Silicon Graphics to use Intel processors
SANTA CLARA, Calif. (AP) -- Silicon Graphics Inc. said today it
will use Intel Corp.'s chips in its computers and spin off part
of its own chip subsidiary as part of a broad recovery strategy.
The agreement with Intel will allow SGI to offer its own high-
end graphics technology on machines using Intel chips. The
computers will run on both SGI's Unix-based operating system
and Microsoft Corp.'s popular Windows NT software.
Silicon Graphics, based in Mountain View, Calif., had been
expected to adopt Intel processors, which have become standard
in the industry with a huge variety of software applications.
But Rick Belluzzo, SGI's new chairman and chief executive, said
his company wasn't simply becoming part of the ''Wintel''
platform, the industry name for the dominant combination of
Windows software and Intel chips.
''It's really quite the contrary. We are taking the Intel
architecture and building around that,'' he said in an interview.
Belluzzo also stressed that the alliance with Intel and the
decision to shed much of its MIPS Technologies chip subsidiary
were part of a wide-ranging plan to revive Silicon Graphics and
clarify its direction.
''What we're really doing today is (outlining) the direction of
Silicon Graphics, talking about the path forward,'' he said in
an interview before announcing the changes at a briefing with
analysts in New York.
The announcement was the first important news out of SGI since
Belluzzo took charge of the company earlier this year,
succeeding Ed McCracken. He previously was the No. 2 executive
at Hewlett-Packard Co., where he oversaw that company's
successful computer business.
Belluzzo is respected in the industry for his no-nonsense
management style. Industry analysts said he was capable of
leading Silicon Graphics out of its difficulties.
SGI is best known for its workstations, which are powerful
desktop computers used by scientists, engineers and artists.
Only a few years ago it was flying high, famous for its
technology used to create special effects in such movies as
''Jurassic Park.''
But since then, the company has been grounded, hurt by
competition by Hewlett-Packard and Sun Microsystems and by
Intel-based workstations and other computers using Windows NT.
In January, SGI reported its most recent loss, $31 million, or
17 cents a share, for the October-December quarter. The results
reflected charges of $53 million, largely to pay for a
restructuring that included hundreds of layoffs.
SGI plans to ship workstations with Intel chips in the second
half of the year. The agreement with Intel also allows the
company to use Intel's next-generation processor, known as
Merced, in servers and high-end workstations.
Belluzzo's announcement also included spinning off its MIPS chip
subsidiary as part of SGI's plant to concentrate on its core
business.
SGI will retain MIPS' microprocessor technology but will shed
the rest of its assets as a public company focusing on the
consumer electronics. MIPS chips are currently used in video
game machines, set-top boxes and other devices.
SGI, by making an alliance with a major industry player and
adopting standards, is following a path that analysts previously
recommended to Apple Computer Inc., said Rob Enderle, an analyst
with Giga Information Group in Santa Clara, Calif.
Such a move frees a company from having to compete against
mainstream basic technology and allows it to use its resources
to distinguish itself from other computer makers -- in this case
HP, Compaq and IBM.
''This would be a good case in point to see if this course will
work,'' Enderle said.
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