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I just got an credible tip, confirmed by an SGI Sales rep, about a sour love triangle between the Old SGI, the New SGI, and the Pittsburg Supercomputing Center (PSC).

About a year ago, the National Science Foundation worked with PSC to prepare for a 1 PetaFlop system to be deployed there and integrated into the TeraGrid, a large global supercomputing network used for academic and public research.  The result was an SGI UltraViolet system, approximately 197 cabinets, 100,000 cores, and all of it for the low price of $30 million dollars.

Well, that was with the old SGI.  News now is that the new SGI has found other customers willing to pay higher “more reasonable” prices for these same cabinets, and has decided not to honor the original offer.  Legally, they don’t have to honor them but it puts PSC and the NSF in a tight spot as they now have $30 million that’s supposed to magically turn into a 1PF supercomputer, and won’t.

On the other hand, if you’re looking to buy an SGI UltraViolet, the wait just got a lot shorter.

Hardware business, nsf, psc, rackable, sgi

It’s been a while since we’ve talked about the events surrounding the SGI Legal Case. What, you thought it was over?  Far from it, actually.  There’s a hearing today (June 24th) at 10AM to address some more issues, big items on the docket include objections raised by Intel and Oracle about transfer of contracts.  Also, a new set of Monthly Operating Reports have been published in dockets 480-493 showing that the CEO’s pulled in a nice $190k this month, down from last month’s $223k.  It also shows that SGI operated at a net loss of $15Million this month, not surprising for a company that’s really nothing more than a dying husk at this point as the actual business is being done in the new SGI company.

It’s worth nothing that Eliot Bernstein (iViewIt) and William Kuntz III are still working the system with several objections and legal motions surrounding the event.  Check back later for an update of Eliot Bernstein’s objections, direct from the man himself.

Dockets .

Hardware legal, rackable, sgi

Chart courtesy of the new Wolfram|Alpha . (Corrected)

A new press release today states that Rackable has finished the paperwork for acquiring SGI, and the final change is that the “RACK” stock symbol is no more, to be replaced by “SGI”.

See the full press release after the break.

Read more…

Hardware rackable, sgi

In a fresh press release from Rackable systems, they’ve announced completion of the acquisition of SGI, and stated that they will be adopting the SGI name.

FREMONT, Calif. – May 11, 2009 – Rackable Systems, Inc. (NASDAQ: RACK), a leading provider of ecological servers and storage products for medium to large-scale data centers, today announced that it has completed its previously-announced acquisition of the operating assets of the former Silicon Graphics, Inc. With the completion of this acquisition, the company will adopt SGI® as its global name and brand. Rackable Systems president and CEO, Mark J. Barrenechea, will lead SGI in the same capacity. The Rackable Systems board of directors remains unchanged.

One other interesting note I hear from other sources is that SGI Federal, the group behind the questionable $40Million HPCMO purchase and many other government SGI contracts, will remain a wholly owned entity.  It will become a subsidiary of the new SGI, and that their existing GSA schedule 70 will remain in place.  Essentially, it’s business as usual in the SGI Federal division.

Update: Oh, almost forgot – SGI is Dead! Long live SGI!

Update #2: John Leidel at InsideHPC has more details, including details on what SGI resources are being shut down and the nuggets that Bob Pette, who we interviewed previously, will become the VP of Visualization.

via Rackable Systems.

Hardware, Science rackable, sgi

Rackable’s Q1 2009 Earnings call was today, and they covered alot of ground.  Toward the end they discussed the details of the SGI acquisition.

We anticipate closing the transaction within the next few days, subject to closing conditions in the agreement. Let me provide more detail on the acquired assets. Internationally, on the agreement, we would purchase the equity of the SGI operating subsidiaries. We would also purchase the equity of SGI’s U.S. federal business. Essentially, it is SGI’s domestic non-federal U.S. business entities that are going through the bankruptcy process.

In the acquisition they get inventory, patents, real estate, and all cash on hand.  They become immediately operational in over 25 countries, and do not assume any of SGI’s approximately $150M of debt.  They assume a few select liabilities such as accounts payable and employee benefits, but that’s it.  They also drop this bomb:

We expect to streamline operations and eliminate redundant positions, resulting in an initial 10% reduction in personnel. We anticipate a global workforce of approximately 1,250 employees soon after closing.

Now, before all you SGI engineers start brushing up resumes (Which I recommend you do anyway), this 10% is probably management and HR-type positions.  Rackable has it’s own human resources, accounting, and middle-management structure and likely doesn’t need SGI’s.

For the full transcript, follow the link.

via Rackable Systems Q1 2009 Earnings Call Transcript — Seeking Alpha.

Hardware rackable, sgi

A visitor tangled up in the recent SGI sale to Rackable and currently wondering what is going to happen to their paycheck and health coverage, has sent me a link to the bankruptcy consultancy Donlin Recano, which seems to be managing the SGI deal.  At the link below you can read all the various information about the SGI bankruptcy deal.  Of particular note if you view the “First Day Pleadings and Court Docket”, there is a MASSIVE amount of information for you to peruse.  One thing pointed out to me by the tipster is “Document #14“, Section 6: Exhibit E – Asset Purchase Agreement, which has some juicy details toward the end under “Executive Retention Arrangements”.

