There's an old saying that goes something like this: One's an incident, two's a coincidence, and three's a pattern.

In which case, you could say that--in recent weeks--there's been a pattern of high-tech companies focusing more on their core businesses. Specifically, Intel, Dell, and T-Mobile have all made moves which will help them concentrate on their cores. Here's a summary:

1. Intel plans to sell a big part of its venture capital portfolio. Intel Capital, Intel's venture capital arm, hired UBS to explore selling roughly $1 billion worth of its investment portfolio, Bloomberg has reported.

The primary motivation for the sale is strategic, rather than financial, according to an analysis by Fortune. For example, consumer tech holdings will be for sale. But anything in the portfolio related to drones, wearables and the Internet of Things will not be for sale. In short, Fortune reports, Intel "intends to sell as much as possible in its portfolio that doesn't fit with CEO Brian Krzanich's strategic priorities....It's a fine example of an organization prioritizing focus over financial opportunity, the theory being that the former will lead to even more of the latter."

Validating this thesis is a memo Intel Capital sent to its portfolio companies, which reads, in part: "There are investments in our portfolio that are representative of a different investment focus. Provided that we could find a better home for such investments, we would contemplate a sale. We will concentrate our future investments on areas where we are better aligned to bring expertise and perspective."

2. Dell sells Perot Systems for $3.1 billion. Seeking cash to finance its whopping $67 billion acquisition of EMC, which was announced in October, Dell agreed to sell its Perot Systems subsidiary, which provides information technology services to hospitals and governments, to the Japanese technology company NTT Data.

While raising cash was its primary concern, the Boston Globe reported that Dell was exploring "the disposal of assets that aren't core to its business." And Re/Code has noted that Dell is also looking to sell off Quest Software--another asset peripheral to its core. 

3. T-Mobile doubles down on its wireless business. In a cogent analysis of T-Mobile's marketplace position, the Seattle Times observes that T-Mobile "has a smaller war chest than its bigger peers. That gives the company less room to make expensive, futuristic bets that might not pay off."

In 2014, the U.S. wireless industry posted its first-ever decline in revenue derived from selling wireless services. That's led T-Mobile's rivals to invest in other areas. AT&T, for example, now owns the DirecTV satellite TV business. It's offering bundled packages which include TV, Internet and phone service. Verizon, for its part, has a new smartphone app targeting young consumers with video content produced by its AOL unit. And "both AT&T and Verizon are said to be among the potential suitors for Yahoo, the struggling Silicon Valley Internet-content pioneer," reports the Seattle Times.

But with its smaller war chest, T-Mobile is pursuing a different strategy. Instead of focusing its investments in other areas, it's doubling down on its core business: Being a wireless phone provider. For example, the company now offers no-contract wireless service, and it has eliminated fees for exceeding data usage limits. T-Mobile also introduced a "Binge On" feature, under which your Netflix and YouTube usage don't count against your monthly data limits.

Of course, in all three of these core-focusing scenarios, the companies' motivations are commingled. For Intel, it's a strategic shift to wearables and IoT-type technologies that hold high promise for winning the future. For Dell, its financing a landmark acquisition essential to the venerable company's posterity. And for T-Mobile, there's a need to find a differentiated strategy that doesn't sink the company's war chest. 

In other words, focusing on your core will always sound great on paper. It's a textbook move. But you should make sure there's a strategic thought process behind it, too. 

Published on: Mar 31, 2016