As SGI fights to stay alive, users hope for the best

Despite filing for bankruptcy this week, Silicon Graphics Inc. officials said that users will get their products, service and support without change even as new product plans will move ahead. That message is an attempt to sooth worried users who rely on the Mountain View, Calif.-based company's high performance computing technology.

SGI CEO and Chairman Dennis McKenna has been telling customers that he has a strategy for the company since taking his job in February. Earlier this year, McKenna restructured the company, laying off 12%, or about 250 employees, and installing some new managers. Then came the decision, announced on Monday, to seek Chapter 11 bankruptcy protection. That move won initial approval in court Thursday, ensuring that the company will have $70 million to continue day-to-day operations while it reorganizes.

"We are pleased with the approval of our 'first-day motions' by the Bankruptcy Court," said McKenna in a statement. "This approval will enable SGI to operate globally and meet normal business obligations."

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Despite filing for bankruptcy this week, Silicon Graphics Inc. officials said that users will get their products, service and support without change even as new product plans will move ahead. That message is an attempt to sooth worried users who rely on the Mountain View, Calif.-based company's high performance computing technology.

SGI CEO and Chairman Dennis McKenna has been telling customers that he has a strategy for the company since taking his job in February. Earlier this year, McKenna restructured the company, laying off 12%, or about 250 employees, and installing some new managers. Then came the decision, announced on Monday, to seek Chapter 11 bankruptcy protection. That move won initial approval in court Thursday, ensuring that the company will have $70 million to continue day-to-day operations while it reorganizes.

"We are pleased with the approval of our 'first-day motions' by the Bankruptcy Court," said McKenna in a statement. "This approval will enable SGI to operate globally and meet normal business obligations."

In an interview, he said no additional cuts are planned and asserted that the Chapter 11 move would not disrupt SGI'soperations. "It's business as usual and we will continue to reinforce that," McKenna said, adding that the company is moving ahead with plans to broaden its enterprise reach through the introduction of x86 servers, as well blades running Intel's Montecito Itanium dual core chip. New products are due beginning next month.

Analysts have repeatedly blamed competition from low-cost x86 vendors running Linux for SGI's plight, but the company's visualization technology and shared memory architecture has proponents. The National Aeronautics and Space Administration (NASA) is using an SGI Altix supercluster named Columbia, in honor of the space shuttle astronauts, that's made up of 10,240 Itanium 2 processors. The system became fully operational in the fall of 2004.

Walt Brooks, who until recently was chief of the NASA Advanced Supercomputing Division and is still with the space agency, said, in an e-mail that the ability to configure large single system images with high bandwidth and low latency "is extremely advantageous for a number of our codes in terms of scaling and the ease of programming and diagnostics." Brooks also heads the SGI user group, which is meeting next month in Las Vegas.

SGI's Numaflex technology, a shared-memory architecture that allows memory to be shared across multiple processors and the large Intel Itanium cache, is "the key to the effectiveness of the Columbia Constellation design," he said. "There are other options out there for both capacity and capability computing, but overall the community would lose a major option in designing their computer centers if SGI failed to regain its footing."

SGI systems make up nearly half of the 3,000 CPUs available at the U.K.'s University of Manchester Research Computing center, according to Terry Hewitt, its director.

Hewitt met with McKenna soon after he took over at SGI. "He has a good understanding of the product range," said Hewitt. "I was very impressed with his competency."

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