SGI Faces Bankruptcy

Richard Finney writes " The stock chart tells the story: One time Silicon Valley high-flyer and contender for the Unix crown, SGI stock price dropped 20% on Friday ... deep into penny stock territory ... after releasing fiscal fourth quarter results. The Mountain View, California maker of high end computers is ' exploring financing alternatives with its lender and other sources.' With mounting losses and investors giving ol' Silicon Graphics the thumbs down, things aren't looking good."

Comments

Shame

[SirPrize]

It's a shame to see a company that had such interesting hardware and operating system going down. I used IRIX on an O2, and loved it. Was way ahead of its time.

Re:Shame

[tgd]

Thats pretty debatable. The O2's were overpriced and underpowered, and Irix was SUCH a pain to work with. SysV but things just didn't quite work the same as other SysV boxes.

SGI had gone from making significant high end hardware to making an attempt at the "trendy" market that Apple did such a good job being successful in. During the dot-com hype in the late 90's, they were pushing case design and graphics demos as justification for overpaying for their hardware.

They were already on the way down at that point. The decision shortly after the O2 systems were introduced to start selling vastly overpriced PC-compatible Intel hardware was the nail in that coffin. (Lets hope Apple weathers that decision better than SGI did! There's a LOT of parallels between the two, only Apple has had success where SGI had failure).

I think the last real significant (from a market innovation standpoint) hardware SGI really was selling was the Indy line, but even those were form-over-function and were mostly useful because at the time they had a real stranglehold on high-end graphics production.

Well..

[sbentmar]

They could always sue Linux.

Re:Well..

[Zeinfeld]

They could always sue Linux.

Linux has always been a much bigger competative threat to UNIX vendors than to Mr Softy in Redmond.

SGI had a ringside seat for the Web revolution, all the Netscape stuff was written on SGI. Sun trounced them because SGI made the mistake of concentrating on the 'high end' and abandoning the comodity computing area. Also all that Java mumbo jumbo somehow led people in the Internet world to think that everything had to run on Sun.

DEC also disappeared, rmember the days when they were second only to IBM and growing faster? IBM is no longer in the PC business and its mainframe business is all but dead. They are now a consulting company that makes a few unix boxes.

Clark predicted that SGI was on the road to ruin back in 1994 when he quit. They have been a shell for years. Pretty much all the former SGI offices off Shoreline and Charleston were taken over in the 90s.

This is like the death of Cray or Symbolics, by the time the company finaly disappears its ten years later.

Re:Well..

[aktzin]

IBM is no longer in the PC business and its mainframe business is all but dead. They are now a consulting company that makes a few unix boxes.

You're correct that IBM left the PC business (sold the Personal Systems Group to Lenovo last year) but IBM is still making -- and selling -- plenty of hardware. From page 22 of IBM's 2004 Annual Report,

ftp://ftp.software.ibm.com/annualreport/2004/2004_ ibm_financials.pdf

($ in billions of US dollars)

Systems and Technology Group 2004: $17,916 2003: $16,469 Yr to yr change: 8.8% zSeries: 14.9% iSeries: (17.2)% pSeries: 7.3%

Almost $18 billion in hardware sales sounds pretty decent. A 14.9% increase in mainframe sales from the year before doesn't look "all but dead", and a 7.3% increase in pSeries (AIX/Linux) machines is more than "a few unix boxes." Especially since Gartner reports IBM leading the worldwide Unix server market last year,

http://www-1.ibm.com/servers/eserver/pseries/news/ pressreleases/2005/feb/gartner.html

You make some very good points in your post and I agree with most of them, but please understand that IBM hasn't completely left the hardware business. We (yes, I work there) are having too much fun kicking Sun and HP around. And by the way, we sold over $15b in software last year, so we're not just a consulting company.

Make a deal with the devil...

[Anonymous Coward]

And you lose. I'm pretty sure that SGI's downward spiral can be directly attributed to their little tangle with the Beast of Redmond.

The zombie corpse of SGI, stripped of its important 3D computing patents which went mostly to NVIDIA and Microsoft, has been shambling around for a while now, but it will take a miracle for it to pull back from the edge.

Re:Make a deal with the devil...

[Anonymous Coward]

How can you say that after all SGI have done for Linux, and open standards in general?

SGI:

- Gave Linux XFS, arguably its fastest and most robust filesystem to date. Far, far more robust than reiser, and quicker than anything else except reiser4 (and then only sometimes), except on deletes where it is slow by design - SGI realised earlier than most that if you need a simple rule, it's pretty safe to assume that people just don't delete files often (excluding short-lived temporary files, which XFS handles _incredibly_ efficiently.) Just check out the low rate at which XFS volumes become fragmented to see how you can take advantage of putting a little thought into deleting files.

