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OctigaBay 12K development running late and eating cash

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Supercomputer maker Cray is to buy its smaller rival OctigaBay, the duo announced yesterday, after both firms' boards gave the acquisition the green light.

The deal values the Vancouver-based high performance computing specialist at $115m. Cray will pay $15m in cash and 12.7m of its own shares for all outstanding OctigaBay stock.

OctigaBay's specialism is building supercomputing clusters out of AMD Opteron processors. Indeed, the company came to our attention late last year when it detailed an upcoming system, the OctigaBay 12K, based on a number of 2.4GHz Opteron 200 series processors. Such a part still does not exist, of course.

The 12K was due to have shipped early this year, but now has a launch date sometime in the second half of the year. Even then the system will be only available in limited quantities - "general availability" won't happen until early 2005. Pricing, to be announced later this year, is expected to range from under $100,000 to about $2m. OctigaBay is currently spending around $2m a quarter developing 12K, the company said.

OctigaBay's President and CEO, John Seminerio, said the company had decided to join Cray because of the latter's "worldwide sales and service organization and global customer relationships", which will give its own products greater exposure.

Last October, Cray announced a plan to build Opteron-based systems of its own, aimed at organisations who need something more integrated than a cluster of off-the-shelf SMP systems. The company said the acquisition had been made to extend its product line into that latter area - in the process, multiplying "its addressable market by over four times". ®

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