The SGI/Rackable deal is completed

Silicon Graphics News

The latest on SGI and Rackable has come through via a press release from … SGI. Yes, as I speculated when the deal was first announced () Rackable are following Tera’s lead (when Tera bought the bones of Cray from Silicon Graphics) and have rebranded, keeping the familiar SGI name.

The headline news is that the XE products will be merged with Rackable’s existing x86 clusters (which was their core competency) and sold under the Rackable brand.

Existing high end techologies – like Altix, VUE, ICE, Infinite Storage etc. – will remain. The company is also positioning itself as a ‘solutions provider’ – moving away from just selling tin, which should hopefully push sales, growth, and revenue.

At the moment, the main SGI site redirects to Rackable’s website, although things like Techpubs are still live and reachable. Customers should be re-assured that the product lines will continue with renewed vigour – how this affects the hobbyist community, independent consultancies, and IRIX users remains to be seen.

You can read the full press release here.

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Going, going, gone! Silicon Graphics sold for $25m

Silicon Graphics News

Well, this news came as a bit of a shock. Out of the blue SGI announced they were going in to Chapter 11 (again), closely followed by the news that Rackable were buying the company for a paltry $25m.

You can find the entirety of SGI’s press release at At that URL you’ll also find PDFs of the letters sent out to SGI customers, as well as holders of a Silicon Graphics support contract.

John West over at insideHPC has a good post up discussing the Rackable/SGI deal – rather than re-hash everything, I’d recommend you read through his thoughts.

Despite still sailing close to the wind financially, Silicon Graphics still have some very clever tech, which remains in demand. The entire VUE suite is good, CXFS is miles ahead of offerings like Sun’s Lustre, and no-one can do large shared memory systems like SGI.

The question is – can Rackable take this great tech, and SGI’s awesome technical staff, and accomplish what Silicon Graphics have been unable to do – sell them to clients?

Under the disastrous mis-management of that imbecile Rick Belluzo, Silicon Graphics really suffered. Yet, even after he’d bailed, they still retained the arrogant attitude of a much larger company – despite the best efforts of the bulk of their technical staff, and some of their management.

Ignoring the (incredibly vocal and loyal) hobbyist userbase, ignoring business data centres, VARs and OEMs was never going to work. You can’t trade on past glories for too long. That was starting to turn around in the last couple of years, with large systems aimed at businesses and the start of a VAR program, but it was a case of too little, too late.

It’s going to be interesting to see what Rackable’s next move is. Like Compaq swallowing DEC, they’ll be inheriting some longer term government contracts which still require IRIX and MIPS support. Rackable would be foolish to ditch the Silicon Graphics brand – it’s far more established, emotive, and powerful than their own. Will they do a Tera and ‘become’ Silicon Graphics?

With Intel’s Nehalem Xeons now out the door, there’s a credible upgrade path for Altix user’s stuck with Itanium, and Rackable could make some serious coin from that – and land some new business too.

John also has some details on how the deal will work and it looks like we’ve got a short timeframe to hear what’s going to happen.

Interesting times – both literally and in the Chinese curse sense – for both Silicon Graphics, their userbase, and the hobbyist community.

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