Slashdot Mirror
Rackable Buying SGI Assets For $25M?
UnanimousCoward was one of many people to submit a story that might be an April Fools day joke, except that I don't think it is. Rackable Systems has announced that it is buying SGI for the bargain basement price of $25M. Time was that there was little cooler than an SGI workstation. And note to Rackable's PR: Either this was a genius joke, or a terrible day to announce huge news. Someone either deserves a promotion or a firing.
a story that might be an April Fools day joke
Hey I myself enjoy taking a joke too far but if this is an April Fool's Day joke, I must confess I would have jumped out and yelled "surprise" before filing a merger and acquisition notice with the Security and Exchange Commission of the United States Government. I hear they don't take too kindly to joke 8-Ks.
From the SEC Filing:
On April 1, 2009, Rackable Systems, Inc. ("Rackable"), a Delaware corporation, announced that it had signed an Asset Purchase Agreement (the "Agreement") to acquire substantially all the assets of Silicon Graphics, Inc., a Delaware corporation ("SGI"), including SGI's non-U.S. subsidiaries and operations, other than certain assets unrelated to the ongoing business. The Agreement, dated March 31, 2009, was made and entered into by and among Rackable, SGI and certain SGI subsidiaries. The Agreement has been approved by the respective boards of directors of Rackable and SGI.
Under the terms of the Agreement, Rackable or a subsidiary of Rackable, will acquire the assets for a purchase price of approximately $25 million in cash, $10 million of which will be placed in escrow and available to Rackable following the closing to reimburse Rackable for payments and expenses made or incurred in connection with certain tax matters. In addition, Rackable will assume certain liabilities associated with the acquired assets. Following the signing of the Agreement, SGI and certain of its affiliated entities located in the U.S. filed a voluntary Chapter 11 bankruptcy petition and motions to approve the Agreement.
Also note that they had planned to repurchase up to $40 million worth of shares but it looks like instead they're opting to acquire SGI. What that means to you day traders and quant fund managers, who knows?
And note to Rackable's PR: Either this was a genius joke, or a terrible day to announce huge news. Someone either deserves a promotion or a firing.
The world doesn't screech to a halt because a bunch of nerds are slapping their knees and pulling pranks; here's evidence someone got something done yesterday.
My work here is dung.
Right up until you found out how bad Irix could be ;)...
Very sexy hardware, terrible *nix implementation. I once had (sigh) an IR2 in my office for 6 months. I don't think I slept at home the entire time.
Loading...
Anybody could buy SGI for peanuts.
-Karthik
Or if it is, the Alternative Press, Reuters, and Wall Street Journal are all in on it.
I would not be surpised in the least if it were true. After all, SGI has been on the downswing for quite some time, after making a series bad moves that just completely eroded their marketshare.
BTW. I hear you can pick up killer SGI MIPS equipment on eBay for a song. These machines are still workhorses for 3D rendering, audio and video production.
My blog
"Time was that there was little cooler than an SGI workstation."
My head hurts trying to parse that sentence. Is there some grammatical rule that I don't fully understand or was that just a mistake in the summary?
I kind of understand it to mean -
"There was a time when there was little cooler than an SGI workstation."
Though I could be wrong.
Not that I didn't preview or anything, but I could have also linked in the SGI customer letter. Rackable is getting SGI without getting their debt.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Time was that there was little cooler than an SGI workstation.
Time was that there was little cooler than your company having its own Cray machine.
... Wait, I'm sorry, what was the point of this exercise again? To wax nostalgic about the inevitable fall of empires?
Time was that there was little cooler than having the latest Sega game system in your home.
Time was that there was little cooler than to puts around on a BSA motorcycle in front of your friends.
Time was that there was little cooler than to be a citizen of Rome
My work here is dung.
Between IBM buying Sun and Rackable - SGI, it seems like the IT industry is getting cheesier by the day. UNIX vendors are quickly disappearing, which is kinda unfortunate IMHO :/
... But SGI is $500+ mil in the hole.
