Requiem for a Cluster Vendor

By Michael Feldman

February 22, 2008

The decline and fall of Linux Networx Inc. (LNXI) may serve as a cautionary tale to other struggling HPC vendors. It’s not that the demise of the company was unforeseen. It had become apparent that the company had stagnated after a series of big wins in 2005 and 2006. When LNXI was a no-show at the Supercomputer Conference (SC07) in Reno, it was pretty clear that the company was in trouble. And over the last six months, Linux Networx had become increasingly sensitive about how the company was portrayed in the press. Paranoia is never a good sign. (Memo to vendors: Never let them see you sweat.)

So what happened to the feel-good HPC cluster vendor of 2000-2006? Certainly, the increased competition from larger, more established companies was a factor. As tier one vendors like HP and IBM moved in with their own cluster computing portfolios, they were able to wield a lot of brand power against their smaller rivals. According to IDC, IBM and HP alone captured two thirds of the $11.6 billion HPC server market. Of course, that still leaves a pretty good-sized chunk for other vendors.

But competition for the remaining slice of the pie is fierce. In October 2007, when Appro was awarded the $26.1 million contract to deliver capacity computing to the three NNSA ASC labs (Lawrence Livermore National Laboratory, Los Alamos National Laboratory and Sandia National Laboratories), the deal effectively closed the door on all other cluster vendors at those labs for the next two years. Linux Networx was almost certainly a bidder for that contract. If large mega-deals like this one become the norm, it will be feast or famine for smaller vendors. The NNSA had good reasons to make a big one time investment in their computing capacity, but over the long term this strategy may limit their choice of future vendors. Considering the fate of Linux Networx, it already has.

But it’s likely that Linux Networx was not destined to survive anyway. The resurrection of SGI may have been the final straw that broke Linux Networx’ back. When SGI emerged from bankruptcy in 2006, LNXI was faced with a resurgent competitor with fresh funding, an established HPC brand, and a new product portfolio aimed squarely at Linux Networx customers. The fact the SGI has now acquired the company’s assets is bitter irony, especially considering that SGI’s current CEO, Bo Ewald, was at the helm of Linux Networx up until April 2007.

Last week, SGI and Linux Networx’ major investors (Oak Investment Partners and Lehman Brothers) negotiated to exchange specific company assets for SGI stock. Those assets included system management software products, intellectual property and intellectual property rights. According to the SEC filing, SGI transferred 390,000 shares of stock to the investors in exchange for the those assets. At the current value of $17/share, this works out to a sale price of $6,630,000.

A number of senior LNXI people have joined their former competitor. LNXI CTO Dave Morton will now work under Dave Perry, SGI’s product general manager. Dave “Sunny” Sundstrom, who ran the service organization at LNXI, will support that effort at SGI. Bobbi Hazzard, LNXI’s SVP of sales and channels, will also come onboard in a sales capacity. SGI also offered employment to a number of other “key” Linux Networx people, but it’s likely that the majority — probably around 60-70 percent — of the 140 or so LNXI employees are now without a job.

As far as the products themselves, SGI does not intend to offer Linux Networx cluster systems, presumably since the overlap with SGI’s portfolio would be confusing to customers and expensive to support. A letter to LNXI customers obtained by insideHPC states that SGI is under no obligation to honor current LNXI service contracts, but will try to accommodate customers on a case-by-case basis. In a conversation this week, Ewald told me that over the long term, SGI would like to transition current LNXI customers to their own Altix XE and ICE cluster lines.

“We have systems that are every bit as good as the Linux Networx products were, and we hope to switch customers over to our products as we move along,” said Ewald.

SGI will however attempt to leverage some of the intellectual property from the defunct company. Linux Networx was working on its next-generation cluster management software, which, according to Ewald, is a great fit for SGI’s recently announced Industrial Strength Linux Environment (ISLE), so that work will be preserved. In addition, LNXI had a system management tool Clusterworx, which SGI intends to support at existing customer sites and is considering folding into its system management offerings. LNXI also had patents related to cluster system packaging that will now be added to SGI’s own patent portfolio.

At this point, it’s worth contemplating why some other enterprising vendor didn’t buy Linux Networx intact, avoiding the unseemly dissolution of the company. It’s widely assumed that the LNXI investors were shopping the company around. According to an unnamed former LNXI employee, number one on the list of possible buyers was Cray, who had apparently expressed some interest in the company. That combination would have made sense inasmuch as the product lines of the two companies would be complementary. But that deal was not to be. Dell’s name was never brought up, but that would have made a certain amount of sense as well. Dell was reputed to be the system supplier of Linux Networx hardware and could have offered the LNXI software and expertise as part of Dell’s HPC professional services offerings or as value-added pieces to their generic clusters.

The problem with selling a company like Linux Networx is the same problem it had as a business, namely, most of its products weren’t differentiated enough to offer special value to either its customers or its competitors. If there’s general agreement that one vendor has “systems that are every bit as good” as another, then it’s only a matter of time before competition eliminates the weaker company.

—–

As always, comments about HPCwire are welcomed and encouraged. Write to me, Michael Feldman, at [email protected].

