SGI First To Use Linux In High End
Investor's Business Daily
Date: 8/2/99
Author: Michael Tarsala
Computer maker Silicon Graphics Inc. on Monday will announce plans to use the upstart Linux operating system as the guts of its next top-of-the-line computer hardware.
It will be the first computer maker to bet so heavily on Linux in the high-end market. Linux is a freely available version of the Unix operating system seen as a possible rival to Microsoft Corp.'s NT software.
'They think it's such a hot bandwagon that if they're the first to jump into it full-bore, they'll have an advantage,' said Amy Wohl, a Narberth, Pa.-based analyst.
A maker of number-crunching workstation computers and data-dishing servers, Silicon Graphics has appealed to certain niches. Its products are popular among engineers and other technical customers.
But the company has failed to keep up with rivals. Until the quarter ended June 30, the company had lost money every quarter since mid-1997.
The company's managers are looking to give their machines broader appeal. As a result, the company will make both Linux and NT servers. As a first step, Silicon Graphics executives say they expect to ship the company's first Linux and NT
servers in early August. Most of Silicon Graphics' servers sold so far run its own version of Unix, called Irix.
The new NT computer, which runs on chips from Intel Corp., will start at $8,945. The company expects to sell NT machines as powerful as its $20,000 Irix computers for about $14,000.
And the new Linux machines will cost about $1,000 less than the comparable NT machines, says Jan Silverman, a Silicon Graphics product marketing manager.
Long term, Silicon Graphics will focus on small NT servers for hosting popular applications in computer networks. But the largest - and most lucrative - Silicon Graphics computers will use Linux.
When Intel ships its new and more powerful server chips code-named Merced in mid- 2000, Silicon Graphics hopes to have its high-end Linux ready.
'We're saying that Linux is a strategic direction for our company,' Silverman said.
It's a good plan, says Rob Enderle, a Santa Clara, Calif.-based analyst with Giga Information Group. Linux is the best operating system value on the market, since the guts of the operating system are available for free. Most of Linux's cost is wrapped up only in service and support of the software.
Linux appeals to Internet service providers and other companies that host many sites on the Internet, Enderle says. Many customers have a strong loyalty to Linux, and not to a particular brand of hardware. It gives any computer maker with good prices a chance, he says.
Analysts say if Silicon Graphics can make Linux into a reliable high-end operating system, it's a coup. IBM Corp., Hewlett-Packard Co. and most other computer makers already have committed to other new operating systems that use
the new Merced chips. So far, IBM and HP are using Linux only on low-end and midrange computers.
Linux has been gaining in the market. In 1998, it was the fastest-growing operating system, says researcher International Data Corp.
'Linux is very hot right now and seems to be getting hotter all the time,' Wohl said.
(C) Copyright 1999 Investors Business Daily, Inc.
Ref: investors.com
Regards - Dale |
