SGI Assets To Be Sold For $25 Million To Rackable Systems

Silicon Graphics Inc. (SGI), which was once regarded as a giant in corporate computing, entered the bankruptcy protection for the second time in last three years, and was promptly acquired by Rackable Systems for a trifling sum of $25 million only.

The datacentre specialist company Rackable Systems has agreed to undertake some of the liabilities of the tormented server maker, and the deal is expected to be closed within two months time.

Rackale said that the assets obtained from the acquisition will be used in bolstering company’s performance, cluster and cloud computing business.

Asserting on the importance of this acquisition in improving business for Rackable Systems, company’s chief exec Mark J. Barrenechea, said in a statement, “This combination gives us the potential for significant operational synergies, a strong balance sheet, and positions the combined company for long-term growth and profitability”.

SGI had been facing miserable times since 2006, when the company underwent some serious restructuring, and last month it even faced delisting from the Nasdaq stock exchange.

Incidentally, SGI laid off around 15 percent of its employees that left the company with around 1,155 employees, but even this move couldn’t save it to stay afloat as a standalone company though.

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Our Comments

A decidedly somber day for tech... Within a few hours, SGI assets were sold, Encarta was closed and Wikia was shut down. Reminds us of the kind of products and services extinction we saw back in the last bubble bust. Remember the likes of ecircles and Like for the dinosaurs, this is part of evolution. More companies are set to disappear, some of them big names like Sun Microsystems. But watch out amongst the ashes for the new stars of tomorrow.

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