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Whenever this topic comes up there are always comments saying that SGI was taken by surprise by cheap hardware and if only they had seen it coming they could ha

Whenever this topic comes up there are always comments saying that SGI was taken by surprise by cheap hardware and if only they had seen it coming they could have prepared for it and managed it. I was there around 97 (?) and remember everyone in the company being asked to read the book "The Innovator's Dilemma", which described exactly this situation - a high end company being overtaken by worse but cheaper competitors that improved year by year until they take the entire market. The point being that the company was extremely aware of what was happening. It was not taken by surprise. But in spite of that, it was still unable to respond.

szundi 3y ago
Thanks for this comment, very much appreciated.
ghaff 3y ago
Having worked longtime for a minicomputer company--which actually survived longer than most mostly because of some storage innovations along with some high-end Unix initiatives--it's really hard. You can't really kick a huge existing business to the curb. Or otherwise say we're going to largely start over. Kodak was not actually in a position to be big in digital. And, of course, the digital camera manufacturers mostly got eclipsed by smartphones anyway a decade or so later.
- loloquwowndueo 3y ago
  Data General?
  - ghaff 3y ago
    Yes. CLARiiON eventually enabled a sale to EMC (which arguably saved EMC for a time) and the Unix business (especially NUMA servers) were sufficient revenue producers for a while to keep the lights on. ThinLiiNe (or whatever the capitalization was) never went anywhere but neither did a lot of things in the dot.com era.
    - loloquwowndueo 3y ago
      I knew it :) thanks for confirming! And for sharing.
      - ghaff 3y ago
        I was the PM for a bunch of the minicomputers from the mid-80s on. Then I was PM for the initial Unix AViiONs and later the NUMA servers including being one of the main liaisons with CLARiiON.
    - panick21_ 3y ago
      Seems like Sun really shot itself in the foot by not buying DataGeneral. A Unix storage business that fits pretty well with their larger datacenter portfolio. And a start to a real x86 business. I just finished reading 'LIFE UNDER THE SUN: My 20-Year Journey at Sun Microsystems' that talks about Sun and the storage businesses a bit. Sun was never happy with how well they did in storage. Sun was part of defining Fibre Channel. For some reason that still doesn't make sense to they bought StorageTek for an incredible $4 billion at the time when Sun wasn't exactly flying high. The explanation from the CEO given in the book mentioned above is baffling. Edit: Seems they bought: 1999: MAXSTRAT Corporation, a company in Milpitas, California selling Fibre Channel storage servers. Never heard of them. Not sure how comparable it was.
- aurizon 3y ago
  On the contrary, Kodak was well placed to do well by anticipating 'Moore's Law' as pertinent to sensor pixel density and sensitivity versus film. Film resolution was towards the end of intense development in pixel terms - not much further to go. They had pioneering patents and ongoing R&D would have enabled a long period of dominance during the transition and to this day!! The board and scientists were asleep on a mountain of cash, and they sold their future for a few crumbs left for shareholders after bankruptcy. Blackberry did much the same with fewer excuses. I met with some board members of Kodak in the 80's and they were like old English gentlemen - long on pomp and procedure, but they wore blinders and a vision bypass - TRIH.
  - ghaff 3y ago
    Kodak was essentially a chemical company at one point. They even spun off an actual chemical company. Kodak could probably have played a better hand even if they did probably before their time things like PhotoCD. But they could have been Apple or maybe Instagram? That's a stretch. I'm not a particular Kodak apologist but suggesting that a company should have been able to anticipate and correct for their business collapsing by 90% in a decade or so seems to need a lot of particulars.
    - xcv123 3y ago
      > But they could have been Apple? That's a stretch. They could have been a Sony. The iPhone camera sensor is made by Sony.
      - ghaff 3y ago
        And Sony has certainly had rough patches too. And that's for a company coming from an electronics manufacturer angle. Kodak could have spun off a consumer electronics or semiconductor manufacturing company. But it's not clear why that is actually a better model than someone else just spinning up similar entities. I don't need all the chemical engineers and a lot of other people connected with the old business anyway. And I'm sure not turning them into semiconductor experts. So you're one of the 10% of employees in HR who snuck through to the other side. Is that really a big deal?
- maire 3y ago
  Kodak was well aware of what was going to happen. Company culture killed digital photography. I was at Apple when we worked with engineers from Kodak who were working to change various format standards to allow digital photos. This was in the late 1980s or early 1990s.
  - ghaff 3y ago
    But, from the perspective of today, Kodak would have had to basically eclipsed Apple. Even displacing the big Japanese camera manufacturers, who by then had dominated high-end photography, would have required reversing decades of a shift away from high-end cameras like the Retina line. I don't doubt there was company DNA against digital photography but it's not like non-smartphone photography, especially beyond relatively niche pro/prosumer level, has had such a good run recently either.
    - nradov 3y ago
      There is still a lot of business opportunity in supplying image sensors and lenses to smartphones.
      - chiefgeek 3y ago
        But it is nowhere near as profitable as the 35mm film system was.
        ghaff 3y ago
        The 35mm system was a huge consumables business down through the food chain. That basically doesn't exist with digital. (Aside from ink jet supplies and I'm not sure how true even that is any longer.)
foobarian 3y ago
I think it's a near impossible situation - the status quo is literally something that should not exist given the new market realities. Pivoting is pretty much asking a company to commit seppuku - asking the layers of leadership to basically replace themselves and quit in many cases. Which is pretty much what happens anyway.
- ghaff 3y ago
  And, at some point, what does it matter if the leadership and most of the employees turn over, typically involuntarily? Is there any significance really to Foot Locker basically being a reorganized Woolworth's as opposed to being a brand-new company? If you're big enough and have some product lines that still bring in a lot of money and didn't totally collapse like IBM you can sometimes pull it off. But it's hard.
- bunderbunder 3y ago
  And, just like every Unix workstation vendor of the 1990s, they got hit with a perfect storm. They had their hardware being disrupted by x86 really coming into its own as a viable option for higher-end computing at the exact same time that Linux was becoming a serious option for the operating system. "Literally something that should not exist" is the perfect way of putting it. In 1990, lots of people needed boutique workstation vendors. In 2000, nobody did.
  - bunabhucan 3y ago
    It's worse than that. Instead of "nobody" it was conservative slow moving vendor locked clients that could convince you to keep selling at those prices ("look at the margins!") instead of focusing on alternatives. I remember $5,000+ PCs being considered "cheap" workstations when those clients finally migrated.
  - rbanffy 3y ago
    Even Apple, which became the unlikely last of the Unix workstation vendors, was disrupted by Intel (and moved from PowerPC to x86 for a while). Ironically, Apple is now the very last Unix workstation vendor in existence.
