SAN JOSE, Calif. — At Super Micro Computer, cartons of parts are often stacked in the parking lot, exposed to the elements. The 15-year-old computer maker has grown to 850 employees but still tracks orders the old-fashioned way, relying on sales representatives to monitor each step from assembly to shipping.
On Saturdays, a family-style lunch is served to workers as a token of thanks for workdays that can stretch to 15 hours.
And Charles Liang, the company’s co-founder and chief executive, obsesses over every detail of the business, from approving the custom orders that are the company’s specialty to dictating the environmentally themed, green neckties that executives wear to customer meetings.
Despite its peculiarities, Super Micro is a thriving, publicly traded business that sells about $600 million a year of servers to the likes of eBay and Yahoo. More often than not, the company beats rivals to market by three to six months, offering the fastest, most compact, energy-efficient computers to demanding corporate and institutional customers. It has managed to post annual sales growth exceeding 20 percent in recent years, and its stock has outperformed competitors like Rackable Systems and Sun Microsystems.
Super Micro reflects the passion and quirks of Mr. Liang, an immigrant from Taiwan, who is considered so vital to the operation that the company warns investors in regulatory filings that his loss could derail the company’s business, culture and strategic direction.
“He is the person who approves and looks at everything the company is doing — every new product, marketing effort, sales effort, anything you want to do or promote,” said Scott Barlow, who was manager of American sales at Super Micro before leaving to join Salesforce.com. “He is kind of a one-man show.”
Current and former employees describe Mr. Liang with reverence that borders on the cultish. “It’s almost as if Charles wills things to happen,” said Don Clegg, a vice president. “If he says a product will be on schedule, it will be on schedule. This is not driven on fear. It’s driven on belief.”
At the heart of everything Super Micro are two principles: give customers what they want, and do it as fast as humanly possible.
Whereas rivals long ago sent key design work to Asia to take advantage of cheaper, plentiful labor, Super Micro still relies on hundreds of expensive engineers working at its San Jose headquarters. These workers are charged with grabbing the latest and greatest components from suppliers and coming up with new designs months ahead of lumbering heavyweights like Hewlett-Packard and Dell.
“As an individual, Charles is very aggressive and motivated,” said Patrick P. Gelsinger, Intel’s senior vice president in charge of server chips. “Every once in a while, he appears on the verge of reckless, but if you’re going up against the big guys, you have to be willing to take risks.”
The company has become the lead manufacturer that Intel uses for showcasing new products, and rivals often relabel and ship systems built by Super Micro until they can come up with their own designs that accommodate the latest chips. “They are ready to move and move quick,” Mr. Gelsinger said.
Super Micro’s quick turnaround times and sophisticated products have allowed it to grab some loyal and large customers, like the Lawrence Livermore National Laboratory, which purchases tens of thousands of servers each year.
“We’re usually trying to buy the latest and greatest stuff, and they typically have new technology first,” said Mark Seager, head of advanced computing at the lab. “This helps us maximize the bang for our buck.”
In order to produce gear at such a quick clip, Super Micro asks a lot of its workers. It’s quite common for employees to arrive just after 7 in morning and stay until 10 p.m., coming in on weekends as well. Mr. Liang himself regularly works seven days a week, saying “every hour is a happy hour, or least every day is a happy day.”
Mr. Liang has run the firm alongside his wife and company treasurer, Chiu-Chu Liu, known as Sara, since it started as a five-person operation in 1993.
The insular, family-run approach is typical of traditional Chinese business culture, said AnnaLee Saxenian, a professor at the University of California, Berkeley, who has studied immigrant-run businesses in Silicon Valley. “It echoes back to a very traditional Chinese business model, where you have the family-run farm,” she said. “It’s all about trust and how you save money.”
One of Super Micro’s main Taiwanese manufacturing partners, Ablecom, is run by Mr. Liang’s brother, Steve Liang. Charles Liang and his wife own close to 31 percent of Ablecom, while Steve Liang and other members of the family own close to 50 percent.
Regulatory filings show that “a substantial majority” of Ablecom’s sales come from Super Micro. And while Super Micro pays most suppliers within 81 days, it will sometimes take up to 118 days to pay Ablecom, which houses components and regularly renegotiates prices with Super Micro.
“There are some funky, inter-family ownership questions that I would prefer didn’t exist,” said Alex Kurtz, a securities analyst with Merriman Curhan Ford, though he praised the company for disclosing a fair amount about the relationship.
Super Micro has some other rough edges, too. The lack of order-tracking software forces sales representatives to spend valuable time making sure systems are built and shipped, and they often squabble over who owns particular accounts.
The company’s poor controls also contributed to its violation of a United States embargo against the sale of computer systems to Iran. In 2006, Super Micro pleaded guilty to a felony charge and paid a $150,000 fine.
“We were a new company and didn’t know every regulation,” Mr. Liang said. “Now, we are well trained and watch over this 24 hours a day.” Mr. Liang added that Super Micro was improving its order-tracking system and might consider purchasing process management software.
Despite the global economic slump, Super Micro could enjoy a sales spurt over the next few months as Intel and Advanced Micro Devices release new server processors and the company races to design machines that use them to full advantage, according to analysts.
And those green ties? At Mr. Liang’s request, sales representatives wear them to meetings as a symbol of the company’s energy-conserving hardware. Text on the ties boasts that Super Micro’s products are “earth friendly” and lead to nothing less than “better life.”
From NYT.
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