- Scaled Linux beyond 32 CPUs for the first time ever. And years later they still hold the record: 1,024 CPUs in the one computer with a single memory space. Nobody else comes close, and I do mean nobody. And this isn't just SGI lab stuff any more - NASA bought 20 of these computers to build the fastest computer on the planet that uses commercial microprocessors.

- Invented OpenGL (hint: what do you think the "Open" in "OpenGL" refers to? bonus marks: compare and contrast OpenGL and DirectX) together with the surrounding (open) glue like GLX. This is pretty much the only reason Linux boxes and Macs have decent 3D, and the only reason you can actually have a decent game of quake even if you're using a dumb terminal. Try playing Quake when connected to a Citrix box. Fun? Didn't think so.

- a bunch of other things I don't know about personally, but here you go anyway.

Anyway, since SGI's main role these days is selling IA64-based supercomputers and workstations, I hope Intel just buy SGI but let them continue to run independently so they can just keep on with all their good work. They provide a useful service to the Linux community, even if you never pay them a cent - this probably has something to do with their current share price (sadly). You might not use OpenGL, Itanium, massive shared memory systems or XFS but the odds are good that at least one of these is helping you, or at least some bugs SGI fixed while getting one of these working.

Re:Make a deal with the devil...

[Anonymous Coward]

What the fuck are you talking about? Since it's impossible for any filesystem to be perfectly reliable in the face of arbitrary hardware failures, filesystems don't need to take hardware into consideration in order to be robust. You can simply desire that:

1) if the hardware is running smoothly, the filesystem never fails
2) if the hardware screws up in any way imaginable (aliens come and rape your hard disk while you're sleeping), the filesystem never fails to return to a perfectly working state (as if nothing had ever happened) and with a low amount of data loss.

With XFS, you can tune the amount and nature of data loss in the case of hardware (power) failure. The default (which many people don't like) is to emit NULL for any region of a file that was known to have had writes that were not committed. This is arguably BETTER than filesystems that will simply give you the old contents of the file, even though the filesystem could have known that there was an uncommitted write. Of course, XFS can let you have that exact same behaviour, on a per-file basis.

XFS also gives you advanced quota support and guaranteed-rate I/O, but most people don't need that.

However, you shouldn't need to be a freaking guru to add the four letters "sync" to your /etc/fstab and mount any super-critical filesystems synchronous, so that power failures lose the least amount of data possible (and you take the accompanying performance hit.)

In short, XFS' default configuration is top speed and high reliability only on high quality hardware setups (UPS or whatever), and this has surely bitten a lot of people who didn't bother to find this out/test things first/read the fine documentation.

There is absolutely nothing about XFS that stops you from making it as reliable as any other filesystem, however. I don't see how a filesystem can not be "memory-to-disk". I guess you mean "buffered" (asynchronous) - you can turn that off dude.

Re:Make a deal with the devil...

[Jeremy Allison - Sam]

Completely untrue. I was at SGI at the time. The grpahics workstation business wasn't great, but not collapsed.

The original poster was completely correct, the Microsoft deal burned $300 million of much needed cash.

The Farenheight debacle was another aspect of it. *DONT* deal with Microsoft. Just don't. Ever. No matter how attractive it looks on the surface.

But greed keeps people thinking "but it'll be different for *me*. They won't screw over *me*. I'm different....). Wait until Microsoft pulls the plug on the Microsoft/NetApp agreements for more of the same.

Jeremy.

huh

[user32.ExitWindowsEx]

maybe nvidia will buy them (thereby fixing up lingering IP issues) and be able to open-source their video drivers.

extremely unfortunate.

[bagel2ooo]

Unfortunately, when the hardware was new I was not able to afford it. Currently I own an Indigo, Indigo2, and an O2. They are very capable and suprisingly rounded machines. I was concerned with SGIs direction during their stint of windows clusters but with the linux superclusters they've been working on lately and some of the rekindled movement with the workstations, I have been very hopeful of a bit of an SGI revival. Hopefully, they will be able to recover from this. If not, I know that many people will be greatful for the contributions they have made.

This is really too bad...

[sgant]

But I have to ask, is there really any reason why to get an SGI today? I can see a company with an installed base of SGIs upgrading or what-not...but do they really offer anything new or different?

