SC08: Day 2, as the market tumbles …

One of the aspects about being on a show floor all day, talking to partners, and prospective customers, is that you sort of have to ignore whats going on around you in the market outside of the walls of the center.

The stock market closed below 8000 today. Some of the more traditional HPC stocks have been whalloped. Like SGI. On a day when the market dropped 5%, they dropped 16.8%. Current market cap at $22M. The news about their financial fortunes seems to be out of whack with the perceptions of end users who named it a “company to watch in 2009”.

Cray dropped almost 12%. In my mind, Cray has always been the supercomputing company. Current market cap is $56M. A little more than 2x SGIs.

Sun is a more general company with some HPC projections. They dropped about 12%. Market cap of $2.4B. Less than their cash on hand.

Our friends over at AMD dropped 15% to a $1.3B market cap.

Only HP and Dell escaped serious damage.

None of this did I see until about 10:30pm local time.

Basically the market is finding the right valuation. Until it settles, it will likely continue to fluctuate wildly and dissapate real wealth.

The danger of all of this is, that in the volitle market, it might be possible to drive a potentially successful company to zero valuation simply over fears.

I won’t talk about root causes or solutions to this. I will talk about my observations.

SC08 appears to be smaller in show floor attendence than previous years. This is my perception, it might not be reality. Some of the previous “flash in the pans” have gone. I saw very few VC/angel types running around. I did see a few companies with differentiated solutions.

The folks with an interesting story, like Pervasive, like nVidia, like … were talking about their value. HPC isn’t just about the gigatonnage of calculation, but what you do with it. With MPI-HMMer on nVidia CUDA, we have the ability to materially impact scientific research with accelerated tools. With nVidia, the cost per cycle is dramatically lowered. With Pervasive’s DataRush, the complexity of certain large scale data-intensive analytics becomes tractible.

This is how I think we are going to grow going forward. Its not just hardware, its how it impacts where it is used. Get to the real value of the hardware … as an enablement platform for what you do with the software.

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