It's definitely not an April Fools joke. But does this really surprise anyone? They're just going the way of DEC and just about every other Unix vendor. The only ones that are still around and thriving are Sun, IBM, and HP. But those too are slowly dying the old Unix death, done in by Linux I suppose.
:-)
When I was younger, I could have only dreamed of having one of these venerable Unix systems. But now that they're finally cheap and I can afford them, Linux now makes them seem very outdated and proprietary in nature. Kind of a sad thing to see old dreams die, but in this case I think it's also a step forward.
It's always seemed like such a shame to see old well-designed machines built around Unix (rather than just generic PC's) become a thing of the past, though. Good quality hardware and a machine that looked and ran like it meant business, with fast disks and lots of RAM...
Systemd: the PulseAudio of init systems
OB Ozymandius reference
I remember when Everex and Kodak (and Dell too?) all got out of the Unix/SVR4 business. Kodak got out by selling to Sun. I seem to recall that Everex sold off their Unix operation for a paltry $100K.
I really wonder why Rackable is even bothering? Do they think the companies using SGI iron today will keep buying more stuff an SGI label on the front?
It was obviously going to be all downhill for SGI when they replaced their cool cube logo with the useless text logo....
It doesn't sound like Rackable is paying much for SGI's assets; but, they are picking up SGI's considerable debt, several hundred million dollars, in the deal. So, the up front $25 million cash is only a small part of the total "cost" of the transaction.
My O2 is running OpenBSD, now. Too bad I can't get the latest versions of IRIX. It was pretty impressive what that little O2 could do.
My Octane does a pretty good job of holding the carpet down.
Workstations died because all the PC hardware and software got better, and by leaps and bounds.
I think it started with the discovery that people could buy server motherboards and put them into desktops. Workstations were always about multiple processors and big bandwidth, and you could get there with a PC by buying a server motherboard. AMD + Intel's Mhz war just rocketed x86 way past where the likes of MIPS and Alpha could go through sheer brute force.
Even in the late 1990s, I had a dual Pentium II that was pretty competitive with a Sun workstation and for a lot less money. Better graphics cards, integrated SCSI, and AGP were the body blow. I'd say SATA and PCI-Express have just doomed the whole genre of proprietary hardware computers.
Finally, on the o/s side, Windows 2000 came out and was a lot sexier than existing proprietary unixes and at the same time, a bit more functional than the still newish Linux. Proprietary unix vendors could laugh at DOS and Windows 3.1, disparage Windows 95, and criticize Windows NT, but every release from MS just closed the big criticisms - first real multithreading, process isolation, auditing, remote management, all those features gradually were attacked in successive Windows releases. I remember people doing X remotely and saying "hah, Windows can't to that", and today even Linux uses Windows remote desktop protocol RDP, even if only to run VNC over it.
This is my sig.
How old are you, where did you learn to speak English, and is it your native language?
Serious questions - I found the sentence mostly unexceptional (I'd probably have left out "that"), and I'm curious about the difficulty you had in parsing it.
It's always seemed like such a shame to see old well-designed machines built around Unix (rather than just generic PC's) become a thing of the past, though.
Oh... and happy belated birthday, Apple.
The only ones that are still around and thriving are Sun, IBM, and HP.
You forgot Apple - OS X is a certified Unix after all.
Since SGI holds an HPC contract for $30M, I find the price odd - perhaps the reporters got it wrong or there were significant debts on SGI's books.
Jim Hofmann
http://www.digibarn.com/collections/songs/sgi/index.html
You are so right.
Like, right now, I have to ask myself, what exactly does a SPARC or even POWER do that an AMD64 cannot? I just don't know now, and the differences used to be much more clear cut.
IT used to be floating point and registers that set the workstation cpu apart and both of those advantages are gone. Both AMD and Intel have made a lot of strides in floating point and then AMD64 added a lot of registers.
x86 assembly went from torture to kinda fun. I don't lust after a POWER chip the way I used to want Alpha or SPARC.... with my dual Opteron I'm well, fairly satisfied.
