What Business Week won't tell you.
Here's a random and by no means complete summary of twisted or
just plain wrong facts, wrong analogies, misleading innuendos,
etc. in the Business Week cover piece.
1) No advantage over Sun/HP etc. in servers:
The most significant technical advantage of SGI
is the S2MP technology (scalable up to 4096 processors
in the Los Alamos ASCI project). No mention of S2MP
in the story. On the other hand none of IBM, Sun, DEC,
etc has S2MP or a ccNUMA equivalent and all of which are
trailing SGI by at least two years (using plain SMP)
in scalable servers.
2) While sun was growing ... SGI was slowing. I just checked
the revenues of Sun and SGI from 1993 to 1997. The SGI revenue
as a percentage of Sun Revenue was growing steadily as follows:
26%, 33%, 38%, 41%, 43%. Just the numbers.
3) Talking about the blunders in the low end with absolutely
no mention of the Nintendo 64 which is a significant contributor
to the bottom line this year.
4) Comparing SGI who didn't have any operational loss in
the last several years with Apple which lost 600 Million in
one quarter with a series of huge losses around that quarter.
Even after one time charges, the SGI two quarterly losses
in 1997 were minute compared to revenue. But comparing with
Apple is juicy isn't it ?
5) Sun takes SGI Hollywood business (with Toy story). Are they
serious? did they really check the facts? Sun gave away
the 117 workstations to get some publicity. They were used
as a rendering farm, as opposed to SGI workstations which were
actually used to design the characters and do the animations.
BTW: Pixar recently had a big OCTANE order from SGI and Steve
Jobs personally endorsed the OCTANE saying that Pixar checked
all the options and no one came close to SGI. Clearly the
reporters either didn't talk to Pixar, or decided to omit
their input from the story. As Alexis noted: check their
"clever" use of words:
Sun "persuaded" pixar to use Suns (as opposed to *sold*)
and "to help create" the film (to hide the fact they were
used only as a rendering farm).
6) HP introduced faster graphics worstations... Bzzzt, SGI is
still faster, even the preannounced PixelFlow machines
don't do 88 million poligons per second like the Reality Monster
Onyx2 could do back in 1996.
7) The R10000 processor glitch was a manufacturing problem
at NEC, not a design problem at SGI. Such things happen.
Contrast with the Intel Pentium flaw which was
a design error. While SGI immediately recalled all customer
CPUs, Intel didn't admit a problem until much much later.
when it cost them a 100 times more than it did cost SGI.
Sure, Intel is a great company, their blunders are nothing
like SGI's.
8) An isolated incident of customer (Tektronix) replacing a 100
SGI workstations with Sun. Guess what, there are many more
contrary examples from what I hear. In fact most of the new
SGI Wins are against former Sun, HP, IBM, and DEC accounts.
What the story is full of though is jucy stuff: the starry eyes
of an infatuated CEO, a heart attack of an evangelist, managers
drinking themselves to death in a party --
How come? A company with blind senior managers, a full string
of purely losing strategies, a management that is totally out of
whack and touch with reality and who drinks itself to death.
How come this company manage to grow from $1.5B to $3.7B in the
last three years ?
I'm completely amazed by this high quality and well researched
piece of journalism. Glad I'm not a subscriber.
Draw your own conclusions.
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