This is not a troll, it's an honest question. Back in the budding early days of the workstations sure, I could see getting these machines to work on 3D graphics etc etc. But now that 3D graphics cards are on regular PCs and Macs and both can run UNIX type operating systems, what does SGI or SUN for that matter have that you can't get elsewhere?

I'd be interested in knowing what others think about this or why they would keep going to SGI.

Re:This is really too bad...

[ebh]

Is there really any reason why to get an SGI today?

It's a reasonable question, all right, with an unexpected answer: I/O. This is the one area where IRIX still stands out among the other Unix flavors, and nobody outside the supercomputer world knows it, even though it holds true on all their hardware platforms. If you look under the hood, you'll see that the IRIX kernel's I/O layer can move bits at a higher percentage of available bus bandwidth than any of the others. The OS does an amazing job of getting out of the way of the hardware.

When I was working on HP-UX, we used them as our benchmark goal, and never met it.

Re:This is really too bad...

[iwadasn]

If you're NASA, you probably find the Altix supercomputers pretty compelling. If you're an iBank, you probably find the 8-24 way dual core (48 cores in the big ones) Sun boxes pretty useful for processing all your data and trades.

Sun boxes are about the same cost as x86 boxes in the high end, and they have all the stuff you really need. 64-bit, lights out management (you can discover problems in the hardware even after it has crashed, because it contains a little computer on a chip designed just to report the statte of the hardware, power cycle it, etc....), lots of PCI cards, SSL accelerator cards, lots of ram slots, disk slots, raid cards, etc....

Your average 8 proc US-IV system (16 cores) from Sun costs about the same as an 8 proc (8 cores) Opteron system from HP, for similar configurations. It (supposedly) has much better support for things like SSL cards and massive multiprocessing/multithreading, especially under java.

Someone probably should buy SGI and Cray. There is a market for high end (top 500) supercomputers and other high end data processing systems.

Translation...

[iamdrscience]

The stock chart tells the story:

See that's their problem, there's a mutiny going on at Silicon Graphics, the graphics are turning against them!

This is very sad

[Darth Maul]

I have an Indy. I used in in college for CS work, and it was perfect. Learned OpenGL stuff, etc. I was the biggest SGI fanboy. evar.

I was actually at the event that started the complete destruction of SGI. It was summer 2000 in New Orleans. This would be SIGGRAPH 2000. I actually presented a paper, and was invited to the SGI party at Anne Rice's humble adobe. This was the day of a "big annoucement", and we were ALL expecting SGI PC graphics cards. Taking the SGI name and technology into the new up-and-coming PC graphics card market was the brilliant move we all expected. Compete with nVidia, and take names.

What did they announce? Some newer, bigger supercomputer thingy. You could taste the silence in the room.

That was the day, certainly in my book, that sealed the fate of SGI. After that, PC graphics cards just exploded onto the scene, and the whole reason for getting an SGI became moot.

I still love Irix, and can't believe how amazing the Indy is that I bought back in 1994. Still is a great machine, and it's a shame to see SGI finally near the end.

Re:How Linux Killed An Industry

[Nutria]

I still can't figure out why anybody would buy a Sun box?

Because some people need big SMP systems with operating systems that have the features that big organizations need.

Linux-on-Opteron plus the OSS tool makers are getting there, but not yet.

Re:Another notch...

[buckhead_buddy]

If you're thinking about companies that'll buy up SGI rather than just kill them off, don't forget that other Jobs' company with a focus on software rendering products. They've been known to also be big consumers of SGI stuff when they're putting together a new demo reel every couple of years.

Re:They should have got into the graphics card mar

[Anonymous Coward]

Instead they sent girls around in push-up bras selling upgrade licenses.

Torrent please.

Let us mourn...

[AnObfuscator]

... the loss of yet *another* innovative & powerful system architecture ... yet another victim of the cheap-ass & now all-conquoring x86.

PowerPC in Apple, SPARC in Sun, and now MIPS in SGI... one wonders how long PowerPC/POWER will last in IBM's workstations & servers...

I love commodity hardware from a social perspective -- cheap, standardized, capable hardware means access to vast quantities of information is becoming practically free for a rapidly increasing percentage of the world's population. On the other hand, I can't help but feel a substantial pang of loss as these non-standard platforms are, despite innovative and arguably superior design, destroyed only by the economy of scale. Alas.

RIP, SGI. You were damn cool while you lasted.

Nerd Typo

[iamdrscience]

after releasing fiscal forth quarter

They're still using Forth? No wonder they're going out of business! Keep up with the times, SGI!

