SGI Versus Dell Case Analysis Essay

Anthony Moore

SGI versus Dell: Competition
In Server and Cloud Computing

I. The History, Development, and Growth
Rackable Systems was founded in 1999 by Mark Barrenechea in Milpitas Silicon Valley, California, as a specialist server company. Rackable had achieved much success until late 2006 when much larger companies, such as IBM, HP and Dell, began a price competition, driving down cost and Rackable Systems profit margins as well. During the 2000’s Rackable changed business strategies several times and acquired acquisitions in an attempt to gain a competitive advantage and compete in the server market. However, during this turbulent time Rackable Systems managed to stay profitable. In 2009, Mark Barrenechea sought fit to …show more content…
Larger competitors, such as Dell, Hewlett-Packard, and IBM have considerably greater financial, technical, development, sales and marketing resources, broader name recognition and larger customer bases than SGI in both server and storage markets. In addition, particularly in the storage market, there are many new companies introducing new products and technology that directly compete with SGI. Since these large competitors have greater financial strength than SGI does they have the ability to severely undercut the pricing of their products or provide additional products or servicing at little or no cost, which can make them less competitive or force SGI to reduce their selling prices, negatively impacting their profit margins. Lastly, these competitors may be able to develop products that are superior to the available components that SGI incorporates into their products, or maybe able to offer products that provide significant price advantages over those SGI offers.
IV. SWOT Analysis
As we can see from this case Silicon Graphics International has a strong market presence in the server and cloud market. Although SGI may not have the financial, technical, development, name recognition, and customer bases as larger companies, SGI has been able to establish themselves as a competitor for market share. New and innovative products and processes threaten large companies and create opportunities for SGI.
Poor or delayed business decisions can have dire

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