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SGI Warns That Bankruptcy Might Be Year-End Option
tbcpp writes "OS News reports: "SGI issued its most ominous regulatory filing to date, warning that a bad 2006 could force the former high-flyer into bankruptcy. In order to improve its business, SGI will consider measures ranging from axing or selling off product lines to pursuing 'a strategic partner or acquirer.' The hardware maker will basically look at anything and everything to remain a going concern.""
Recently I was working on a project that involved an SGI server. It was initially just for simulation but it needed to render LADAR images and also show pretty graphics of planes flying over terrain.
When I got up to present it, I had made a video that captured the output through a capture device of the SGI box. It was a real pain in the ass to capture that in high quality but I did. One of the females in the audience (and it was a large audience) raised her hand and asked me why it looked like shit. I told her that it was because SGI servers concentrate on points of location--not really graphics. She balked at my explanation and kind of scoffed at me for not finding another alternative that sold better. She told me her son's PS2 rendered better graphics than that. I agreed though I said her son's PS2 wasn't concerned about exact locations and LADAR images.
What I'm trying to say is that they've been surpassed in quality.
Oh, and another thing, I had to get these LADAR images across the network onto a Windows machine that was running a webservice. Let me tell you that the support for NTFS and SAMBA servers on SGI servers is really not there anymore. I barely got something to work and that was pretty ganky.
My coworker (who is ten years older than I) told me that those purple boxes used to sell for ~$125k. Now, he says you can pick up the newer ones for around $25k. That's quite the drop in market dominance.
Goodbye SGI, I'm sorry things didn't work out better for you. You lost site of what kept you floating. In the long long ago, I hear tell you made the product. Today, that foothold has crumbled.
My work here is dung.
well that's bad news for someone. They should try and sue someone using their patent portfolio. That seems to be in vogue at the moment.
They backed the wrong horse (Itanium) and don't appear to have a Plan B. We have some nice parting gifts and the home version of The Silicon Valley Company Game.
SGI's heyday was when most people thought of them as The Purple Computer Company; the Jurassic Park Era. And yes, their lack of a brand identity and strategy was part of their undoing.
"I'd rather be a lightning rod than a seismometer." -Ken Kesey
And to think I nearly forked over the cash to buy one of the machines. They were just so damn sexy. I easily would have given up beer for a few months to pay for one.
I used to dream about these boxes. Of course whenever that wonderful experience came over me, the wife would wake me up for real sex.
Gawd.
This would be a real shame as SGI has talent for engineering great systems. The Altix is a really nice architecture, the idea being you start with a 4 CPU node and can scale to a very large system with a single system image, high availability, easy scalability of memory, cpu, storage and interconnect, and has nice management tools for partitioning, etc. Unfortunately the price of entry is a bit high, and I think that perhaps going with IA64 rather than the budding Opteron was a misstep at the time.
I also feel they lost a lot of momentum by dabbling in various unpopular markets like high end NT workstations, expensive specialty graphics workstations (given this was a core market for them earlier, but high power graphics became commoditized) and didn't really strongly launch into the linux server market and make a big presence in time. If they had pushed a cheaper starting system for a scalable single system box they may have done better, but who knows.
Dibs!
The fat lady has been following them around for a long time.
who buys their IP, that is, the IP which isn't secretly pwn3d by Microsoft already. That is, if SGI has any IP that isn't secretly pwn3d by IBM already, either. SGI gave us whizbang graphics, spiffy NUMA stuff, and XFS (and more, let the list begin here). Some of the people there are obviously clever. Let IBM buy them for a song, and set up a skunkworks project somewhere.
I want to delete my account but Slashdot doesn't allow it.
I have heard it said of Microsoft that they have so many really smart people, and you don't see it in the products that they actually release to us normal humans. (I have even heard people who work there say it: they say they have really cool stuff in house, that somehow never gets out, or when it gets out, the cool has been removed.)
I'd be interested in hearing other examples of "really smart engineers working there but the results that outsiders see are mediocre". Amazon.com is another example that comes to mind (I used to work there).
