MOUNTAIN VIEW, Calif.--Supercomputer maker Cray Inc. has signed a definitive agreement to sell its interconnect hardware development program and related intellectual property to Intel Corp. for $140 million in cash.
Under the terms of the agreement, Cray said it would transfer 74 Cray employees to Intel, but would retain certain rights to use the transferred assets and intellectual property in its upcoming products.
Cray will also continue the development, sales and support of its current product lines, as well as the company’s next-generation supercomputer, code-named “Cascade,” which will use Intel's x86 chips.
Meanwhile, the agreement also gives Cray access to “certain future Intel products,” according to a company statement.
Peter Ungaro, president and CEO of Cray said the agreement represented “an exciting win” for the firm’s customers, the company and its shareholders. Ungaro added that by broadening Cray’s relationship with Intel, the firm was better placed to push further into the HPC market and expand on other technologies related to its “Adaptive Supercomputing vision.”
Ungaro said Cray’s product roadmap remained “intact” and that the agreement “dramatically strengthens our balance sheet and increases our options for further growth, profitability and creating shareholder value.”
Prior to the deal, Cray's market capitalization stood at less than $250 million. The $140 million cash injection represents a significant boost. The reduced headcount will also save Cray money in the coming year, as the transaction is expected to close relatively quickly, even before the end of the current quarter.
A communications link often used in data centers for HPC clusters, Infiniband allows for more scalability, higher throughput and lower latency.
Intel has said it is already building chip-to-chip as well as server interconnect using Qlogic's assets.
“This is a good story for Cray and Intel,” said Barry Bolding, Cray’s vice president of storage and data management. Bolding said the deal was motivated largely by the realization that as process technology continues to scale, chip makers had more space and were planning to integrate interconnects on-chip eventually.
“Intel, as a leader in the space would be able to turn that technology very quickly. And if they start putting those network technologies on the processor it would be more and more difficult for a small company like Cray to develop and keep up with our own proprietary interconnect,” Bolding said.
Cray has been making its own interconnects for over a decade, said Bolding, but did not see much value in continuing to invest in a technology that, as a standalone, “might be going away over time.”
Bolding said Intel had approached Cray to ask if the firm was selling any of its technologies in the interconnect area and that the deal was “win-win” for both parties, with Cray retaining the rights to use all the technology it’s selling in its roadmap for the next five years or so.
In recent times, even in downturn Intel has done some smart purchases. I feel this deal is win-win for both the Intel and Cray. I feel this deal is more in favour of Cray because they still keep the IP rights which means they can build on those IP's.
I am not sure what is Cray's advantages are in their interconnects are... at the base band, for a given signaling frequency (& wire gauge in case of Copper), the latencies are comparable between IB and Cat6A. The hardware-dependent latencies are a small fraction of the overall latency figures.
On the mother boards, it is a different story -perhaps this is where Cray brings in some advantages? It is not clear from the article...
"Bolding, however, was adamant that the “strong partnership” with Intel would not affect Cray’s relationship with either AMD or Nvidia..", this is like telling your girlfriends that marriage will not affect their relationship.
I'm sure that Intel did not enjoy that the X6 was filled with AMD cpus. This could be looked at similar to sponsoring a cycling team (which can sometimes cost in the neighborhood of 50 million). Plus you get technology and IP on top of it! Cray doesn't really lose much, presumably, since they can still use the technology...
In the long term, I can see Intel extending its on chip ring bus and QPI processor bus with hooks into the system clustering interconnect to provide performance advantages and extend its reach into systems (i.e. platform) technologies. Such hooks could make its processors and networking chips preferred solutions in HPC systems. Look out Mellanox!
This is a very great business technique Cray is getting benefited two ways getting more money and simultaneously not reducing the overhead without completely loosing them, its really a great work done by Cray.
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