Oh, for a bowl of fat Canary,
Rich Palermo, sparkling Sherry,
Some nectar else, from Juno's dairy;
Oh, those draughts would make us merry!
-- John Lyly, "Oh, For a Bowl of Fat Canary"

Rackable Systems (NASDAQ:RACK) needs to look for new customers. The server-system designer has leaned much too heavily on its top three accounts, and it's coming back to haunt the company now. Like John Lyly in the National Poetry Month contribution above, Rackable is hungry for new meat and drink.

Don't just take my word for it -- CEO Tom Barton said as much in last night's earnings release. He called the company's dependence on its biggest customers a "key factor affecting our performance during the quarter," as competitors moved in with aggressive bids to steal Rackable's prize partners.

As the company defended its turf in the data centers of Yahoo! (NASDAQ:YHOO), Microsoft (NASDAQ:MSFT), and Amazon.com (NASDAQ:AMZN), mainly by lowering contract prices, revenue fell 15% year over year. The cost of filling those orders remains rather fixed, so gross margins were nearly cut in half, and it's a downhill slide from there. The net loss this time was 70% larger than last year's net profit, even after a sizable tax benefit reduced bottom-line bleeding by 37%.

Rackable does have other sales accounts, with respectable businesses like Schlumberger (NYSE:SLB) and some of the nation's top research institutes and universities. But it seems obvious that greater diversity would benefit this company tremendously. With the likes of Dell (NASDAQ:DELL) and Hewlett-Packard (NYSE:HPQ) putting the squeeze on Rackable's core business, it's high time to send the sales force north and south, in search of supplemental income sources -- and workaday meat and potatoes would do just as well as any exotic dish.

Further Foolishness:

Dell, Amazon, and Yahoo! are all Motley Fool Stock Advisor selections; Microsoft and Dell also appear on the Motley Fool Inside Value scorecard. Rackable does keep fancy company, doesn't it? Taste-test any of our newsletters with a free 30-day trial.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure will make your day, every day.