Silicon Graphics Linux based hovercraft back in the channel

IT SEEMS THAT IN ITS HISTORY former proprietary workstation maker Silicon Graphics has been in and out of the channel more times that a hovercraft.

But now it is back, with a soon to be announced Suse Linux based Itanium II powered server and a storage product which will be reseller exclusive. Details in July.

The transitional company (it now does “high performance computing”) accepts that it's been beached for a while where the channel's concerned but thinks it has the model, products and margin to attract Elite (2.5 million euro revenue target plus four trained staff), Preferred (1million euro plus 2 dedicated staff), Premium (300k euro, dedicated sales person) and Logistic resellers (no dedicated staff needed but 500k target).

The European part of the global channel model is single tier, apart from Italy and eastern block where country distributors have or will be appointed.

Steve Cooper runs the SGI EMEA channel business. When we spoke to him he accepted it was a challenge to flip the company's 70/30 direct indirect model on its head and hit the target of 70 per cent of business going through the channel by 2007/08 with all the channel business being new business.

Cooper's proposition is that SGI wandered off from the channel (he says that 4 years ago, 70% of its business was through the channel) as it concentrated on big clients like NASA, other scientific institutions and US Federal Government bodies like those responsible for security. These are clients who need to manage huge amounts of vastly complex data, but SGI now says it can see that markets related to these and others (defence, sciences, manufacturing, energy, and media) are ready to be served by resellers with products that can perform similar complex tasks.

The logic being that not only is there more data out there but that the data itself is more complex.

Hence the timing of the move. Cooper believes that the time is right for Linux on “industry standard” chips along with SGI's multi-processor and own storage technologies to attract customers.

“SGI was a well known graphics player but we've reengineered our technology base. We now have the great products but are under distributed. But that doesn't mean we are going to sign and cull resellers. It's not a numbers game. We're looking for long term partners with who we can work on long term business plans,” Cooper says. It believes it has growth on its side: "The mid-range of the High Performance Technical Computing market is growing dramatically. During 2004 it grew over 47% and is expected to do well again this year. In addition, we expect indirect server sales will increase in significance in the market as vendors work to expand their reach through more aggressive channel strategies," said Earl Joseph, vice president of High Performance Technical Systems at IDC. "These two trends coupled with SGI's new channel strategy positions the company to take advantage of these growth factors."µ

The web site is www.sgi.com/resellers