Lessons from a Fall - SGI

The fall of Silicon Graphics Inc. (SGI), which went Chapter 11 today, has many lessons, including a vital one for open source.

SGI rose to prominence as the maker of a "graphics supercomputer," and led Hollywood's digital revolution in the 1980s. It was a very important company, led by Jim Clark, who later founded Netscape.

But early success made SGI arrogant. It ignored important lessons:

• Don't resist the technology trend. In SGI's case it was parallel processing.
• Know when to fold 'em. SGI could have fetched a good price a decade ago, but resisted and become worthless.
• Proprietary advantages are temporary.

It's this last which is most vital in the open source world.

I believe SGI could have saved itself had it been early in embracing open source.

The company had two big advantages in the 1980s:

• Hardware, an advantage lost with parallel processing.
• Software, an advantage that was whittled-away and eventually replaced.

Open sourcing its software could have given SGI an opportunity. Arrogantly it ignored this reality.

Had Sun not begun an embrace of open source, it would have ended precisely where SGI sits now.