Sgi vs Dell

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Rackable Systems (SGI) was founded in 1999 as a specialist server company. At that time, all the other server making companies used the latest and best high technology chips or software which they bought from ADM or Microsoft to complete their own servers, and then they can provide customers services. SGI wanted to find a new way that they could enter the market without competition, and based on its unique server which meet customer needs better than its competitors and offer customers maximum flexibility and cost-effectiveness. SGI gained a profitable share in the server market and became the first company to try to eliminate the storage, networking, and cooling hardware for each server to work as a stand-alone entity. First of all, they announced their goal which is to create a database center which can reduce the electricity costs associated with cooling servers. All the large companies want to reduce their cost, so this brand new idea grabbed lots of potential customers’ attention. Later, their innovations such as half-depth server, a pair of servers could operate in one place, and double computing processing power, “dense server racks”, by using highly differentiated and patented server to store large numbers of information to meet each customer’s need, and improve the physical design of server racks to reduce heat in order to reduces the energy costs. SGI created this most successful business model that opened a new market. All other competitors all followed its step to innovate high-density energy-saving server, and want to gain some shares in this market. At this time, Dell entered to the market with its own low-priced, customized servers to compete with SGI.

Along with the time passed, more and more companies, especially Dell, targeted SGI’s customer and provided them low-price products that SGI cannot compete with them anymore. In May 2009, Rackable Systems that is the former SGI merged with Silicon Graphics (SG) that is a supercomputer maker. This...
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