SGI to Refocus on HPC and Big Data

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SGI is looking to shore up its Big Data business to replace declining cloud datacenter revenue. This week the company reported its financial results on for its fiscal fourth quarter on August 7th.  Revenue fell sequentially to $171 million, compared to $233 in the prior quarter, and $179 million in the same period a year ago.  For the fiscal year 2013 total revenue was $767 million a gain of two percent from $753 million in fiscal year 2012. The company’s loss was $4 million for the quarter, and $3 million for the year, which is an improvement on the loss of $24 million in fiscal 2012 but profitability has not yet been restored.

SGI had been supplying some cloud providers notably Amazon, but the margins on that business are thought to low. Going forward SGI intends to refocus on Big Data and HPC sectors.

In fiscal year 2014, we expect to achieve solid double-digit revenue growth in our core high-performance computing (HPC), storage, and Big Data solutions, while managing the run-off of our lower margin legacy cloud infrastructure business,” said Jorge Titinger, SGI’s CEO.

The company also announced a number of major wins at VW subsidiary Skoda for a CAE system, Princeton University for seismic research, the US Department of Defense, Translational Research in Australia, NASA Ames, and CQ University in Australia where the systems in Big Data research for healthcare.

The company reports that Hadoop business is growing and it has installed tens of thousands of server nodes for commercial Big Data applications. Revenue for next quarter is expected to be in the $160 to $170 million range, still eluding profitability.

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