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Cray workers are settling into downtown St. Paul and gearing up for battle [Pioneer Press, St. Paul, Minn.](Saint Paul Pioneer Press (MN) Via Acquire Media NewsEdge) Jan. 18--Dennis Arason, a software engineer at supercomputer maker Cray Inc., had an unusual way of settling into his new office in downtown St. Paul. He paced the floor. And counted. Arason, 34, who works in quality assurance, also had paced off the length of the company's former one-story office space in Mendota Heights. It was 758 steps exactly, he said. 'Here,' he said, gesturing to the refurbished suites inside the renamed Cray Plaza overlooking Mears Park, 'it is 450 steps from one end to the other. But it's on three different levels.' Collin Rust, 53, a Cray supply-chain manager for commodities like processor chips, has been taking measure of the office, too. He hits the Skyway YMCA next door at lunch. 'I actually paced it off -- it's 92 steps from our front door,' he said. A co-worker tells him someone else paced it off, too, but claims it's really 93 steps. Rust, considering that from his specially elevated desk and chair, says, 'huh.' All this makes the 222 Cray employees who moved into the former Galtier Plaza Nov. 9 sound like a collection of obsessive compulsives. But it's only a sign that the newest workforce additions to downtown St. Paul are ... well, hopeless nerds. Not helpless nerds, though. They help build some of the world's most powerful supercomputers, including the planet's fastest machine: a high performance Cray XT5 nicknamed Jaguar that sits at the Oak Ridge National Laboratory in Knoxville, Tenn. Although the company is headquartered in Seattle, the St. Paul office played a major role in developing Jaguar, which allowed Cray to steal the supercomputing world crown from IBM, said Wayne Kugel, senior vice president of operations and support for Cray in St. Paul. About 70 percent of the St. Paul workers do software and design, and maybe a fifth of them hold doctorates or master's degrees in math or computer science as well as numerous patents, he said. "Basically, they added the secret sauce to make it go as fast as it goes," he said. The St. Paul office will continue to play an important role as Seattle-based Cray races to keep one step ahead of IBM in a tight two-company race for supremacy at the bleeding edge of high performance computing. Winning can lead to government contracts worth hundreds of millions of dollars. But if they stumble, so does Cray. With that kind of pressure, quirks like pacing are forgivable. After all, supercomputer engineers are trained to look for the quickest way for data to enter and exit processors. Seeking the most efficient path eventually becomes second nature, whether it's on circuit boards or wandering the skyway. "This is their number-one job -- to bring supercomputers to life," Kugel said. CUBICLES, WELCOME MATS When city planners last year heard an expanding Cray was looking to relocate outside of Mendota Heights, St. Paul went after the company like a romance-novel suitor for the hand of the fair maiden. Besides offering Cray a $400,000 five-year forgivable loan the company won't have to repay if it keeps at least 200 workers downtown, it touted everything from Wild hockey to the St. Paul Chamber Orchestra to the promise of light rail as cultural amenities. Cray moved into the former Galtier Plaza, rebadged it Cray Plaza, pumped $4 million in remodeling into nearly 51,000 square feet of office space and took the building from one-third empty to full occupancy. Businesses gave away "goodie bags" to the new arrivals: cookies from the St. Paul Hotel, pizzas, concert tickets, a happy hour at trendy Barrio, restaurant coupons -- it was a big, welcoming hug. Workers are exploring their new urban environment. "They're like kids in a candy store," Kugel said. Arason said he dons his Bluetooth headphone for his Droid smart phone while he explores "the skywalk" at lunch. In Mendota Heights, he said, he'd have to drive three miles to get to the nearest Leeann Chin or McDonalds. "Here, it's a lot more convenient," he said. "There's a lot more places to eat, which is good ..." he paused, considering his waistline, "or bad." Rust, 53, enjoys being able to take the bus to work from his home in Crocus Hill instead of driving. But some Cray workers have a farther commute because they settled in Dakota County near work. One man, Rust said, misses not commuting on his unicycle. The biggest complaint centers on the cubicles. In Mendota Heights, each employee had an office with a door. The new space uses an open design -- meaning cubicles. "It's kind of like having your own apartment and going to a barracks. It's a different ethic," said Becky Kwapick, 40, a paralegal who tracks contracts in the legal department. Does she miss her office? "Sometimes." She shrugs. "Not all the time." Trendy new surroundings -- with the promise of light rail, arts and culture, Wild hockey, the restaurants and a developing nightlife in Lowertown -- serve a serious purpose, Kugel insists. He is looking ahead 10 years, when he calculates one-fifth to one-fourth of his workforce will retire. The next generation of Cray brains wants more work-life balance, and Kugel said Cray will be competing not against staid IBM for workers but with hipper and more out-there companies like Google and Yahoo. A boring workplace won't cut it. "What we're trying to do is stay on the edge of what this technology is going to be," Kugel said. "We're always saying, 'What's next?' " FROM CRAY 1 TO JAGUAR It sounds rosy, but the world of supercomputing companies has a crowded graveyard, and some of the headstones have the name "Cray" on them. The history begins with founder Seymour Cray, a skinny, soft-spoken University of Minnesota graduate who first got noticed at a super-secret military skunk works started after World War II in St. Paul. He later founded his eponymous company in his hometown of Chippewa Falls, Wis., in 1972 before moving it to the Twin Cities. A scientist once joked he didn't know whether to refer to Cray as "the Albert Einstein of supercomputing" or "the Thomas Edison of supercomputing" or "the Evel Knievel of supercomputing," according to a biography called "The Supermen," by Charles Murray. Which was a way of saying Cray took enormous risks that belied a subdued demeanor. He died in a 1996 auto accident at age 71. His risk-taking led to a split