yndoendo 3y ago
When statements like X was better than Y come up. I always think of "All models are wrong, but some are useful", from statistician George E. P. Box, and rephrase it as "All models are flawed, but some are useful" so that model becomes ambiguous, such as a smartphone, TV, computer, car, programing language, programing design pattern, social media platform, and so on. Price-point, SGI technology was a financially flawed model pertaining to the growing market and more useful than flawed performance of the low cost technology market. Did anyone at SGI try to simply buy the low tech products, play with them a bit, and see about slowly integrating your tech to make that low tech product just a little better than the competition and cost effect for the market?
AnimalMuppet 3y ago
Someone at SGI wrote a paper/web page/blog post titled "Pecked To Death By Ducks", claiming that x86 chips could never compete with SGI, and claiming to refute all the arguments that they could. Then Intel introduced dual core (or maybe just two chips in one housing sharing a bus), and that generated a lot of buzz. So he wrote a follow-up titled "Pecked To Death By Ducks With Two Bills". I don't recall the timing, though, how it related to the timing of asking everyone to read The Innovator's Dilemma. But at least some of the time, there was a pretty deep denial (or at least a pretty deep effort to keep the customers in denial).
- MichaelZuo 3y ago
  That’s really funny for some reason.
  - HeyLaughingBoy 3y ago
    IIRC, "Pecked to Death by Ducks" is the title of either a short (nonfiction) story or a book by Gerald Durrell, one of my favorite childhood authors.
    - jfk13 3y ago
      I don't recall that one, and I thought I knew Gerald Durrell's work pretty thoroughly. There is a book of that title by Tim Cahill, though; maybe that's what you're remembering?
      - HeyLaughingBoy 3y ago
        Yesss! Thank you. I'm embarrassed because I used to have that one, too :) On the upside, I've never known anyone else who had even heard of Durrell.
        bluenose69 3y ago
        I would have thought that lots of folks had watched the "The Durrells in Corfu" TV series (PBS Masterpiece Theatre) and then did some research on the family. I don't know whether this is available online, but I can recommend it as a pleasant programme, with lovely scenery, interesting storylines, and engaging actors.
Animats 3y ago
They sort of tried. Around then they had a Windows NT machine that cost around US$12,000. But it was too late. The first serious graphics cards for PCs were appearing, from Matrox and others, with prices of a few thousand dollars. (I tried some early NT graphics cards on a Pentium Pro machine. This was before gamer GPUs; these were pro cards from tiny operations. Fujitsu tried unsuccessfully to get into that business, with a small business unit in Silicon Valley. At one point they loaned me a Fujitsu Sapphire graphics card prototype. When I went back to their office to return it, the office had closed.) Also, there was a bad real estate deal. SGI owned a lot of land where Google HQ is now. They sold it to Goldman Sachs in a sale and lease-back transaction, selling at the bottom of the market. That land, the area north of US 101 in Mountain View had, and has, a special property tax break. It's the "Shoreline Regional Park Community", set up in 1969. The area used to be a dump. Those hills near Google HQ are piles of trash. So there was a tax deal to get companies to locate there. That made the land especially valuable.
- msisk6 3y ago
  SGI tried its hand at the PC video card business as early as 1990. I was at Autodesk at the time and got one of these to beta test on a DOS 486 running AutoCAD. It was an impressive product. But huge; it took up two full-length ISA slots. And the display drivers were a bit buggy.
  - sillywalk 3y ago
    Here's a brochure for the IrisVision boards - uses 2 ISA or Microchannel slots. Prices start start at $3,495 https://www.1000bit.it/js/web/viewer.html?file=%2Fad%2Fbro%2Fsgi%2Fsgi%2Dirisvisionboardset%2Epdf#zoom=page-fit https://www.1000bit.it/js/web/viewer.html?file=%2Fad%2Fbro%2...
  - Y_Y 3y ago
    Sounds just like Nvidia in 2024
    - theandrewbailey 3y ago
mrandish 3y ago
You highlight one of the most interesting (and perhaps less understood things) about the key Innovator's Dilemma insight. Even if the senior management have read the Innovator's Dilemma books, know they are being catastrophically disrupted and desperately trying to respond - it's still incredibly difficult to actually do. Not only are virtually all organizational processes and incentives fundamentally aligned against effectively responding, the best practices, patterns and skill sets of most managers at virtually every level are also counter to what they must do to effectively respond. Having been a serial tech startup founder for a couple decades, I then sold one of my startups to a valley tech giant and ended up on the senior leadership team there for a decade. I'd read Innovator's Dilemma in the 90s and now I've now seen it play out from both sides, so I've thought about it a lot. My key takeaway is that an incumbent's lack of effective response to disruption isn't necessarily due to a lack of awareness, conviction or errors in execution. Sure, there are many examples where that's the case but the perverse thing about I.D. is that it can be nearly impossible for the incumbent to effectively respond - even if they recognize the challenge early, commit fully to responding and then do everything within their power perfectly. I've even spent time sort of "theory crafting" how a big incumbent could try to "harden" themselves in advance against potential disruption. The fundamental challenge is that you end up having to devote resources and create structures which actually make the big incumbent less good at being a big incumbent far in advance of the disruptive threat appearing. It's hard enough to start hardcore, destructive chemo treatment when you actually have cancer. Starting chemo while you're still perfectly healthy and there's literally no evidence of the threat seems crazy. It looks like management incompetence and could arguably be illegal in a publicly traded company ("best efforts to maximize/preserve shareholder value" etc).
- throwaway4good 3y ago
  Everyone has been reading that book since the late 90es. I remember a talk by Clayton Christensen talking specifically about Intel and how they setup the Celeron division to compete with themselves (based on his advice). A key property of tech in economics lingo is that it is “natural monopolies” - all fixed cost and no variable cost. This creates these winner takes all games. In this case both Intel, SGI plus others knew the rules and it just ended up with Intel taking the prize and it all becoming Wintel for a decade or so - basically until the smart phone allowed enough capital to be accrued to challenge the old monopoly.
VelesDude 3y ago
It was clear they were trying to do more consumer grade things, just look at the N64. Couldn't get more mainstream than that. Seeing how the graphics market ended up, it looks obvious from here but in the mid 90's it was still the wild west and everybody was throwing mud at the wall seeing what would stick. I have never really said that they where "taken by surprise", but a part of it felt like (from the outside) that management had been a little blinded by their pass success and the profit margins from their workstations combined with no clear path forwards for the whole industry. Nvidia could have very easily been just a curiosity of the past but they managed to strike it lucky standing on the shoulders of others. If SGI had always been a company that could provide graphics workstations the worked with x86/Windows PC's early for example - maybe they would have fared better. Would have gone with the flow of technology at the time rather than fighting uphill no matter the potential technical brilliance. But being saddled to their MIPS processors and custom OS meant that once people left, they almost never came back. One can have the best tech and still fail.
