It is on the verge of being repossessed by the Martinez administration; it is about to be evicted from its home at Intel; and its ranking among fastest supercomputers in the world has dropped from third to No. 128, substantially reducing its market value.
The administration has told the New Mexico Computing Applications Center that it plans to take possession of the machine, claiming the nonprofit group set up to operate Encanto can’t pay its bills or perform necessary upkeep.
State Information Technology Secretary Darryl Ackley said in a June 20 letter to Applications Center CEO Tom Bowles that combination puts the nonprofit group in breach of contract.
The letter said the government would take over all equipment and assets as of June 30.
Bowles denies the allegations. He said the Martinez administration seems bent on repossessing the supercomputer to sell it to private operators – something the governor has considered since taking office in January 2011.
In his letter, Ackley said the center owes nearly $1.25 million in past-due bills to Intel Corp. in Rio Rancho, where the supercomputer is housed, and to SGI Inc., the company that sold the computer to New Mexico and that provided maintenance and operation services until last fall.
“We don’t see the Computer Applications Center as having the ability to sustain operations,” Ackley told the Journal on Wednesday. “It’s only a matter of time until the center is completely unable to run it. They’re running up debt without revenue to pay for operations.”
Even if the state doesn’t repossess the computer, the center faces an uncertain future because Intel has declined to renew its lease to remain on the company’s campus in Rio Rancho.
Intel plans to demolish the building where Encanto is housed, meaning the computer will have to be relocated by Sept. 30.
Bowles has been negotiating with the state’s three research universities to locate portions of the supercomputer at each campus, but even if he strikes an agreement, that plan is subject to state approval.
And even if it did, Ackley said the state wouldn’t leave the Computing Applications Center in charge of operations. “We won’t allow the Computing Applications Center to just move it to another location and continue to operate it,” he said.
The state will consider various options, including selling it off entirely or in part, or putting another entity in charge of it.
However, if it divests itself of Encanto, it is unlikely to get anything close to what it paid for it.
Bowles said Lt. Gov. John Sanchez planned to lead a group of business people on a tour Wednesday morning.
“I don’t know what the lieutenant governor is doing, but it seems the governor wants to follow through on getting rid of the computer,” Bowles told the Journal.
Ackley said privatization is a possibility.
“We’re evaluating now whether to sell it or make it available for other uses,” Ackley said. “It’s not a foregone conclusion yet.”
The nonprofit center was set up by the New Mexico University Research Consortium and has operated Encanto since April 2009 under a management agreement with the state Department of Information Technology.
The supercomputer has been a source of political bickering since 2008, when the Legislature approved $11 million to buy it.
Then-Gov. Bill Richardson’s administration planned to use the computer to support research at New Mexico’s universities and national labs, as well as state economic development initiatives, such as planning and simulation to build a smart clean energy grid.
The legislature also approved $3 million in 2008 to set up 20 “gateways” at colleges and universities statewide to provide access to the supercomputer for research, training and other uses.
It provided another $5.9 million in 2009 and 2010 to help the Computing Applications Center maintain operations.
After taking office, Martinez criticized Encanto as a “symbol of excess” left over from the Richardson administration, and no new funding has been approved for the Applications Center since 2010.
The Applications Center has worked to develop a paying customer base to sustain operations and continues to provide free access to the computer for research universities and colleges, although they’re now allotted less time, in order to cut expenses.
The center was thrust into a financial crunch last November, after its largest customer, Cerelink Inc. in Corrales, ceased operations and defaulted on $934,000 in back payments, Bowles said. That caused the center to fall into arrears on $421,000 owed to SGI for maintenance and operation services.
But Bowles said that’s the center’s only unpaid bill.
Ackley had cited an outstanding $826,800 debt the center owes to Intel for power and cooling services to run the computer. But Bowles said those expenses are covered under an exchange agreement with Intel in effect since 2010, whereby Intel houses the computer for free and provides power and cooling services. In return, it gets working time on the computer.
Intel spokesman Bill Davidson confirmed that arrangement remains in force.
Bowles also disputed Ackley’s claims that the center no longer has adequate ability to maintain the computer or provide sufficient support to customers.
Ackley had said that, after SGI stopped providing services in December, the supercomputer stopped receiving adequate upkeep. “There’s no ongoing maintenance, and hardware problems are starting to occur,” he said.
But Bowles said the center struck an arrangement in December with computer service provider HPC Tools to continue operating the supercomputer for a share of revenue generated from users.
— This article appeared on page A1 of the Albuquerque Journal