SGI Kills Off Irix Unix and MIPS Machines, At Long Last

Published: September 21, 2006

by Timothy Prickett Morgan

In a move that anyone who watches the Unix server market could have predicted years ago, server maker Silicon Graphics, which has been working for several months to get out of bankruptcy, has said it will pull the life support plug on its MIPS-based servers and workstations. These machines, which run the Irix variant of Unix, will no longer be generally available after December 29.

By killing off the Irix Unix operating system and its related Origin 350 and Origin 3900 servers, as well as the Fuel and Tezro workstations, SGI can eliminate costs associated with the development and manufacturing of these product lines, which have been effectively replaced by SGI's Altix servers for several years. The Altix machines make use of the same NUMAflex clustering technology to create shared memory server clusters, which was developed for SGI's MIPS-based Origin servers. The Altix boxes are based on Intel's Itanium processors and run Linux instead of Irix.

SGI was founded in 1982 by Jim Clark, the same guy who backed Netscape in the mid-1990s and brought it to the stock market. Clark was a professor at Stanford University, and he and a team of people from that university founded the company to create what eventually became the IRIS 1000 workstation. Like other workstations of the time, it was based on Motorola's 68K processors. While Sun Microsystems gets a lot of credit for creating the RISC/Unix workstation business--Sun was also founded by a bunch of Stanford grads, which means someone was cheating off of someone else's homework somewhere--SGI arguably built better workstations and certainly had a keener sense of 3D raster processing. In 1992, SGI launched the first 64-bit RISC processor, its own MIPS R4000, and its own variant of AT&T's Unix System V, which it called Irix, in the Indigo workstations. These were wildly popular among defense contractors, Hollywood studios, and financial services companies. The first Origin servers came to market in 1996 with the MIPS R10000, and SGI quickly built machines that could scale to 512 processors. Suddenly, SGI was in the big time.

But, it wasn't to last. The company whose computers created the dinosaur animation in the movie Jurassic Park itself became a dinosaur, and recently sold its Mountain View, California headquarters to Google.

SGI made some mistakes. The company bought the carcass of supercomputer maker Cray, in 1996, for $740 million and some would say foolishly sold off one of the best bits to Sun--the "Starfire" Cray 6400 server, which was based on Sparc processors. This deal allowed Sun to take on the data center while SGI sought to focus on the academic supercomputer centers and other places where floating point processing and graphics were key. In 1998, SGI was one of the early supporters of the Itanium processor--like Hewlett-Packard, Compaq, IBM, and Sun--and announced that it would be eliminating its MIPS line. Of course, Itanium was years late and underpowered, and this put a dent in SGI's numbers. By the summer of 2000, the MIPS chip business was spun off, Itanium wasn't cutting it, and SGI was left trying to keep alive a product line it had made obsolete while it waited for decently powered Itanium chips to arrive. SGI sold off the Cray business to Tera Computer (now known as Cray) during this trying time.

Throughout all of this tumultuous change, the MIPS and Irix products have somehow persisted. But, SGI wants to focus on Linux and Itanium from here on out, and it seems clear that it is sun-setting the Irix Unix and MIPS-based Origin servers to cut costs and possibly shift some sales to Altix products.

SGI says December 29 will be the last day Irix and MIPS-based products will be available for sale. All final orders for these products will be completed by March 2007. However, knowing that some of its defense and financial services customers will still want to get MIPS iron and Irix software, SGI also said that it will allow customers who sign a product line extension agreement to acquire machines through December 2008. SGI also said that, depending on supply, second-hand equipment will continue to be available through the company, and added that technical support for the Irix Unix variant and MIPS-based servers and workstations would be available until December 2013.

In a related announcement, SGI said this week that the U.S. courts handling its bankruptcy proceedings have approved the company's plan of reorganization. By accepting the plan, the courts have given SGI the green light to pay off creditors and stabilize itself so it can eventually emerge from bankruptcy.

SGI filed for bankruptcy protection back in May after years of rocky financials. The company's stock has not been trading on the New York Stock Exchange, where it went public many years ago, since November 2005. In May, SGI filed for bankruptcy protection from creditors--which is called Chapter 11 protection--in U.S. Bankruptcy Court for the Southern District of New York. On Tuesday, Judge Burton Lifland ruled that SGI had met all of the necessary requirements to implement the plan of reorganization that had been filed with the court.

"This is a great day for SGI," said Dennis McKenna, the SGI chairman and chief executive officer, in a statement. McKenna took over those posts from Bob Bishop when the bankruptcy was announced in May. "We have accomplished so much in just five months, reaching our confirmation on the fast track that we expected," he continued. "As we emerge, the recapitalization of the company will be complete. We have eliminated the legacy debt, improved our liquidity and stabilized the business. We have also taken out significant costs--$150 million on an annualized basis."

In May, McKenna said that the company had made immediate cuts that removed $100 million in annual costs from the SGI books, and that he was working to squeeze another $50 million in costs from the company.

SGI also announced Tuesday it had acquired an $85 million term loan from Morgan Stanley Senior Funding and a $30 million line of credit from General Electric Capital; these funds will be used to pay off its debtor-in-possession financing, pay off other creditors according to the plan, and provide working capital for SGI's operations going forward.

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