Well, this news came as a bit of a shock. Out of the blue SGI announced they were going in to Chapter 11 (again), closely followed by the news that Rackable were buying the company for a paltry $25m.

You can find the entirety of SGI’s press release at http://www.sgi.com/company_info/newsroom/press_releases/2009/april/rackable.html. At that URL you’ll also find PDFs of the letters sent out to SGI customers, as well as holders of a Silicon Graphics support contract.

John West over at insideHPC has a good post up discussing the Rackable/SGI deal – rather than re-hash everything, I’d recommend you read through his thoughts.

Despite still sailing close to the wind financially, Silicon Graphics still have some very clever tech, which remains in demand. The entire VUE suite is good, CXFS is miles ahead of offerings like Sun’s Lustre, and no-one can do large shared memory systems like SGI.

The question is – can Rackable take this great tech, and SGI’s awesome technical staff, and accomplish what Silicon Graphics have been unable to do – sell them to clients?

Under the disastrous mis-management of that imbecile Rick Belluzo, Silicon Graphics really suffered. Yet, even after he’d bailed, they still retained the arrogant attitude of a much larger company – despite the best efforts of the bulk of their technical staff, and some of their management.

Ignoring the (incredibly vocal and loyal) hobbyist userbase, ignoring business data centres, VARs and OEMs was never going to work. You can’t trade on past glories for too long. That was starting to turn around in the last couple of years, with large systems aimed at businesses and the start of a VAR program, but it was a case of too little, too late.

It’s going to be interesting to see what Rackable’s next move is. Like Compaq swallowing DEC, they’ll be inheriting some longer term government contracts which still require IRIX and MIPS support. Rackable would be foolish to ditch the Silicon Graphics brand – it’s far more established, emotive, and powerful than their own. Will they do a Tera and ‘become’ Silicon Graphics?

With Intel’s Nehalem Xeons now out the door, there’s a credible upgrade path for Altix user’s stuck with Itanium, and Rackable could make some serious coin from that – and land some new business too.

John also has some details on how the deal will work and it looks like we’ve got a short timeframe to hear what’s going to happen.

Interesting times – both literally and in the Chinese curse sense – for both Silicon Graphics, their userbase, and the hobbyist community.

Why do I get such a strong feeling of deja vu? Haven’t I seen headlines like this before? Wasn’t this all supposed to be behind SGI?

Silicon Graphics, Inc. (SGI) (Nasdaq: SGIC) announced today that it received a notification letter from The Nasdaq Stock Market on December 2, 2008, indicating that, for 10 consecutive trading days preceding the date of the letter, the market value of the SGI’s listed securities had been below the minimum $35 million requirement for continued inclusion on The Nasdaq Stock Market pursuant to Nasdaq Marketplace Rule 4310(c)(3)(B) (the “Market Value of Listed Securities Requirement”).

You can read the full press release from SGI at http://www.sgi.com/company_info/newsroom/press_releases/2008/december/nasdaq.html

Personally I think the time is ripe for Silicon Graphics to take themselves private, and concentrate on R&D and doing what they do, well, without having to keep a corrupt and incompetent stock market happy.

Disclaimer: I run my own business and I’ve been stung heavily by banks over the last year or so.