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Supermicro Weathers the Downturn: Q&A with CEO Charles Liang

Amid major shake-ups in the server and storage industry, Supermicro keeps investing in R&D and pushing for market share.

The last couple of years have been tough for datacenter hardware vendors in general, but Super Micro Computer Inc. (Supermicro) pressed through the period with good growth and profitability -- and an impressive amount of product development.

Supermicro used the recent Computex show in Taiwan to unveil new models of its FatTwin, MicroCloud, SuperStorage and SuperBlade products with across-the-board performance-per-watt, compute and storage-density improvements. RCP Editor in Chief Scott Bekker caught up with the San Jose, Calif.-based company's CEO and Founder Charles Liang for a phone interview just before Computex.

Bekker: How is the move to the cloud changing buying patterns in the server and storage industry, and how is Supermicro responding?
Liang: We strongly believe when we are able to provide a total solution, then those midsize datacenters in corporations will continue to keep their own datacenter facilities or their own private cloud. We're constantly improving our costs so we are capable of supporting both [midsize businesses and larger datacenter customers].

As a $1.1 billion company, how does your R&D budget compare to what the related divisions among your Tier 1 competitors [Hewlett-Packard Co., IBM Corp., Dell Inc. and others] are spending in your sector?
Our percentage of R&D spending has been much higher than our competitors, even though the total amount was smaller than our competition. However, our team has been a very stable, very steady team. We've been working together for many years in a harmonic, efficient way.

Will you invest as much in R&D in 2013?
In the last three years, we hired about 80 percent more engineers. This year, it's time for us to focus on growing revenues. It's very important to improve our costs, as well. That's why, three years ago, we [began work on a state-of-the-art integration and logistics facility in Taiwan]. Very soon, we'll be shipping product from Asia to the United States, so our costs have been improving significantly.

Why should partners choose Supermicro rather than the Tier 1 companies they know?
We've focused on performance-per-watt, which can influence their total return on investment. With 10 percent to 20 percent better power consumption, in three to four years, each system can save a customer $300 to $600 in power costs.

Seven years ago, our company focused on green computing. The more we studied the value of green computing, the more we appreciated the way Mother Earth deserved our care. At the same time, we saved tons of money for our customers.

What sparked Supermicro's focus on green computing?
About eight years ago, I took my kid to watch the movie, "The Day After Tomorrow." [The 2004 climate-change disaster movie. --Ed.] After that movie, [we talked about it and realized we could] make computing more efficient. The next day, I called the engineers and said, "We can make a system that's maybe $50 more expensive, but maybe save $300 to $400 in energy costs over the next few years."

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About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.