- the_mitsuhiko 3y ago
  > It was clear they were trying to do more consumer grade things, just look at the N64. Yes, but the team that did that also left SGI, then worked directly with Nintendo for the GameCube and are acquired by ATI. I’m not sure how SGI managed to not support that effort within itself.
  - cuno 3y ago
    Nintendo wasn't loyal to the company it was loyal to the team, so when they just decided to leave and form ArtX they took the customer with them... SGI was happy with the Nintendo contract. They earned $1 in additional royalties for every single N64 cartridge sold worldwide. Losing the team was a big blow.
- rbanffy 3y ago
  > provide graphics workstations the worked with x86/Windows PC's Integraph started making PCs with high-end graphics at one point, when they abandoned CLIX and gave up on their (Fairchild's, really) Clipper processor. It didn't work for them either. SGI did their own "Visual Workstation" that ran Windows and had a Pentium, but that too was a huge disappointment.
appstorelottery 3y ago
I was making crazy money in the dot-com boom and bought a SGI 540 in 1999 (with an SGI monitor). With money to burn SGI was a childhood brand, legends in 3D. Such wonderful memories. 15k on a desktop setup - it was loose change, however it shows how clueless I was back then. However I'd felt like I'd "arrived". SGI with Windows NT - lol - I wrote my first OpenGL game in Visual Basic... I've always been somewhat of an outlier ;-) God help me. The point? My personal experience says something about the strength of the SGI brand - even in the face of what was happening at the time (3DFX and so on - my previous company was one of the few 3DFX api devs - illustrating how clueless I was...)... it all happened so quickly... I'm not surprised SGI couldn't respond - or more importantly understand the strength of Microsoft/OpenGL/DirectX in the boiling pot of 3DFX / Nvidia and the rest... From memory it took three years and SGI was done - shared memory architecture? No longer worth the cost. :-( Looking back, I was such a kid - a complete fool. Greybeard advice: bet on the monopoly. Be smart. Brands like SGI are nothing in the face of install base. Think about how crazy it was to spend 15k on a desktop SGI back then... nostalgia is insanity, vanity.
- lizknope 3y ago
  Yeah but it still sounds really cool! From 1991 when I first saw SunOS I wanted a SPARCstation. I started college in 1993 and the school was full of DEC Ultrix machines, Suns, HP PA-RISC, and a handful of IBM RS/6000 and SGIs. I just thought DOS/Windows PCs were such garbage. Single user, no preemptive, multitasking, no memory protection. Then Linux came out and it changed everything. I bought a PC just to run Linux. My dream of a Unix RISC workstation faded away. My roommate in 1996 bought a DEC Alpha. Not the cheaper Multia but an Alpha that could run OSF/1 Digital Unix. He actually ran NetBSD on it. In 1997 I took the computer graphics class and we used SGIs. There was just one lab of them reserved for that class and grad students. I was so excited and it was really cool but I didn't think I could ever afford one. It's still really cool though that you had one.
  - panick21_ 3y ago
    Linux on RISC-V ... Its happening ... eventually ... probably.
hintymad 3y ago
I remember Clayton Christensen mentioned that Andy Grove invited him to Intel to talk about how to deal with the dilemma, and interrupted Christensen while he was talking and said something like "I know the problem, and I need you to tell me the solution". Similarly, Peter Drucker repeatedly mentioned one of the biggest challenges in business is "killing the cash cow". Along that line, Netflix's Reed Hasting is really amazing. He somehow managed to kill the DVD business and used it to milk the streaming business, when almost everyone in the industry and some of his lieutenants in Netflix didn't believe him.
- froonly 3y ago
  For a while you could view Netflix online and rent DVDs from them.
  - RandallBrown 3y ago
    Oh dang, I thought you still could. Looks like they shut down the DVD rentals about 6 months ago.
    - chiph 3y ago
      There are now a couple of smaller disc-by-mail startups who aim to serve that market. I've signed up with DVDInBox out of Florida and they've done a good job thus far. From what I've seen their biggest current challenge is their mailer. Netflix spent a lot of time designing their signature red envelopes, working with the USPS on ensuring they would survive a trip through the postal sorting machines. DVDInBox has yet to reproduce it - their envelopes sometimes arrive fairly mangled, or have not arrived at all (lost to the bowels of the machines).
- specialist 3y ago
  Yes and: These years later, while the innovator's dilemma thesis describes what, there's still little treatment of why and how. I keep wanting someone to account for the roles of investment and finance. Amazon's innovation was lower cost of capital. They convinced investors to wait for returns. And they got a massive tax holiday. (How could they not succeed?) Ditto Tesla, with its saavy moves like govt loans, prepurchases, tax incentives, and selling direct. That cheap capital was necessary, but not sufficient. Both still had to create products customers wanted. I keep coming back to Apple. How'd Apple avoid the trap? Despite their terrible position. My guess is better financial strategy (if that's the right phrase). Apple focused on margins (and monosophony) instead of market share. And then leveraged their war chest to implement monosphony.
foobiekr 3y ago
I was at one of SGI's competitors and we had teams doing cheap HW - ATi and other cards, like IBM's GPUs at the time - and yet the company as a whole was like "ALL GOOD LET'S KEEP BUILDING MASSIVE CUSTOM GRAPHICS SYSTEMS!" They were as dead as SGI in the same timeframe.
jiggawatts 3y ago
In the late 90s I was in the last year of high school. Silicon Graphics came to do a demo of their hardware for students that were interested in taking a computer science course at university in the following year. The graphics demos looked like trash, basically just untextured and badly shaded plain colored objects rotating on the screen. For reference I was playing Quake III around the time which had detailed textures and dynamic lighting. I asked the SGI presenter what one of his Indigo workstations cost. He said $40,000, not including the graphics card! That’s extra. I laughed in his face and walked out.
- dekhn 3y ago
  In the late 90s, SGI demos were much more impressive than what you describe. It was used by technical folks to do real stuff, with stringent criteria. More importantly, the things that made Quake III so great were state-of-the-art for gaming. But those things couldn't render lines quickly and well (a mainstay of CAD at the time), or render at very high resolution (which IIRC was 1280x1024 in that era). Here's what Carmack said abotu the SGIs a few years before: """SGI Infinite reality: ($100000+) Fill rate from hell. Polygons from hell. If you don’t trip up on state changes, nothing will come within shouting distance of this system. You would expect that.""" SGI was also key for map builds before PCs were capable. But yes, 1999-2000 was just around the cusp of when SGI went from "amazing" to "meh".
  - rbanffy 3y ago
    The curve that maps fucking around with finding out is not linear. By the time you start finding out, it's very hard to stop finding out much more than you would like to.
  - jiggawatts 3y ago
    If I remember correctly, their cards had a high compute rate even at double precision, but had tiny memory buffers and basically couldn’t do texturing at all in practice. It turned out that double precision was a mistake that was sold as a “professional” feature. By sharing edges correctly and using the correct rounding modes, single precision provides pixel-perfect rendering. Efficiencies like this allowed the consumer GPUs to run circles around SGI hardware.
