May 6, 2008

SGI Gets Another Big Win — and another big loss

Michael Feldman

This afternoon SGI announced it will deliver NASA its next major HPC system. The 245 teraflop machine is an SGI ICE blade cluster with 20,480 Intel Xeon cores and 20 TB of memory. When installed later this summer, it will be used in tandem with the 52 teraflop Columbia supercomputer — a shared memory Altix machine, based on Itanium processors — to support future NASA missions. The cost of the new system was not revealed.

The agency cites the resumption of the missions to the moon (and the manned exploration of Mars) as “one of the chief reasons for securing a new, exceptionally powerful computing resource.” Of course, these missions may never get funded, especially when you consider the volatility of the public commitment to space exploration and the political pressure to reduce discretionary spending at a time of looming budget deficits.

The three remaining U.S presidential candidates have all come out in general support of NASA’s overall mission, but they have somewhat different takes on priorities for the agency. A recent Popular Mechanics article does a nice job of analyzing possible scenarios under new presidential leadership. From the article:

A new administration will either support the current direction of NASA or strike out on a new path. But with the space shuttle’s retirement set to free up funding in two years for the already complex Ares and Orion shots at manned orbit and lunar landing—not to mention the expanding private-space industry and struggling economy—our next decade in space remains decidedly undecided.

Even if space exploration funding gets cut back, the new SGI supercomputer is also slated to support NASA’s ongoing initiatives in aeronautics, science and space operations.

Today’s good news for SGI was tempered with yet another report of quarterly losses on the financial front. The company announced it was $40.6 million in the red for the third fiscal quarter of 2008, compared to a loss of $30.8 million in the second quarter and $20 million in Q3 2007. Revenue was $79 million, a $33 million year-over-year decline.

Putting a positive spin on the quarterly results, SGI CEO Bo Ewald said: “We have made great strides in continuing to execute on our strategy this quarter. We saw a 50 percent increase in orders compared to the third quarter of last year, acquired significant software assets to strengthen our business and accelerate development of our Industrial Strength Linux Environment, announced a new support solutions program to reinforce our services offerings, and continued building on solid traction in our core markets. And with new significant customer wins in April, the fourth quarter is off to a strong start as well.”

Unfortunately, Ewald and company have yet to post a profitable quarter since emerging from bankruptcy in October 2006. Ewald returned to SGI as the chief exec last April in an effort to turn around the company’s fortunes.

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