Rumor: SGI breaks off NSF petaflops deal with Pittsburgh

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I think this falls into the category of credible rumor. Last week reported on a tip that the new SGI had backed out of a deal by the old SGI and the Pittsburgh Supercomputing Center. From their coverage

SGI logoAbout a year ago, the National Science Foundation worked with PSC to prepare for a 1 PetaFlop system to be deployed there and integrated into the TeraGrid, a large global supercomputing network used for academic and public research.  The result was an SGI UltraViolet system, approximately 197 cabinets, 100,000 cores, and all of it for the low price of $30 million dollars.

Well, that was with the old SGI.  News now is that the new SGI has found other customers willing to pay higher “more reasonable” prices for these same cabinets, and has decided not to honor the original offer.  Legally, they don’t have to honor them but it puts PSC and the NSF in a tight spot as they now have $30 million that’s supposed to magically turn into a 1PF supercomputer, and won’t.

I sent email to the company asking for clarification late Friday and haven’t heard back. I’ll update this post if I hear an official word from anyone. If you are close to the deal and want to unburden yourself of the facts surrounding this particular development, leave a comment or drop us a line.

I will say that the story is credible given something that SGI CEO Mark Barrenechea was quoted saying in The Register last year about the way he runs his business

The new CEO also issued a hard-line stance against doing business with customers that want to play margin games. In recent quarters, Rackable’s margins had dipped into the negative as it battled with Dell and others on price. Moving forward, Barrenechea wants no part of what he termed “unfavorable business”.

This is actually my all-time favorite HPC CEO quote, and it speaks to the kind of discipline that the new SGI is going to have to have if it is to avoid a bankruptcy hat trick. That said, high end supercomputing is a very small community, and one generally wants to avoid being sick in one’s own hat (that’s a cleaned up version of another, more popular saying).


  1. […] West at InsideHPC has, as usual, an interesting article on rumors of SGI abandoning a bid because of “margin games.” The new CEO also issued a hard-line stance against doing […]

  2. […] Rumor: SGI breaks off NSF petaflops deal with Pittsburgh […]

  3. […] PSC and SGI had a public spat after Mark Barrenechea and his band of merry men took over SGI and walked away from a deal that PSC had been working with them as part of a petascale NSF bid. This put PSC in a nasty […]


  1. Wow, that’s too bad… I was really looking forward to seeing this system. From everything I had heard, it was a really interesting design. And while one can argue about publicity from such a win being worth a ‘margin-based’ sale, it IS refreshing to see a CEO actually try to make money. I’m just sad for the science that could’ve been done and all the hard work the PSC guys put in.