At the turn of the century Silicon Graphics Canada and its parent company SGI were in a tight spot.The company was winning awards for innovation. SGI hardware was considered bleeding-edge compared to its vanilla box-producing competitors. The company was also walking down Hollywood red carpets because its hardware was used to create some of the most spectacular special effects in movie history.
However, the company was hanging by a thread technologically and financially.
SGI was unable to keep top application developers because of the company’s proprietary Irix operating system. Sales volumes simply were not there for independent software vendors, so SGI was becoming a less important player in the market.
Martin Pinard, the president of SGI Canada, became the subsidiary’s boss during that time. Recently he made time for CDN to discuss how the company’s fortunes have been turned around because of open source and the channel.
CDN: You must have some special challenges trying to grow SGI’s business in Canada because your strength is technical and in graphic arts.
Martin Pinard: The challenge we had was parallel with SGI worldwide. We had to re-engineer the company away from the Irix proprietary operating system. The challenge we had was with application providers. The ones that write the applications dropped us because the volume was becoming less and less. We were becoming less important and we had to re-engineer the company and offer a different technology in open source. In Canada it was all application selling, and all the resellers focused on selling applications. When you lose applications you lose the reseller market and you lose customers. We succeeded in transforming the company into a complete open source company.
CDN: SGI is planning on announcing an entirely new iteration of the Altix at the Supercomputing 2005 show this month. What is happening in the market that has made SGI take this step?
M.P.: I would say it’s a continued focus on offering solutions or technology at the high end of the spectrum that cascades down to multiple levels of customer and markets. It is not new that we are innovating and are a world leader in high performance computing. It is the next step for Altix, with more capability and scalability. It is our vision to go to a multi-paradigm offering. The Altix 4000 is the foundation of that next wave in high performance computing that we will build on for many years to come.
CDN: Your company dramatically cut prices on the Altix 330. Why?
M.P.: The price is always dropping. It is part of the computing model — twice as much computing for the price. That is Moore’s Law.
CDN: How do you transform SGI into an SMB player?
M.P.: You mentioned the Altix 330. That brings high-end computing and innovation to the lower marketplace. This product can enter the SMB business easier and with a small footprint that costs less. There are hundreds of applications that can run on it. Today we are making technology.
CDN: SGI Canada went looking for storage specialists in the channel this year. How did the search go?
M.P.: I would add not only with storage but also having geo resellers that address the market for storage computing and visualization. I made a dramatic change in how we go to market. I converted my direct sales force into a channel sales force to support the channel. No one else did that at my level throughout the company. I am (also) making some strategic investments in the channel so we can succeed and grow the business to new heights. As of July 1, we started a program and we have one geo reseller by region in this country. We had none before July 1. Today we have six.
We came from 30 per cent channel business and we will do 60 per cent by year’s end. As of the first quarter we are already at 50 per cent. That was done in three months.
So it is working and I believe we can do more than 60 per cent. That was the objective I wanted for SGI Canada. Not only to double the business, but in absolute numbers we will increase by 25 per cent growth year over year.