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Silicon Graphics Declares Bankruptcy and Sells Itself For $25 Million

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Sadly, this is no April Fool’s joke. Silicon Graphics, the high-end computer computer workstation and server company founded by Jim Clark in 1982, today declared bankruptcy and sold itself to Rackable Systems for $25 million plus the assumption of “certain liabilities.” In its bankruptcy filing, SGI listed debt of $526 million.

A decade ago, SGI’s revenues peaked at about $4 billion a year. Now it will be lucky to make one tenth of that, with a revenue run-rate of less than $400 million, and its losses are piling up. Rackable’s stock is down nearly 7 percent on the news. SGI’s high-performance, highly-proprietary, computing systems fell victim to the spread of cheap Linux boxes hooked up together with massive redundancies.

You don’t build Web-scale services on expensive proprietary boxes. You build them on cheap, open-source systems. Just ask Google (or Amazon or Salesforce or anyone else).

  • haha

    April fool

  • haha

    April fool

  • http://www.favbrowser.com Vygantas
    • swag

      Truer words were never spoken.

  • http://www.favbrowser.com Vygantas
    • swag

      Truer words were never spoken.

  • Volcane

    If it really is a joke Rackable must not be laughing cos their stock is defo down 8% :)

  • Volcane

    If it really is a joke Rackable must not be laughing cos their stock is defo down 8% :)

  • http://www.rajajasti.com/2009/04/01/sgi-sold-for-25m/ SGI sold for $25M! « Raja Jasti’s Blog - Renaissance Thinking

    […] in the computer workstation market and a silicon valley icon, has been sold to rackable systems for $25M. I am surprised that SGI is still around. SGI was disrupted by low cost PC graphics chip companies […]

  • http://www.rajajasti.com/2009/04/01/sgi-sold-for-25m/ SGI sold for $25M! « Raja Jasti’s Blog - Renaissance Thinking

    […] in the computer workstation market and a silicon valley icon, has been sold to rackable systems for $25M. I am surprised that SGI is still around. SGI was disrupted by low cost PC graphics chip companies […]

  • http://www.vizworld.com VizWorld

    This is no joke, and as information comes out it’s looking even stranger.

    Rackable’s not actually the buyer at this point, but they’re in prime position to buy it. Everyone else has 25 days to step up and make an offer, after which Rackable gets all of SGI’s holdings, but _none of the debt_.

    http://www.vizworld.com/tag/sgi/

    • Fleacool

      sounds like a good deal

  • http://www.vizworld.com VizWorld

    This is no joke, and as information comes out it’s looking even stranger.

    Rackable’s not actually the buyer at this point, but they’re in prime position to buy it. Everyone else has 25 days to step up and make an offer, after which Rackable gets all of SGI’s holdings, but _none of the debt_.

    http://www.vizworld.com/tag/sgi/

    • Fleacool

      sounds like a good deal

  • http://www.facebook.com/people/Seph_Skerritt/846710466 Seph Skerritt

    Clayton Christensen knows what’s up.

  • http://www.facebook.com/people/Seph_Skerritt/846710466 Seph Skerritt

    Clayton Christensen knows what’s up.

  • Blame Linus

    The Torvalds Effect

    OSS FTW!

  • Blame Linus

    The Torvalds Effect

    OSS FTW!

  • SGI guy

    Maybe Seeqpod will do the same thing! All these bankruptcy companies are probably a result of the downturn.

  • SGI guy

    Maybe Seeqpod will do the same thing! All these bankruptcy companies are probably a result of the downturn.

  • Kats

    ha ha ha ha ha ha…

    You guys…you’re slaying me

  • Kats

    ha ha ha ha ha ha…

    You guys…you’re slaying me

  • http://thirdnature.net mark

    You made one mistake: SGI uses Linux for their operating systems, so the problem wasn’t a proprietary OS.

    One of their many mistakes was selling *expensive* open source systems.

  • http://thirdnature.net mark

    You made one mistake: SGI uses Linux for their operating systems, so the problem wasn’t a proprietary OS.

    One of their many mistakes was selling *expensive* open source systems.

  • http://www.screensleuth.com Screen Sleuth

    I don’t think this is a joke, AFAIK.

  • http://www.screensleuth.com Screen Sleuth

    I don’t think this is a joke, AFAIK.

  • Davor

    This is sad news. I remember playing around with one of these machines in my father’s lab when I was a kid and it ROCKED back then.

  • Davor

    This is sad news. I remember playing around with one of these machines in my father’s lab when I was a kid and it ROCKED back then.

  • LauderdaleStunna

    To those in the know: Rackable is doomed too.
    We have been using Rackable servers, they are the worst in the industry- unreliable, no warranty support, nothing.
    Our reseller just switched away from them to a major brand, citing that they want to quite before they go out of business.

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