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Technology Stocks : Silicon Graphics, Inc. (SGI)

SGI 93.75

-0.6%

Dec 12 9:30 AM EST

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To: Richard S. Schoenstadt who wrote (470)	12/3/1996 11:18:00 AM
From: Jeff Maresh	of 14451

Hi Rich - The geeks (me included) have had a pretty good debate on the virtues of NT vs. UNIX and SGI vs. competition for the past few weeks. Look up my posts in the archives to see the debate. I've worked with SGI starting with the IRIS 2000 system circa 1987-89 (somewhere in there). And I made a lot of $$ on the stock in the past. I'm currently long at $26. I am very skeptical of any media reviews. Its very easy to say nice things about a company who at a point dominates a particular market. If you read the archives you will see my concerns. I like Peter Lynch's approach of discounting what the pros say and do your own homework. I have been seeing an alarming number of once-loyal SGI customers moving to Wintel which is a bad sign. Other users said that they were buying O2 but SGI is clearly not as dominant as it once was. Multimedia is an area that SGI is doing pretty good with but there are a lot of other areas like engineering simulation where they are seeing the real challenge. In my opinion, its clear they are losing their dominance. > Is Ms. Waring wrong? > Or is this just a case of the 02 maintaining dominance in ever > narrower niches while intel is catching up in the rest? Wintel is catching up. Check out the web site for Standard Performance Evaluation Corp. (sorry I don't have the URL) for an objective evaluation of whats out there. > In the short run this seems to me a very important point re. > SGI's stock price. Me too. But VL and S&P are pretty rosey about next year too. I think their estimates are too high. At this point I'm looking at SGI as a turn around play which I might say good-bye to sometime next year. > If in fact the 02 swats down the competition like gnats one would > expect a substantial increase in sales and all the good things that > go along with that. Until the next wave of NT boxes hit... > By the way another important point that Ms. Waring makes is that > the performance of the 02 has so impressed software companies that > they are porting to the 02 software packages popular on other > platforms. And this will allow SGI to compete in areas currently > dominated by the Mac and others. This statement leads me to believe that Ms. Waring may not be doing her homework. If the app is written in Open GL, conversion is straightforward. Which is another big problem caused by the Wintel boxes. Open GL is embedded in NT which means that customers are going to buy the cheapest box that will do the job in a lot of cases. If thats SGI, thats good for us. But I've seen a lot of people moving to the Wintel boxes lately. Software companies are writing in Open GL just so that they can run on any platform.

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