• Mr. Ewald will remain until December 31, 2009 (“The Transition Period”), making at least 90% of his current salary.  After that, he gets a $600,000 lump sum payment (unless he’s terminated for cause or resigns) to go away.
• Certain “Retained Executives” will also stick around, making 90% of their current salary, to be decided by the “Sale Order Date”. After that they will receive a severance package containing a lump sum payment equal to 6 months of his current salary plus 6 months of health coverage.
• The other executives will be terminated with a severance package of 2 months of their current salary plus vacation.

It’s a huge amount of legal mumbo-jumbo that I am incapable and unqualified to decipher, so I put it to the readers: What do you make of all of it?  Find any other juicy tidbits?  Some questions that are already on my mind (and the original tipster’s):

• What/Who is the mentioned “Sapphire” and “Ruby”?
• Why so many signoff’s from Cray Research?  Because they’re a major debtor?
• What is the “Sale Order Data”?

Also, like the disclaimer on the website says: These documents are in-flux and the details are still being hammered out.  Although, they do have the signatures of all the higher-ups at SGI & Rackable on them, so I can’t see them changing too much from what you see here.

I’m slowly digging through the documents, and putting all my findings in This Article several articles under the SGI tag..

Case Information for Silicon Graphics, Inc., et al..

Hardware rackable, sgi

It’s official, SGI has just issued a press release stating that Rackable has court approval to purchase SGI’s Assets. The final amount was $42.5Million in cash plus “certain liabilities”.

FREMONT, Calif. and SUNNYVALE, Calif., April 30, 2009 – Rackable Systems, Inc. (NASDAQ:RACK), a leading provider of ecological servers and storage products for medium to large-scale data centers, today announced that it received court approval to acquire substantially all of the assets of Silicon Graphics, Inc. (SGI) for $42.5 million in cash, plus the assumption of certain liabilities associated with the acquired assets.

The sale, pursuant to an amended asset purchase agreement as approved today in U.S. Bankruptcy Court in New York, allows Rackable Systems to complete the previously announced transaction under Section 363 of the U.S. Bankruptcy Code. The acquisition is anticipated to be completed by approximately May 8, 2009, subject to closing conditions.

“We are pleased with today’s news,” said Mark J. Barrenechea, president and CEO of Rackable Systems. “With this acquisition, Rackable will be positioned to solve the most demanding business and technology challenges our customers confront today. We believe we will have a stronger company with differentiated product lines and professional services; reaching commercial, government and scientific sectors on a worldwide basis.”

Rackable and SGI customers will benefit from a comprehensive portfolio of hardware, software and services, enabling the deployment of technologies for large-scale data storage and management, clustered compute scale-out, shared memory systems, visualization solutions, data center solutions and HPC productivity tools.

To learn more and for further updates, please visit www.rackable.com/sgi.

via SGI – Press Releases: Rackable Systems Receives Court Approval to Purchase Silicon Graphics Assets.

Hardware rackable, sgi

Now, this isn’t 100%, but I’ve heard from a reliable source that Rackable has beaten out Cray, HP, and Cisco to acquire SGI.  The price isn’t known, but rumors have it that Rackable was willing to pay up to $50Million for it, which is still a paltry sum.

Either way, official word should be out Tomorrow or Friday.

Update: InsideHPC is reporting the same.

Graphics, Hardware, Science rackable, sgi

Update #2: Hear the actual interview with Bob Pette, along with a better explanation of the acquisition from John West of InsideHPC in our Special Edition Podcast.

Update: See a summary of our Interview with SGI VP Bob Pette about the acquisition.

John West at InsideHPC has gathered some more information on the SGI/Rackable deal, and it seems the deal isn’t quite as solid as originally reported.

The sale is actually being made via a section 363 “stalking horse” procedure, which means there is a 25-day window for other bidders to come in and buy SGI instead.  If none come, however, Rackable gets SGI without the debt. It’s pretty much a done deal because, as John points out:

But the word “short” is part of the problem from the perspective of those other bidders. Rackable has (likely) had a much longer amount of time for due diligence on the sale and, according to the Focus article probably has stacked up some other benefits as well.

I’m still attempting to reach people inside SGI for more information.  If anyone inside wants to speak about the impacts of this on SGI business (VUE, Hardware, sales, support, etc) contact me!

SGI, Rackable, and the stalking horse | insideHPC.com.

Hardware rackable, sgi

Once the industry standard in Computer Graphics, father of the famed Onyx, Infinite Reality graphics pipes, and Large Shared Memory architectures, SGI has filed for bankruptcy and is now to be acquired by Rackable Systems.

According to the press release, Rackable has agreed to acquire “substantially all the assets of Silicon Graphics, Inc. for approximately $25 million in cash.” The agreement includes Silicon Graphics filing for Chapter 11 bankruptcy protection in order to reduce their overall debt load.

So what does this mean for the VUE product line?  As information comes, we’ll let you know.

via Rackable Systems to Acquire Silicon Graphics | insideHPC.com.

Hardware rackable, sgi