First GM, now Silicon Graphics. Lessons learned?

The optimist in me wants to believe that even the most raging egos must know that all glory is fleeting. What with Silicon Valley's famous chronic self-absorption, that's not a sure bet.

It was to be expected. When a one-time tech powerhouse winds up bankrupt and sold off for chump change, that's bound to ignite the daily bloviation fest.

So it was that one and all are today offering their dutiful ruminations on the cosmic import of SGI's acquisition by Rackable Systems for a paltry $25 million.

This is not so complicated. SGI was a comet, soaring through the tech firmament during its brief moment of glory. But it's only one in a list of former high-flyers to come crashing back to earth, a roster that includes the likes of Novell, Borland, WordPerfect, Digital Equipment, Wang, Data General-well, you get the point. The company made mistakes, like a big bet on Intel's Itanium. Also, management was slow to respond to the emergence of lower-cost alternatives to SGI's fancy (read: expensive) computers. If Harvard's Clayton Christensen ever wants to add another chapter to his previous work on the impact of disruptive technologies, SGI offers the classic example.

But somehow, I can't muster the necessary shock, especially when you consider the hard times in Detroit. Seriously, who ever expected to see the day when General Motors--General Motors!--would totter on the verge of bankruptcy? Now that's a shock of near-existential proportion.

GM was an icon of American manufacturing while SGI briefly figured among the leading lights in the tech firmament. But the companies' twin fates underscore how right Andy Grove was about the fate of companies that fail to be sufficiently paranoid. Here's what he wrote in 1996 and it's worth repeating:

"...when it comes to business, I believe in the value of paranoia. Business success contains the seeds of its own destruction. The more successful you are, the more people want a chunk of your business and then another chunk and then another until there is nothing left."

Amen to that and SGI proves the point in spades. Today's news should get printed out and pasted to cubicles all across the tech world. Will it? What with Silicon Valley's famous chronic self-absorption, it's anyone's guess whether any of this is going to make much of a dent. But the optimist in me wants to believe that even the most raging egos must know that all glory is fleeting.

We'll see.

 

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