SGI adds x86 servers in bid to emerge from bankruptcy

Silicon Graphics said Monday that it's broadening its product line to provide lower-cost options, including the introduction of an x86-based server, in its effort to return to profitability after its bankruptcy filing in May.

SGI has centered its products on the Itanium processor, but it faces competition from makers of high-performance computing systems that build clusters based on lower-cost x86 systems. SGI is attempting to attack that low-cost market with its new Altix XE, which is based on the latest dual-core Intel Xeon 5100 processors, also known as Woodcrest. And the Altix XE is preconfigured for use in a cluster.

Regarding the move into x86-based systems, Jill Matzke, SGI's high-performance computing marketing manager, said, "Obviously, one of the things we need to [do] is expand our market reach." She added that the new products "are very much part of our path back to profitability."

Pricing on the Altix XE starts at $3,100; the product will start shipping in August. It's built to support Red Hat Enterprise Linux 4, and Novell's SuSE Versions 9 and 10. The system also includes SGI's ProPack for Linux software stack.

SGI will continue to rely on Itanium for its high-end, memory-intensive systems. The Mountain View, Calif.-based company is also expanding its midrange line with a cheaper alternative, the Altix 450 blade server. According to SGI, the Altix 450 has a performance gain of about 2.5 times that of the existing Altix 350. The new system uses Itanium 2 dual-core processors that can scale to 38 sockets. It will ship in July, and pricing begins at about $14,000.

SGI's big iron system, the Altix 4700, which can scale to more than 1,000 processors on blade servers, has also been upgraded with Intel's latest dual-core Itanium processor. SGI said the change will double the performance of the existing blade. The Altix 4700 is now shipping, and pricing starts at less than $75,000.

After posting successive quarterly losses, SGI earlier this year cut 12% of its workforce, or about 250 employees. It then filed for Chapter 11 bankruptcy protection and quickly received court approval for a reorganization and $70 million in financing.

Analysts have cited competition from low-cost x86 vendors as one of SGI's key problems. "The problem is that you need to sell a lot of those kinds [low-cost] boxes," said Gordon Haff, an analyst at Illuminata. Even so, "SGI probably wishes they had gone down the x86 route" earlier, he said.

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