Whenever this topic comes up there are always comments saying that SGI was taken by surprise by cheap hardware and if only they had seen it coming they could have prepared for it and managed it.
I was there around 97 (?) and remember everyone in the company being asked to read the book "The Innovator's Dilemma", which described exactly this situation - a high end company being overtaken by worse but cheaper competitors that improved year by year until they take the entire market. The point being that the company was extremely aware of what was happening. It was not taken by surprise. But in spite of that, it was still unable to respond.
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