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SGI Opens Chapter 11

Struggling Silicon Graphics (SGI) today filed for bankruptcy protection in an attempt to clear debts of $250 million, although there is now speculation that the move could make the high-performance computing specialist prime acquisition bait. (See SGI Files Chapter 11.)

"It makes them more appealing as an acquisition, because then you don't have to deal with all that debt," says Tony Asaro, senior analyst at The Enterprise Strategy Group, adding that the vendor's "huge" customer base is a major selling point. (See SGI Powers WHOI, SGI Creates Weather Models, Buffalo Cluster's a Grid Cornerstone, NSWC Uses SGI , and NRL Purchases SGI Kit.)

Certainly, M&A is in the air, with SGI's rival ADIC snapped up by Quantum for a whopping $770 million last week and SGI itself recently spinning off its European broadcast division. (See Quantum Takes Tape Rival ADIC, Quantum Buys ADIC, and SGI Moves Euro Operations.) Sun, for its part, has already bought some of the assets of the Cray Business Systems division of Cray Research, which was itself a subsidiary of SGI.

"All of the big two- or three-letter companies could be interested," says an IT manager and SGI customer at a northeastern U.S. university, who asked not to be named, adding that the vendor's shared memory and visualization technology could prompt interest from a number of quarters.

The exec, however, tells Byte and Switch that, in the short term, he is keen to ensure that his current levels of support from SGI will continue. "I certainly hope that they continue to take care of their current customers while they are reorganizing," he says. "We will have to wait and see."

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