The days of high -end hardware are over

[pongo000]

Back in the mid 90's, I wrote software for a commercial satellite imaging system (now part of Space Imagining). SGIs were the workstation of choice: Very high-end, graphics without compare, in-depth support for parallel processing, and relatively fast. Cheap they were not (not to mention a fairly buggy C++ compiler in IRIX that took up many hours of our time...usually very esoteric bugs that even stumped the SGI folks).

Back then, the rumor was always floating around that SGI was considering moving from Irix to Linux. (Did I hear correctly that they finally did, years later?) Amongst ourselves, we would talk about there was no way Linux would be able to replace Irix (remember, this was '96!), and that it would be a mistake for SGI to go this route.

How wrong we were...SGI, like Cray and some of the others mentioned, refused to give up their hold on proprietary high-end hardware, and have fallen hard. Now that the hardware market has become commoditized, with throw-away PCs, there's really no need for companies like SGI, Sun, etc. Sun, to their credit, has tried to bail from their sinking ship by making overtures to the OSS crowd and by delving into software, but they may have been too late to start manning the lifeboats. But it's my belief that Sun's days are numbered as well.

So a hearty farewell to SGI. I just hope they go down swiftly and silently.

tragic but not surprising

[william_w_bush]

owned an indigo2 for a while, nice r10000 mips. nice having a 64-bit cpu and operating system back in 1999. well designed too.

the problem with sgi is that it's been living in the year 1995 since 1990, which was working well for it for a while, but when commodity gear just starts killing your performance and cost there comes a point where you have to move on to a new platform. this is like sun, except sun seems a little farther along and willing to keep pushing forward, while sgi just keep digging bigger and bigger holes for themselves.

sad, but the dot-com boom which fed these companies also birthed the commodity pc boom which killed them. i actually want to lump apple in that same catagory, but unlike the rest which stayed in their path and carved themselves farther and farther from the mainstream, apple kept pushing to keep their market position, and in pc's managed to keep their niche. surprising, but their success in the last few years had very little to do with their core pc business, and everything to do with i*'s keeping their brand warm.

just hope these same market forces end up killing the ms monopoly they created, an good open sourced os (not necc. linux) would make a lot of the hardware innovation that stopped post-lintel possible again.

Recipe for Failure

[DynaSoar]

1. Make something that is X better than everything else.

2. Count on the fact that people will pay Y times the common average going rate for "the best".

3. Charge X*Y+Z where Z is an arbitrary high number chosen by management who are paying more attention to the stock prices than the computer science.

4. Neglect the fact that while many people will makes googly noises about "the best", they will go for "good enough" in proportion to the constant Z, and that this effect will increase over time.

Re:Speaking of Huh?

[alienw]

They are both assets. If you think drivers are so easy to write, why don't you try writing one? Here's a hint: the main difference between a professional card that sells for $2000 and a gaming card with the same chipset (which sells for $200) is the drivers.

NVIDIA has a very good and very fast OpenGL implementation, not to mention lots of optimizations and tricks. The driver is as much of an asset as the hardware; it's certainly just as important for performance. If you've ever used ATI's version of OpenGL (which is half-assed at best), you'll realize how much of an asset the driver really is.

OpenGL?

[rexguo]

SGI is the inventor and care taker of OpenGL. Without OpenGL, desktop 3D graphics would be completely monopolised by Microsoft's Direct3D. If SGI goes down, what's going to happen to OpenGL and the OpenGL Architecture Review Board that's responsible for advancing OpenGL?

Re:Apple should buy them out

[suitepotato]

Their engineers and their software libraries alone should be worth quite a tidy sum and at least Apple would put the stuff to use in some or other product (some high end 3D package that does for 3D what FCP did for video). Microsoft would almost certainly mess it up if they bought them up.

That said, the fact that buyers are not exactly beating down SGI's door speaks volumes in itself.

Hey, those with mod, points... mod parent up, please. The poster makes a good point. Bear with me here, I'm going to address the second line first and proceed to the first.

For years, SGI was seen as the platform for CGI but SGI was indeed one of the biggest bunch of arrogant bastards I ever got within ten feet of. I requested some information and nothing more and they ignored three requests and on the fourth called me and asked to meet with me at a local sales office. I asked to be sent their printed marketing material first before I would meet with them and they point blank refused and insisted on speaking with me in person at which point they'd hand me the literature.