I do not have an explanation for why this happens so often.
A counterexample: I worked at Apple in the early 90s and, given the amount of really dim or useless people we had there, we had really GREAT products.
I wouldn't be surprised if Apple considers acquiring SGI. They certainly can afford it these days, and benefit from all the UNIX goodies that SGI has produced over the years.
SGI faced the innovator's dilemma big-time; it was tricky to cannabalize their $2 billion workstation business for a $300 million graphics card market. And to move from being a full-system vendor to being a graphics card vendor. And even with all the management and business-issue problems, I noticed three problems their engineering effortsg never overcame:
- trouble with quality and shipping on time (see IMPACT)
- couldn't match/switch from 3-4-year development cycles of the workstation business to 6-month product cycles of the PC graphics card business
- engineers were loath to give up control of the chipset/box/OS in order to settle for just controlling the graphics subsystem. They tried to be a full-system player in a PC world. Given that Compaq couldn't really do it (something that was at least semi-obvious at the time), its not a surprise they, coming from the workstation space, couldn't do it with their integrated NT workstations.
- The engineers were delivering product that was differentiated but not in the areas that the biggest customers cared the most about. The benefits of UMA (unified memory architecture) graphics just weren't in sync with what the market most wanted: the fastest 3D at the cheapest price. And in the classic workstation space, polygon-pushing was what was most needed. Half their business was CAD workstations and in the end they lost that to Sun/HP/IBM who didn't have the sexy texture mapping stuff but could render polygons "good enough".
SGI also benefitted from many years from the other workstation vendors under-investing in 3D graphics. When that era ended, even the workstation business they were in got a heck of a lot more competitive.
Anyway, that's what comes to mind when I remember back to SGI in the mid-90s. In hindsight, I don't know of any silver bullets that would have gotten them out of the situation; it was death by a thousand cuts. At the time, I wondered if a merger with Apple would have made sense but it wasn't clear that the disfunctionality of the two organizations at the time would have melded into something better. (11072394) Maybe a damn good CEO could have helped them carve out a more defensible role in the industry; that's the only thing that got Apple through as far as I'm concerned.
A question and a comment:
How will this affect Opengl or is it completely independent of SGI now?
I recently took an opengl class at SGI in Mountain View. The class and material was good but the desktop SGI machines were less than impressive. The final application I ended up with ran at 20 fps on the SGI machine and at 250 fps on my vanilla dell 2.5ghz pentium with intel integrated graphics. I mean come on, they are supposed to be the graphics dudes. I forget which SGI model it was but is was a weirdly shaped purple mini-tower (couldn't stack anything on top of it, thats for sure). If they hoped to ever sell anything to the classroom attendees then they shouldn't have given us something that made them look so bad.
Back during the .com bubble bust, I was looking to invest in a company with some of my RedHat stock money I'd made (post IPO). A coworker who had been dabbling in trading heard my question. He suggested I invest into SGI. I looked 'em up and they were somewhere around $10. Having just invested in a stock that I bought at $50 and sold at double the price, I wasn't too keen on buying such an inexpensive stock. He just shook his head knowingly and looked at me with a big smile and said:
"When there's blood in the streets, buy!"
So i finally got around to buying it at $12/share. That was its peak. I waited and waited, but only lost and lost. I sold most of it at something like $5/share.
Two lessons learned:
1) Some companies have more blood than you think they do.
2) I am not (nor was ever) a real stock trader.
To hear that SGI's only now announcing the possibility of bankruptcy tells me they had years worth of blood left...
(My friend never sold his stock and AFAIK still holds his shares!)
Two fish swim into a wall, one turns to the other and says, "Dam".
Huge proprietary one-off systems, divisions that fight each other, a virtual pinball machine of executive changes, marketing that would make even DEC blush, it's no wonder why SGI is toying with Chapter 11. This after several years of trying to get themselves sold, is just so amusing.
I have a strong pity for people that thought SGI was a Silicon Valley progenitor and captain, only to find that it was really a dopey engineering company determined to constantly reinvent the wheel, never use anything anyone else did, and had the quintessential not-invented-here sickness that nearly killed Silicon Valley after co-inventing it.
