Cray makes computers that aren't just good -- they're super. Its massively parallel and vector supercomputers provide the firepower behind research ranging from weather forecasting and scientific research to design engineering and classified government projects. The company also provides maintenance and support services, and it sells its own and third-party data storage products primarily from NetApp and DataDirect Networks. Cray's largest customer is the US government, which accounts for more than half of sales. Cray also targets academic institutions and industrial companies. Around two-thirds of sales come from customers in the US.
Cray has used expansion into emerging geographic markets, including India and Brazil, to boost sales as the high-end computing market matures in other regions. All of its engineering and manufacturing facilities are located in the US, though the company uses subcontractors to produce the majority of its components. It has a direct sales force that operates from sales and service facilities in Australia, Canada, France, Germany, Hong Kong, India, Italy, Japan, South Korea, Spain, Switzerland, Taiwan, the UK, and the US.
In 2012 Cray formed a subsidiary in China, a nod to the rapid growth of high-performance computing in the region. The subsidiary -- Cray Computing Equipment (Beijing) -- is focused on selling Cray supercomputers and storage systems, training system end users and administrators, and providing customer support. Also that year the company sold its interconnect hardware development program and related intellectual property to Intel for $140 million in cash.
With supercomputer price tags often at $10 million and up, the company's annual results can fluctuate dramatically. Overall sales in 2011 decreased by a little more than a quarter compared to 2010. Product sales fell 35%, primarily due to a supply problem with a key component needed to upgrade the Cray XK6 at Oak Ridge National Laboratory, which delayed recognition of related revenue, as well as lower demand for external storage systems. Service revenue rose slightly, with increased maintenance and support sales offsetting lower revenues on custom engineering projects. After years of losses, Cray recorded profits in 2011 and 2010 (its first since 2003).
In 2012 Cray expanded its line of midrange supercomputers, which have price tags starting at $200,000. The lower priced systems expand the company's market reach and potential for growth. In another strategic move, in 2012 Cray formed YarcData, a division focused solely on providing systems and services to the big data market. It also acquired California-based Appro International for about $21.8 million in cash. Appro International provides supercomputing services.
Cray entered the integrated storage market late in 2011, in order to capitalize on demand in adjacent markets such as data centers, an essential element of cloud computing.
Cray has supercomputers installed at more than 100 sites worldwide. Cray supercomputers run on the company's Cray Linux Environment (CLE) operating system. Cray is one of the only companies left that exclusively makes supercomputers. Its competitors, such as IBM, are traditional PC companies that custom-design high-performance models for customers.
Formerly Tera Computer, the company bought Cray Research from Silicon Graphics and changed its name to Cray in 2000. In 2004 Cray acquired Canadian supercomputer developer OctigaBay Systems, which became Cray Canada. The company's name comes from the late Seymour R. Cray, the "father of supercomputing," although Mr. Cray never worked for Cray Inc.