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Silicon Graphics files for Chapter 11 bankruptcy protection

Monday, May 8, 2006 · 8:41 am · 21 Comments

“Silicon Graphics Inc., a long-struggling maker of high-performance computers, filed for Chapter 11 bankruptcy protection. A group of bondholders agreed to trade their debt for a stake in the company, which filed for Chapter 11 protection Monday morning in U.S. Bankruptcy Court in New York. Silicon Graphics is known for desktop workstations and larger server systems that are favored by engineers and others who demand sophisticated graphics, including Hollywood studios. But the company has suffered a long slide, partly due to competition from machines based on standard components used in personal computers,” The Wall Street Journal reports.

“Silicon Graphics’ stock was recently delisted from the New York Stock Exchange for trading below a minimum threshold of $1 a share, and now trades on the small-cap OTC Bulletin Board,” The Wall Street Journal reports. “On Monday, the company said its fiscal third-quarter loss narrowed to $42.7 million, or 16 cents a share, from $44.5 million, or 17 cents a share, a year earlier. Revenue fell to $108.1 million from last year’s $159.2 million.”

Full article here.

[Thanks to MacDailyNews Reader "Fred Mertz" for the heads up.]

MacDailyNews Take: An opportunity for Apple or just something to avoid?

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Comment Feed

21 Comments

me

Monday, May 8, 2006 - 9:48 am · Reply

I may be the only one SAYING this, but I am sad to see SGI go (not that bankruptcy == going-out-og-business but it isn’t a good sign either).

In college, we had a NeXT lab where I got my first taste of “OS X alpha” if you will. Next door was the SGI lab where we did some really cool stuff with vector art and multi-processor computing.

Just like Apple, SGI was one of those who fought to innovate for teh select few (research scientists in SGI’s case) rather than try to take the spreadsheet market from Microsoft.
Gregg Thurman

Monday, May 8, 2006 - 9:52 am · Reply

An opportunity for Apple or just something to avoid?

Absolutely something to avoid. Look at their groww revenue. Apple does more than that each quarter selling Xserves.

Intel’s new microarchitecture is going to allow them to produce 4-way and 8-way processors in the near future. Apple’s OSX (UNIX based) will be plenty strong enough to take advantage of processors with that kind of power.

The days of the specialized workstation manufacturer are over.

The King is Dead, Long Live the KIng.
Dirty Pierre le Punk

Monday, May 8, 2006 - 9:58 am · Reply

Still, if anybody could have given Apple a run for its money (with the right business plan), it was these boys. I used one of their machines for graphics work a few years ago and was impressed with the design of their computers and also the OS. Sorry to see them go.
Thorin

Monday, May 8, 2006 - 10:09 am · Reply

Yes it is a little sad. We have a couple of older workstations in use here where I work. They are a little more stable than most Windows machines due to the stripped, “proprietary” NT setup.
andy

Monday, May 8, 2006 - 10:11 am · Reply

apportunity, Jobs has already taken ground by the Pixar developing for mac, and im a 3D designer so please…more more more
JadisOne

Monday, May 8, 2006 - 10:13 am · Reply

Ouch. Sad to see them go. I used to love that company. Seems like they never really adapted with the times. Everyone else was slashing prices, theirs stayed in the stratosphere.
Petey

Monday, May 8, 2006 - 10:54 am · Reply

I used SG machines when I lived and worked in Paris.

I designed interfaces on them and were great machines.

Unfortunately this is a result of many factors, those being; ashrinking market share, desktop comps getting more powerful (therefore companies not buying the SG comps), prices being too expensive, lack of any real support of the OS.

An inevitable end i’m very sad to say.
DLMeyer

Monday, May 8, 2006 - 10:57 am · Reply

Gregg,
Where did you get your numbers on the Xserve’s market/share? I’ve been curious about the numbers for Apple’s “enterprise” machines (Xserve, Xraid) for a while now but have only seen vague – but positive – statements.

“The days of the specialized workstation manufacturer are over.”

The days where you could get by serving a single niche market may be over, but niche markets WILL be served. Macs are perceived in IT circles as a Necessary Evil for use by Creative Types. That’s a sort of niche, if a broad one encompassing print design, web design and more. Microsoft seems to have done quite well by owning the Corporate Desktop niche, moving from there into the Small Corporate Server niche.

Apple will likely benefit from SGI’s troubles. But not a lot. If every SGI not sold translates to a PowerMac or Xserve being sold, the blip would hardly be remarked upon.
Nice Patent Portfolio

Monday, May 8, 2006 - 11:41 am · Reply

Apple should buy these from SGI and then license them back to SGI. It wouldn’t cost a lot, would help SGI and insulate Apple from future Patent cases. If SGI sells them to someone else, they could be used as a weapon against many.
Too Hot!

