SGI abandoning public cloud to high performance computing and large data

Http://www.aliyun.com/zixun/aggregation/13840.html "> supercomputer and high-density server manufacturer Silicon Graphics (SGI) company still failed to deter losses and return to profitability, But CEO Jorge Titinger says he has found a way to get it wrong: to pull out of the fierce competition to sell infrastructure to public cloud providers, instead concentrating on the commercialization of High-performance computing systems, related large data system, and storage solutions that support both.

Why did
make such a decision? The latter is profitable, the former almost in vain, so simple.

Titinger said the company's revenue in the public cloud business for the current fiscal year was about $200 million trillion in the SGI company's earnings call for the quarter of 2013 (up to June), and the figure is likely to continue shrinking over time,
.


is well known that Amazon is SGI's largest public cloud customer, and its product digestibility also accounts for a significant proportion of SGI's overall cloud vendor sales share. Amazon was not explicitly mentioned in the conference call, but SGI apparently did not want to provide server products at Amazon's price-even as the "biggest cloud customer" purchased 139 million of billions of dollars of equipment in the 2013 fiscal year, SGI's stance remained intact.


only a few simple arithmetic questions, we will understand SGI's firm determination. Public cloud providers accounted for 27% of sales, or about $46 million trillion, in the quarter of this fiscal year. However, Titinger said the company expects sales figures for public cloud providers to fall to between 25 million and 30 million dollars in the first quarter of fiscal 2014. This decline is surprising. If the worst-case scenario is the assumption, then after this sales contraction, the company's cloud computing business in fiscal year 2014 will be left with only 70 million to 80 million dollars, and the end result could be even worse based on actual profit pressures.


Titinger did not want the news to expose Wall Street to chaos. Frankly, as Asian contract manufacturers introduce open source hardware in their products, such a shrinking market is understandable. SGI Company's current plan is to use its own UV 2000 shared memory system, ICE x cluster and Infinistorage array as the main means of upgrading the value stack, bang to core high-performance computing, emerging large data, as well as government agencies and business groups in the Quasi high-performance computing market impact.


"We have realised that there is a huge difference between UV and large data," he said. Titinger on the conference call. He also added that the UV system in the 2013 fiscal year sales were lower than expected, but already on the rise, believe that in the 2014 fiscal year will usher in revenue.


He did not disclose the specific expected revenue of the UV device, only that the product will be connected to the Intel Xeon E5-4600 processor through the SGI's own NUMAlink 6 interconnection program, creating a huge set of monster-level systems with 2,408 compute cores and 64TB main memory. However, titinger that the current UV channel revenue reached 200 million U.S. dollars, and the business in the 2014 fiscal year will continue to operate, which may become a big boost to the SGI.


already has a lot of customers to try to use the UV system as a large memory-sharing virtualization system to provide the operating environment for open source software, the main idea of this program is to ease the cost of hardware acquisition through Low-cost open source software, so as to achieve higher system flexibility. (We are not free to run large tasks with a common server cluster of Ethernet or InfiniBand, but NUMAlink 6 interconnect technology is capable of achieving this concept.) ）

The
hyper-high-density ice X-Xeon cluster is another bright spot for SGI to bridge the shrinking cloud infrastructure business. Titinger did not give the channel sales of Ice X, but said it would bring about 100 million U.S. dollars in the 2013 fiscal year, as it planned to usher in a 20% per cent growth in fiscal year 2014. Most of the sales will be in the second half of fiscal year 2014, due to the long budget planning cycle of many large deals.


SGI, of course, wants to take care of the ice X product line, and the company used to be too concerned about the "Sandy Bridge" Xeon E5 chip, so much so that its own well-designed ice x equipment, while welcoming 87 million of dollars in revenue and real profit margins, is very limited. This until the top of the enterprise faced restructuring, Titinger also in February 2012 to board the CEO throne. These low profit deals are now being handled properly.


The company also pinned its earnings to the big data-devouring Hadoop business, saying that the company has installed tens of thousands of server nodes running the commercial Hadoop version.


In combination, SGI expects large data, high-performance computing and storage operations to gain 15% overall growth in fiscal year 2014, and to bridge the revenue gap that has been generated by abandoning public cloud marketing-and, more importantly, the higher margins of the top three businesses. Of course, all of this is just a plan, and we hope everything is really what it wants. (For now, Titinger and his management team did well to drive SGI back to business.) ）


's total revenue fell 5% to $170.5 million in the quarter ended in the 2013 fiscal year of June, with product revenues falling 4% to 129.2 million dollars and service revenues down 8.1% to $41.3 million. On the product side, the computing program accounts for 86% of total revenue and 111.1 million dollars. Storage revenue still remains at $18.1 million trillion. SGI reported a net loss of $4.5 million trillion, although the situation is still not optimistic, but compared with the same period last year, the 18.4 million loss figures still progress significantly.


for the whole year, SGI company won 776.2 million U.S. dollars in revenue, compared with last year, an increase of 1.9%. The total loss in fiscal year 2013 was $2.8 million trillion, much better than the 24.5 million dollar losses of the last fiscal year.


we are almost certain that Titinger and the company CFO Bob Nikl are directing the enterprise to a healthy development path. SGI will give up cheap equipment for Amazon or other cloud service providers, which will only torment its own shareholders and help clients earn large profits.


looking ahead, SGI is expected to get 160 million to 170 million U.S. dollars in the first quarter of the 2014 fiscal year, a small drop from a sharp cut in cloud customer revenues. For the whole year, SGI believes overall revenue will grow 8% to 10%. And according to non-GAAP standards that ignore restructuring and share-compensation costs, companies will bring at least 1 dollars in earnings per share.