It's my fervent hope that they just liquidate, and get it over with. My advice: skip Chapter 11 and go straight for seven, and put SGI and its employees (I've known many) out of its constant misery and pain.
---- Teach Peace. It's Cheaper Than War.
SGI was my first non-government job, and my first time exposed to the Bay Area, back in the early 90's. SGI was just on a tear then, with Jurassic Park and virtual reality and so on, and it was a blast to work there. In fact, looking back, I'd say I was happier when I was at the office than when I wasn't. The people were brilliant, the products were dead sexy, and the environment was all about balance. For instance, while the group I worked in taught me a lot about what can be done with a polygon, they also introduced me to sumo wrestling (those padded costumes), windsurfing, motorcycle riding, a Grateful Dead concert (one of Jerry's last ones), and strip clubs (bachelor party for a team member).
If there's ever a funeral for SGI, I'd show up.
They were responsible for the OpenGL spec itself, had a ton of influence on directions taken in the CG market generally, and instead sang endlessly about something called "Virtual Reality" while the rest of the world realised that unless it could be affordably domesticated, there would be no market for it. While NVIDIA and ATI said "Hey, mind if I check out this 'gaming' thing while you're out?" they were selling Caves with Dolby and a few O2's to CEOs of mining companies and a few UNI's once or twice a year.
I know, I worked in one. SGI reps would come over with "THE FUTURE" written all over their face even when we were openly replacing their boxes with white PC's running GeForce cards.
Snobbery or stupidity (they often converge), it is utterly their fault.
I mean, they have been circling for like 6 years now.
I have a friend there, he says the've lost money for 28 straight quarters. The layoffs they do EVERY quarter don't exactly help morale, either.
They're a premium brand, and USED to have cool stuff. They got passed in the graphics business, their bet on Itanium turned out to be a turkey, and the government isn't buying SGI stuff like they used to -- they used to have some nice hookups there.
Turn out the lights, the party's over.
I was reminded of this interesting post I had found on an mit email archive a few months back... http://projects.csail.mit.edu/gsb/archives/old/gsb -archive/gsb2001-06-29.html
Its the Itanic... she sinkin n draggin everyone with her. So much for the MIPS.
[all generalizations are untrue except this one]
SGI's MIPS once ruled 64-bit computing (along with Alpha). Somehow all changed when Belluzzo convinced them to become yet-another-wintel dealer; and Intel bluffed them into giving up their technical expetise with Itanium vaporware.
You kinda feel sorry for them - but this has been a long long time coming. Funny thing is that people call Itanium a failure; while in really it's key in helping Intel take 64-bit leadership away from MIPS & Alpha -- and Belluzzo got a president job at microsoft rummored to be largely because of his role in killing the microsoft competitors of SGI as its CEO and crippling the non-wintel parts of HP in his exc management role there.
Meanwhile the products that were relevant to graphics customers are long gone, and with all their hardware talent moved to Ati & Nvidia, companies like Apple have caught up to take their professional consumers.(To the point where Apples now do all the things which those amazing Indigo^2 boxes did all those years ago.)
SGI gave us whizbang graphics, spiffy NUMA stuff, and XFS (and more, let the list begin here). Some of the people there are obviously clever.
Don't forget the Standard Template Library.
Might wanna download all the docs before the bankruptcy court pulls the plug on the servers.
Am I the only one who read that as SG1 at first glance? :P
We all though Apple was dead and out too. And now look at them. It sounds like it is house cleaning time and a change of direction. The OpenGL standard is nice but really out dated. If a company created a real time ray tracer (RTRT) they could pomel the raster graphics erra. But this is just my opinion.
/^([Ss]ame [Bb]at (time, |channel.)){2}$/
Soon Going Insolvent....
They backed the wrong horse (Itanium) and don't appear to have a Plan B.