with his original company, Cray Research Inc., in 1989 to start a venture that also carried the Cray name and slid into bankruptcy in the mid-1990s. Meanwhile, a weakened Cray Research got acquired by competitor Silicon Graphics Inc. in 1996, which spun off the Cray bits and later sold them in 1999 to Terra Computer Co. of Seattle in 2000. Terra changed its name to Cray Inc. Silicon Graphics got sold at fire-sale prices last year to California data storage company Rackable. An artifact from the original Cray Research sits in the lobby of Cray Inc.'s skyway offices. It's a circular Cray 1 -- the first Cray design from 1972 -- borrowed from the University of Minnesota. It weighs 10,000 pounds and looks like a prop from the original Star Trek. It looks retro-cool, but today's iPod has four times its computing power, Kugel said. Today's top Cray design is the XT5, which was installed at Oak Ridge with a flashy jaguar logo. It was named the world's fastest computer in the latest semiannual Top500 list of the world's most powerful supercomputers in November. Able to do more than 1.75 quadrillion calculations per second, Jaguar surpassed an IBM machine named Roadrunner to claim the top spot for the first time. Roadrunner has Minnesota speed in it too. IBM's manufacturing facility in Rochester built specialized servers for Roadrunner, which was assembled in Poughkeepsie, N.Y. The Rochester plant also built IBM's Blue Gene supercomputers that in 2004 brought the top honors of fastest computer back to the United States from Japan. The company last week said it expects revenue for 2009 to be $284 million, up slightly from $282.6 million in 2008 in spite of a recession. It expects to break even or post a small operating loss. Analysts had been expecting revenue of $284.9 million on average with earnings of 11 cents a share, according to Thomson Reuters. Cray had a "blockbuster year" in 2008 when it hit $283 million in revenue, up from $186 million in 2007, said Sid Parakh, a financial analyst with McAdams Wright Ragan in Seattle. Parakh shrugs off the $54.5 million goodwill write-down in 2008 that left the company with a $31 million loss. He's expecting 2010 revenue of $305 million and the stock to hit $7.70 this year. (It has bounced between $1.83 and $9.49 over the past year and was trading around $5.70 last week.) "They will be around," Parakh said of Cray. "They've got a very healthy balance sheet." THE THREAT OF CLOUDS Others aren't so sure. Cray, said John Bender, managing partner of Bender Consulting in Redwood City, Calif., makes the Ferrari of supercomputers -- the highest of the high-performance machines built for speed, not for carrying groceries or ferrying the kids to soccer practice. There isn't a big market for Ferraris or for the special-purpose computers Cray excels at making, Bender said. Its main customers are governments and energy companies that need to develop nuclear weapons, track climate change or find oil under the ocean floor. The advance of cloud computing -- battalions of look-alike servers that can run any application (think Toyota sedan) -- is cutting out the industrial market beneath Cray's feet, he added. Clouds are too slow to challenge Cray or IBM for the high end, but the rise of the cloud means the share of the market at the very high end will get smaller, he predicted. "Cray won't necessarily need to change if they're comfortable with the possibility of eroding market share," Bender said. "But I'm not sure if the shareholders would be comfortable with it." The threat from cloud computing is overblown, said Earl Joseph, an analyst with technology research company IDC. The ultra-high end of the supercomputer market where Cray and IBM battle -- a $2.5 billion slice of the overall $10 billion supercomputer market in 2008 -- will always need the kind of special workmanship the two heavyweights bring, he said. The machines can cost $100 million each: "So if they sell two big ones in a year, it pretty much makes the year for them," Joseph said. Revenue grew last year because it was tied to government, not the larger economy, he and other analysts said. But a large contract can be a tricky beast. At the moment, Cray is in the middle of a $250 million multi-year contract with DARPA, the Defense Advanced Research Projects Agency -- which decades ago developed the forerunner to the Internet -- and it has hit a snag getting reimbursement this year for research and development costs on a prototype machine it is developing for 2012. The snag will delay payment of $7 million in RD reimbursements that had been expected for the fourth quarter, the company said last week. Cray expects to get that money back in the first quarter, company spokesman Nick Davis said. Contract changes mean some parts of the prototype will be eliminated, reducing the contract by $60 million, the company said. Analysts think it's unlikely DARPA will drop Cray. The government would rather have at least two healthy companies to bid on its projects instead of one. That may explain why Cray CEO Peter Ungaro likes his chances. But his company is hedging its bets a bit, anyway. Last year, Cray introduced a low-cost $12,000 supercomputer that fits under a desk for smaller customers -- think Porsche Boxster. In St. Paul, Cray has created a custom engineering shop to leverage what it learns on large projects so it can design custom systems for industrial customers -- think hot rods. Both businesses are expected to smooth out the financial ride, Ungaro said from headquarters in Seattle. Mostly, he sees ramped-up demand by governments that want to remain competitive in science, look for oil, protect their borders or design highly complex machines. Cray's St. Paul office has grown faster than the company's locations in Seattle, Austin, Texas, and Chippewa Falls, Wis. If it continues to grow, St. Paul could eventually surpass Chippewa Falls, which with 249 workers is the company's largest office, the CEO said. Ungaro has visited the St. Paul offices and was struck by its open, bright appearance. "The layout of the floors are designed for collaboration and open discussion," he said. "All in all, I couldn't be more pleased with how that worked out." Leslie Brooks Suzukamo can be reached at 651-228-5475. To see more of the Pioneer Press, or to subscribe to the newspaper, go to http://www.twincities.com. Copyright (c) 2010, Pioneer Press, St. Paul, Minn. Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |