As published in HPCWire

Do you know what the saddest part is of Rackable’s attempt to acquire SGI’s assets out of bankruptcy for a paltry $25 million in cash? There would
be very little effect on the HPC market as a result. Thanks to a cascading series of problems — bad marketing, operational misfires, bad technology
bets, and ordinary bad luck — SGI didn’t have much left to lose.

It’s been a long ride down for SGI, and now that it’s finally over, it comes almost as a relief, like when a beloved relative who has been suffering
in pain for years with a terminal disease, a mere shadow of former self, finally passes. It gives us one last chance to light candles, join hands,
and remember an icon that once exemplified Silicon Valley greatness.

The industry is full of opinions on what went wrong with SGI, and I’ve got my stories too. Before becoming an HPC industry analyst, I worked at SGI
myself for a little over six years in product management and product marketing roles in SGI’s server group.

When I joined Silicon Graphics in August 1997, the company appeared on the cover of BusinessWeek magazine. No, not that cover story. People remember
SGI being anointed “the Gee-Whiz Company” by BusinessWeek in 1994, but some forget that the same publication announced the company’s downfall only
three years later in “The Sad Saga of Silicon Graphics.” Marketing was to blame, along with reckless spending; that much was common knowledge.
On both these points, I’d have to agree.

I didn’t witness the most reckless of spending myself — Silicon Graphics’ final infamous Winterfest party, with its headliners, revelry, and raucous
lip-synch contests, was just before my time — but I can tell you what marketing was doing about our position in HPC. We were killing it as fast
as ever we could.

Silicon Graphics’ technology leadership in workstations and servers was widely acknowledged, but our executive leadership suffered from a collective
inferiority complex when compared to Sun, Silicon Graphics’ twin sister. (Both companies were founded in the same year, with neighboring headquarters,
and they competed in several markets.) Sun was flying high with enterprise servers based on SPARC and Solaris, and we wanted to catch up. The training
I was given that first summer directed me to assume, as an inalienable truth, that the market didn’t care about performance. We had to beat Sun
with enterprise features, with an emphasis on RAS (reliability, availability, serviceability). I was the IRIX product manager at the time. I could
probably still whiteboard the “Cellular IRIX” presentation for you.

You have to give CEO Ed McCracken credit; he wanted the company to be responsive to customer needs, and he listened to marketing. Marketing just blew
it. We told engineering to back off on performance and give us RAS. We made “Sun Sucks” bandit videos and rewrote the marketing literature. Instead
of taking on Alpha in HPC, we took on Solaris in enterprise. We were destined to fail.

Interestingly, one of the main platforms we competed against, the Sun Ultra Enterprise 10000, was based on technology we had sold to Sun. I’m in the
minority opinion in that I don’t think we should have kept the technology for ourselves. I just think we should have gotten more money for it.
Probably a lot more.

I should also mention Cray at this point. We owned them, and I worked in the server group. I have to say, I really didn’t know those guys back then.
Again, it’s not the purchase I had a problem with, but rather the implementation. We never integrated those teams. The eventual planned merger
of the roadmaps got delayed more than a few times. As of this moment, it was slated to come to market in SGI’s Ultraviolet product, which might
yet never see the light of day.

The next chapter is well-documented. McCracken was out, and our new CEO was Rick Belluzzo, who was further convinced that volume was the key to success.
He put Silicon Graphics’ resources on souped-up PCs — I was still working on servers, trying to sell our customers IRIX-based systems as Belluzzo
told the world we wouldn’t invest in them — and he boldly announced the plan to the world. He abruptly quit weeks later. He was not popular around
the water cooler after that.

Then came Bob Bishop, and I have to tell you, things started to get better, at least with strategy and marketing. It was 1999 when he took over. Bishop
loved the big systems, and he brought us back to an HPC strategy. We built excitement in our roadmap. And we made it to what was supposed to be
a critical turning point: the launch of Origin 3000 at the end of June 2000.

Reckless spending? Yeah, there was some. The annual sales conference, where we did the internal launch, featured magicians Penn and Teller and motivational
speaker Tony Robbins (not to be confused with namesake Anthony Robbins, who ran federal sales), among others, in a supercool tent event set up
adjacent to our supercool new buildings, a campus known today as the GooglePlex. Still, it could have been worse.

Bad marketing? I have to say, the NUMAflex messaging was a little off. Not entirely my fault, but by the time everyone had their say, “NUMAflex” represented
a suite of tangentially related benefits, only one of which was performance. Still, it could have been worse.

And the launch? What a success. We had enough sales already booked to make our next two quarters. That’s when different culprits got us: operations
and plain old bad luck.

We’d been shipping O3Ks for only a few weeks – weren’t even at full speed yet – when we hit a part outage. It was the ceramic packaging for the chips.
We had a single-source supplier, IBM, and there was no ceramic packaging to be had. We went on stop-ship, with the whole backlog of new orders
waiting to be fulfilled. It took months. By the time we started the line again, a lot of those sales were gone.

No matter, we had the second punch coming, our first systems based on Itanium chips. First-generation Itanium chips. Anyone here remember Merced? Intel
delayed it, then delayed it again, then pulled the plug on it. There went another batch of orders. We retooled for McKinley, also delayed.

We finally got our first Itanium and Linux-based Altix 3000 systems out at LinuxWorld in January 2002. It was a great product, and if I do say so myself,
marketing was really ticking. The press was good, we won awards, and everyone knew what we were doing and what the value proposition was. It was
just a tough sale.

By 2002, x86 clusters were the norm. Our standard pitches that explained why you shouldn’t convert your code to MPI were moot. The codes were MPI,
and they weren’t coming back. Furthermore, Itanium had marginalized in the market – SGI picked the wrong chip. Back to the drawing board.

The rest is not as interesting, and it’s more recent, so you remember it. SGI started working on clusters. Bishop was out, replaced by Dennis McKenna,
who guided the company through its first bankruptcy, then Bo Ewald. Under Ewald, SGI purchased the remains of Linux Networx and integrated the
software into its own cluster stack, but it was too little too late. Customers had been hurt too many times, and they weren’t coming back.

The last five years have been a grind for SGI, and many of us – especially us former employees with purple blood – silently rooted for the company
to succeed. “Not dead yet” was the constant diagnosis. Until this month. Now SGI is gone.

What happened? As with any prolonged misery, a lot of things went wrong. If you want my opinion, look at the things we did wrong, and the few we did
right, in the six-year span from 1997 to 2003.

But forget about that now. Remember the good times. Remember what you loved about the Gee-Whiz Company. Tell a friend your favorite SGI story, and
then listen to someone else’s. Have an SGI-style TGIF beer bash and raise a glass to a Silicon Valley icon.

And then bury it, ’cause it’s gone.

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