Linux killed SGI, not Itanium. I've always argued that Linux is a far greater threat to traditional unix vendors. like Sun and SGI, than to Microsoft. Sun and SGI sold many systems to users who did not really need anything Sun or SGI specific. For some they just needed a generic unix box and a PC running Linux was a whole hell of a lot cheaper than a Sun. With PC graphics cards getting decent 3D hardware, some found a PC running Linux was a whole hell of a lot cheaper than SGI. I saw this at school where PCs replaced Suns unless you could state a need for something Sun specific, few did. I saw similar things in the chemical industry with PC doing day-to-day visualization and modeling, Sun and SGI boxes became rare.
Back to the school example, ironically, the switch from Sun to PC/Linux was also a win for Microsoft. Somewhere along the line they decided to have the PCs dual boot.
Interestingly, recently I've seen a slight shift away from Linux towards Mac OS X. Apple is doing some good outreach to unix developers, academics, etc.
SGI made (and still makes many SMP Intel boxes). We still use SGI 1300 (Quad PIII) on FreeBSD everyday. Do more research!
It's amazing how quickly people forget. Ricky "Microsoft Mole" Belluzzo is the reason SGI got it's head-shot to begin with. Remember Rick? Yeah, he was the guy who, while working at HP back in the mid-90's, made the announcement that HP would be "dumping HPUX in favor of Windows NT" without any warning or approval, forcing HP to do the world's larged backpedal ever seen.
He then went to sabotage SGI with the SAME STUPID GAMBIT, before finally going "home" to Microsoft.
If they'd had their dramatic culture shift towards Linux and back towards Openness only a year or two earlier, it would have made a big difference to them.
Nope.
What killed SGI was the standard Big Computer squeeze, just like it killed Cray, DEC, Tandem, DG, etc, etc. The commodity hardware improved enough to eat their lunch, and there just aren't enough of the super high-end customers to keep them in business.
SGI could have survived by returning to their roots as a graphics hardware maker. Instead of ATI and Nvidia, we'd have SGI and a handful of also-rans, but SGI's management thought that making graphics boards for PCs was beneath them.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
I don't blame them for going down the tubes. The fact is, their niche doesn't exist anymore. When you look at all the top companies from 1990, hardly any are left. Those that survive are in niches which happen to still be profitable - and generally much less so (Oracle, Sun). Successfully re-inventing a sizeable business on the fly hardly ever happens. And no, I wouldn't count Apple as an example of that, unless they leave the PC business. HP has changed its business more, but they're not a standalone company anymore and also aren't doing terribly well.
SGI *was* cool. How many of you has actually help the company by really *buying* some stuff from them?
Apple *was* cool and *is* cool. I, like many many many of you, own an iPod.
They already sold their entire patent portfolio to Microsoft several years ago (1998?) for ~$60M in an attempt to stay alive. Very sad.
That's true for the software, but not the OpenGL trademark.
And what of subsequent revisions of the spec? Are they always guaranteed to be open?
"Nine times out of ten, starting a fire is not the best way to solve the problem." - my wife
As far as I understand it, it seems the Standard Implementation is licensed under a BSD, mozilla alike license
s e.html
http://www.sgi.com/products/software/opengl/licen
Apple used to be on the verge of death as well, but Steve Jobs made the smart move of makeing the "i" series of products. The 'iMac' and the 'iPod" saved Apple and made it the powerhouse it is today.
Using that same lowercase "i", SGI needs to create the following products:
iRIX -- a new "internet" version of their operating system. Based on Unix and with a slick looking GUI, it should be named after various breeds of Dogs.
iNDIGO -- A candy-colored all-in-one box, preferably purple, that glows while it's on, pulsates while downloading data from the network and runs absolutely silently.
iNDY -- A smaller version of the sam box. Maybe plays MP3s.
This series of moves should save them from death...
TTYL
Brian C.
If telephones are outlawed, then only outlaws will have telephones.
Maybe they aren't taking in cash hand over fist like they used to, but SGI still holds some serious patents that are being used by Nvidia, ATI, and other major players. I doubt they will go the SCO route and start suing everyone, but don't be surprised if there is a bidding war over this particular bloated corpse.
