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Supercomputing Linux Business

SGI Acquires Linux Networx Assets, LNXI Dead? 96

Posted by kdawson from the tags-involving-cluster-not-welcome dept.
anzha writes "It seems that that Linux Networx, the pioneering Linux supercomputing company, has gone belly up. SGI announced that it has bought the core assets of LNXI. Furthermore, the rumors are that the doors were locked and employees were just given their paychecks. This analysis, on the other hand, claims that SGI has 'made employment offers to many LNXI engineers.' It's unclear what kind of support will be extended to customers of LNXI's Clusterworx Advanced products. What does this mean for the future of Linux supercomputing?"
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SGI Acquires Linux Networx Assets, LNXI Dead? More

SGI Acquires Linux Networx Assets, LNXI Dead?

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  • Belly Up? (Score:4, Insightful)

    by eldavojohn ( 898314 ) * <eldavojohn@gm a i l . com> on Friday February 15, 2008 @09:08AM (#22433810) Journal

    "It seems that that Linux Networx, the pioneering Linux supercomputing company, has gone belly up."
    What causes you to think that? Have they filed for bankruptcy? Is there some indication they were failing?

    According to most definitions of 'belly up' [wiktionary.org]:

    1. (idiomatic) Dead or defunct, often used with go, went, or turn. (see go belly-up)
    After several financial failures, the organization went belly up.
    I'm pretty sure that since SGI has slowly become a niche provider for creating solutions for a few specific customers, they see Linux Networx as another good partner in another niche market. SGI isn't at the greatness they once were but it looks like they're holding their own in what they are doing.
    • Yeah but thats not very exciting is it?... "Just another merger"... but the more you can make it sound like the entire future of Linux depends on this single deal, the more attention you get...
      • I just passed their headquarters this morning. There are no cars in the parking lot on a regular workday, and I don't recall any there on Wednesday, either. Perhaps that is an indication of their current position?

        I interviewed for a sysadmin job with them several years ago and had done some consulting work on Bugzilla for them in the past, and they seemed like a good place to work. They had plenty of customers and pretty solid technology for managing clusters. But once you've deployed a few dozen superc

        • Re: (Score:2)

          by sl3xd ( 111641 ) *
          Depends entirely on the time of day you drove past. Typical working hours for most employees was shifted a few hours later in the day. There were plenty of vehicles there yesterday, (and around back), as well as quite a few today.

          One reason few cars were there is they were trying to plow the parking lot in the morning (yesterday and today). There was a pretty wicked snowstorm the night before, making the commute painful.

          That and most of the staff rolls in later in the morning, and leave later at night th

          • Re: (Score:1)

            by bbice ( 1246198 )
            It also depends on what site/office you're talking about. The parking lot of the Sunnyvale office fills up fairly early. (shrug)

      • but the more you can make it sound like the entire future of Linux depends on this single deal, the more attention you get...
        You must be new here...

    • Re: (Score:2, Insightful)

      by neurovish ( 315867 )

      "It seems that that Linux Networx, the pioneering Linux supercomputing company, has gone belly up."

      What causes you to think that? Have they filed for bankruptcy? Is there some indication they were failing?

      According to most definitions of 'belly up' [wiktionary.org]:

      1. (idiomatic) Dead or defunct, often used with go, went, or turn. (see go belly-up)

      After several financial failures, the organization went belly up.

      I'm pretty sure that since SGI has slowly become a niche provider for creating solutions for a few specific customers, they see Linux Networx as another good partner in another niche market. SGI isn't at the greatness they once were but it looks like they're holding their own in what they are doing.

      Since SGI hasn't turned a profit in forever and usually loses about $100M a year, I'd say that having your assets bought by them would qualify you for dead.

      • Re:Belly Up? (Score:5, Interesting)

        by eldavojohn ( 898314 ) * <eldavojohn@gm a i l . com> on Friday February 15, 2008 @09:18AM (#22433920) Journal

        Since SGI hasn't turned a profit in forever and usually loses about $100M a year ...
        False. Their net income [google.com] for 2006 was -$146.19 Million while their net income for 2007 was $222.61 Million. You may have been correct but at least in 2007 it looked like they have turned things around.

        • Since SGI hasn't turned a profit in forever and usually loses about $100M a year ...

          False. Their net income [google.com] for 2006 was -$146.19 Million while their net income for 2007 was $222.61 Million. You may have been correct but at least in 2007 it looked like they have turned things around.

