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Technology Stocks : Silicon Graphics, Inc. (SGI)

SGI 90.70

+1.6%

Nov 26 3:59 PM EST

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To: Bill Holtzman who wrote (3994)	1/14/1998 11:52:00 PM
From: Joseph E. Caiazzo	Read Replies (1) of 14451

Bill: The answer to your question is within in your response. You said "The future of SGI (if there is one)..." and this implies your own doubts about its continued operation as a going concern. Why would you feel this way if you thought that the server market was secure for SGI? Obviously, you have your doubts. My own opinion is that SUNW will dominate the server market for those companies committed to UNIX, with the exception of the relatively rare graphics intensive users which will remain within the SGI/CRAY realm. Now, this is still a big and growing market. But it is growing slower than the migration to SUN for mainstreet businesses. After INTC releases the 64-bit Merced chip, then SUNW, DEC, IBM and the other members of the UNIX crowd better watch out. I think INTC will dominate the field just as they have dominated every other field they have entered. They will deliver performance, not as good as UNIX, but good enough for most business apps., at a cost that will be impossible to beat. Yes, all the pros know that NT sucks. But the pros are not people buying and paying for the machines. Caiazzo's iron law of technology investing will come into play.. "Good marketing beats good technology every time". (Proof? Look where Apple is today.) High priced Unix based systems will be reserved for the true believers who cannot afford anything less than superior performance. For most business apps. WINTEL will be sufficient and will sell the most units. The true believers that insist on UNIX will stay will or migrate to SUNW. The large institutional graphics intensive users will stay with or migrate to SGI. How long will all this take? Don't know for sure...but I'd say one year should be the beginning and the trend should be apparent within two years. JEC

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