blackoil 3y ago
I believe having a talented dictatorial leader at top may be only solution. Like Steve Jobs, Bill gates or Jeff Bezos. Once they believe in a path, they have methods to get it done. Internet Tidal Wave memo is a good example of it. Zuckerberg is able to invest 100s of billions on a future he believes in. Obviously the observation has a confirmation bias.
- pixelfarmer 3y ago
  Companies through their usual hierarchical structuring are authoritarian by nature. However, many leaders are no actual leaders, they are just bureaucrats, and that is the reason why things get stuck.
hintymad 3y ago
I guess an interesting question would be whether Nvidia is SGI in the late 90s or Intel of 80s.
- leetrout 3y ago
  I have been comparing them to SGI of the late 90s but the next 18 months will prove me right or wrong as Intel, Apple, Google and AMD try to compete.
- geor9e 3y ago
  SGI was a pretty small 3D workstation company at the bottom of the S&P500, even at it's peak. Microsoft was at least a hundred times as big as SGI. (And Nvidia was even smaller, selling GPUs for both SGI worthstations and Windows PCs at the time.) Now Nvidia is a titan at #5 in the S&P. They could certainly be taken down a notch or two as CUDA alternatives mature and people start buying cheaper AMD/Intel/FPGA(groq, etc) hardware. But they're the best at what they do, with the best people. They don't really have a doomed business model the way SGI's "take out of a second mortage for the Onyx workstation to make N64 games" business model was doomed. I don't buy Nvidia stock, personally, but I especially wouldn't bet against them long term either.
- VelesDude 3y ago
  I get the vague feeling they are more like Intel in the 80's. Nvidia has had a real talent partially by their own smart moves and partial just pure luck for stumbling from one win to another. Seeing them fall into the Crypto boom and then straight onto the AI boom has been wild to see.
bombcar 3y ago
The way to survive is to eat your own lunch. Be the low cost competitor and cannabilize your own market. Otherwise you don’t build the iPhone because you don’t want to lose iPod sales.
- VelesDude 3y ago
  I not so obvious but similar example of this would be with Nintendo and the Switch. They had always hand their handheld and consoles as separate things but eventually decided to just combine them into a single thing. So instead of double dipping on the hardware and potentially the software sales, it just become a single entity. And to say that has worked out well for them is an understatement. Sold 139 million units and are still taking their time of getting to a successor. They are probably going to take the #1 highest selling games machine of all time and they did it by going against their old business practices.
- musicale 3y ago
  > Be the low cost competitor and cannabilize your own market. Otherwise you don’t build the iPhone because you don’t want to lose iPod sales. The iPhone was a high-cost competitor to the iPod. And Apple knew that multi-function devices usually offered poorer user experiences than more focused, (mostly) single-function devices like the iPod. But they still did the iPhone.
bigboy12 3y ago
Walking the streets of nyc 19 years ago. I saw a sgi indigo on the street and sadly I just kept walking on. Like wow.
deleted 3y ago
[deleted]
Octokiddie 3y ago
> It was not taken by surprise. But in spite of that, it was still unable to respond. This is even a major point of discussion in the book. The incumbents always see it coming a mile away. They can't respond because doing so breaks their business model. Employees can't go to managers and say, "We need to enter this low-margin market for low-end products." Doing so is a good way to get sidelined or fired. The "dilemma" is that either traditional option, compete with the upstarts or move further up-market, leads to the same outcome - death.
tambourine_man 3y ago
I remember reading how Andy Grove, IIRC, spent two years trying to exit the DRAM business. He would flat out order people to stop working on it and they wouldn’t listen, believe or understand. The amount of inertia for large bodies is remarkable.
- Pet_Ant 3y ago
  And yet there are stories of people ignoring the company direction, continuing work, and saving the company. See: The Blue LED https://youtu.be/AF8d72mA41M?feature=shared https://youtu.be/AF8d72mA41M?feature=shared So it’s not clear that the company knows better. Feels like educated guesses but a lof of luck involved.
  - tambourine_man 3y ago
    Very true
- AtlasBarfed 3y ago
  Why was exiting the DRAM business such an obvious positive? Intel is basically at its root PC hardware. Yes, it doesn't dominate the entire industry, but memory is pretty key to a PC and the OS that runs on it. In fundamentally it's another fab product. Like chipsets.
  - tambourine_man 3y ago
    They were being crushed by the Japanese in price and went from the dominant player to barely registering the sales chart in one decade https://anthonysmoak.com/2016/03/27/andy-grove-and-intels-move-from-memory-to-microprocessors/ https://anthonysmoak.com/2016/03/27/andy-grove-and-intels-mo...
dclowd9901 3y ago
Can you guess why? Was it maybe outmoded or outdated sales models that didn’t take reasonable competition into account. I’m so sick of dancing around this topic. Managers and business types destroy companies. It never stops. Company after company. How many times do we have to pretend this isn’t the case before we see the truth. Innovators make things worth selling. Business types drop it on the floor.
mcculley 3y ago
I worked a lot with SGI hardware and IRIX in the 90s and very early 2000s. I ported a lot of code to and from Linux in that time. I remember trying to explain to SGI reps that while we loved the SGI hardware, Linux on commodity x86 was the increasingly more effective choice for our projects. We wanted to buy SGI x86 boxes but they were pushing NT. It was very apparent that SGI salesmen knew which way the wind was turning and they were milking the last bits of the commission gravy train. Even when everyone understands “The Innovator’s Dilemma”, the incentives of salesmen and shareholders can be to optimize for extracting value out of the dying company. If I am a shareholder in a company being out innovated, it might make sense to want them to maximize short term profits while reallocating capital to the innovators instead of trying to improve the dying company.
- Pet_Ant 3y ago
  Seems like issue is a shift from high margin sales representative lead growth to low margin mass where you don’t need sales people to convince you to buy it. Then there is no way to justify the sales team, so they don’t support it. The company is beholden to them, and they sabotage the move to mass market.
  - mcculley 3y ago
    That is certainly one case, maybe the most likely. But another case I was involved with involved sales just not understanding the innovation. They could have potentially made just as much or more money with the new thing, but were too comfortable selling the old thing.
voidmain0001 3y ago
Could this eventuality happen to Google, Nvidia, or Apple?
- infinite8s 3y ago
  Why not? Google's only been a powerhouse for the last decade or so.
hulitu 3y ago
> The point being that the company was extremely aware of what was happening. It was not taken by surprise. But in spite of that, it was still unable to respond. They had the best processor on the market, yet they decided to sell Intel and Windows. I really don't underestand what were they smoking.
masfoobar 3y ago
"taken by suprise" When looking at 3d Acceleration cards on PCs, I believe PowerVR (and 3dfx) was released in 1996. Beforehand would have demonstrated their technology at conferences, shows.. with demos and adverts before they were released... this means SGI must have seen this coming as early as 1994. In as little as 4 years... Graphics Cards were required for PC gamers!

