Rackable Systems completed its acquisition of Silicon Graphics, Inc. on Monday and oddly enough, Rackable will adopt SGI as its global name and brand, instead of the other way around.
Rackable closed the transaction to acquire the debt-ridden Silicon Graphics (SGI) for $42.5 million in cash on May 8 and the company said it will change its name to Silicon Graphics International – or SGI – but will keep the Rackable Systems product line and ticker symbol (RACK) the same.
I wonder if abandoning the Rackable brand in favor of SGI is a good idea. Sure, SGI was hugely successful in the 1980’s and is still a more recognizable brand than Rackable because of its legacy, but SGI is also a failing brand that filed Chapter 11 bankruptcy in 2006 and again in April 2009 due to unmanageable amounts of debt.
In fact, I liken SGI to the captain of the high school football team; you know the type – a leader in its time, popular, and admired by all, but 20-some years later? Balding, broke, and holding desperately to what used to be.
Maybe I’m being too critical of SGI’s brand, but others question Rackable’s decision to take the SGI name as well. SGI is “Well known, sure. But more than a bit tarnished and not descriptive of Rackable’s business,” said Illuminata Analyst Gordon Haff.
Coincidentally, Sun Microsystems Inc. was founded the same year as SGI – 1982 – and they, too, are being acquired this year, by Oracle Corp. (Oracle won’t be dropping its name for Sun Microsystems though. )
Either way, Rackable now has a much larger portfolio of high performance computing products, with SGI’s x86 cluster offerings, shared memory clustered compute products, scalable data center and storage technologies, modular data centers, data management software, HPC tools and visualization technologies.
SGI will maintain its corporate headquarters in its current Fremont, California facility, with offices around the world, and the new management team will have senior executives from Rackable Systems and the former SGI.