O2's weren't teal.
O2's weren't $20,000.
You're spot on on everything else.
XML causes global warming.
Idiots should have got into the GFX card market.
Uh... people who worked for SGI DID. It ain't their fault that management's a bunch of asshats.
Where the smegging hell do you think ATI and NVidia got their talent, hmmmmmmm?
I once did a fellow ship with these guys in 00 and was really impressed with their product. I was at the main campus that one day in April when the CEO gathered all of the employees into the cafeteria just off the yellow brick road and told the employees exactly how much trouble they were in when their stock completely tanked. It is really sad considering some of their hardware (Onyx and Origin) were not only innovative, but kick a$$ as well. Hopefully someone will pick them up. I would like to see Sun gobble these guys up and take control of their machines!
See "Lost In Space" The Movie, to see what I'm talking about. SGI got a plug in the film as co-funding the trip the Robinsons were taking. D'oH!
I guess that's like the PAN-AM logo on the Shuttle in Kubrick's 2001.
Or the ATARI logo in Blade Runner.
Hrmm. The one thing you should not put in a Sci-Fi film is an existing corporate logo... Seems to be the kiss of death.
If telephones are outlawed, then only outlaws will have telephones.
My work here is dung.
1. The Cray aguisition
The whole company focused on the highend and integrating Cray's technology and took it's eye off the low end commodity market.
2. Windows NT 3.5.1
The first version of NT that was stable and made the developers of scientific and CAD apps and universities (SGI's bread and butter) to take Microsoft seriouslly.
3. Ego and denial
Tom Jermoluk and Ed McCracken refused to admit there was a 500lb pink elephant in the middle of the board room with Intel and Microsoft logos tatooed on it's ass. Jim Clark didn't, but he lost a power struggle with McCracken and went AWOL until he resurfaced with Netscape. By the time SGI decided to build Wintel boxes, it was too late.
4. The Internet boom
SGI's heyday pre-dated the 'net boom and when the boom hit their talent pool was drained by startups such as nVidia.
5. Re-inventing the wheel
Few of SGI's products ever "evolved". Once they completed rev. 1, they threw it into the market and went completely back to the drawing board to reinvent something brand new instead of evolving (and supporting) existing products.
6. Developing for the sexy, not the practical
SGI's products were sexy and they demoed great but the reality was that the flashy capabilities targeted the small, niche markets like entertainment while they ignored more practical (but un-sexy) features which made them more valuable in larger markets such as CAD.
7. Horribly late in bringing products to market
The O2 and Octane workwstations, as well as their last decent graphics card, were 1.5 - 2 yrs late in coming to market. By the time they were announced they weren't competitive and comprimises had to be made to shoehorn the latest processors from MIPS into them. And the O2's graphics were hardwired to the motherboard and couldn't be upgraded. And as detailed in #6, they were loaded with features that demoed well but almost nobody used (e.g. Octane's crossbar bus technology). And then McCracken handed development of the Wintel box off to the same group that screwed up the O2 and the made the exact same mistakes again.
8. No clue on Wintel
As mentioned above, the group that developed the O2 was handed the keys to develop SGI's first Wintel offering and they made the exact same mistakes. Horribly late to market, loaded with features few people used, and with graphics that were hardwired to the motherboard and couldn't be upgraded. They even went as far as to build a custom BIOS incompatible with existing BIOS-based tools such as Ghost. When sys admins evaluated the boxes, they said "wait a minute.... I can't use my existing admin tools with this thing.... forget it."
9. Fahrenheit
Just as John Carmack had given OpenGL the shot in the arm it needed and it was gaining incredible momentum against Direct3D, SGI made a deal with the devil to merge OpenGL and Direct3D. Fahrenheit never saw the light of day, OpenGL lost it's momentum, SGI's CEO got a high paying gig at Microsoft, and OpenGL is going to be a second class citizen in Vista. SGI also gave up it's efforts on scenegraph and large model APIs which would've differentiated OpenGL even further.
*sigh* so sad
The time I spent working for SGI was one of the most rewarding experiences in my career.