“The Departed” - Dave DeWalt and Documentum

Being a co-founder of Documentum prior to starting Alfresco, it is only natural that people are asking me what I think of Dave DeWalt’s departure from EMC to become CEO at Security Software firm McAfee. EMC is also one of the largest players in enterprise content management after acquiring Documentum and so we should have an opinion.

I actually owe quite a bit to Dave DeWalt. I worked with and for Dave while at Documentum. He and I are actually very different. He is a tall, aggressive Olympic wrestler who runs triathlons. And me - well, I saw a triathlon or something like that on television once. Documentum’s turn-around after the recession in 2001 has a lot to do with Dave’s determination and competitive nature. Dave is also very smart and very ambitious.

I made a bet with someone in EMC that Dave would be CEO of EMC within two years. Dave’s progression from his initial entry in Documentum to his current position as the CEO of McAfee has been remarkable. Dave began at Documentum to head up the web content management group when Documentum had no solution. The early success transformed the Documentum brand and set up the all time high market value for Documentum. Jeff Miller, the CEO of Documentum at the time would frequently say that Dave would make a great CEO one day. Dave took on the role of running product operations, then became COO and then CEO in relatively quick succession. Not bad for something like a three year run.

It was around the time that Dave was COO that I left Documentum. Six years of travelling to the US once a month to be at the center of power in Pleasanton got to be too much. That was the price that I paid for choosing to live in the UK and still have any influence. However, I wouldn’t leave Documentum when it was low, but Documentum was on a high and it had been 11 years since starting it with Howard Shao. It wasn’t long after that the stock market crashed and Documentum stock with it.

Dave taking the reigns as CEO did a great job in recovering the stock price and for that I am extremely grateful. Dave’s management style was seemingly to do everything and he was at the center of most major projects. You can’t fault the job he did though. Documentum stock went from strength to strength as the rest of the enterprise software world was collapsing. As he moved up, he still held responsibilities for the core product and sales. Howard Shao was behind the acquisitions with good execution by Rob Tarkoff. But Dave glued the pieces together building a loyal cadre of people to run the business.

I had expected Documentum to be acquired by Oracle in the 2002 to 2003 timeframe. According to Oracle PowerPoint slides released as part of a DOJ anti-trust investigations indicated that Oracle was thinking the same thing. However, it was EMC that made the winning offer. What I had heard was that Dave, who used to work for Oracle, was not interested in working for Larry Ellison. (Could you blame him?) The price that EMC paid was one that neither Oracle nor IBM were willing to pay. I didn’t hold on to my new EMC stock because I knew nothing about the hardware business.

Dave, coming from the aggressive “only one of you will come out of here alive” culture of Oracle did very well in EMC, especially since EMC essentially left Documentum alone. The senior managers on the hardware side lacked Dave’s charisma, enthusiasm and customer engagement style. Dave moved from CEO of the Documentum business to co-head of EMC software to President of the software group. EMC was proud to declare that had one of the top 10 software businesses. Dave taking over the Legato group was a real coup, no really, a *real* coup. The acquisition of Captiva has been particularly lucrative for EMC. As I have said many times before, EMC was busy consolidating the Enterprise Content Management industry through acquisition.

Joe Tucci probably won’t be around forever. I really believed that Dave’s career would continue its trajectory to become CEO of EMC. Taking over World-wide Sales was an indication that it was in the cards. What I have heard was that there was concern about Dave’s lack of experience in hardware and lack of discipline at various company events led to him to be not taken seriously to run a $6 billion per year business. You can see Dave thrive being the boss and not getting the top job would lead him to look elsewhere.

Anything could have happened to cause Dave to leave. However, there are indications that EMC did not expect it. As of today, March 9th, Dave DeWalt was still on the EMC Executive Team web page. In addition, having two people in charge of the software division, Mike DeCesare and Balaji Yelamanchili, is consistent with Tucci not making a decision of who is charge or just letting things sort themselves out. However, having both in charge of an important division that must be close to a $1 billion business is a tacit admission on the part of EMC that they neither are up to the job either. There are a couple of events that Dave should have been at and EMC just had to cancel, even though really shouldn’t have. It could be that Dave was asked to look elsewhere or that he was just plucked from the air by McAfee. Knowing Dave, it’s likely that he got frustrated at the fact that he wasn’t going to get the top job and just went and looked elsewhere.

Dave commands a great deal of loyalty because he respects and rewards loyalty. He was more than a hands-on manager as he took on responsibility to sell and drive product strategy himself. Of course, there is the Dave that I knew pre-2001 and people have said that he has grown, but Dave’s personality and drive will only change so much.

I would expect some significant hiccups without Dave at the helm. Ironically, sales for EMC could go smoother, although the shift from an extrovert, aggressive, technologically savvy executive to Bill Teuber, EMC’s CFO until last August, is a very stark contrast. The software division will have a big whole in it. The looming threat of SharePoint 2007 is a big one for Documentum. The merged IBM and FileNet will be coming out of their massive integration sometime this year. I won’t even mention open source.

   
DeWalt and Teuber must have very different styles.

Without the bond of personal loyalty that Dave built up, I really wonder what will happen to that layer of next generation of executives that came on board after I left. Can we expect to see heads move from EMC to McAfee? Did EMC give him a golden goodbye to not take anybody? Now that Howard Shao has retired and Dave DeWalt has left, who will drive that vision of what Documentum and the combine entity that is EMC software will be? Technical decisions will be ably handled by new CTO Razmik Abnous, one of the original engineers of Documentum, but what about the business side?

This will be an interesting turn in the further consolidation and commoditization of the ECM market.

Comments

[Michael]

When you say "open source", do you mean "Nuxeo" ? ;)

[Heard]

Interesting, would like to chat

Cheers,
Harold