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New SGI chases new partners

Boutique strategy

Reducing the cost and complexity of web vulnerability management

The recently combined Rackable/SGI is looking to add some new blood to depleted partner ranks. After the merger, the company dropped about one-third of its combined partners for various reasons and is now trying to rebuild its channel presence.

The company is looking for folks who have both enterprise and HPC chops – which makes sense, given their product set and strategy. You can read about it here.

SGI isn’t in an enviable position right now. The old Rackable installed base was skewed very heavily toward a handful of companies that bought a hell of a lot of gear. These were primarily Web 2.0 types who purchase servers by the thousands.

Unfortunately for Rackable, this growing market attracted the attention of the big guys like IBM, HP, and others who are now attacking it like pit bulls going after a bacon-scented mailman. All of the major x86 vendors have launched new products and initiatives that are aimed squarely at mass scale-out, price-sensitive customers.

The problem for Rackable/SGI is that the heavyweights will enhance products at a faster pace. They also have enough cash to buy deals when they want them. These twin actions can grind Rackable into a fine dust between the rocks of margin pressure and the requirement to ramp new products faster in order to keep up.

Rackable badly needed new customers and new markets – thus the purchase of SGI. Everything that made Rackable boxes just right for Web 2.0 makes them a pretty good fit for a lot of HPC installations. With the addition of SGI (and even changing their name to SGI), they get an entrée into HPC and at least the chance to peddle their wares to new folks. What we don’t know yet is just how much of the legacy SGI skill set they have retained.

A lot of the value of SGI isn’t in the hardware; it’s in the heads of their people in the labs and in the field. If the new SGI can hold on to this asset, it has a shot at carving out a sustainable niche for themselves. Long term, it must still deal with competition from much bigger competitors.

But mixing together the Rackable and legacy SGI secret sauces can give a unique flavor that will stand out from richer, but broader, competitors. SGI's task is to put together a solid strategy that leads to products and services that are compelling enough to overcome the resource advantages of the dominant vendors.

One of my long-standing recommendations to SGI (before the Rackable acquisition) was for it to use its expertise and IP to put together high-performance analytics HW/SW/service bundles for key industries (not traditional Wall Street, Oil & Gas, or Pharma types). This would play to their strengths in visualization, moving immense amounts of data, and, of course, computation.

My thought was that its should look for partnerships with a few leading companies and/or perhaps a high-end business school in order to get the business chops its needs to be credible in the market. Doing this could help the company land higher-margin enterprise computing deals, allowing it to get full value for the IP built over decades of HPC experience.

Reducing the cost and complexity of web vulnerability management

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