Bankrupt SGI pins hopes on x86 servers
- 04 July, 2006 14:14
Silicon Graphics this week launched a low-cost kit that includes an x86-based server, in a continuing effort to return to profitability after filing for bankruptcy in May.
SGI moved to extend its low-end offerings because it faces competition from makers of high-performance systems that are building clusters of lower-cost x86 systems.
At the same time, SGI will continue broad use of Itanium processors in its midrange and high-end systems. The company also brought out new midrange and high-end systems.
The new low-end systems "will appeal to us, because we're an existing customer, we have a relationship with SGI and its support staff, and we know the company and the people," said David Roach, director of the Mississippi Center for Supercomputing Research. "Whether it appeals to others outside of that community is yet to be determined."
Roach said SGI's success in its new x86 line will depend on software, pricing and how aggressively the company markets it. "I think the jury is still out on how successful it will be overall," he said. "Hopefully it will be."
The centre is already using hardware including a 192-CPU SGI Altix 3700 supercomputer and a 128-CPU SGI Origin supercomputer.
The new low-end Altix SE line includes both x86-based systems and systems running the latest dual-core Intel Xeon 5100 processors, known as Woodcrest.
Jill Matzke, SGI's high- performance computing marketing manager, said the company added the x86 systems because "obviously, one of the things we need to [do] is expand our market reach."
The new midrange Altix 450 blade server offers performance that's about 2.5 times better than that of the current Altix 350 system. It will ship this month; US pricing begins at about US$14,000.
At the high end, SGI unveiled the Altix 4700, which can scale to more than 1,000 processors on blade servers. It is shipping now and costs from about US$75,000.
SGI filed for Chapter 11 bankruptcy protection in May after posting several quarterly losses in recent years. In March, SGI cut its workforce by 12 percent, or 250 workers.
Analysts have cited competition from low-cost x86 vendors as putting a strong squeeze on SGI's financial results. "The problem is that you need to sell a lot of those kinds of [low-cost] boxes," said Gordon Haff, an analyst at Illuminata. Even so, "SGI probably wishes they had gone down the x86 route" earlier, he said.
Roach said the new products should help the company stem its losses. "We are hopeful that SGI's financial situation will improve," said Roach. "I think they've taken the right steps to put themselves on a more stable financial footing. Whether or not that's successful is yet to be determined."