This is my sig.
It almost broke my heart when during the remodeling I finally decided to put my old Sun workstation out to pasture - literally, into the backyard, to be picked up by trash folks later. It looked at me with that big monitor, "is that what you do to your elders?". A few years back it was my first Pentium, all SCSIed up and nowhere to go. Then it was my first 386, with extra drives hanging on ribbons out of a half-opened case. Before that it was my XT, along with its sharp yellow Casper monitor. I couldn't bear even to look at it. We spent so much time together. The only thing that remains from those days is my VT220 terminal which I used to log in to work through a modem to work remotely.
I never owned an SGI machine, but I knew people who worked there. SGI was in my back yard, so to speak. We were all so proud or "our" companies and "our" valley. There was no cooler place to live on the planet.
I also remember when Computer Literacy Bookstore closed down. I remember looking into the empty space at North First St. I remember when Kim Vestal's "Get your buns out of bed!" did not ring out in the morning.
Our friends leave us every day. Every time the world gets a little grayer. When it's all colorless, it may be time for us to go.
End anonymous moderation and posting on
as was HP and Sun, until Linux and OpenBSD Unix took away a lot of their marketshare by allowing cheaper Unix boxes based on Intel X86 PC systems to exist.
Who needs an expensive SGI Irix box when you can build a Linux box a lot cheaper?
The same thing happened to Amiga, Inc. and Be, Inc. when Windows 95 and Linux showed that they could compete with AmigaOS and BeOS on cheaper Intel X86 PC clones.
Remember, Slashdot does not have a -1 disagree moderation, and no, troll, flamebait, and overrated are not substitutes.
In his soft, slightly wheezy voice:
Time waaaasssss,
there was little cooler than...
But to the extent that American English is an archaic off-shoot of English, this is even an archaic off-shoot of American English. People use diction like this when they either are or want to associate themselves with hay seeds fresh off the farm.
I, for one, welcome our Rackable, Silicon Graphical, overlords.
Also note that they had planned to repurchase up to $40 million worth of shares but it looks like instead they're opting to acquire SGI. What that means to you day traders and quant fund managers, who knows?
Well, I'm not an expert, but I've taken some finance and valuation courses. In general, stock buybacks are a way of returning cash back to investors, i.e., it's kinda like a really huge dividend. There's a couple reasons for doing this: (1) the managers think that the company is worth more than what the market values it at, or (2) the company doesn't have any available projects where it can invest the $40million. In the first case, they buy back the shares now at a cheap price, and then issue more later at a higher price. In the second case, they say "Well we're not doing anything useful with the money, you shareholders go spend it yourselves". There's other reasons for buybacks, but they're questionable as to whether they actually produce value for shareholders.
Going back to March 30, the company was only valued at $120million. It had $170 million in cash on hand, and no debt. I think it's pretty obvious that the company thought their company was worth more the market was valuing it at, i.e. it's stock was cheap, so they wanted to buy back their shares. Offhand, holding a huge amount of cash isn't very useful, since it's not a return-producing asset. Some for liquidity, yes, but not a huge amount. It's probably a good thing that they're spending it in some way.
Looking at the SGI deal, it's pretty obvious that Rackable thinks that their $25million investment is going to produce value than a stock-repurchase. They're acquiring all of SGI's assets, and they're not going to have to take on all their debt. Without looking at all the numbers, it sounds like a decent plan.
Final note, I don't follow this stock, my analysis isn't rigorous at all, and anything I say should hardly be taken as a fact. I'm just a random dude on the internet, and I'm not giving you investment advice.
Buying assets means you are buying the property of the company, literally computers, chairs, desks, coffee mugs, etc. The company still exists, it still owes money, it mere has some cash for its former property.
