Silicon Graphics Selects pcOrder.com to Power E-Commerce Strategy

Silicon Graphics (NYSE: SGI) announced on Thursday that it has selected pcOrder.com, Inc. (Nasdaq: PCOR) as the primary technology and service provider for expanding SGI’s business-to-business online sales initiative. The relationship, termed by the companies as a “partnership,” is intended to provide Silicon Graphics’ channel partners, resellers and distributors with extensive Web-based tools necessary to support their sales efforts.

Under this new agreement, pcOrder will integrate software and hardware to enable SGI’s channel partners to research, configure, determine pricing, generate sales proposals, determine product availability, as well as order Silicon Graphics products worldwide.

According to Keith Watson, executive vice president, Worldwide Sales and Marketing, Silicon Graphics is dedicated to making every transaction for obtaining the company’s products as effortless as possible. Watson said, “We expect that the e-commerce tools that pcOrder provides will help make it as easy as possible for customers to do business with us.”

SGI’s Big E-Commerce Picture

The announcement marks the beginning of the second phase in Silicon Graphics’ channel strategy. On January 11, 1999, the company announced that it had embarked upon an “aggressive recruiting campaign” to sign up resellers to sell its new visual workstations and flat panel display products. The next phase is to provide customers, resellers and channel partners with a set of enhanced e-commerce tools that make the order fulfillment process — from end to end — a “streamlined and positive experience.”

Initially, the company plans to offer the Silicon Graphics 320TM and Silicon Graphics 540TM visual workstations and Silicon Graphics 1600SWTM flat panel display through its enhanced e-commerce solutions. The company announced that it plans to roll out the technology in North America in the third quarter of 1999, followed by implementation in Europe, Japan and Asia/Pacific.

Said Ross Cooley, CEO of pcOrder, “pcOrder’s technology and content, combined with our experience in providing front-office solutions for leading manufacturers, resellers and integrators, will provide Silicon Graphics with the integrated toolset they need to introduce new efficiencies into their channel program.”

A Big Win for pcOrder

Spun off from Trilogy Software in June 1996, pcOrder.com made its IPO in February. The company focuses on e-commerce for the computer industry, offering software, content (including a database that aggregates product pricing and availability data for 600,000 product SKUs from over 1,000 manufacturers), and “Community” — a software platform for connecting a business’ entire supply chain. The company lists major industry players among its clients, including Hewlett Packard, Ingram Micro, Egghead.com, GE Capital, IBM, Tech Data, Compaq, CompUSA, MCI and several more.

This latest deal with Silicon Graphics represents a healthy addition for pcOrder, which, in our estimation, is poised for additional rapid expansion. If the company can keep its current clients happy and continue to grow at its current pace, it is likely that the company may represent an attractive buyout candidate for one or more of its larger clients, who compete, to varying degrees, in similar market segments.