October 16, 2008

The Week in Review

by John E. West

Here’s a collection of highlights, selected totally subjectively, from this week’s HPC news stream as reported at insideHPC.com and HPCwire.

>>10 words and a link

Should HPC vendors use down market to go private?

Parallel programming and the .Net Framework 4.0;

SDSC dedicates new building;

NVIDIA Hosting SC08 CUDA Tutorial;

Liquid Computing bails on its proprietary interconnect;

Dell and Platform partner for HPC;

UMaine, SiCortex keep cyclists off mean streets of New England;

DOJ Drops Antitrust Investigation of NVIDIA;

Target the Excel set;

>>Cray retires debt, signals healthy business in spite of turbulent market

Last week Cray filed a Form 8-K [PDF] with the Securities and Exchange Commission, “Report of unscheduled material events or corporate event.” The unscheduled material event is the buy down of 50 percent of Cray’s outstanding debt, held as Convertible Senior Subordinated Notes. BusinessFinance.com has an explanation of what a Convertible Note is here, but basically you should think of it as a loan that the lender can convert to shares of stock at some point in the future.

From the filing:

On October 1, 2008, we repurchased $25,000,000 in principal amount of our 3.0% Convertible Senior Subordinated Notes due 2024 (the “Notes”) at a price equal to 92% of par value plus accrued interest.

On October 2, 2008, we repurchased $15,200,000 in principal amount of Notes at a price equal to 91.5% of par value plus accrued interest.

After these purchases we have an aggregate principal amount of $39,800,000 of Notes outstanding.

There are a few important things to note here. First, Cray is buying back this debt at a discount of roughly 92 percent in each case. This is great for them, since they got to borrow 100 dollars and only pay back 92 ($92 on the first and $91.50 on the second). They were able to do this because the lenders were desperate for cash in the wake of the ongoing financial turmoil.

Second, the company has taken this action when the credit markets are fairly seized up. The short term credit markets are important for all kinds of businesses, including Cray, because they use these markets to borrow money to buy the pieces and parts they use to make their final products. Customers don’t pay before they receive the product, but you can’t build the product without the parts. Cray is indicating with this move that their cash position after the move is still strong enough that they won’t have trouble filling orders in the near term. I’m not a financial guy, but this to me seems like the actions of a relatively healthy company.

Cray CEO Pete Ungaro had this to say in an email exchange about the move:

We are very excited about this transaction. We feel confident enough in both our short and longer-term financial position to be able to buy back the notes at a nice discount and strengthen our balance sheet — a move that is positive both for our shareholders and customers alike.

>>Warm up your datacenter

Rich Miller writing at Data Center Knowledge:

The latest company to focus attention on temperature in the datacenter is Google. “The guidance we give to data center operators is to raise the thermostat,” said Erik Teetzel, an Energy Program Manager at Google. “Many data centers operate at 70 degrees or below. We’d recommend looking at going to 80 degrees.”

Jumping Jehoshaphat, that’s warm. We are well below 70 ourselves…

Data center managers can save 4 percent in energy costs for every degree of upward change in the set point, according to Mark Monroe of Sun Microsystems, who discussed data center set points at a conference last year.

The article covers different approaches and some of the downsides that balance the upside potential. Worth a read.

Intel recently conducted a 10-month test to evaluate the impact of using only outside air (also known as air-side economization) to cool a high-density data center in New Mexico, where the temperature ranged from 64 degrees to as high as 92 degrees. Intel said it found “no consistent increase” in failure rates due to the greater variation in temperature and humidity.

>>Ferrari Takes a Look at Windows HPC Server

Ferrari SpA has announced that it has signed up to test Microsoft’s latest HPC-centric operating system, Windows HPC Server 2008. Ferrari will utilize the Windows HPC stack to enhance its automotive engineering, design and development.

“Ferrari is always looking for the most advanced technological solutions, and of course, the same applies for software and engineering,” said Piergiorgio Grossi, head of information systems at Ferrari. “We are always focused on scouting new technologies that can give us a competitive advantage. Windows HPC Server 2008 is very promising, and the long-lasting collaboration with Ferrari will give directions to develop a fast, familiar, high-performance computing platform for our users, engineers and administrators.”

No mention of whether they will also use it for Formula-1 development activities. No (prancing) horses were harmed in the writing of this article. More info here.


John West is part of the team that summarizes the headlines in HPC news every day at insideHPC.com. You can contact him at john@insidehpc.com.

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