szundi 3y ago

Thanks for this comment, very much appreciated.

ghaff 3y ago

Having worked longtime for a minicomputer company--which actually survived longer than most mostly because of some storage innovations along with some high-end Unix initiatives--it's really hard. You can't really kick a huge existing business to the curb. Or otherwise say we're going to largely start over. Kodak was not actually in a position to be big in digital. And, of course, the digital camera manufacturers mostly got eclipsed by smartphones anyway a decade or so later.

loloquwowndueo 3y ago
Data General?
- ghaff 3y ago
  Yes. CLARiiON eventually enabled a sale to EMC (which arguably saved EMC for a time) and the Unix business (especially NUMA servers) were sufficient revenue producers for a while to keep the lights on. ThinLiiNe (or whatever the capitalization was) never went anywhere but neither did a lot of things in the dot.com era.
  - loloquwowndueo 3y ago
    I knew it :) thanks for confirming! And for sharing.
    - ghaff 3y ago
      I was the PM for a bunch of the minicomputers from the mid-80s on. Then I was PM for the initial Unix AViiONs and later the NUMA servers including being one of the main liaisons with CLARiiON.
  - panick21_ 3y ago
    Seems like Sun really shot itself in the foot by not buying DataGeneral. A Unix storage business that fits pretty well with their larger datacenter portfolio. And a start to a real x86 business. I just finished reading 'LIFE UNDER THE SUN: My 20-Year Journey at Sun Microsystems' that talks about Sun and the storage businesses a bit. Sun was never happy with how well they did in storage. Sun was part of defining Fibre Channel. For some reason that still doesn't make sense to they bought StorageTek for an incredible $4 billion at the time when Sun wasn't exactly flying high. The explanation from the CEO given in the book mentioned above is baffling. Edit: Seems they bought: 1999: MAXSTRAT Corporation, a company in Milpitas, California selling Fibre Channel storage servers. Never heard of them. Not sure how comparable it was.
aurizon 3y ago
On the contrary, Kodak was well placed to do well by anticipating 'Moore's Law' as pertinent to sensor pixel density and sensitivity versus film. Film resolution was towards the end of intense development in pixel terms - not much further to go. They had pioneering patents and ongoing R&D would have enabled a long period of dominance during the transition and to this day!! The board and scientists were asleep on a mountain of cash, and they sold their future for a few crumbs left for shareholders after bankruptcy. Blackberry did much the same with fewer excuses. I met with some board members of Kodak in the 80's and they were like old English gentlemen - long on pomp and procedure, but they wore blinders and a vision bypass - TRIH.
- ghaff 3y ago
  Kodak was essentially a chemical company at one point. They even spun off an actual chemical company. Kodak could probably have played a better hand even if they did probably before their time things like PhotoCD. But they could have been Apple or maybe Instagram? That's a stretch. I'm not a particular Kodak apologist but suggesting that a company should have been able to anticipate and correct for their business collapsing by 90% in a decade or so seems to need a lot of particulars.
  - xcv123 3y ago
    > But they could have been Apple? That's a stretch. They could have been a Sony. The iPhone camera sensor is made by Sony.
    - ghaff 3y ago
      And Sony has certainly had rough patches too. And that's for a company coming from an electronics manufacturer angle. Kodak could have spun off a consumer electronics or semiconductor manufacturing company. But it's not clear why that is actually a better model than someone else just spinning up similar entities. I don't need all the chemical engineers and a lot of other people connected with the old business anyway. And I'm sure not turning them into semiconductor experts. So you're one of the 10% of employees in HR who snuck through to the other side. Is that really a big deal?
maire 3y ago
Kodak was well aware of what was going to happen. Company culture killed digital photography. I was at Apple when we worked with engineers from Kodak who were working to change various format standards to allow digital photos. This was in the late 1980s or early 1990s.
- ghaff 3y ago
  But, from the perspective of today, Kodak would have had to basically eclipsed Apple. Even displacing the big Japanese camera manufacturers, who by then had dominated high-end photography, would have required reversing decades of a shift away from high-end cameras like the Retina line. I don't doubt there was company DNA against digital photography but it's not like non-smartphone photography, especially beyond relatively niche pro/prosumer level, has had such a good run recently either.
  - nradov 3y ago
    There is still a lot of business opportunity in supplying image sensors and lenses to smartphones.
    - chiefgeek 3y ago
      But it is nowhere near as profitable as the 35mm film system was.
      - ghaff 3y ago
        The 35mm system was a huge consumables business down through the food chain. That basically doesn't exist with digital. (Aside from ink jet supplies and I'm not sure how true even that is any longer.)

foobarian 3y ago

I think it's a near impossible situation - the status quo is literally something that should not exist given the new market realities. Pivoting is pretty much asking a company to commit seppuku - asking the layers of leadership to basically replace themselves and quit in many cases. Which is pretty much what happens anyway.

ghaff 3y ago
And, at some point, what does it matter if the leadership and most of the employees turn over, typically involuntarily? Is there any significance really to Foot Locker basically being a reorganized Woolworth's as opposed to being a brand-new company? If you're big enough and have some product lines that still bring in a lot of money and didn't totally collapse like IBM you can sometimes pull it off. But it's hard.
bunderbunder 3y ago
And, just like every Unix workstation vendor of the 1990s, they got hit with a perfect storm. They had their hardware being disrupted by x86 really coming into its own as a viable option for higher-end computing at the exact same time that Linux was becoming a serious option for the operating system. "Literally something that should not exist" is the perfect way of putting it. In 1990, lots of people needed boutique workstation vendors. In 2000, nobody did.
- bunabhucan 3y ago
  It's worse than that. Instead of "nobody" it was conservative slow moving vendor locked clients that could convince you to keep selling at those prices ("look at the margins!") instead of focusing on alternatives. I remember $5,000+ PCs being considered "cheap" workstations when those clients finally migrated.
- rbanffy 3y ago
  Even Apple, which became the unlikely last of the Unix workstation vendors, was disrupted by Intel (and moved from PowerPC to x86 for a while). Ironically, Apple is now the very last Unix workstation vendor in existence.

yndoendo 3y ago

When statements like X was better than Y come up. I always think of "All models are wrong, but some are useful", from statistician George E. P. Box, and rephrase it as "All models are flawed, but some are useful" so that model becomes ambiguous, such as a smartphone, TV, computer, car, programing language, programing design pattern, social media platform, and so on. Price-point, SGI technology was a financially flawed model pertaining to the growing market and more useful than flawed performance of the low cost technology market. Did anyone at SGI try to simply buy the low tech products, play with them a bit, and see about slowly integrating your tech to make that low tech product just a little better than the competition and cost effect for the market?

