Crushed by Bubble 1.0
I would argue that RLX was affected more by the demise of the DotComs in 2001 than by bigger competitors coming in and stealing their customers with better, faster, cheaper products. The initial products from the tier one server makers sucked quite frankly and it took them several more iterations before they got it right. And, in that time the market had a chance to recover, which is when the blade revolution began in earnest (around 2006). But, by then all the products were aimed at the Enterprise market, leaving a vacuum at the low end of the market. Therefore the Web 2.0 properties have, for the most part, reverted back to buying the same white box servers that were the bain of the data center back in 1999.
As Ashlee knows, I have been saying for years that someone could/should build a modern day version of the original RLX System 324 product – using current technologies and new design – and be very successful. That time has finally arrived, I guess.