Rackables Adopt and Go Strategy

By Jeffrey Burt  |  Posted 2009-05-12 Print this article Print


Charles King, an analyst with Pund-IT Research, said retaining the SGI name makes sense, particularly since SGI's problems in the past seemed to be highlighted more within the tech industry than outside.

"Despite the trouble [the old] SGI has had as a company, the brand ... still holds a lot of credibility, particularly in the areas of visualization and high-performance computing," King said. "Not only does the SGI name still have [a] residual legacy [of credibility], but it also allows [Rackable] to move beyond its own legacy of offering data centers in a box and rack-centered systems."

That seems to be the plan. Rackable now is a brand name for the company's x86 cluster computing products, joining other brand names such as Altix and InfiniteStorage from the old SGI and ICE Cube from Rackable.

Now comes the work of bringing the two companies together, Skaff said. He declined to talk about plans for the company over the next few months, pointing out that the bankruptcy judge, upon approving the deal, only gave the companies eight days to close.

Right now officials are going with an "adopt and go" strategy, taking the best of both companies and getting rid of the rest, he said.

The old SGI, once a high-flying tech company that made massive computing systems that sold for millions of dollars, fell on hard times when it couldn't adapt to the changing server landscape, where businesses were buying many small x86 boxes.

In the past few years, the company moved in and out of bankruptcy, and had amassed $526 million in debt when Rackable announced April 1 it was buying SGI.

Rackable officials said there were several reasons for buying the struggling company, pointing to complementary products in the HPC and visualization fields, a stronger international reach, and a loyal customer base.

"From Day One, we become a company with presence in 25 countries," Skaff said, noting that Rackable itself mostly sold in the United States.

He also said customers of the old SGI wanted to continue working with the company, but also wanted more financial stability, which the deal gives them.

"Innovation, expertise and service are at the core of SGI," Mark Barrenechea, CEO of the new SGI, said in a letter to customers posted May 11 on the company's Website. "We built our company by listening to our customers, providing unique solutions for the toughest and most demanding technology and business problems, offering mass customization, and being first to market with new component technology in order for our customers to maintain their competitive advantage. This tradition will continue."


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