Cray, the name of the Minnesotan who pioneered the supercomputer, will live on in high-tech.
After the news last week that Cray Inc. would be purchased by Hewlett Packard Enterprise, executives disclosed the combined firms would continue to build and sell supercomputers under the Cray name.
In a letter to employees made available to investors this week, Cray Chief Executive Peter Ungaro said Hewlett Packard Enterprise executives "decided to combine their [high performance computing] business into ours and are planning to keep the Cray brand alive in how we market our supercomputing products."
Cray is named for founder Seymour Cray, who studied engineering at the University of Minnesota and in 1957 helped start Control Data Corp., which became one of the nation's largest computer firms in the 1960s and 1970s. He left Control Data in 1972 to start Cray Research and build even larger machines known as supercomputers.
He moved the company to Colorado in the early 1980s and sold it in 1996 to Silicon Graphics. Cray died in a car crash later that year at age 71.
The firm has been through several ownership changes since then. In recent years, it has been based in Seattle but continued to have sizable operations in the Twin Cities, Colorado and Chippewa Falls, Wis., where Seymour Cray was born. Today, its main office in the Twin Cities is in a tower at the Mall of America that has its name prominently displayed.
With the $1.3 billion sale to Hewlett Packard Enterprise, Cray joins the heritage of a firm started by two other high-tech luminaries, William Hewlett and David Packard. They started their eponymous firm in a garage Palo Alto, Calif., in 1939, a founding that for years has been portrayed as Silicon Valley's original startup.
Hewlett-Packard Co. started as a maker of oscillators used to test sound equipment, expanded to other electronic-measuring equipment and built its first computer in 1966. By the 1980s, the company was one of the world's biggest makers of calculators, personal computers and printers.
In 2015, Hewlett-Packard split into two firms: HP Inc. as a seller of personal-computing products and Hewlett Packard Enterprise, or HPE, as a provider of enterprise-technology infrastructure, software and services.
With Cray, HPE adds to its business that develops and sells large computers. Cray's supercomputers are chiefly used by government and research institutions. Its revenue has seesawed in recent years but was about $460 million in 2018.
Ungaro told employees he agonized in recent months as the deal came together. "I would be lying to you if I said that this was not an emotionally difficult decision — heck, I haven't slept so well these past few weeks," he wrote.
But he said Cray has continued to be challenged for capital to pay for new technology and expansion.
"With our current operating model, it's challenging to make the investments we need to fully take advantage of [market] opportunities," Ungaro wrote. "At the same time, our size often inhibits us from getting the same prices on components that our competitors do."
He said the firm also faces a "longer-term threat" from "massive cloud vendors." Though he didn't specifically identify them, firms like Amazon and Google are building enormous data operations that are reached through the internet and offer computing backbone to other businesses.
In a separate online letter to customers, Ungaro noted the company's long history. "Since the founding of Cray Research in 1972 by the legendary Seymour Cray, we have focused on building some of the fastest supercomputers on the planet so that leading visionaries can keep asking questions that challenge the limits of possibility," he wrote.
Evan Ramstad • 612-673-4241
