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Technology Stocks : Silicon Graphics, Inc. (SGI) -- Ignore unavailable to you. Want to Upgrade?

To: Thomas A Watson who wrote (6444)	8/24/1999 10:12:00 PM
From: stock talk	Read Replies (2) \| Respond to of 14451

Interesting, 2 week old news, but did the CEO know this company was going to be sold and left?? If NEC were to buy them what would be a fair price?? SGI cutting up to 1,500 jobs in reorganization By Stephen Shankland Staff Writer, CNET News.com August 10, 1999, 8:45 a.m. PT SGI announced the next phase of its recovery plan today, saying it's slashing 1,000 to 1,500 jobs, selling its Cray supercomputer unit, and transferring several operations to other companies. The company--known for its powerful workstations that produced the graphics in movies like Jurassic Park--plans to sell its Cray supercomputer unit, which it acquired in 1996. SGI will also hand over development of its Intel-based workstations to another company and transfer many employees to the Nvidia graphics chip company, said Bill Kelly, senior vice president of corporate operations said in an interview with CNET News.com today. "What we have here are a series of related actions that are all about realigning ourselves as a company [to focus on markets] that we think are going to grow," Kelly said. "If you take the two extreme ends [of SGI's product line]--the Visual Workstation on one end and Cray on the other--we're really going to pursue those with and through partners," Kelly said. As previously reported, the changes are a major reworking of SGI's recovery plan, which has been under way for more than a year and a half. In recent months, SGI had been focused on moving from its custom hardware and software to more mainstream technology, but difficulties in design, distribution, manufacturing, and competition hampered the effort. The realignment could make SGI a potential takeover target. After its reorganization, SGI will primarily be a maker of high-end servers. These companies will likely get snapped up by larger, full-service computer companies who are looking for niche technologies. Two of the five independent server makers--Sequent and Data General--were both recently acquired. Last month, SGI reported its first profitable quarter after seven in the red, but chief executive Rick Belluzzo said the company still has work to do before it reaches long-term profitability. In the future, SGI will focus on selling high-performance servers, in particular models designed specifically for tasks such as delivering streaming media content such as movies over high-speed, or broadband," network connections, Kelly said. Along those lines, SGI has set up a new broadband business unit and will spin off its MediaBase streaming media software and engineers into a new company in which SGI will hold a minority interest. Independent server makers, however, are having no easy time either. Yesterday, Data General was purchased by storage king EMC while Sequent was picked up by IBM earlier this summer. This leaves only SGI, Unisys, and NCR as major independent server companies. The technology these companies make is attractive, both to customers and to large full-service computer makers that need to fill in their product lines. At the same time, only Unisys does not seem to be in the midst of an economic crunch or changing times, according to analysts. "I think NCR would be a good match for a larger systems provider. That could be any of the big six or seven," James Gruener, analyst with the Aberdeen Group, said yesterday. SGI will announce a series of partnership deals to help them reach bigger markets. First on the list is a deal with NEC, which will sell SGI servers in Japan, Kelly said. "It's the first installment in a series of partnerships to extend our distribution reach," he said.