tucci to get his take on tech. Following are edited excerpts of their conversation:
Q: Can companies still get a competitive advantage from technology?
A: Sure they can. For sure, on one axis the industry is maturing, which is a good thing. On the other side, innovation will continue forever. And companies are going to apply novel ways to use that innovation to help in productivity.
I think it's a reverse action to this nuttiness that went on in 1998, '99, and 2000, where the world would be remade: Bricks and mortars didn't matter, [only] eyeballs and clicks. There's a ridiculousness about that. The real answer will be a blend of the physical with the online digitization craze. That's where we're trying to find our way. Technology will adapt forever.
Q: How pervasive is the feeling that companies have been duped?
A: I don't think it's that pervasive. Companies are saying "I spent a lot of money putting in a brand-new system." They ask, "Is my life better?" And I think the vast, vast majority say "yes." A lot of them think there's gotta be a better, easier way. It took too long, at too much expense. I think a lot of companies feel they got duped by the Internet. But half of that was on the personal investment they lost as opposed to their companies'.
Q: How will this recovery differ from previous ones?
A:It'll be slower. The bubble was bigger than ever. So the amount of indigestion is bigger. It takes longer to crawl out of the hole. It has been going on now for the better part of three years.
I do think we're in the beginning of some recovery in the U.S., and the U.K. is very similar. You have the Asian economies [excluding Japan] rocking and rolling -- China, Indonesia, Australia, and New Zealand. The eastern bloc -- Poland, Czech Republic, and Hungary are doing pretty well. But the economy in Europe -- Germany, Italy, France are still suffering. And Japan is still suffering.
Q: What will be the role of Silicon Valley?
A: It's an impressive place. It will always be important. But let's do it by market cap. Far and away the most valuable company is Microsoft (MSFT). It's not in Silicon Valley. The strong No. 2, IBM (IBM), is in New York. Their brains aren't in Silicon Valley. No. 3 is Intel (INTC). Yeah it's in SV, but they're in a lot of places. No. 4 is Cisco (CSCO), clearly in SV. No. 5 is Dell (DELL), in Austin, Tex. So they're pretty spread out. Then you have SAP (SAP), EMC, EDS (EDS).
Q: Will the big companies lead the charge?
A: Absolutely. This will be led by established companies. Because everyone got burned by the innovators in the last round. What's the value of tech companies that got destroyed in the last round, and where are they today? It's unbelievable how many were supposed to change the landscape that are now bankrupt.
[Buyers] are going to Microsoft, Oracle (ORCL), HP (HPQ), EMC, Sun (SUNW), the top 10. Those are the ones customers are going to now. They have great service organizations [other than Microsoft], great products, proven track records. That's what'll lead us out of the trough here. Absolutely, positively.