Fallen star Silicon Graphics, bankrupt, to sell most assets for $25M

[Liberal_in_LA]

http://www.mercurynews.com/ci_12049610?source=most_viewed

Fallen star SGI to sell most assets for $25M

By Steve Johnson

Mercury News
Posted: 04/01/2009 05:54:36 PM PDT


Storied Sunnyvale tech company Silicon Graphics, the onetime multibillion-dollar company that rose to fame in the 1990s by helping Hollywood create blockbusters like "Jurassic Park,'' agreed to sell itself for a mere $25 million Wednesday after seeking bankruptcy protection for the second time in three years.

If the bankruptcy judge approves the sale to Fremont-based Rackable Systems, which makes servers and storage devices for data centers, it might mark the final chapter for SGI, which was founded in 1982 and has taken a painful tailspin into near obscurity in recent years.

Rackable Systems CEO Mark Barrenechea is hopeful. "They are a Silicon Valley icon," he said. "We believe the entire business is of compelling value to Rackable."

Still, the news is "kind of sad," said Rob Enderle, an analyst with the Enderle Group in San Jose, which tracks emerging technologies. "At one time, SGI was really thought to be where much of the creativity was going to occur in Silicon Valley. They were the guys kind of on the forefront of virtual reality."

[cliffordu]

1. I remember when SG was it for graphics...

Sad day...

[Merlot]

2. I took a 3 month course at the Silicon Studios

In special effects and 3D in the late 90's. It was so cool. SGI's were so smooth.

[PM Martin]

3. Sad.

What happened? They were at the forefront of the "digital revolution".

[ContinentalOp]

4. The era of high-end turnkey systems is done.

Same thing that happened to Avid, Flame, etc. All of this stuff is possible on off the shelf PCs and Macs now. I have no idea about the market for servers and science-y stuff but I'd imagine it's much the same thing. They should have focused on the software and held onto Maya.

[Fovea]

8. The cloud kills.

At least high end single purpose server architecture.

[lapfog_1]

6. Same thing (more of less) that happened to DEC from the

previous generation...

They catch (or create) a technology wave. The wave is very impressive when it crests and breaks.

But you have to get off the wave and catch the next one while it's just a ripple on the horizon... if
you hope to keep it going.

SGI had a number of nice boxes, great graphics engines, and a decent implementation of Unix (IRIX).

But the graphics engines were killed off by the new generation of much cheaper graphics... Nvidia and so on...

And the nice server boxes were killed by cheaper commodity boxes with Intel Xeons and AMD Opterons...

And the Unix was nice, but never could compete with the marketing clout of Winblows... and free Linux
(and some BSD unix) killed off the Irix OS.

The only thing they had left was the technology they bought from Cray Research (the Cray Link) for NUMA
cluster Supercomputers. But the supercomputer market is (and has been since the end of the cold war)
a dead market. It's hard to make it there when you are (at the end) just another vendor of rack mounted
cluster systems. Interconnect isn't going to keep you alive. Plus, the opportunity to sell another
Supercomputer is maybe 1 or 2 big ones a year, and maybe a dozen or so smaller ones a year.

Still, some of their software should have been worth something (Cray compilers, XFS file system, their
optimized NFS...). But it would be a struggle to market that stuff.

Some of their ongoing contracts for maintenance are worth something... believe it or not there are still
a number of Cray supercomputers and SGI supercomputers in service. And the people that have them pay
$$$ for annual service. But not enough to sustain over 1000 people (last time I checked).

Sigh.

[ContinentalOp]

7. "Still, some of their software should have been worth something"

Yeah, like Maya. They bought Alias and Wavefront for $500 million, sold Maya for $57.5 million to the Ontario Teacher's Pension Plan, who turned around and sold it to Autodesk 3 years later for $197 million! I don't know much about the business world but those sound like some questionable moves.

[lapfog_1]

9. They bought Cray Research for $740 million in 1996

and then sold it to Tera Computer for something less than $100M just a few years later.

Not only that, but a significant portion of the sale was for stock in Tera which has since tanked.

Competent management was never an SGI strong suit.

[billyoc]

5. IRIX on a 64 bit Mips

What now, bitches? :smoke: