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SGI Negotiating Cray Research Sale

Aviast writes "SGI is in talks with the Gores Technology Group to sell the Cray Research unit of SGI. Read the [Yahoo News] story here. SGI bought Cray three-and-a-half years ago for $700 million. According to this story Gores originally offered $100 million for Cray, but has since lowered its offer." Rumors about this have been floating around for weeks. Looks like they *may* become reality, but the deal is apparently still a long way from done.

12 of 67 comments (clear)

  1. Hmmm by Signal+11 · · Score: 2
    I'm not an econ expert, but if they slid from $700 million on their last buyout to under $100 million this time around, wouldn't that indicate their market value has fallen sharply?

    Perhaps Cray computers are not as valuable now that we have beowulf & other clustering technology which can give you the same amount of raw processing (with alittle extra latency) as the big iron?


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    1. Re:Hmmm by substrate · · Score: 3

      Cray is a sliver of its former self. When SGI purchased them there were over 4000 employees, they had their own semiconductor fab, PCB house and manufacturing operations. Now they're under 1000 employees, have no fab, no PCB or manufacturing operations.

      Beowulf clusters still can not touch the Cray supercomputer market unless vector processors were sold to markets where there wasn't a good match in the first place. The price/performance of a beowulf cluster is much higher than any Cray machine that has been built, but a vector processor running the right codes can make the difference between something being unfeasible or feasible.

  2. That price sounds low. by Uruk · · Score: 2

    Now why on earth would SGI sell a company like Cray for less than what it costs to buy one of Cray's boxes? :)

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  3. Massive parallel computing and SGI by Lonesmurf · · Score: 3

    I read an interesting article this morning on SGI and it's future. Heck, it may even be this article that in my rush to beat the floods of AC's out I've decided to temporarily postpone reading to jot this down. Anyways, this article talked about how for the longest time, Cray held this niche in the market that noone could penetrate. 'Cray' was synonamous(sp?) with 'SuperComputer'. Then something terrible happened: BEOWULF. (Yes, yes, I know.. make all the cracks that you like, but this story just SCREAMS Beowulf threads.) They said all kinds of neat-o things like how it has become easy for companys that want huge processing power to get it at a fraction of the price through massively powerful parallel computers. A thousand P3's are most likely still cheaper than a Cray.

    One interesting thing that stuck in my mind was how the CEO, you know, what's-his-name, said that the advantage of Cray Machines was in the architecture.

    This would keep the mean old Beowulf at bay.

    He was talking about how in the PCs under (or above, doesn't really matter) our desks, the processor is powerful and the pipe is small which limits the amount of data that can be pushed through. Crays are fast with huge pipes, making them perfect for big data-crunching applications (like simulating wind sheer in a Cumulonimbus Thunderstorm in real-time).

    Now, how long will it be before the architecture (finally) in our PCs changes to something that will be more along the lines of this system? 10 years? more? less? Who knows.

    Man, I rambled alot. I know that I had a point somewhere in there.

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    1. Re:Massive parallel computing and SGI by sql*kitten · · Score: 2
      Then something terrible happened: BEOWULF

      The decline of SGI and Cray began long before Beowulf. Cray's rivals, such as Hitachi, Fijitsu and Thinking Machines took huge chunks of its markets, even the IBM machines were a threat. There simply wasn't enough momentum behind UNICOS for it to compete with Cellular IRIX even within SGI.

      SGI are struggling as much as they can, but really they are only delaying the inevitable. They are being attacked on all sides, HP and IBM are crushing them in the VLDB market, Sun are making ever larger inroads into rendering, Compaq's professional workstations are forcing SGI out of CAD shops, the latest kit from Apple is competitive in the DV space... SGI need a miracle to save them.

      This would keep the mean old Beowulf at bay.

      Beowulf doesn't really compare to a Cray, since it lacks common memory across all of its nodes. Beowulf is more analogous to PVM.

    2. Re:Massive parallel computing and SGI by Detritus · · Score: 2
      When you look at memory bandwidth, as measured with benchmarks like stream, Beowulf systems and PCs look pathetic.

      My limited experience has been that large datasets will blow out the cache on PCs and send the performance into the crapper.

      High-performance memory systems cost money. PC vendors don't seem to be interested in building balanced systems.

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  4. No surprise. by SirSlud · · Score: 2

    C'mon, really, who expected this not to happen when SGI picked up Cray awhile back? Long gone are Cray's glory days, where it was whispered on the lips of computer geeks who swore theyd own one when they grew up.

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  5. More layoffs from SGI in the future by heroine · · Score: 2

    This will no doubt result in more layoffs from SGI's engineering team. We remember how they laid off 3000 engineers in April. Now is a bad time to be in anything but e-commerce. SGI's e-commerce strategy is definitely to get rid of everything else. That's the method of operation in Silicon Valley: if it doesn't work don't fix it. Get rid of it.

  6. This is crazy! by jd · · Score: 3
    Cray computers -cost- more than that! The name alone is worth more than $100,000!

    Mind you, if SGI are flogging Cray off cheap, I'm offering $10! That's right, I'll offer a whole $10 to buy Cray from SGI, no questions asked. And I bet I could make it profitable =and= bleeding-edge, too. All I ask is the chance for SGI to prove me wrong! :)

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  7. I hope, SGI doesn't fade away too soon... by Dr.+Wonz · · Score: 2
    ...because we still need those funny-looking IRIX-boxes for Computational Chemistry. Most of the powerful commercial software is written for IRIX and the big companies like MSI have been rather reluctant to port to Linux.

    With all the news coming from SGI, it doesn't look like they will be going anywhere in the future.

    Even if the software eventually gets ported to Linux in the future, I bet it will have to be repurchased and this might be a real obstacle especially for academic institutions since it is rather expensive.

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  8. surprise, surprise... by LocalYokel · · Score: 2

    It never seemed like Silicon Graphics had a solid financial or technological interest in Cray when they bought the company. The two products don't pair well together, the supercomputing and workstation technologies are totally different, and Cray had been floundering around for years. The computing trend of the time was toward the desktop, and Cray was the opposite.

    Now that they're simply SGI, it hasn't taken quite as long to figure that out. We need Cray, but we need one that can turn a profit in the private sector.

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  9. history/future of supercomputing by Greg+Koenig · · Score: 5

    In my opinion, in order to put this into perspective, you need to look at the history of the subject at hand.

    The first types of supercomputers were faster and better than typical computers because of the design and features put into them. They used faster components which were custom-built (and thus a lot more expensive) and had features like vector units which made them attractive to scientific applications (but again, more expensive). Then, people started to think about how they could make supercomputers at the same or faster performance but bring the cost of producing them down. Rather than using expensive custom-built processors that had to be submerged in cooling fluid or using vector units to manipulate large arrays in a single operation, they started to develop new designs for supercomputers. One new type of machine was SMP based systems such as the Cray PowerChallenge type of machine. In this machine, many processors share a common memory, just like in your 2-way or 4-way desktop boxes now. With these types of machines, the lack of vector units isn't such a big deal since you can instead just separate your array into N different portions (where N = the number of processors) and apply your vector operation in parallel over the processors in the system. The problem with these types of computers is that scaling up to large numbers of processors is difficult since contention for the system bus (to talk between the CPU and memory or I/O) gets complicated with the larger number of processors. Another new type of machine were Massively Parallel Processor (MPP) machines such as the Cray T3D and T3E. In these types of machines, many processors (~1024) are interconnected with a very fast network. Each processor has its own individual memory, so the system can be scaled up to much greater numbers of processors. The problem is that now instead of having a single common shared memory, you have all these distributed memories and you have to use message passing techniques to get your data distributed around, which is a pain. So, this led researchers such as John Hennessy (at Stanford) to come up with a new architecture that uses Distributed Shared Memory (DSM). To the applications programmer, things appear to be a large shared memory (although if you touch certain parts of memory, access times are slower than touching other locations in memory -- since they have to be fetched from a remote machine). In fact what actually happens is that each processor still has its own local memory, but a processor on a very fast interconnect card coupled with each processor examines memory references and if it sees you are using memory that is not local to your processor, fetches the desired section of memory from the remote processor. So, it's sort of an MPP type system but appears to the programmer as sort of an SMP type system. This is what SGI/Cray sells as the Origin 2000. It's still cheaper to produce than traditional vector machines which use custom CPU's and memories (since it uses more commodity CPU's and components), but at the same time offers good relative performance.

    Now, in the late 80's, Seymour Cray decided that building supercomputers out of commodity components wasn't the right way to go. His opinion was that, all things being equal, you could always make a faster supercomputer if you used more expensive components and designed your supercomputer with that goal in mind (i.e., use SRAM for all memories, use the fastest technology in your CPU, etc.). To that end, he created a company called Cray Computers which was separate from Cray Research (i.e., Seymour was in charge of Cray Computers and had nothing to do with Cray Research). Cray Research produced the computers such as the PowerChallenge and T3E while Cray Computer continued to make expensive vector-type computers. Unfortunately what ended up happening was that Cray Computers folded because their machines were so expensive and the performance gain you got from them did not justify the greater cost. (Really, the only places that bought these types of computers were "spook sites" like the NSA, to the best of my knowledge.)

    The pervading idea is that this trend towards computers that offer decent performance while costing significantly less will continue. This is the idea behind clusters such as the Beowulf or, more importantly, clusters like the NT Supercluster at NCSA. The NT Supercluster differs from a Beowulf in that it uses a more costly network adapter (specifically, a Myrinet adapter from Myricom) to allow internode communication to take place at higher bandwidths and lower latencies than a standard Ethernet. No, the performance of these types of machines is nowhere near what you get from a machine like the Origin 2000, but the idea is that you get comparable performance at a huge reduction in cost. Additionally, because the components used to construct these clusters are commodity components, everybody will be producing these components and continuing to improve their performance. So, the speed of cluster-based computing relative to machines like the Origin improves over time. [Disclaimer: I am one of the people who helped develop the technology in the NT Supercluster, so I have some bias.]

    To say that SGI ruined Cray is no more true than to say that they ruined MIPS. The reason that people are not that interested in MIPS processors any more is that Intel processors are a commodity now. Everybody uses them, so the overall industry trend is to make Intel and Intel-related technologies faster and better since everybody works together in a sort of de facto way. Yes, probably the MIPS design is a much better processor design than the Intel design (it wouldn't be difficult), but the key thing is that everybody in industry is using Intel. This is the same reason that building supercomputers out of commodity components (i.e., clusters) will probably be the way things work in the future.