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Technology Stocks : Silicon Graphics, Inc. (SGI)
SGI 91.87+1.8%Dec 5 9:30 AM EST

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To: Jeff Maresh who wrote (430)11/27/1996 3:23:00 PM
From: Michael Madden   of 14451
 
I will agree with you on one point. Unix Workstations are being replaced by lower cost Pentium and Pentium/Pro machines in the government sector. However, WindowsNT is not necessarily the OS of choice for these computers. I've seen alot of organizations, including my own, adopt Linux (or a commercial Unix). In this era of tight budgets, free software is getting a serious look from contractors and government agencies. The free UNIX's have matured and are just as capable as many commercial packages. Increased market share for Intel will not necessarily increase market share for Microsoft.

The real question is whether this trend affects SGI. In my opinion, the answer is no. SGI has a reputation for building powerful servers and multi-media workhorses. They have always concentrated their resourses on this market that demands high I/O bandwidths. PC's may have made quantum leaps in CPU power and 2D graphics that have caused them to catch-up with many other UNIX vendors. But PC's still lag far behind in I/O architecture. There are companies that build Intel-based servers with powerful I/O subsystems, but these companies charge nearly as much as their UNIX competition. There is not an Intel based-machine that can match the graphics performance of an Onyx or the disk I/O of a Challenge server. (Sorry, no experience with the O2 architecture yet.) In many ways, SGI is the "Apple Computer" of the UNIX world. They concentrated on particular markets and have won many loyal customers. However, unlike Apple, they have made no expensive attempt to appeal to a broader audience. They have remained focussed on providing the best computers for video editing, 3D animation, VRML publishing, and scientific visualization. It will be many more years before the PC can challenge SGI's dominance in this explosive market.
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