Subscribe to HPCwire's Weekly Update!

Be the most informed person in the room! Stay ahead of the tech trends with industy updates delivered to you every week!

SODALITE: Towards Automated Optimization of HPC Application Deployment

May 29, 2020

Developing and deploying applications across heterogeneous infrastructures like HPC or Cloud with diverse hardware is a complex problem. Enabling developers to describe the application deployment and optimising runtime p Read more…

By the SODALITE Team

What’s New in HPC Research: Astronomy, Weather, Security & More

May 29, 2020

In this bimonthly feature, HPCwire highlights newly published research in the high-performance computing community and related domains. From parallel programming to exascale to quantum computing, the details are here. Read more…

By Oliver Peckham

DARPA Looks to Automate Secure Silicon Designs

May 28, 2020

The U.S. military is ramping up efforts to secure semiconductors and its electronics supply chain by embedding defenses during the chip design phase. The automation effort also addresses the high cost and complexity of s Read more…

By George Leopold

COVID-19 HPC Consortium Expands to Europe, Reports on Research Projects

May 28, 2020

The COVID-19 HPC Consortium, a public-private effort delivering free access to HPC processing for scientists pursuing coronavirus research – some utilizing AI-based techniques – has expanded to more than 56 research Read more…

By Doug Black

What’s New in Computing vs. COVID-19: IceCube, TACC, Watson & More

May 28, 2020

Supercomputing, big data and artificial intelligence are crucial tools in the fight against the coronavirus pandemic. Around the world, researchers, corporations and governments are urgently devoting their computing reso Read more…

By Oliver Peckham

AWS Solution Channel

Computational Fluid Dynamics on AWS

Over the past 30 years Computational Fluid Dynamics (CFD) has grown to become a key part of many engineering design processes. From aircraft design to modelling the blood flow in our bodies, the ability to understand the behaviour of fluids has enabled countless innovations and improved the time to market for many products. Read more…

Supercomputer Simulations Explain the Asteroid that Killed the Dinosaurs

May 28, 2020

The supercomputing community has cataclysms on the mind. Hot on the heels of supercomputer-powered research delving into the fate of the neanderthals, a team of researchers used supercomputers at the DiRAC (Distributed R Read more…

By Oliver Peckham

COVID-19 HPC Consortium Expands to Europe, Reports on Research Projects

May 28, 2020

The COVID-19 HPC Consortium, a public-private effort delivering free access to HPC processing for scientists pursuing coronavirus research – some utilizing AI Read more…

By Doug Black

$100B Plan Submitted for Massive Remake and Expansion of NSF

May 27, 2020

Legislation to reshape, expand - and rename - the National Science Foundation has been submitted in both the U.S. House and Senate. The proposal, which seems to Read more…

By John Russell

IBM Boosts Deep Learning Accuracy on Memristive Chips

May 27, 2020

IBM researchers have taken another step towards making in-memory computing based on phase change (PCM) memory devices a reality. Papers in Nature and Frontiers Read more…

By John Russell

Hats Over Hearts: Remembering Rich Brueckner

May 26, 2020

HPCwire and all of the Tabor Communications family are saddened by last week’s passing of Rich Brueckner. He was the ever-optimistic man in the Red Hat presiding over the InsideHPC media portfolio for the past decade and a constant presence at HPC’s most important events. Read more…

Nvidia Q1 Earnings Top Expectations, Datacenter Revenue Breaks $1B

May 22, 2020

Nvidia’s seemingly endless roll continued in the first quarter with the company announcing blockbuster earnings that exceeded Wall Street expectations. Nvidia Read more…

By Doug Black

Microsoft’s Massive AI Supercomputer on Azure: 285k CPU Cores, 10k GPUs

May 20, 2020

Microsoft has unveiled a supercomputing monster – among the world’s five most powerful, according to the company – aimed at what is known in scientific an Read more…

By Doug Black

HPC in Life Sciences 2020 Part 1: Rise of AMD, Data Management’s Wild West, More 

May 20, 2020

Given the disruption caused by the COVID-19 pandemic and the massive enlistment of major HPC resources to fight the pandemic, it is especially appropriate to re Read more…

By John Russell

AMD Epyc Rome Picked for New Nvidia DGX, but HGX Preserves Intel Option

May 19, 2020

AMD continues to make inroads into the datacenter with its second-generation Epyc "Rome" processor, which last week scored a win with Nvidia's announcement that Read more…

By Tiffany Trader

Supercomputer Modeling Tests How COVID-19 Spreads in Grocery Stores

April 8, 2020

In the COVID-19 era, many people are treating simple activities like getting gas or groceries with caution as they try to heed social distancing mandates and protect their own health. Still, significant uncertainty surrounds the relative risk of different activities, and conflicting information is prevalent. A team of Finnish researchers set out to address some of these uncertainties by... Read more…

By Oliver Peckham

[email protected] Turns Its Massive Crowdsourced Computer Network Against COVID-19

March 16, 2020

For gamers, fighting against a global crisis is usually pure fantasy – but now, it’s looking more like a reality. As supercomputers around the world spin up Read more…