AnimalMuppet 3y ago

Someone at SGI wrote a paper/web page/blog post titled "Pecked To Death By Ducks", claiming that x86 chips could never compete with SGI, and claiming to refute all the arguments that they could. Then Intel introduced dual core (or maybe just two chips in one housing sharing a bus), and that generated a lot of buzz. So he wrote a follow-up titled "Pecked To Death By Ducks With Two Bills". I don't recall the timing, though, how it related to the timing of asking everyone to read The Innovator's Dilemma. But at least some of the time, there was a pretty deep denial (or at least a pretty deep effort to keep the customers in denial).

MichaelZuo 3y ago
That’s really funny for some reason.
- HeyLaughingBoy 3y ago
  IIRC, "Pecked to Death by Ducks" is the title of either a short (nonfiction) story or a book by Gerald Durrell, one of my favorite childhood authors.
  - jfk13 3y ago
    I don't recall that one, and I thought I knew Gerald Durrell's work pretty thoroughly. There is a book of that title by Tim Cahill, though; maybe that's what you're remembering?
    - HeyLaughingBoy 3y ago
      Yesss! Thank you. I'm embarrassed because I used to have that one, too :) On the upside, I've never known anyone else who had even heard of Durrell.
      - bluenose69 3y ago
        I would have thought that lots of folks had watched the "The Durrells in Corfu" TV series (PBS Masterpiece Theatre) and then did some research on the family. I don't know whether this is available online, but I can recommend it as a pleasant programme, with lovely scenery, interesting storylines, and engaging actors.

Animats 3y ago

They sort of tried. Around then they had a Windows NT machine that cost around US$12,000. But it was too late. The first serious graphics cards for PCs were appearing, from Matrox and others, with prices of a few thousand dollars. (I tried some early NT graphics cards on a Pentium Pro machine. This was before gamer GPUs; these were pro cards from tiny operations. Fujitsu tried unsuccessfully to get into that business, with a small business unit in Silicon Valley. At one point they loaned me a Fujitsu Sapphire graphics card prototype. When I went back to their office to return it, the office had closed.) Also, there was a bad real estate deal. SGI owned a lot of land where Google HQ is now. They sold it to Goldman Sachs in a sale and lease-back transaction, selling at the bottom of the market. That land, the area north of US 101 in Mountain View had, and has, a special property tax break. It's the "Shoreline Regional Park Community", set up in 1969. The area used to be a dump. Those hills near Google HQ are piles of trash. So there was a tax deal to get companies to locate there. That made the land especially valuable.

msisk6 3y ago
SGI tried its hand at the PC video card business as early as 1990. I was at Autodesk at the time and got one of these to beta test on a DOS 486 running AutoCAD. It was an impressive product. But huge; it took up two full-length ISA slots. And the display drivers were a bit buggy.
- sillywalk 3y ago
  Here's a brochure for the IrisVision boards - uses 2 ISA or Microchannel slots. Prices start start at $3,495 https://www.1000bit.it/js/web/viewer.html?file=%2Fad%2Fbro%2Fsgi%2Fsgi%2Dirisvisionboardset%2Epdf#zoom=page-fit https://www.1000bit.it/js/web/viewer.html?file=%2Fad%2Fbro%2...
- Y_Y 3y ago
  Sounds just like Nvidia in 2024
  - theandrewbailey 3y ago

mrandish 3y ago

You highlight one of the most interesting (and perhaps less understood things) about the key Innovator's Dilemma insight. Even if the senior management have read the Innovator's Dilemma books, know they are being catastrophically disrupted and desperately trying to respond - it's still incredibly difficult to actually do. Not only are virtually all organizational processes and incentives fundamentally aligned against effectively responding, the best practices, patterns and skill sets of most managers at virtually every level are also counter to what they must do to effectively respond. Having been a serial tech startup founder for a couple decades, I then sold one of my startups to a valley tech giant and ended up on the senior leadership team there for a decade. I'd read Innovator's Dilemma in the 90s and now I've now seen it play out from both sides, so I've thought about it a lot. My key takeaway is that an incumbent's lack of effective response to disruption isn't necessarily due to a lack of awareness, conviction or errors in execution. Sure, there are many examples where that's the case but the perverse thing about I.D. is that it can be nearly impossible for the incumbent to effectively respond - even if they recognize the challenge early, commit fully to responding and then do everything within their power perfectly. I've even spent time sort of "theory crafting" how a big incumbent could try to "harden" themselves in advance against potential disruption. The fundamental challenge is that you end up having to devote resources and create structures which actually make the big incumbent less good at being a big incumbent far in advance of the disruptive threat appearing. It's hard enough to start hardcore, destructive chemo treatment when you actually have cancer. Starting chemo while you're still perfectly healthy and there's literally no evidence of the threat seems crazy. It looks like management incompetence and could arguably be illegal in a publicly traded company ("best efforts to maximize/preserve shareholder value" etc).

throwaway4good 3y ago
Everyone has been reading that book since the late 90es. I remember a talk by Clayton Christensen talking specifically about Intel and how they setup the Celeron division to compete with themselves (based on his advice). A key property of tech in economics lingo is that it is “natural monopolies” - all fixed cost and no variable cost. This creates these winner takes all games. In this case both Intel, SGI plus others knew the rules and it just ended up with Intel taking the prize and it all becoming Wintel for a decade or so - basically until the smart phone allowed enough capital to be accrued to challenge the old monopoly.

VelesDude 3y ago

It was clear they were trying to do more consumer grade things, just look at the N64. Couldn't get more mainstream than that. Seeing how the graphics market ended up, it looks obvious from here but in the mid 90's it was still the wild west and everybody was throwing mud at the wall seeing what would stick. I have never really said that they where "taken by surprise", but a part of it felt like (from the outside) that management had been a little blinded by their pass success and the profit margins from their workstations combined with no clear path forwards for the whole industry. Nvidia could have very easily been just a curiosity of the past but they managed to strike it lucky standing on the shoulders of others. If SGI had always been a company that could provide graphics workstations the worked with x86/Windows PC's early for example - maybe they would have fared better. Would have gone with the flow of technology at the time rather than fighting uphill no matter the potential technical brilliance. But being saddled to their MIPS processors and custom OS meant that once people left, they almost never came back. One can have the best tech and still fail.

