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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.
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.
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.
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.
/^([Ss]ame [Bb]at (time, |channel.)){2}$/
Soon Going Insolvent....
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."
They certainly can afford it these days,
The cost of merging with SGI would be way beyond the cash outlay. SGI brings with it an enormous burden of management distraction: government contracts, security clearances, legal issues, etc, etc.
and benefit from all the UNIX goodies that SGI has produced over the years.
Everything Apple could possibly want from SGI can be had without buying the company.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
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.
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.