          Weird, the statement I'm looking at shows a -$103.64 million income for 2007 http://finance.yahoo.com/q/is?s=SGIC&annual [yahoo.com], but their debt also substantially reduced that year. It looks like google figured that into their income calculation.

        • Re: (Score:3, Informative)

          by Sen.NullProcPntr ( 855073 )

          False. Their net income [google.com] for 2006 was -$146.19 Million while their net income for 2007 was $222.61 Million. You may have been correct but at least in 2007 it looked like they have turned things around.

          Not sure where google gets their numbers from but you shouldn't believe everything you read on the interwebs;-) If you go to the source [sgi.com] you will see nothing but net losses for FY2007 [PDF] [sgi.com] (which ended on June 30, 2007) and FY2008 [PDF] [sgi.com] (which somehow ended December 29, 2007!!!).
          The change in FY dates may have caused the confusion in the totals.

          Disclaimer: I buy high and sell low.

        • They made money on their cash ballance, and by offering more shares, that's not really the same as an operating profit. Investors aren't going to keep dumping money into you, if you don't make a return on that money better than a t-bill. (that said, they sure do keep throwing good money after bad at sgi.)

          2007 may have been better than 2006 for SGI, but I look at it as loosing money on every deal, just to drive up volume. It's too bad, as they have good technology in the altix and cxfs, but they just can't s

      • Re: (Score:2)

        by fm6 ( 162816 )
        You're out of date. SGI is no longer big enough to lose $100M a year. They scaled way back before emerging from bankruptcy. They're now a small (but modestly profitable) company.

    • Re: (Score:2)

      by jrumney ( 197329 )

      "It seems that that Linux Networx, the pioneering Linux supercomputing company, has gone belly up."
      What causes you to think that? Have they filed for bankruptcy? Is there some indication they were failing?

      The fact that the employees turned up to find the doors locked and received their final paychecks suggests that the company was wound down and the assets sold, rather than being sold as a going concern.

    • Re: (Score:2)

      by mihalis ( 28146 )

      "It seems that that Linux Networx, the pioneering Linux supercomputing company, has gone belly up."
      What causes you to think that? Have they filed for bankruptcy? Is there some indication they were failing?
      The press release says SGI acquired the core assets of Linux Networx. That phrase normally refers to buying parts of a defunct company. It does not mention taking on LNXI's staff

    • Re: (Score:2, Informative)

      by Hatta ( 162192 )
      I think the bigger story here is that SGI is still around. Hadn't heard that TLA in a while.
    • ... And it isn't because SGI has nothing to offer (unlike SCO). It is just what they have always done has practically become irrelevant. They made powerhouse workstations with special top-grade hardware, and software optimized for said hardware. The problem, the same problem that Sun has needed/needs to tackle is that x86 PCs are so dirt cheap, that even if they aren't the best of the best, you can just throw more hardware at it for a mere pittance.

    • Re: (Score:1)

      by Falcula ( 20022 )

      What causes you to think that? Have they filed for bankruptcy? Is there some indication they were failing?
      Well, the first bad sign I noticed is when they were a no-show at the SuperComputing 07 conference last November. They had a booth, and were noted in the program, but had pulled out late.

      That and their website hadn't changed in months.

  • The future of Linux supercomputing (Score:5, Insightful)

    by jrumney ( 197329 ) on Friday February 15, 2008 @09:10AM (#22433830)

    What does this mean for the future of Linux supercomputing?

    It means the future of Linux supercomputing will be backed by SGI. You don't think SGI bought an already dead company just to kill it, do you?

    • Cray, which still exists and still builds and sells Supercomputers, also runs Linux.
      http://www.cray.com/products/xt5/index.html [cray.com]

    • Re: (Score:2, Interesting)

      by Maller ( 21311 )
      One Linux-based HPC vendor bought out another Linux-based HPC vendor, this will not really effect Linux on HPC. All of the Top 10 of the TOP500 use Linux in one way or another. The Blue Genes have SLES on the service nodes and CNK on the compute nodes. The SGI is SLES with add-ons. The HPs are Linux clusters. The Crays are SLES on the service nodes and either Catamount or Linux on the computes.