An analogy far too many people can envision: It's like going to a garage sale at a foreclosed home. Buying a couch and a playstation 2 does not make you liable for the mortgage.
here
BTW, IANALBIPOAP, Where can one get citizenship in the current state of SGI if not downwind from a Ballmer Redmond?
The Apple switch to Intel was more about logistics than anything else. Apple realized that they were constantly at the mercy of their CPU supplier (IBM, Motorola) for a custom chip.
This may be part of the reason for the Intel switch. But another reason was that IBM and Freescale didn't have a low power G5 processor for laptops. I waited for more than a year after the G5 came out for one to be put into a laptop. Apple couldn't get one to run cool enough. As it is after the switch many people complained the MacBook/MacBook Pro ran too hot. There were a lot of comments about how you could cook food on one.
Falcon
Should there be a Law?
I would have wrote them a check for that, PLUS thrown in my old TRS-80 and VIC-20 to sweeten the deal.
Every time you call tech support, a little kitten dies.
Neither did I but Kodak does have patents on some technology in Sun's Java.
Falcon
Should there be a Law?
It doesn't sound like Rackable is paying much for SGI's assets; but, they are picking up SGI's considerable debt, several hundred million dollars, in the deal.
No, Rackable isn't picking up all of SGI's debt. TFA says Rackable is assuming certain liabilities relating to the assets.
Falcon
Should there be a Law?
Isn't the second bankruptcy of SGI in three years the bigger story?
If it were not for the pending buyout, I would think that a business that files for bankruptcy this often should be forced into Chapter 7 liquidation because this frequency of filing for bankruptcy means that the company is not viable and keeps hurting investors and banks by creating toxic and worthless debts.
SGI has long suffered from the classic theme of the innovator's dilema. They invented really cool graphics technology in the 80s and early 90s. It performed very well, but they charged an enourmous amount of money for it. Along comes the first generation of 3D graphics cards for PCs. At that point, SGI had the option of putting out a top notch PC graphics card. They could have become a dominant player in that market. Some business unit at SGI would sit in the place now occupied by nvidia. That's hard to do, as the graphics card division would undercut sales from the workstation division. However it's better to be undercut by an internal competitor than an external one.
actually, I know you are mistaken about lustre. Lustre is a regular kernel filesystem just like CXFS, stornext, GFS, or GPFS. In the case of puma or bluegene you have to link it into the application, but not on linux. The point, however, remains. SGI has used CXFS to sell its hardware, which was awesome at the time, but it limits the ability of rackable to make a business out of selling CXFS as a stand-alone product. IDeally you would want to sell CXFS licenses on every commodity cluster out there, your own, or the competition. Sun has that now, with lustre. Lustre is run on IBM clusters, HP clusters, even SGI clusters. I doubt rackable could turn CXFS into that product and displace lustre from very many machines.
If you look at the history of infiniband, it was always intended to be something like numalink+xio. Origionally you were supposed to connect peripherals, storage, and processor nodes onto this big network and add and remove them all dynamically. It got scaled down from that, and now is pretty much used as a high-speed network, with the occasional RAID attached directly to it. Numalink can be used in this way too. One does not need to make a single numa domain from an altix.
The numalink chip also has the extended cache directory logic in it, which allows large numa machines. Importantly, that version of large is large on the scale of numa database servers, but rather small on the scale of supercomputers. Even SGI has to fall back to infiniband for the really large machines, such as the two big systems at nasa. It's not as feature-rich as numalink, but it'll scale to tens of thousands of nodes, sorta affordably. I should note that there's no reason that the cache director chips can't talk to one another over an infiniband network. Noone has invented this chip, but the network can be an independant piece.
I agree that SGI has long had great technology, and useful products. (I reserve the term great products, as they have tended to have great strengths coupled with great weaknesses) But I would not say that their products have been successful. If they had, SGI wouldn't have been circling the bowl for the last ten years. SGI learned how to make a lot of money when they were at the top of a growing market. They never learned how to make money in a shrinking market, or how to transition to a profitable spot in a different market.