20 Comments

Summary:

Earlier this month, Jim Clark, the 65-year-old maverick entrepreneur well known for starting companies such as Netscape and Healtheon, tied the knot with 28-year-old Australian supermodel Kristy Hinze. The odd coupling mirrors today’s strange agreed-upon wedding of Clark’s first major company, Silicon Graphics and the little-known […]

Earlier this month, Jim Clark, the 65-year-old maverick entrepreneur well known for starting companies such as Netscape and Healtheon, tied the knot with 28-year-old Australian supermodel Kristy Hinze. The odd coupling mirrors today’s strange agreed-upon wedding of Clark’s first major company, Silicon Graphics and the little-known server-making upstart Rackable Systems. SGI filed for bankruptcy and was agreed to be sold to Rackable for $25 million.

As a beat reporter, I covered SGI pretty closely. I remember the company’s foray into the “Information Superhighway” and how its coolest-looking machines helped create Steven Spielberg’s “Jurassic Park.” SGI was cool, in an Apple sort of a way. It had some of the smartest engineers and had a feeling of counterculture, which has slowly vanished from the Valley. I remember writing about the company giving up on its own version of UNIX and adopting Windows NT.

A series of management blunders and teutonic tectonic shifts in the technology landscape turned this once proud bastion of engineering into a historical footnote. And, as of today, even that is no more.

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By Om Malik

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  1. It’s tectonic shift. The Teutonic Knights can be blamed for a lot of things, but not for death of SGI :)

  2. I seem to recall around the time SGI was starting to release windows machines ( around ’97-’98 IIRC ) they were suffering a brain drain of 3D engineers. I believe many ended up at Nvida, which then produced the first geforce chip in ’99.

  3. Looks like a smart move on Rackable’s part. Getting >$350MM/yr in sales. If they can replace SGI’s CoGS with Rackable HW and elim a great deal of SG&A, then they’ll probably change the profitability profile of the deal dramatically. Plus, gives them a big position in HPC and potentially Cloud.

    1. I agree… there is a lot of debt they have to assume and of course they would have to fix SGI. But they are now a serious threat to Sun and Dell.

      1. They’re actually not going to assume *all* of the debt. Saw a note somewhere that they’re only picking up a portion. Not sure how that works when you’re giving equity value…

  4. The Cruft Of My Brain » SGI, oh SGI…what has become of you…. Wednesday, April 1, 2009

    [...] 1st, 2009 Goto comments Leave a comment 0Digg meI just read about SGI’s demise over on GigaOm. It seems Rackable has scooped them up for a measly 25 million. This is just [...]

  5. I remember when the first workstations arrived in England during the early 80s. Then the main players were HP, SUN, SGI and DEC. At the time I was working for BP Research and remember the delight of the chemical engineers when they started to develop graphical applications to run on SGI workstations. Given the status SGI had at the time it’s hard to believe that the company is no more.

  6. Hmm, I would have thought that Sun, or even Stratus Technologies would have thought of acquiring them, for what it’s worth. Although I don’t know what redeeming qualities they have, these days (other than their brand, a legacy, and a few HPC products)…

    1. Uh…Sun and Stratus aren’t in any position to be acquiring anybody. Don’t know if you’ve been watching the news lately…

  7. kurtlar vadisi pusu Wednesday, April 1, 2009

    I would have thought that Sun, or even Stratus Technologies would have thought of acquiring them, for what it’s worth

  8. Erik Schwartz Wednesday, April 1, 2009

    I always wanted an SGI workstation so I picked up last year on eBay for $200.

    It’s a nice little unix (irix) box).

    Of course their campus lives on…

  9. Jim Clark’s Former Venture Silicon Graphics Sold To Rackable For $25 Million Wednesday, April 1, 2009

    [...] deal, but for a company that seems very unstable right now at least it is better than nothing. [via GigaOm] Categorized under Jim Clark, Rackable Systems, Silicon Graphics If you liked this post, [...]

  10. Aaron deMello Wednesday, April 1, 2009

    End of an era. A touch sad, actually. I started my first company in 1995 with $75k in SGI equipment. Btw, Om – my understanding is that they are walking away from most of the ~$500M+ in debt.

  11. Davos Newbies » Blog Archive » The moving finger writes, and, having writ, moves on Wednesday, April 1, 2009

    [...] Silicon Graphics is sold for a song. Who knew it still [...]

  12. Krishna Baidya Wednesday, April 1, 2009

    looks like ….. even good thing had to come to a stop. It hurts to see something with such great product soon gets lost in the dust.

  13. Umm. Did someone check if the peanuts were not tainted. A lot of that going around.

  14. Subbaraman Iyer Friday, April 3, 2009

    I think this is a classic management failure. I wrote an obituary for it at: http://subbaiyer.wordpress.com/2009/04/03/sad-about-silicon-graphics/.

    But the lessons that Silicon Graphics can teach us was written almost 2 years ago at: http://subbaiyer.wordpress.com/2007/03/12/lessons-from-sgi/

  15. On the Block: SiCortex’s DeLorean-Style Green Supercomputer Thursday, May 28, 2009

    [...] year, SGI, which made proprietary machines for the HPC industry, filed for bankruptcy and sold its assets to Rackable Systems (which has changed its name to SGI). So I wonder, is SiCortex’s lack of money a sign of a [...]

  16. Complete List of Q2 2009 Web, Internet and Tech Acquisitions » The StartUp Blog at PartnerUp Tuesday, July 14, 2009

    [...] Silicon Graphics is a high-end computer workstation and server company. TechCrunch  GigaoOM [...]

  17. Dissecting the New SGI’s Plan for Profitability: Cloud Computing News « Thursday, February 24, 2011

    [...] actually turn a profit again. In April 2009, simultaneously with its second Chapter 11 filing, SGI sold itself for peanuts ($25  million) to webscale server maker Rackable Systems, which — surprisingly — decided not only to keep selling SGI’s products but [...]

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