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Technology Stocks : Silicon Graphics, Inc. (SGI)

SGI 92.96

-0.9%

Dec 15 3:59 PM EST

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To: Paul Jamerson who wrote (1346)	5/8/1997 6:43:00 AM
From: Jeff Maresh	of 14451

Paul - SGI quoted some concrete numbers during the conference call in response to: >NT is beginning to take away the low end from SGI, ~30% of the business. NT is gaining CAD business but it wasn't SGI's business to begin with. (ie. how can you lose something you never had?) O2 growth is growing significantly faster than NT sales. >The going is will be difficult from this point on. Revenue growth and >income will begin to slow unless something is done. You don't regard building a $6,000 graphics workstation that burys $9,000 NT workstations or building the most scalable server products of any company as "something"? >The Wintel >threat is real, forcing SGI and all the other workstation companies >to fight for the mid to high range. That piece of the pie will have >to be divided by several companies. I don't think it's a big a threat as the media has hyped it to be. The market is not a "zero sum game". The pie keeps getting larger. The Unix server market continues at 45% growth per year and Internet is growing at 100%+ per year! Behind all that equipment that CSCO, COMS and the other networking companies are selling are big Unix servers. Also, a recent article in LAN times noted that a lot of network managers are not impressed with NT servers stating that it is unreliable, is as expensive to maintain than Unix counterparts, and not nearly as scalable as Unix boxes. Last year at this time before I really started working intensively with NT for both graphics and networking applications, I saw NT as the Unix killer. After a year's worth of hands-on development in both environments, I now share the sentiment of the LAN times article which is that NT has not been able to deliver on the hype. I think NT is going to grow and grow fast but the lack of a scalable architecture and the fact that they are only 32-bits limit its usefulness. These are not problems that will be solved anytime soon. Regards Jeff

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