SGI Japan thrives on broadband
Leader in workstations enjoys surging demand for graphics technology
NOBUYUKI OKADA
Staff writer
Nikkei Weekly
The age of broadband is coming and the prospect of "always on" Internet access is helping revive the fortunes of SGI Japan Ltd. as demand surges for its high-performance computer graphics (CG) technology. In response, the company is now focusing on strengthening its content-related solution services.
Leading cable-music provider usen Corp. has recruited SGI Japan, Sony Corp., NEC Corp., Mitsui & Co. and others to invest in U's Communications Corp., a high-speed, fiber-optic Internet connection service unit. Through the deal, SGI Japan is believed to be aiming to secure a role as a provider of support services for the fiber-optic Internet connection service operating at throughput of 100 mbps.
SGI Japan already formed ties with usen before making the capital participation in U's Communications. The two firms have been running a communications-satellite (CS) content-distribution service for businesses since September. The service lets users store video and music content in a special terminal, developed jointly by the two companies, for replay at any time.
SGI Japan has been a dominant player in the CG workstation market since the products developed by U.S. parent Silicon Graphics Inc., have long commanded a large market share in workstations used in the areas of advanced CG, computer-aided design (CAD), computer-aided manufacturing (CAM), structural analysis and hydrodynamic analysis.
Later, SGI expanded its reach to supercomputers with the acquisition of Cray Research Inc. However, the future of SGI Japan, as well as that of its parent, appeared bleak as the price of personal computers and servers fell sharply even as their performance reached new levels, greatly enhancing the edge in cost-effectiveness held by PCs over workstations. As even Norio Izumi, president of SGI Japan, admits, the company's CG workstations are too high performance and expensive to handle Internet content that mostly consists of text and still images.
But, SGI Japan's CG workstations and technology are once again enjoying strong demand since the existing servers and network systems are deemed incapable of handling the massive amount of image data that is expected to flow through networks in the broadband network age.
Izumi's decision to reorganize SGI Japan and spin off the company's CG division as Silicon Studio Corp., is also helping drive the revival. Thanks to the spinoff, the company can now pursue two different directions without conflicts. Traditional businesses directly linked with the U.S. parent were transferred to Silicon Studio, and SGI Japan is now aggressively promoting servers while maintaining its advantage in CG-related technology.
Along with its U.S. parent, SGI Japan is making the conversion from being simply a hardware vendor to a solutions provider. The reorientation has already paid off, for example with a deal clinched last year to supply a video-distribution system to Chubu University. For the system, which can deliver educational materials to 100 terminals simultaneously, SGI Japan supplied the hardware, but the main focus was on system design, installation and maintenance.
"Of course, we want to sell SGI machines. But, if a customer prefers another brand, we have no problem with that," said Izumi, explaining the company's new stance of openness toward all vendors.
Issued: March 19, 2001 |
