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SGI delisted, becomes penny stock

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Silicon Graphics Inc today issued a melancholy press release confirming that it has been kicked off the New York Stock Exchange, and will now trade as a "penny stock".

The news will bring a shudder to many in Silicon Valley for whom SGI was not simply an employer - and many Reg friends have passed through its doors - but a company that represented the heady elixir of what untrammeled engineering prowess may achieve when married to some fairly intoxicating dreams.

SGI was the high-bandwidth, visualization-rich, media-savvy computer systems company that flourished in a decade when media pundits clamored for a winner in what they called "the convergence space". SGI obliged, and spared nothing - for a while its budgets were flush for R&D and fancy architecture.

"The engineering budget was a firehose they couldn't turn off," Larry McVoy once told us.

While other companies could barely muster a showroom, SGI built expensive "theatres" to showcase its kit, and it worked: there was no shortage of customers in data mining, government, science research and Hollywood to buy SGI's first class systems.

But as one reader who mournfully passed on the news to us tells it -

"SGI had the most wonderful technology coupled with lethally inept management. I bought one of their monster servers to do genetics research in the late 90s and they walked all over every other vendor we saw. These guys were the bomb where HPC was concerned."

"Then came a few years of pure craziness: the workstations running a special version of NT; the Itanium clusters; abysmal quality control on the O2 and Octane workstations; selling off their great broadcast technology to Kasenna; ignoring the inroads that Linux was making into render farms."

"Oh, SGI, we loved you and you screwed up. Bigtime."

SGI failed to foresee not only the rise of cheap, commoditized render farms running Linux but the astonishing increases in 3D graphics performance from NVidia, available at low cost to any PC user. So TV viewers tuning into 2003's network spectacular - the US invasion of Iraq - saw maps rendered not on Onyx clusters but on Keyhole's simple PC technology, over the web. Keyhole was started by, and largely staffed by former SGI employees.

Today Google occupies the place in the popular media's consciousness as the wish fulfillment company, the place where all dreams come true. And Google also occupies SGI's spectacular high tech offices by the sand dunes on Shoreline Boulevard. And Google bought Keyhole, and renamed it, and made available to you as "Google Earth".

Are those Shoreline dunes haunted? Surely not. But SGI's spectacular rise and fall should give any company so drunk on its own technical prowess and media kudos, just a moment's pause for thought. ®

Related link

SGI Securities to Cease NYSE Trading - press release

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