Their moat is good server hardware that can be ordered without talking to a sales person that has one goal - determine how much they can milk your budget.
They used to let you order without talking to sales, now they want to validate the config like Dell and HPE. They are slow and don't respond and their ETAs are terrible and often wrong.
They have multiple friendly, competent resellers who will happily quote their machines, often using online tools, and will often come in around half of, say, Dell’s price. Maybe even better if you want something ridiculous like disks in your machine.
its not really a moat, but its a difficult model to emulate.
what they offer is a set of standard parts, tailored for verticals they think are important. but the secret sauce is that they are willing to customize just that much to make things work the customer.
even if you are a small startup and can't promise more than 100 units/yr, its entirely likely that they will build a custom PCB or riser or chassis on the chance that you will be successful. not a whole design, but a tweak on one of their standard models. they've done that for me before with no NRE, maybe they do charge sometimes.
so their moat is that they have enough money to make those bets, and an engineering organization that can do that in a lightweight enough fashion to make the whole thing work. and they do this while remaining very cost competitive
Given how few people in a “startup” possess the skills to know and articulate their needs and have the network to reach the right people in a company that size, it seems like a reasonable bet to make.
I have a system along these lines lying around. It’s a very low volume Supermicro board, made for a partnership between Intel and a little startup (not mine). The startup might, at their discretion and possibly with an NDA or two, tell you the model number. Then Supermicro would sell you the board.
I have no idea what money, if any, changed hands, other than the fact that I paid, IIRC, about $600 for the board.
Their competition is the enterprise hardware divisions of HP, Dell, and IBM. SuperMicro makes reasonably good quality, lower-cost server equipment. They are, IMO, a pretty good value if you don't want high-end support from the hardware vendor.
ASRock has also pushed into some of Supermicro's traditional product segments via the "ASRock Rack" brand. I have no idea how big that business is, though.
Gigabyte and Zotac also comes to mind, resemble Asrock.
There's a bunch of other kit too, but https://servethehome.com reviews a bunch of the various rack systems.
Example of some late January posts. Albeit none are of the "fits lots of GPU" sort that is helping propel Supermicro, but these folks all have those offerings too,
HPE, Dell, and IBM are glorified CDW-business model salespeople. Megacorps have no use for that when they can engage the source and get their own custom gear.
`Analysts clash on Supermicro’s ability to hold on to its position longer term. Wedbush analyst Matt Bryson said, historically, no company selling servers has had more than 30% market share.
“There’s not a reason Dell can’t do exactly what they’re doing,” Bryson said.
Others aren’t so sure. Some analysts say that established competitors will have a hard time bringing new products to market so quickly and have larger revenue streams from software and services.
Supermicro is trying to gain further market share by doubling down on AI and continuing to ship its servers out quickly. The company is also keeping prices low to entice new customers: Its gross profit margin totaled around 15% in its latest quarter, down from 17% in the previous one. HPE, by comparison, had gross margins of 36% in its latest quarter.`
“There’s not a reason Dell can’t do exactly what they’re doing,” Bryson said.
I find that quote interesting. As someone that worked for Dell, I can figure out why - they're heavily-invested in the support side of things. They're too busy with that and their current consumer and business-class offerings that realistically the server market segment they're already in doesn't exactly overlap with Super Micro, and most likely never will outside of some buzzword AI marketing.
Dell also can’t do what supermicro does because it would eat their margins. The dirty secret is that supermicro is making headway because they’re a lot cheaper than dell or hp. If dell/hp start to compete on price they don’t really gain any additional marginal business to speak of, but they do lose margin on all their current contracts (who presumably want to get the discount too).
The “companies become too stagnant to disrupt their own revenue streams” isn’t just a trope about leadership vision, it’s a very real financial phenomenon. Customers don’t like open price discrimination and often it’s better to keep your best customers than to chase after new ones and push all your margins downwards.
Funny, we're going the other direction, for much the same reasons. I suppose different organizations have different needs and Dell is moving in the wrong direction for us, while SuperMicro seems to deliver in the areas we value.
Quanta and FoxConn. The weird thing though, is the megacorps who can afford to design their own gear in-house are spending money on these outside shops. Waste of money.
Depends how you see it. Spending resources to do it in house when an outside shop does it could be seen as a waste of money too. if someone else is already doing it, why spend money redoing what they do?
Here's the incumbent experience for proper servers:
1. You're a small company. None of the big companies will talk to you. You're a waste of their time.
2. You're a medium company. Maybe the worst sales person on the team is desperate enough to talk to you.
3. You're a big company. They will be only too happy to talk to you.
You want to buy a rack of servers. They will not sell you a rack of servers. No, no, no.
You need to talk about how their SAN is much better than your current SAN. Also they just bought a virtualisation company so maybe you should replace your virtualisation stack with theirs. And have you considered how helpful their outsourcing service could be for running your datacentre? They'll undercut your current team of staff as long as you commit to replacing all your servers with theirs. Also they hear you're making use of REST services, have you considered one of their REST security appliances? They'll throw them in free.
None of these conversations happen with the person trying to buy a rack of servers, they'll happen with a vice president or procument or your finance team. Your rack of servers comes with a bunch of "free" stuff that you didn't want and don't have time to implement. Eighteen months later you're being told to drop all your work that your customers care about, because whoever inked the deal with the free REST appliances looks stupid if they don't get used, so you have to implement them
Supermicro are just selling you a rack of servers.
