Goodbye SGI

GOODBYE SGI by Scott Budman

In a land famous for watching small companies grow into world leaders, it is with sadness that I write about a one-time Silicon Valley giant, whose machines roamed the earth, that has now vanished.

It’s hard to find someone who has not been touched by Silicon Graphic’s technology.  Not long ago, it was built into the Hollywood machine, with its workstations as common in big-budget movies as highly paid actors.  For a movie fan like myself, the list is staggering:  blockbusters like Star Wars (episode 1), The Matrix, Jurassic Park, Lord of The Rings, and Terminator 2, as well as smaller personal favorites like The Crow and Starship Troopers.  All were boosted by SGI-created special effects.

SGI created a lot of jobs, made investors wealthy, and boasted a gigantic Silicon Valley campus that was both the envy and ambition of other technology firms. It was one of the early companies that made geek chic, and technology cool.  As someone once told me, after Jurassic Park came out, wearing the SGI logo on his shirt became less a badge of nerd-dom, and more of a cool conversation piece.  For me, personally, SGI was the very first tech company I covered, almost 15 years ago.
But it didn’t last.  SGI’s workstations, like some of the dinosaurs they created, were big and cumbersome, especially compared with the smaller and more nimble competitors that followed.  As moviemaking became less expensive and more open to everybody, filmakers found it possible to create high-end special effects with those cheaper, smaller computers.  SGI’s machines were no longer necessary, and the company did not adapt fast enough.  Its stock price tumbled, layoffs mounted, and even a last-ditch comeback attempt from a 2006 bankruptcy filing didn’t pan out.
The gigantic campus is now populated by an ever-growing number of Googlers, some of whom weren’t even in their teens when SGI computers ruled the roost.  In what would once have qualified as an April Fool’s Day joke to us tech old-timers, yesterday SGI announced that it was once again going into bankruptcy — but this time, there won’t be a comeback:  the company will sell its assets to a Silicon Valley rival, Rackable Systems, for a paltry $25 million dollars.  That’s basically the cost of buying SGI’s repair business for aging customers.
It’s a sad legacy for a company whose technology led people to get into the tech field, and whose special effects inspired people to learn about technology in the first place.  It is also a cautionary tale about why big companies should indeed be paranoid.  SGI still leaves behind a cool legacy here in the Valley, as well as some fantastic DVDs.