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By | Ashlee Vance 18th October 2006 09:59

Gutted SGI 'blasts out' of, er, bankruptcy

Fewer staff, fewer debts, same problems

Grumpy naysayers will argue that SGI shouldn't have bothered. It should have put the purple logos away, handed its old contracts to IBM or Sun Microsystems and called it a day. Never mind this bankruptcy emerging business.

SGI's public relations team did its best yesterday to counter such server cynicism with one of the catchier headlines we've ever seen on a bankruptcy-related financial statement. "SGI Blasts Out of Chapter 11 Lean, Focused and Ready for Growth," the flacks wrote.


To the "New SGI's" point, the company is in fact leaner than before. It now employs just 1,600 people – well down from the more than 10,000 workers it once paid. The server maker also has less cash to play with than in the glory days. It has come out of bankruptcy with $115m in financing.

"Today we debut the New SGI, an efficient and fully recapitalised company armed with a new, market-centric business model and empowered by a rekindled commitment to solving the problems of customers in a targeted range of markets," SGI CEO Dennis McKenna said.

Of course, the new SGI looks a whole lot like the old SGI from a product standpoint. The company still relies on Itanium-based systems for its most lucrative sales. The new SGI, however, has placed more emphasis on Xeon-based servers, while ignoring Opteron kit.

The new SGI also wants to go after a broader customer set than the visualisation and high performance computing crowd that it overcharged for years.

Beyond a few bits of proprietary technology that failed to pay the bills in the past, SGI does not seem to have any special sauce to separate it from other hardware makers. So even with a blasting, lean SGI faces some serious challenges. ®

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