the_mitsuhiko 3y ago
> It was clear they were trying to do more consumer grade things, just look at the N64. Yes, but the team that did that also left SGI, then worked directly with Nintendo for the GameCube and are acquired by ATI. I’m not sure how SGI managed to not support that effort within itself.
- cuno 3y ago
  Nintendo wasn't loyal to the company it was loyal to the team, so when they just decided to leave and form ArtX they took the customer with them... SGI was happy with the Nintendo contract. They earned $1 in additional royalties for every single N64 cartridge sold worldwide. Losing the team was a big blow.
rbanffy 3y ago
> provide graphics workstations the worked with x86/Windows PC's Integraph started making PCs with high-end graphics at one point, when they abandoned CLIX and gave up on their (Fairchild's, really) Clipper processor. It didn't work for them either. SGI did their own "Visual Workstation" that ran Windows and had a Pentium, but that too was a huge disappointment.

appstorelottery 3y ago

I was making crazy money in the dot-com boom and bought a SGI 540 in 1999 (with an SGI monitor). With money to burn SGI was a childhood brand, legends in 3D. Such wonderful memories. 15k on a desktop setup - it was loose change, however it shows how clueless I was back then. However I'd felt like I'd "arrived". SGI with Windows NT - lol - I wrote my first OpenGL game in Visual Basic... I've always been somewhat of an outlier ;-) God help me. The point? My personal experience says something about the strength of the SGI brand - even in the face of what was happening at the time (3DFX and so on - my previous company was one of the few 3DFX api devs - illustrating how clueless I was...)... it all happened so quickly... I'm not surprised SGI couldn't respond - or more importantly understand the strength of Microsoft/OpenGL/DirectX in the boiling pot of 3DFX / Nvidia and the rest... From memory it took three years and SGI was done - shared memory architecture? No longer worth the cost. :-( Looking back, I was such a kid - a complete fool. Greybeard advice: bet on the monopoly. Be smart. Brands like SGI are nothing in the face of install base. Think about how crazy it was to spend 15k on a desktop SGI back then... nostalgia is insanity, vanity.

lizknope 3y ago
Yeah but it still sounds really cool! From 1991 when I first saw SunOS I wanted a SPARCstation. I started college in 1993 and the school was full of DEC Ultrix machines, Suns, HP PA-RISC, and a handful of IBM RS/6000 and SGIs. I just thought DOS/Windows PCs were such garbage. Single user, no preemptive, multitasking, no memory protection. Then Linux came out and it changed everything. I bought a PC just to run Linux. My dream of a Unix RISC workstation faded away. My roommate in 1996 bought a DEC Alpha. Not the cheaper Multia but an Alpha that could run OSF/1 Digital Unix. He actually ran NetBSD on it. In 1997 I took the computer graphics class and we used SGIs. There was just one lab of them reserved for that class and grad students. I was so excited and it was really cool but I didn't think I could ever afford one. It's still really cool though that you had one.
- panick21_ 3y ago
  Linux on RISC-V ... Its happening ... eventually ... probably.

hintymad 3y ago

I remember Clayton Christensen mentioned that Andy Grove invited him to Intel to talk about how to deal with the dilemma, and interrupted Christensen while he was talking and said something like "I know the problem, and I need you to tell me the solution". Similarly, Peter Drucker repeatedly mentioned one of the biggest challenges in business is "killing the cash cow". Along that line, Netflix's Reed Hasting is really amazing. He somehow managed to kill the DVD business and used it to milk the streaming business, when almost everyone in the industry and some of his lieutenants in Netflix didn't believe him.

froonly 3y ago
For a while you could view Netflix online and rent DVDs from them.
- RandallBrown 3y ago
  Oh dang, I thought you still could. Looks like they shut down the DVD rentals about 6 months ago.
  - chiph 3y ago
    There are now a couple of smaller disc-by-mail startups who aim to serve that market. I've signed up with DVDInBox out of Florida and they've done a good job thus far. From what I've seen their biggest current challenge is their mailer. Netflix spent a lot of time designing their signature red envelopes, working with the USPS on ensuring they would survive a trip through the postal sorting machines. DVDInBox has yet to reproduce it - their envelopes sometimes arrive fairly mangled, or have not arrived at all (lost to the bowels of the machines).
specialist 3y ago
Yes and: These years later, while the innovator's dilemma thesis describes what, there's still little treatment of why and how. I keep wanting someone to account for the roles of investment and finance. Amazon's innovation was lower cost of capital. They convinced investors to wait for returns. And they got a massive tax holiday. (How could they not succeed?) Ditto Tesla, with its saavy moves like govt loans, prepurchases, tax incentives, and selling direct. That cheap capital was necessary, but not sufficient. Both still had to create products customers wanted. I keep coming back to Apple. How'd Apple avoid the trap? Despite their terrible position. My guess is better financial strategy (if that's the right phrase). Apple focused on margins (and monosophony) instead of market share. And then leveraged their war chest to implement monosphony.

foobiekr 3y ago

I was at one of SGI's competitors and we had teams doing cheap HW - ATi and other cards, like IBM's GPUs at the time - and yet the company as a whole was like "ALL GOOD LET'S KEEP BUILDING MASSIVE CUSTOM GRAPHICS SYSTEMS!" They were as dead as SGI in the same timeframe.

jiggawatts 3y ago

In the late 90s I was in the last year of high school. Silicon Graphics came to do a demo of their hardware for students that were interested in taking a computer science course at university in the following year. The graphics demos looked like trash, basically just untextured and badly shaded plain colored objects rotating on the screen. For reference I was playing Quake III around the time which had detailed textures and dynamic lighting. I asked the SGI presenter what one of his Indigo workstations cost. He said $40,000, not including the graphics card! That’s extra. I laughed in his face and walked out.

dekhn 3y ago
In the late 90s, SGI demos were much more impressive than what you describe. It was used by technical folks to do real stuff, with stringent criteria. More importantly, the things that made Quake III so great were state-of-the-art for gaming. But those things couldn't render lines quickly and well (a mainstay of CAD at the time), or render at very high resolution (which IIRC was 1280x1024 in that era). Here's what Carmack said abotu the SGIs a few years before: """SGI Infinite reality: ($100000+) Fill rate from hell. Polygons from hell. If you don’t trip up on state changes, nothing will come within shouting distance of this system. You would expect that.""" SGI was also key for map builds before PCs were capable. But yes, 1999-2000 was just around the cusp of when SGI went from "amazing" to "meh".
- rbanffy 3y ago
  The curve that maps fucking around with finding out is not linear. By the time you start finding out, it's very hard to stop finding out much more than you would like to.
- jiggawatts 3y ago
  If I remember correctly, their cards had a high compute rate even at double precision, but had tiny memory buffers and basically couldn’t do texturing at all in practice. It turned out that double precision was a mistake that was sold as a “professional” feature. By sharing edges correctly and using the correct rounding modes, single precision provides pixel-perfect rendering. Efficiencies like this allowed the consumer GPUs to run circles around SGI hardware.

