Rackable takes SGI's name

RACKABLE SYSTEMS said Monday that it had closed the deal to buy Silicon Graphics, Inc. (SGI) for $42.5 million and that the combined company will be renamed Silicon Graphics International, that is... SGI.

The announcement took industry watchers by surprise, because SGI's brand fell into disfavour in recent years due to the firm's high prices as well as technology and management missteps.

SGI was a pioneer in RISC processor based graphics workstations that lost market share when commodity x86 processor based systems became more powerful and closed the performance gap with SGI's more expensive machines. The company had been making losses for a number of years before Rackable came along and offered to buy it.

A builder of dense, efficient and affordable servers, Rackable has come under competitive pressure from larger systems builders such as HP and Dell recently.

Rackable's chief marketing officer, George Skaff, said that SGI's brand name is well known overseas, which Rackable hopes will help it expand into foreign markets.

As the INQ's Nebojsa Novakovic said just the other day, Silicon Graphics is a much sexier name than Rackable. µ

L'Inq
New York Times