      Linux is very pervasive in HPC and becoming more so. Since I know a little something about Cray, the newest v

    • Re: (Score:2)

      by jd ( 1658 )
      OpenMOSIX revival attempts were badly derailed by folks who saw it as only a load-balancing solution that could (and should) never be used for HPC. I took - and take - the line that a good design solves many problems and have considered whether forking OpenMOSIX or developing an alternative would be the better way to go. Linux HPC has many, many tools but very little imagination, and that has poisoned it to a degree.

      You can use one of many variants of scalable reliable multicast to deliver data to many pl

  • What does that mean? It means they decided they became irrelevant to the industry at some point or another, and they know they can't get back up there with superior technology and code, so they'll just buy the competition out so that people in the market have no choice but to go to them.

  • What? (Score:4, Interesting)

    by xzvf ( 924443 ) on Friday February 15, 2008 @09:14AM (#22433870)
    Weak company buys weaker company just to shut it down? Am I missing something? What percentage of the super computing market does SGI and Linux Networx have now? With the top 500 dominated by Linux systems I think Linux based super computing is in good shape. Sure customers that took a chance on Linux Networx MAY be screwed, but only because SGI isn't in a strong position to be around much longer. Someone who cares should look into the deal and the involvement of any LBO firms. Smells kind of SCOish.
    • SGI bought their assets which I take to mean "stuff". Servers, switches, racks, pocket protectors...

      • Re: (Score:2)

        by afidel ( 530433 )
        Nah with a company like that it usually means IP including patents, trademarks and copyrights.

  • Dude.. wait, what? (Score:5, Funny)

    by ackthpt ( 218170 ) on Friday February 15, 2008 @09:18AM (#22433926) Homepage Journal
    I thought SGI was already dead.
    • Ees not dead.. He's pining for the fjord.

      • Ees not dead.. He's pining for the fjord.

        SGI uses Python on their supercomputers? Well, there's your problem right there!

    • Re:Dude.. wait, what? (Score:4, Funny)

      by Hythlodaeus ( 411441 ) on Friday February 15, 2008 @11:44AM (#22435638)
      A dead company came back to life and now controls another dead company. Does that make it a lich company?

      • Re: (Score:3, Funny)

        by jd ( 1658 )
        According to my Rolemaster manuals, if it's a greater Lich and it's posessed by a greater Demon (ie: switches to *BSD), it becomes a Black Reaver.

    • Re: (Score:3, Informative)

      by fm6 ( 162816 )
      In a sense, they did die. They went bankrupt, and their stockholders lost their entire investment. But they had a few products worth saving (massively parallel Itanium and x64 systems), so new investors bought the name and those products. Pretty much a new company, and not a major player.

      It's actually kind of similar to Cray, which SGI bought, ran into the ground, and then sold to Tera Computer. Tera did get a couple of Cray products (others stayed with SGI or had already been sold to Sun), but I suspect th

  • Oh fun (Score:4, Insightful)

    by downix ( 84795 ) on Friday February 15, 2008 @09:37AM (#22434102) Homepage
    The last time SGI bought a supercomputing company things did not go well. SGI has managed to shoot themselves in the foot constantly for over a decade. At one time, they were an industry leader (even have an Indy sitting before me now) now they're in trouble and know it. Their abandonment of MIPS and embrace of Itanium gained them short term benefits, but gutted the long term profitability and flexibility of the company. Now they're desperate for growth before the stockholders abandon them utterly.

    Suggestion SGI, invest in new CPU's, the market is wide open for a solid x86 competitor now that PowerPC's given up the ghost there. Partner with Sun, use the OpenSPARC, make a consumerish-model that fits into customized Opteron motherboards, do something other than stand there admiring your own navel!
    • Abandoning MIPS was what kept them alive for a while longer.
      Invest in a new CPU - I don't think they can afford that now. And Sun is their traditional arch-enemy.

      • Re: (Score:1)

        by downix ( 84795 )
        But the main reason they got to the point that abandoning MIPS saved them is because they abandoned MIPS development upon the Intel announcement of IA64. If they had not done that, and a series of ill timed lawsuits against MIPS core vendors, they would not have gotten to that point.
  • Did they ever try to produce a graphics card?? It would have made sense.

    • Re: (Score:2)

      by gfxguy ( 98788 )
      They did make cards for PCs before most people even considered using PCs for any sort of graphics...

      The problem was the cards were nearly as expensive as buying one of their low-end workstations and didn't work nearly as well.

