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Unfazed by HP Merger News, Structural Genomix Commits to Compaq Purchase

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Structural Genomix has agreed to buy $2 million to $3 million worth of equipment from Compaq and to explore a longer-term strategic relationship with the firm, both companies said last week.

“We are committed to an initial purchase,” said Tod Klingler, vice president of information sciences at SGX, and we “will use the experience going forward to decide future computing needs” for the company.

Both SGX and Compaq noted that Hewlett-Packard’s proposed acquisition of Compaq, expected to take place during the middle of next year, would not immediately affect the equipment purchase.

Over the next three years, Compaq will supply SGX with a 1,700-CPU compute farm running Tru64 Unix as well as a 1,000-node Linux/Intel compute farm, according to Daniel Joy, business development manager for the Life Sciences Group at Compaq.

The choice to go with Compaq was based on SGX’s computational group’s experience with Compaq’s Alpha technology, which Klingler called the “fastest and most efficient to run algorithms and in setting up large data centers” for SGX’s protein computation applications.

Another selling point was Compaq’s experience, which includes supplying Celera Genomics and GeneProt with computing equipment. “If you judge companies by the company you keep, I don’t mind being with Celera and GeneProt,” said Tim Harris, CEO of SGX.

 

THE WEIGHTING GAME

While the purchase has been in negotiations for months, recent shake-ups have changed the near and future terms of the deal.

Up until only a few weeks ago, the bulk of the computer equipment was slated for SGX’s San Francisco office, where the company’s computational center, formerly Prospect Genomics before it was acquired by SGX in April, is based. But while preparing the offices for the computers, SGX found that the weight of the computer racks, anticipated to grow to 30 1,200-pound racks over three years, would not pass San Francisco’s stringent earthquake standards.

The choices were to bring the building up to code, house the computers off-site in San Francisco, or base them in San Diego. SGX chose to put the computers in a new building being put up on its San Diego campus to house its increase in staff and additional labs.

“Time-wise and cost-wise” this is the best decision, said Klingler. “Functionally, there is no difference” with having them in San Francisco or San Diego, he explained. “We will [just] have to make sure there is someone down there to punch numbers and reboot the machine.”

 

HP MERGER NOT A FACTOR

Before Hewlett-Packard and Compaq announced their plans to merge last week, Compaq was preparing for a long-term strategic relationship and possibly an equity investment in SGX, according to Lionel Binns, worldwide life and materials sciences group manager for high performance technical computing at Compaq.

Sources within Compaq now say that the impending deal with Hewlett-Packard has not changed Compaq’s outlook in terms of potential equity investment in SGX or its relationship with the company.

“I’m not too nervous [about the acquisition] because it will be at least a year before anything drastic would happen, and the worst would be a cutback in life sciences,” said Klingler. “A year in computation is a long time. If we have to change partners, we will. ...Unlike GeneProt, we did not commit to a full package.”

It was perhaps a sign of things to come that the week SGX decided on Compaq equipment, according to sources close to the deal, Compaq announced it was phasing out its Alpha chip and migrating the Alpha technology to Intel’s Itanium chip, which HP co-developed.

Klingler is “comfortable” with the switch, saying, “The path forward will be the best of both worlds [with] Intel and Compaq.”

— KH

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