ServerWorks

» see serverworks.com as it lived, on the wayback machine

~ the obituary ~

This is a company you only ever met by taking the lid off a server, which I was not doing in 2001. Consumer motherboards had Intel or VIA chipsets on them. ServerWorks sat on the boards that came in rack cases with handles on the front, in rooms nobody sat in, and on a desktop in Turkey the name reached me only as a line in the spec sheet of a machine I was never going to own.

It started in Santa Clara in 1994 under the name PRQ, which became Reliance Computer Corporation almost immediately. Raju Vegesna founded it with two friends and funded it mostly out of his own savings. He had been the lead architect of the hyperSPARC processor at Ross Technology before that. The first year the company had twelve employees, most of them holding several titles each, and it operated so quietly the trade press described it as semi-secret.

Compaq was the first customer. The Champion 1.0 chipset went into the Professional Workstation 5100 in 1997 and then into three ProLiant servers, and once the biggest server vendor on earth had shipped your silicon, everybody else returned your calls. Fujitsu bought 60 percent of the company in 1998 and introduced Vegesna to Intel's executives, which produced a ten-year license to Intel's PCI bus patents the same year. By 1999 the client list ran through Dell and IBM. The company renamed itself ServerWorks at the start of 2000 and went public, ending the year with nearly a hundred employees and revenue around 200 million dollars.

In January 2001 Broadcom announced it would buy the company for up to 1.87 billion dollars in stock. The deal closed in the middle of that month at 957 million as the share price moved. The New York Times pointed out that this broke Broadcom's pattern of collecting struggling companies, because ServerWorks was making money.

~ the case file ~

~ the founder and the press release ~

On 27 March 2003 Broadcom removed Vegesna from the company he had founded, and replaced him with Duane Dickhut from its broadband processor unit. The press release was blunt enough that The Register called it astonishing. Alan Ross, Broadcom's president and chief executive, credited Vegesna with bringing ServerWorks "from a start-up enterprise to a position of industry leadership" and then described disagreements over operational issues and strategic direction that were not in Broadcom's long-term interests. The chief financial officer, Bill Ruehle, added that most people sugar coat their releases, and that there had been disagreements on a professional level about the direction of the business. Broadcom's stock fell 16 percent. A week earlier ServerWorks had admitted it could not make enough Grand Champion chipsets to meet demand.

On 3 May 2003 Broadcom settled with Vegesna and two other employees who had left in March, paying 25 million dollars in cash and expenses and taking an 88 million dollar one-time charge against it. The headlines put the total at 111 million, which is not what those two numbers add up to, and nobody reconciled them. The company also put out a line saying that every other ServerWorks employee, including the remaining co-founders and the entire engineering team, was staying.

~ the market it had ~

The technical argument ServerWorks won was about input and output rather than clock speed. Intel built server chipsets around the processors it was selling; ServerWorks built them around how much data a four-socket machine could actually move, and sold more of them. By 2002 it had the majority of the Intel server chipset market, which is a remarkable position for a company of a hundred people selling into the same sockets as the processor vendor.

Kimball Brown, the president, put the relationship plainly. Intel was the main competitor and also the best customer, and ServerWorks was helping it sell a lot of processors. The arrangement held together on the 1998 PCI license, and that license did not extend to Broadcom's own products, which is the real reason the subsidiary was left to run itself for two years after the acquisition.

~ the last catalog ~

Intel took the share back by 2006, and around May of that year the ServerWorks parts came off Broadcom's product pages. That date is soft, because a catalog is the only marker there is. It is also not a shutdown in the ordinary sense. No switch was thrown and no notice went out, the catalog simply got shorter. serverworks.com served the company's own site until December 2003 and has redirected somewhere else since January 2004; the domain today belongs to Serverworks Co., Ltd. of Japan, an Amazon cloud partner, unrelated to any of the people or the silicon above.

@}-->--

              )
             (_)
            .-'-.
            |   |
            |   |
            |   |
            |   |
          __|   |__   .-.
       .-'  |   |  `-:   :
      :     `---'     :-'
       `-._       _.-'
           '""""""

« previous  ·  random  ·  next »