Monday, July 31, 2006

SGI: A Case Study for The Innovator's Dilemma

Jason Stamper wrote an interesting blog entry on SGI wondering if it will become next Data General (see, Will SGI Become the Next Data General?). Some takeaways from his post are:
  • Great technology ultimately failed to capitalize.
  • CEO stressing that SGI not looking for exit strategy. Yeah, right!
  • Botched and failed acquisitions. Focus on perceived core, missed opportunities elsewhere. Cultural heritage hurdles!
  • Made irrelevant by commodity, PC and open source. Going the way Data General, DEC and Sequent went.
  • Is it all over for SGI? Most likely!
What I read on Jason's blog and know of SGI, I wonder if SGI will become another case study in favor of the theories elaborated in The Innovator's Dilemma.

Based on the mentioned strategy of "Going Downstream", I am certain SGI is heading in the same direction as every company mentioned in The Innovator's Dilemma who tried this after getting beat by smaller rivals/technologies. This strategy along with reorganization and cost cutting measures may create a smaller leaner SGI ready to be plucked by a rival but it is not going to make SGI an innovative top-tier leader again.

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