      By the time consumer 3D cards were coming out, SGI was already on it's way down.
      • I knew someone that had o2 box on her desk at work. That was a long time ago. I also think that if they are looking at new markets, as they seem to be in chpt11(?). It would make sense. As long as it is competitive.

        • Re: (Score:1)

          by fat_mike ( 71855 )
          We used to have a Canon CLC900 that used an O2 as the ripper. I loved that little blue toaster. It was cool looking, powerful, and it looked like a blue toaster.

          I haven't had a color printer since that is truly WYSIWYG since.

        • Re: (Score:2)

          by gfxguy ( 98788 )
          O2's on Ebay for as little as $30.00 now... of course, you need adapters and stuff in order to get it to work with regular monitors and so forth, but overall a pretty neat toy...
  • But does Netcraft confirm it?
  • Nothing I've heard, but as a Sun shareholder I would really like to see this happen. SGI is _cheap_ right now for the IP it has.

    I miss IRIX too.....

    Regards,

  • Supercomuting is off the shelf now (Score:4, Informative)

    by mlwmohawk ( 801821 ) on Friday February 15, 2008 @10:09AM (#22434478)
    The economies of "COTS" "Consumer Off The Shelf" technology and the advancement of projects like MPI and PVM, as well as gigabit ethernet has made fast and effective clustering almost as easy as plugging in an Ethernet cable.

    Seriously, while "programming" an application takes some chops, the infrastructure to run it is trivial.

    "In my day" we had, at best, 10mbit ethernet. We had to use special drivers to get out "Dolphin Interconnects" working right. We had to really study the network topology to get the message passing right.

    These days, forget about it. virtually all ethernet is interconnected via a switch so collisions are no longer an issue, switches don't cost thousands of dollars anymore, network interface cards use busmastering PCI or PCI2 (not ISA), The networks are 100x faster. The computers are 100x faster.

    What's the point of a company who's products only tend to mitigate (not eliminate) the inevitable diminishing returns? Can you say buggy whip? Yea, sure, people still make them, but they are not in common use.

    • Re: (Score:2)

      by Wells2k ( 107114 )
      In addition, even things like Infiniband have come down significantly in price recently. It is now possible to get Infiniband HCA's (4X SDR) for $125 USD new, and an 8-port switch for $750 USD.

      With that kind of pricing, it is now plausible to setup a small cluster in your own home with very high speed bandwidth between nodes. 4X SDR Infiniband is capable of sending data at 10 gigabit speeds, and running IPoIB on it gives you the same bandwidth as the much more pricey 10 gigabit ethernet that is out there.
      • In addition, even things like Infiniband have come down significantly in price recently. It is now possible to get Infiniband HCA's (4X SDR) for $125 USD new, and an 8-port switch for $750 USD.

        I'm not saying that these things aren't useful, but the point I was trying to make is that "super computing" (well, lets call it highly parallel computing) is far better understood today than ever before and while we have these specialized high speed links, it is important to note that the trick to highly parallel "de

      • Re: (Score:2)

        by afidel ( 530433 )
        Can those $125 cards offload the IPoIB? Because trying to do TCP/IP at 10Gbit without offload is a lesson in futility. In fact even maintaining actual 1Gbit speed takes a lot of overhead unless you are using jumbo frames, which are only useful for bulk data transfers.
    • That works only if you can split the problem in totally independent chunks. Communication times are still very high with off the shelf components.
      If the various parts of the problem require quick exchange of data very often, off the shelf computing fails miserably. In that case you need a true supercomputer, as in a single-OS-image machine, like the ones built by SGI, IBM, etc.
      • That works only if you can split the problem in totally independent chunks. Communication times are still very high with off the shelf components.

        And that is the science of writing a good parallel algorithm. Not all problems can be divided into a parallel paths others require a full working knowledge of the problem.

        If the various parts of the problem require quick exchange of data very often, off the shelf computing fails miserably. In that case you need a true supercomputer, as in a single-OS-image machine
        • You are correct, but remember: despite best efforts, it's sometimes impossible to split an algorithm into independent chunks.
          It depends on the problem you're solving. Some of them are tough cookies.
  • Linux Networx, based in Lindon, Utah (sound familiar?) was one of them thar Canopy/Tarantella -type companies (which SCO happens to be).