blackoil 3y ago

I believe having a talented dictatorial leader at top may be only solution. Like Steve Jobs, Bill gates or Jeff Bezos. Once they believe in a path, they have methods to get it done. Internet Tidal Wave memo is a good example of it. Zuckerberg is able to invest 100s of billions on a future he believes in. Obviously the observation has a confirmation bias.

pixelfarmer 3y ago
Companies through their usual hierarchical structuring are authoritarian by nature. However, many leaders are no actual leaders, they are just bureaucrats, and that is the reason why things get stuck.

hintymad 3y ago

I guess an interesting question would be whether Nvidia is SGI in the late 90s or Intel of 80s.

leetrout 3y ago
I have been comparing them to SGI of the late 90s but the next 18 months will prove me right or wrong as Intel, Apple, Google and AMD try to compete.
geor9e 3y ago
SGI was a pretty small 3D workstation company at the bottom of the S&P500, even at it's peak. Microsoft was at least a hundred times as big as SGI. (And Nvidia was even smaller, selling GPUs for both SGI worthstations and Windows PCs at the time.) Now Nvidia is a titan at #5 in the S&P. They could certainly be taken down a notch or two as CUDA alternatives mature and people start buying cheaper AMD/Intel/FPGA(groq, etc) hardware. But they're the best at what they do, with the best people. They don't really have a doomed business model the way SGI's "take out of a second mortage for the Onyx workstation to make N64 games" business model was doomed. I don't buy Nvidia stock, personally, but I especially wouldn't bet against them long term either.
VelesDude 3y ago
I get the vague feeling they are more like Intel in the 80's. Nvidia has had a real talent partially by their own smart moves and partial just pure luck for stumbling from one win to another. Seeing them fall into the Crypto boom and then straight onto the AI boom has been wild to see.

bombcar 3y ago

The way to survive is to eat your own lunch. Be the low cost competitor and cannabilize your own market. Otherwise you don’t build the iPhone because you don’t want to lose iPod sales.

VelesDude 3y ago
I not so obvious but similar example of this would be with Nintendo and the Switch. They had always hand their handheld and consoles as separate things but eventually decided to just combine them into a single thing. So instead of double dipping on the hardware and potentially the software sales, it just become a single entity. And to say that has worked out well for them is an understatement. Sold 139 million units and are still taking their time of getting to a successor. They are probably going to take the #1 highest selling games machine of all time and they did it by going against their old business practices.
musicale 3y ago
> Be the low cost competitor and cannabilize your own market. Otherwise you don’t build the iPhone because you don’t want to lose iPod sales. The iPhone was a high-cost competitor to the iPod. And Apple knew that multi-function devices usually offered poorer user experiences than more focused, (mostly) single-function devices like the iPod. But they still did the iPhone.

bigboy12 3y ago

Walking the streets of nyc 19 years ago. I saw a sgi indigo on the street and sadly I just kept walking on. Like wow.

deleted 3y ago

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Octokiddie 3y ago

> It was not taken by surprise. But in spite of that, it was still unable to respond. This is even a major point of discussion in the book. The incumbents always see it coming a mile away. They can't respond because doing so breaks their business model. Employees can't go to managers and say, "We need to enter this low-margin market for low-end products." Doing so is a good way to get sidelined or fired. The "dilemma" is that either traditional option, compete with the upstarts or move further up-market, leads to the same outcome - death.

tambourine_man 3y ago

I remember reading how Andy Grove, IIRC, spent two years trying to exit the DRAM business. He would flat out order people to stop working on it and they wouldn’t listen, believe or understand. The amount of inertia for large bodies is remarkable.

Pet_Ant 3y ago
And yet there are stories of people ignoring the company direction, continuing work, and saving the company. See: The Blue LED https://youtu.be/AF8d72mA41M?feature=shared https://youtu.be/AF8d72mA41M?feature=shared So it’s not clear that the company knows better. Feels like educated guesses but a lof of luck involved.
- tambourine_man 3y ago
  Very true
AtlasBarfed 3y ago
Why was exiting the DRAM business such an obvious positive? Intel is basically at its root PC hardware. Yes, it doesn't dominate the entire industry, but memory is pretty key to a PC and the OS that runs on it. In fundamentally it's another fab product. Like chipsets.
- tambourine_man 3y ago
  They were being crushed by the Japanese in price and went from the dominant player to barely registering the sales chart in one decade https://anthonysmoak.com/2016/03/27/andy-grove-and-intels-move-from-memory-to-microprocessors/ https://anthonysmoak.com/2016/03/27/andy-grove-and-intels-mo...

dclowd9901 3y ago

Can you guess why? Was it maybe outmoded or outdated sales models that didn’t take reasonable competition into account. I’m so sick of dancing around this topic. Managers and business types destroy companies. It never stops. Company after company. How many times do we have to pretend this isn’t the case before we see the truth. Innovators make things worth selling. Business types drop it on the floor.

mcculley 3y ago

I worked a lot with SGI hardware and IRIX in the 90s and very early 2000s. I ported a lot of code to and from Linux in that time. I remember trying to explain to SGI reps that while we loved the SGI hardware, Linux on commodity x86 was the increasingly more effective choice for our projects. We wanted to buy SGI x86 boxes but they were pushing NT. It was very apparent that SGI salesmen knew which way the wind was turning and they were milking the last bits of the commission gravy train. Even when everyone understands “The Innovator’s Dilemma”, the incentives of salesmen and shareholders can be to optimize for extracting value out of the dying company. If I am a shareholder in a company being out innovated, it might make sense to want them to maximize short term profits while reallocating capital to the innovators instead of trying to improve the dying company.

Pet_Ant 3y ago
Seems like issue is a shift from high margin sales representative lead growth to low margin mass where you don’t need sales people to convince you to buy it. Then there is no way to justify the sales team, so they don’t support it. The company is beholden to them, and they sabotage the move to mass market.
- mcculley 3y ago
  That is certainly one case, maybe the most likely. But another case I was involved with involved sales just not understanding the innovation. They could have potentially made just as much or more money with the new thing, but were too comfortable selling the old thing.

voidmain0001 3y ago

Could this eventuality happen to Google, Nvidia, or Apple?

infinite8s 3y ago
Why not? Google's only been a powerhouse for the last decade or so.

hulitu 3y ago

> The point being that the company was extremely aware of what was happening. It was not taken by surprise. But in spite of that, it was still unable to respond. They had the best processor on the market, yet they decided to sell Intel and Windows. I really don't underestand what were they smoking.

masfoobar 3y ago

"taken by suprise" When looking at 3d Acceleration cards on PCs, I believe PowerVR (and 3dfx) was released in 1996. Beforehand would have demonstrated their technology at conferences, shows.. with demos and adverts before they were released... this means SGI must have seen this coming as early as 1994. In as little as 4 years... Graphics Cards were required for PC gamers!