By Oliver Peckham

[email protected] Rallies a Legion of Computers Against the Coronavirus

March 24, 2020

Last week, we highlighted [email protected], a massive, crowdsourced computer network that has turned its resources against the coronavirus pandemic sweeping the globe – but [email protected] isn’t the only game in town. The internet is buzzing with crowdsourced computing... Read more…

By Oliver Peckham

Global Supercomputing Is Mobilizing Against COVID-19

March 12, 2020

Tech has been taking some heavy losses from the coronavirus pandemic. Global supply chains have been disrupted, virtually every major tech conference taking place over the next few months has been canceled... Read more…

By Oliver Peckham

DoE Expands on Role of COVID-19 Supercomputing Consortium

March 25, 2020

After announcing the launch of the COVID-19 High Performance Computing Consortium on Sunday, the Department of Energy yesterday provided more details on its sco Read more…

By John Russell

Supercomputer Simulations Reveal the Fate of the Neanderthals

May 25, 2020

For hundreds of thousands of years, neanderthals roamed the planet, eventually (almost 50,000 years ago) giving way to homo sapiens, which quickly became the do Read more…

By Oliver Peckham

Steve Scott Lays Out HPE-Cray Blended Product Roadmap

March 11, 2020

Last week, the day before the El Capitan processor disclosures were made at HPE's new headquarters in San Jose, Steve Scott (CTO for HPC & AI at HPE, and former Cray CTO) was on-hand at the Rice Oil & Gas HPC conference in Houston. He was there to discuss the HPE-Cray transition and blended roadmap, as well as his favorite topic, Cray's eighth-gen networking technology, Slingshot. Read more…

By Tiffany Trader

Honeywell’s Big Bet on Trapped Ion Quantum Computing

April 7, 2020

Honeywell doesn’t spring to mind when thinking of quantum computing pioneers, but a decade ago the high-tech conglomerate better known for its control systems waded deliberately into the then calmer quantum computing (QC) waters. Fast forward to March when Honeywell announced plans to introduce an ion trap-based quantum computer whose ‘performance’ would... Read more…

By John Russell

Leading Solution Providers

SC 2019 Virtual Booth Video Tour

AMD
AMD
ASROCK RACK
ASROCK RACK
AWS
AWS
CEJN
CJEN
CRAY
CRAY
DDN
DDN
DELL EMC
DELL EMC
IBM
IBM
MELLANOX
MELLANOX
ONE STOP SYSTEMS
ONE STOP SYSTEMS
PANASAS
PANASAS
SIX NINES IT
SIX NINES IT
VERNE GLOBAL
VERNE GLOBAL
WEKAIO
WEKAIO

Contributors

Fujitsu A64FX Supercomputer to Be Deployed at Nagoya University This Summer

February 3, 2020

Japanese tech giant Fujitsu announced today that it will supply Nagoya University Information Technology Center with the first commercial supercomputer powered Read more…

By Tiffany Trader

Tech Conferences Are Being Canceled Due to Coronavirus

March 3, 2020

Several conferences scheduled to take place in the coming weeks, including Nvidia’s GPU Technology Conference (GTC) and the Strata Data + AI conference, have Read more…

By Alex Woodie

Exascale Watch: El Capitan Will Use AMD CPUs & GPUs to Reach 2 Exaflops

March 4, 2020

HPE and its collaborators reported today that El Capitan, the forthcoming exascale supercomputer to be sited at Lawrence Livermore National Laboratory and serve Read more…

By John Russell

Cray to Provide NOAA with Two AMD-Powered Supercomputers

February 24, 2020

The United States’ National Oceanic and Atmospheric Administration (NOAA) last week announced plans for a major refresh of its operational weather forecasting supercomputers, part of a 10-year, $505.2 million program, which will secure two HPE-Cray systems for NOAA’s National Weather Service to be fielded later this year and put into production in early 2022. Read more…

By Tiffany Trader

‘Billion Molecules Against COVID-19’ Challenge to Launch with Massive Supercomputing Support

April 22, 2020

Around the world, supercomputing centers have spun up and opened their doors for COVID-19 research in what may be the most unified supercomputing effort in hist Read more…

By Oliver Peckham

Summit Supercomputer is Already Making its Mark on Science

September 20, 2018

Summit, now the fastest supercomputer in the world, is quickly making its mark in science – five of the six finalists just announced for the prestigious 2018 Read more…

By John Russell

15 Slides on Programming Aurora and Exascale Systems

May 7, 2020

Sometime in 2021, Aurora, the first planned U.S. exascale system, is scheduled to be fired up at Argonne National Laboratory. Cray (now HPE) and Intel are the k Read more…

By John Russell

TACC Supercomputers Run Simulations Illuminating COVID-19, DNA Replication

March 19, 2020

As supercomputers around the world spin up to combat the coronavirus, the Texas Advanced Computing Center (TACC) is announcing results that may help to illumina Read more…

By Staff report

  • arrow
  • Click Here for More Headlines
  • arrow
Do NOT follow this link or you will be banned from the site!
Share This