1. I have some serious biases against Penguin at the time (for...reasons) and frankly was never impressed with their product. 2. Without getting into a bunch of weird minutiae, we got big enough to be a threat to people who could afford to bleed us; case in point, we started doing incredibly well in HPC clusters, and big vendors like IBM and Dell started to offer severely below cost hardware packaged with their full services that completely undercut a business that already had thin margins.

IMHO, we made better gear at the time, but we were not in a market as wide and deep for linux optimized machines as it is now. It's not an unusual story in the valley. We did have a deep talent bench that ended up in key roles in a bunch of firms that are doing well: Google, Apple, et al.