SGI's Rackable's future supercomputers
Goodbye Itanium, hello Nehalem
Why SGI didn't launch NUMAflex for x64 servers is a mystery, but I suspect that SGI knew that QPI was coming for both Xeon and Itanium processors and was waiting for that to come to pass before making the switch. Such a switch was expected several years ago, but was pushed out by Intel.
Why SGI didn't realize it could be burned by Intel product delays - considering that it was an early supporter of Itanium - and therefore port NUMAflex to server nodes using Opteron processors from Advanced Micro Devices is another mystery.
I've continually badgered SGI's execs about this, and they've been steadfast in their devotion to Itanium - right up until the second the Altix ICE machines were launched. And they were quiet about their future Itanium support right up to today's third bankruptcy filing.
Although SGI announced it had two-socket Nehalem EP blades for its Altix ICE clusters for sale as part of the Xeon 5500 launch, it didn't say anything about marrying Nehalem processors with NUMAflex.
But that has to be the plan, since no other plan makes any damned sense at all. A cluster of Nehalem EP server nodes with 21TB of shared global memory is something that SGI should be able to sell.
In his statement, Ewald reminded everyone that Rackable has lots of cash and would reduce SGI's debts, some of which it will assume as part of the acquisition of assets that will follow the Chapter 11 resolution. As Rackable's fourth quarter of fiscal 2008 (ended January 3 of this year) came to a close, the company had $171.9m in cash. Mark Barrenechea, Rackable's CEO, said that the company would spend up to one-tenth of that cash on additional research, development, marketing, and sales to chase new markets, such as the HPC sector.
Considering that Rackable has canceled its share buybacks, that leaves something like $57m to play with, and the SGI cash price only eats up half of that cash.
But the deal is perhaps more complex than that.
In SGI's second fiscal quarter, which ended in December, the company had $36.1m in cash and equivalents and $157.4m in long-term debt. SGI had $526.5m in total liabilities and $390.5m in assets. I'm no bankruptcy lawyer, but the Chapter 11 filing seems aimed at lowering the amount of liabilities that Rackable assumes.
You can bet that Rackable wants to conserve all the cash it can - hence it didn't simply buy the company outright.
And while the deal is open for competitive bidding, it is hard to imagine anyone else coming in right now. IBM is busy with its Sun acquisition, and Sun is busy with IBM. Hewlett-Packard is already up to its ears in server architectures, has all that Convex goodness in its Integrity machines, and wants to sell big Integrity boxes to HPC customers who want lots of memory for apps to play in.
It's a pity that Integrities don't support Nehalem, eh? Whoops, again..
Other players are equally unlikely to bid. Dell doesn't think it needs anything more sophisticated than two-socket x64 boxes and an occasional four-socket machine. Fujitsu is distracted by its integration of Siemens' IT biz and its partnership with Sun. Hitachi and NEC, which know all about Itanium, seem to be aloof about HPC except in their home markets. Verari Systems, which most resembles Rackable among x64 server makers, did not go public as Rackable did a few years back and may not have the cash.
Looks like Rackable wins.
But what it wins is somewhat unclear. Both Rackable's and SGI's sales have been so choppy in the past several quarters - thanks in large part to the ongoing Meltdown - that it's hard to make any prediction about what the revenue stream and profit potential might be for a Rackable boosted by SGI's products and customer base.
A lot seems to be hanging on that UltraViolet supercomputer, which needed to be here yesterday.
Well, on Monday, actually - but it wasn't. ®