Silicon Graphics, Inc. (SGI), the company responsible for helping create Terminator 2, Star Wars, and Jurassic Park, agreed to sell itself to Fremont-based Rackable Systems for $25 million. At one point, Silicon Graphics had been worth $3.66 billion in 1997, but has fallen on hard times, seeking bankruptcy protection two times in the past three years.
"It's kind of sad," said Rob Enderle, an analyst with the Enderle Group in San Jose. "At one time, SGI was really though to be where much of the creativity was going to occur in Silicon Valley. They were the guys kind of on the forefront of virtual reality."
SGI's fall from prominence can be traced back to around 1999. The company had started laying off hundreds of employees, its newly hired CEO resigned shortly after taking the job, and many of its customers turned to less expensive computer systems made by SGI's competitors.
Assuming the bankruptcy judge approves the sale, it's unclear whether Rackable will retain the corporate name of SGI or what it plans to do with SGI's 1,169 employees.
