SGI cozies up to Wintel

Silicon Graphics (SGI) has outlined a strategic business plan aimed at turning around its dismal trend of net losses, with the latest financial results posting a third-quarter loss of US$153 million, on revenues of $708 million. This follows the initial strategy announcement in April this year. The vendor aims to move key products to the Windows and Intel platforms, spin off its chip making unit and cut costs by eliminating operations and reducing its workforce by 1,000.

Silicon Graphics (SGI) has outlined its strategic business plan in Singapore, aimed at turning around its dismal trend of net losses, with the latest financial results posting a third-quarter loss of US$153 million, on revenues of $708 million. This follows the initial strategy announcement in April this year.

“The Unix workstation market is not growing at this time… affecting gross margins and pricing pressures. The troubles at SGI are related to that,” said Keith Watson, vice president for worldwide sales and marketing at SGI.

The vendor aims to move key products to the Windows and Intel platforms, spin off its chip making unit and cut costs by eliminating operations and reducing its workforce by 1,000.

The company wants to leverage its strengths in graphics and high-performance expertise, and will align itself with target areas on the technical computing market, which is visual computing on the desktop and technical servers; strategic business analysis; Web service; and media serving, said Watson.

There will also be a focus on six key industries: communications, energy, entertainment, government, manufacturing, and science.

SGI has signed a relationship with Intel, whereby SGI will incorporate Intel's IA32 technology into Silicon Graphics’ workstation product lines (due in the second half of 1998), and port its 64-bit Irix Unix operating system to Intel's upcoming Merced IA64 platform.

“There is a transitioning at the low-end Unix workstation market to NT... more than 50 percent of the workstations are expected to be NT by the year 2000,” said Watson.

Joint Effort

SGI will also engage in joint marketing efforts with Intel to establish the Silicon Graphics Intel Architecture/Windows NT workstations in the marketplace. This complements a partnership between Microsoft and SGI to jointly define, develop and deliver new technologies as part of a project code-named Fahrenheit.

Other key announcements are:

* SGI's structure will be overhauled, cutting back the number of business units from more than 25 to six, to be focused on NT products, Unix products, high-end graphics, the Origin server, Cray servers, and professional services.

* For supercomputers, the four current product lines -- Cray, Origin2000, Cray J90 and Cray T3E -- will converge over the next few years into two lines: a scalable vector line and a highly scalable microprocessor-based family. Products in the two lines will incorporate SGI's CC-NUMA (cache-coherent non-uniform memory access) architecture, scalable Irix with NT interoperability and CMOS chip technology.

* SGI's subsidiary MIPS Technologies, will be organised as an independent business targeting the design and licensing of microprocessors for the consumer and embedded markets.

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