So I reluctantly agreed. I was looking to start a small CGI business for local broadcasters and video producers and what was on the PC platform was just not fast enough for the time frames that prospective clients were asking for. Of course, what the fark would they know, but I digress.

I got there and they gave me the full court press. I told them at the outset that the package would have to be solid and self-consistant and problem free. I could teach myself anything they had, that wasn't the issue. Price and performance was. If it was right I might be able to swing $100K in financing toward it with the backing of some interested people. But I had to show them that it could be done in one shot.

The SGI sales people basically ignored everything I said, kept pressing me on their most expensive machines, and kept encouraging me to blow off my would-be partners and find someone willing to go in on a deal of at least $1.5M. I wasn't planning on any such level, made it clear, they ignored me, gave the full court press, continued on.

I ended up walking out as gracefully as I could, after it became clear they had no intention of settling for $90K worth of sales (I needed to hold back 10% for support equipments), and handed me literature that was by their own admission one year out of date and they promised the up-to-date literature would be sent anon. It never was.

The result was no sale, the potential business never got off the ground, everyone went their different ways, and that was that. Here's where I address the first part. I tried to salvage something of my time by going with off-the-shelf PC hardware and software.

There was maybe one Macintosh app of the time that could do anything useful and IIRC it was Electric Image. At the time, they wanted some ungodly amount of money that was a good 25%-50% above comparable Windows NT based offerings such as Lightwave and even SoftImage. The DEC Alphas of the time were faster than the Macs and they had SMP Alpha boxes availible which could really do some serious work (at that time). The Windows platform was the one to go with, but it couldn't touch SGI of course.

Fast forward to today when Apple is selling SMP boxes every day, they have a really well put together BSD-ish/*nix-ish OS, paid supported software support, and are comparable to the Wintel side. The Wintel side can already do 64-bit, and there are boards which will take four dual-core 64-bit AMD chips. Makes the SGI base of yesteryear look like a calculator. With Apple going to Intel for their boards, a quad SMP dual-core board from Apple could be a reality fairly quickly.

Apple was always the darling of the DTP mavens even when it lagged in power compared to Wintel and less expensive Wintel apps had more and better features than Photoshop. They nearly squandered that religious fervor altogether and if the OSX platform had been delayed any longer,

Well, SunRay

[mcc]

SunRay is actually a truly fantastic product if you can get an opportunity to use it. There is something just absolutely fantastic about being able to pull your little card out of the machine in front of you, walk to an entirely other part of the building to where someone you know is sitting, say "I'm having trouble with this, could you take a look at it?", stick your card into the machine sitting next to him, and have whatever you were doing just pop up there. Those little cards change the entire PC computing dynamic, and the new dynamic makes way more sense pretty much anywhere except in the home.

Unfortunately Sun

• Charges about as much as a low-end PC for the SunRay thin client
  
• Charges about as much as a mid-range business PC for the SunRay thin client if you want little frills like, y'know, a monitor.
  
• More or less requires the use of Solaris to use Sunray, which makes quite a bit of sense when you consider SunRay necessarily requires a hugeass multiproc server stowed somewhere, but which, seriously, is not something many people would want to use as a desktop OS. You could maybe sell the end user on Linux, if you set it up quite specifically. Solaris, um, that's a lot harder. The upshot of this is that SunRay probably only appeals to that small number of companies where everyone is or can expected to be a UNIX user.

So between these things, the only places I've aware of in the entire world using SunRay in a way that demonstrates its potential are large universities with big Sun contracts, and, um, Sun itself. If there's another business using this system I don't know what it is.

I think this is kind of representative of Sun as a whole right now. They've got a WHOLE bunch of promising ideas and services and products. But they're not quite where they can be useful in a real world situation-- there's just those two or three simple-but-difficult-to-solve issues that hold it back from people buying it. In every case Sun could probably address these issues if they thought really hard about exactly who they wanted to buy this and why-- that is, they've got the neat tech but they don't have a clear picture of exactly what (not "it could be used in a multimedia telecommunications infrastructure!", an actual exact product) this tech should be used for in the real world.

In the meantime, the energy that could be used on figuring out how to leverage or market the things that Sun offers but no one else does (SunRay-ish stuff) is all being diverted into fighting uphill battles, mostly trying to keep a market presence for Sun's not-so-unique products-- for example, the Solaris vs. Linux fight-- which are still the cornerstone of Sun's business, but aren't necessarily the company's strength anymore now that similar or interchangeable products have become more commonplace.

I'm sure they're trying to figure this out also, and I'm sure there's some way Sun can change this situation, but I don't know when or if it will happen.