Verari Reboot Paves Way for New HPC Strategy

By Michael Feldman

January 21, 2010

The re-emergence of Verari Systems this week under new management and a new name marks the end of a difficult chapter for the beleaguered server maker. According to a press release posted on Verari’s Web site on Tuesday, company founder Dave Driggers, along with some unnamed investors, have acquired the assets of the business and have relaunched the company as Verari Technologies. As the former CTO — and previous to that, CEO — Driggers is now listed as the company’s new CEO and chairman.

If all that doesn’t seem like a big change to you, that’s because the new company will essentially be like the old one, technology-wise. The big change will come from a more refined customer strategy. The announcement mentions a new focus on blade-based HPC, modular containerized datacenters and blade-based storage. There is also a plan to get back into the consulting biz, with the idea of partnering with other companies to deliver customized solutions.

Verari is not talking a lot to the press these days, but a brief conversation with company spokesperson Mike LaPan did confirm that the new organization will indeed be refocusing on the HPC space. He forwarded me this statement from Dave Driggers:

“Moving forward, Verari Technologies is concentrating on rebuilding our relationships in the High Performance Computing space by focusing on consulting services that deliver advanced, customized solutions for the HPC market. This is where Verari came from, and this is what we are returning to. I am confident that in a short time, you’ll see that our servers, storage and networking solutions will be driving world-record HPC performance again while providing the technological foundation our HPC customers require.”

Verari’s renewed interest in HPC customers harkens back to the company’s roots when it was known as RackSaver, and later in the early days of Verari Systems. This is before it got the idea to go toe-to-toe with the likes of IBM, HP and Dell for big enterprise accounts. With its energy-efficient server blades and containers, Verari did manage some significant wins with companies like Morgan Stanley, AMD, Microsoft, Qualcomm, Lockheed Martin, Sony Imageworks, and others. But as competing server makers added their own energy-sipping blades and space-saving containers, Verari’s ability to compete against the Tier 1 OEMs on the basis of differentiated technology alone, diminished.

The strategy to resize their ambitions is probably a smart one, especially considering the realities of the server market today. One of the reasons we have Tier 2 and 3 OEMs is because the Tier 1 OEMs tend to ignore smaller and more specialized accounts. I’ve had a number of conversations with HPC customers looking to buy moderate-sized clusters, but who couldn’t even elicit a bid from IBM or HP, presumably because the sales organizations at these companies are geared toward the big deals. (The customers I’ve talked with characterized the encounters a bit more bluntly.) In any case, if there is room in the HPC server business these days, it’s likely to be for vendors willing to get more intimate with their customers.

It’s worth noting that server vendor Rackable Systems, who had a similar set of technologies to that of Verari, also found itself in a tough situation in 2009. Like Verari, Rackable’s early success with its power-efficient servers was compromised as the Tier 1 OEMs used their size and market reach to grab more of the big enterprise accounts. Unlike Verari, however, Rackable avoided facing bankruptcy and instead decided to expand its ambitions by acquiring SGI, the idea being to build a synergy between the HPC and enterprise offerings of the two companies. The Rackable/SGI and Verari strategies are not completely diametrical, but they are dissimilar enough to offer an interesting test case for the HPC business.

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