SuperMicro Builds Channel Presence

As the CEO of San Jose, Calif.-based Supermicro Computer, Charles Liang defines his role as an advocate of system builders. To that end, Liang has been pooling the collective purchasing power of his customers to get better pricing on their behalf for a wide range of components beyond processors from Intel. In an interview with CRN Editor in Chief Michael Vizard, Liang explains how that strategy will help customers of SuperMicro compete more effectively against tier-one manufacturers such as Dell and Hewlett-Packard.

CRN: How healthy is the overall custom-system market?

LIANG: In September we had a record high and in October we had another record high. And we expect November to have been very good again. We have a 30 [percent] to 35 percent share of the Intel white-box server market. We provide much better costs and price/performance than HP or Intel or even Dell.

CRN: What is your strategy for competing directly with HP and Dell?

LIANG: We like the more technically challenging things, and this is an area where our customer has a better margin. It varies, but margins can be anywhere from 10 [percent] to 20 percent. Today, we have about 45 different configurations and about 15 different chassis. So we can provide all different kinds of combinations to optimize the customer application. A lot of customers feel that three to five choices are not enough. They need a more specific optimization. That is our benefit to the customer. We can also respond better to changes in the market because we have a more dynamic company. We have a two- to three-month time-to-market advantage over them.CRN: That would suggest then that you are focused less on the desktop these days. Is that the case?

LIANG: About 95 percent of our offerings today are for servers and workstations. The desktop PC is only 5 percent. We are really a server and workstation company now.

CRN: Beyond the desktop, will Supermicro move into the whitebook space?

LIANG: We are building specialized notebooks. One is a very high-performance workstation. The other is more personal, but it has a smartphone, calendar and lots of other personal features.

CRN: One issue that comes up a lot is the pricing advantage that Dell and HP have in terms of their volume deals. Are you working on anything in that regard to help level the playing field?LIANG: We know our customers need this kind of help. With memory, we already do something like that. A customer will buy 2,000 modules from us, but we buy 30,000 to 40,000 modules from the manufacturer and pass on the cost savings. We really started this program about six months ago and will soon extend it to hard drives. As part of that, we provide a three-year or four-year warranty for memory and hard drives. And we will also validate the compatibility and the quality of different memory products for our customers. The whole idea is to make it easier for our customers.

CRN: When do you think Supermicro will be adding support for the new BTX chassis standard being backed by Intel?

LIANG: We have a team working on that in Taiwan. My guess would be the first quarter of next year.

CRN: When do you think the market will be moving to dual-core processors?

LIANG: It's a way to increase performance without increasing the frequency of the processor, which consumes power. I believe it has a good chance, and we are ready for that transition with desktops and workstations in the second or third quarter of 2005 and it will appear in servers in the third quarter. But power users will still need single-core [processors]. They still want to have one powerful CPU in their workstation. Today, our base chassis is ready for dual-core processors when they become available.CRN: Will Supermicro move into the networking arena as it moves into the server area?

LIANG: In the second quarter, we will have a complete server. As part of that, we will have a management switch. We will also offer a stand-alone switch. We're trying to provide one-stop shopping.