Monday, May 8, 2006 - 11:43 am · Reply

SGI workstations are all over the scientific community, and these will have to be phased out. If Apple could come up with great service contracts that would entice universities and research labs, they could easily grab that piece of Unix land. They already have had success in some places, but a concerted effort could be Apple’s first experiment of reaching out to the enterprise market.
botox

Monday, May 8, 2006 - 12:03 pm · Reply

SGI’s selling point used to be graphic. With their talents in graphic chip development draining to nVidia, SGI has nothing to sell anymore but servers. Just look at what SGI has to offer in the graphic workstation line-up. They still have the more than six, sever years V-pro graphic in the machine while nVidia keeps improving their much faster Quadro Pro chips. SGI’s demise is slow in coming but sad. I have been using SGIs since the day of the Indigos. Now I have no choice but to use a Pc for faster CPU and graphic at a much lesser price. I hope Apple, no need to buy SGIs, will come up with MacPro equipped with the latest CPU from Intel and the latest graphic chips from nVidia. That will help Apple make inroad into professional 3-D graphic, scientific, engineering and visualization fields.
Big Al

Monday, May 8, 2006 - 12:06 pm · Reply

In order to take SGI’s place in research Apple will have to fix or replace the Mach kernel. Many problems there. Maybe Leopard will replace the old kernel now that Avie is gonzo.
bodeh6

Monday, May 8, 2006 - 1:05 pm · Reply

I will miss SGI if they go away. They had a great run in the late 80′s toward the mid 1990′s. Jurassic Park, Nintendo 64, Terminator 2 would not have been possible without SGI. What a great company back in the day with MIPS processors. Then starting in the late 90′s till today they have been in a downward slide with no way up. The move to Intel in some of their workstations did not help.
rasterbator

Monday, May 8, 2006 - 1:47 pm · Reply

SGI was the big dog back in the day. The movie studios would use SGIs to do some really cool effects that can now be done on Macs and PCs. SGI started to go South because of their assinine CEO, especially when they purchased Cray, the supercomputing company. They lost a buttload of money on that deal and never recovered. Some of the best games I ever saw in the late eighties and early nineties were running on SGI. But hardware mistake: using their own microprocessor, which was made locally and they eventually bought the company, I believe. Biggest software mistake: IRIX flavor of UNIX was great, but subcscription based software updates. And third party apps were so expensive because SGI was charging them a ton of money to be on the platform
Jake

Monday, May 8, 2006 - 2:27 pm · Reply

Big Al,
What’s wrong with the Mach kernel? Just one example, please. And are there any alternatives?
Seriously, I’m curious.
Thanks.
justme2

Monday, May 8, 2006 - 3:43 pm · Reply

Worked as a temp at SGI for several months back in their heyday in the ’90s. Great company to work for, at least in the software licensing group. Agree that the Cray purchase was a big mistake (and possibly fatal). They also did a lot of construction without looking toward the future — the current Google headquarters was an SGI building, as is the current home of the Computer History Museum.

Companies should learn from SGI what happens if you spread yourself too thin, and don’t make contingency plans for changes in the marketplace.
©

Monday, May 8, 2006 - 7:21 pm · Reply

Doesn’t look too good for SGI, but chapter 11 is a RESTRUCTURING bankruptcy which will protect them from ceditors while they either [1] Prove to their creditors that they have a viable plan to pull out of thier current financial woes or [2] Find a buyer.

This looks like the end, but you never know who may swoop in and buy ‘em out. If not, I suppose it’s the end.

BTW: Anyone know the story of what happened to the company that made the Apollo workstations? I lost track of them long ago – they were a competetor to SGI.
The Other Steve

Monday, May 8, 2006 - 11:54 pm · Reply

With OSX now mature and multi-multi processor mac workstations about to come out, what’s the point. I know they still have some advantages but that won’t last long. There’s money behind OS X and their making all the right decisions. Steve knows movies and computer FX.
drmacnut

Tuesday, May 9, 2006 - 12:04 am · Reply

Somewhat sad to hear, but we all knew the knell would sound sometime soon.

I just pulled out an old t-shirt I’ve still got from the early 90s:

Jurassic Park with thanks to SGI (for all the graphics work they did on the film); the shirt has a T-Rex standing in the middle with the SGI logo on the bottom.

They were given out as gifts to the employees when I was projecting the first showing of JP (outside of ILM of course), which was for all the SGI workers at a thank you party in San Jose. I can’t remember what year that was.

so long
Mike

Tuesday, May 9, 2006 - 12:44 am · Reply

pity, cool logo, and more diversity gone
justme2

Tuesday, May 9, 2006 - 3:11 am · Reply

The original logo (3D cube) was waaaay cooler — wonder if I still have my SGI Varsity shirt I got when I did a major licensing project for that department? It’s waaay too small for me, but very cool…hope it’s in a box somewhere…