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Technology Stocks : Silicon Graphics, Inc. (SGI)

SGI 90.15

-1.0%

Dec 9 3:59 PM EST

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To: Bill Holtzman who wrote (1413)	5/13/1997 8:42:00 AM
From: Shibumi	of 14451

>> One thought that occurs to me is that the most critical personnel move may have been when Jim Clark abandoned his kids to start new families. What I had heard was that he disagreed with the direction McCracken and others wanted to go with SGI. I'm not sure where he wanted to go but it seems likely he wanted to move into internet businesses as they are now. What an education for McCracken!<< Jim Clark or Ed McCracken (or some combination thereof) discussed this several years ago in some business magazine (Harvard Business Review, Fortune, or something like that). To paraphrase, Clark stated that he believed that SGI should adopt to the PC world and have SGI build stuff for PC's (e.g., PC graphics adapters, integrate SGI software on PC's, etc.). McCracken thought that SGI should remain vertically integrated and deliver systems with high SGI content throughout -- from microprocessors to operating systems to whatever. At the time, I thought that Clark was right -- but understood that McCracken was driving for higher margins so he could keep SGI a direct sales/services-focused company. It still seems to me that SGI could supply very high performance PC components (hardware and software) and make a fortune given their truly excellent brand. Of course, you'd see a real cannibalization of their existing system sales -- but I've always believed if you're going to get cannibalized you might as well do it yourself. Evans and Sutherland is coming out this summer with what is supposedly "Infinite Reality"-class hardware for a PC with Windows NT. It should be interesting to see what happens with this.

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