    BUT... unlike their evil twin sister, LNXI is a pretty cool bunch of folks. I got to tour their facilities once (they were looking to contract some Linux training, and I was looking for a side job at the time. A couple of my former students ended up working there. :) ).

    I gotta give 'em props... they were doing some pretty cutting-edge stuff at the time, and they probabl

    • Re: (Score:1)

      by sl3xd ( 111641 )
      LNXI hasn't been in Lindon for years, FYI. It (was) in Bluffdale for 3-4 years now.

  • A prudent investment. (Score:3, Interesting)

    by flaming-opus ( 8186 ) on Friday February 15, 2008 @11:37AM (#22435526)
    SGI probably got the technology for pennies on the dollar. When a company closes its doors, the investors and creditors are left holding the bag, and they're interested in getting out from under a little bit of that debt, and do it quick. If they don't unload the intellectual property quickly, it decays, looses mindshare in the marketplace, and falls out of date. This is doubly true in the world of linux, where you have to keep up with the kernel changes, and the changing distributions.

    Similarly, SGI has changed a lot of their focus from their expensive cache-coherent single-system-image servers to clusters of small/cheap nodes. SGI has great compiler technology, data-management software, and systems integration knowledge. They may not, however, have great systems-management tech. You don't need that for single-system-image machines. Even the big columbia machine at nasa is only a cluster of 20 machines. You can do a lot of stuff by hand, or with creative shell scripts, when you're dealing with 20 machines. With 400, it's tougher. I'm sure this won't solve all their problems, but I bet it will help quite a bit.

  • Former CEO of Linux Networx Buys Old Company (Score:3, Interesting)

    by ryanisflyboy ( 202507 ) * on Friday February 15, 2008 @11:40AM (#22435572) Homepage Journal
    The CEO of SGI used to be the CEO of Linux Networx:

    Robert "Bo" Ewald
    Chief Executive Officer

    Bo Ewald joins SGI as CEO with over 25 years of relevant industry experience in the high performance computing markets. He is a seasoned industry veteran with a successful track record as a CEO.
    Rather interesting, don't you think?
    • Oops. Helps if I quote the right part:

      Prior to SGI, Bo was Chairman and CEO of Linux Networx, Inc. Earlier, Bo served as President of Human Resource Solutions of Ceridian Corporation; CEO of Scale Eight, Inc, a high performance network-clustered storage company; and President and CEO of E-Stamp.

    • Re: (Score:1)

      by elsmob ( 751783 )
      It is no coincidence that SGI purchased lnxi. After Bo joined lnxi, he hired many current and ex-SGI people. An insider tells that many of the Bo cronies were offered jobs after the closing. It is also rumored that after Bo left lnxi, he knew the customer base of lnxi and would often try to sell to these customers.

      • It is no coincidence that SGI purchased lnxi. After Bo joined lnxi, he hired many current and ex-SGI people. An insider tells that many of the Bo cronies were offered jobs after the closing. It is also rumored that after Bo left lnxi, he knew the customer base of lnxi and would often try to sell to these customers.

        I heard the same thing. What a rotten way to run a business. Our local LUG has a small thread on the subject:
        http://www.sllug.org/pipermail/sllug-members/2008-February/010039.html [sllug.org]

  • As a former SGI Employee, I'm forced to ask: (Score:3, Funny)

    by cutecub ( 136606 ) on Friday February 15, 2008 @12:01PM (#22435894)
    ... SGI still exists? I had no idea.

    Where have they been lately?

    Are they cold at night?

    Do they need food?

    Have they been incarcerated?

    Maybe I should make a donation?

    ... ok. Maybe I'm being a little snarky but, c'mon guys, you're keeping a really low profile for a company that's trying to sell stuff.

    -S

  • ... SGI was dead! Are they even relevant in today's computing market?
  • Clearly, the future of Linux supercomputing is in dire jeopardy [wikipedia.org].
  • VIVA SGI!

    *hugs his Octane2 and SW1600*

  • Well, my three coworkers and I were in Kansas City yesterday and today moving a cluster on behalf of LNXI. This was the last official LNXI job ever. Understand that 90 percent of field engineer work (cluster installations, repair, RMA work, etc.) was done by one subcontractor working for LNXI. I am not a pussy so I don't post anonymously, but I can't name it. However I was in the field acting as labor and fallout boy for the hardware and I spent a majority of my time doing Boeing RMA work for the last th

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