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

To: Patrick Gainer who wrote (4866)	5/14/1998 1:35:00 PM
From: vincent bilotta	Respond to of 14451

yup, i went to an SGI technical roadmap presentation at the NYAC in 1993 where what became "craylink" was fully described as a technology that SGI and Stanford were working on. it was to show up in the 96'-97' timeframe. vincent

To: Patrick Gainer who wrote (4866)	5/14/1998 5:07:00 PM
From: Edward Smyth	Read Replies (1) \| Respond to of 14451

Patrick Gainer wrote >SGI bought Cray because the SGI senior execs were >seduced by the "sexiness" of high end scientific >computing. I agree that this was one of the reasons. >As a business decision, it was a stupid one. >Cray was part of a market which was not growing. The I wonder has the market grown in the past 2 years, with ASCI and other large supercomputer purchases. NOAA is soon to decide on a $35 million contract. DOD is buying loads of Origins and a few T3Es. SP2's are doing well, as are some other vendors. That is the problem with the supercomputer industry - it has quite large swings in demand, and is still overly dependent on the US govt. I agree that, of all markets SGI could of spent ~$700 million on, supercomputing was not the most profitable. But it still has the potential to be profitable. All depends on execution. >scientific market as a whole is but a mote in the eye >of commercial computing. Cray itself was shrinking, 1994 was Cray's best year. In 1995 they changed the entire product line and had some internal management problems (so I have been told), so profits etc were down. They were bought early in 1996. Scientific computing may be small compared to business market, but it is still worth a lot of money. Of course, I will defend scientific computing as this is where I make my living :-) >being beaten in part by SGI and the trend towards >"killer micros". "killer micros" may have taken some, even a lot, of supercomputer sales, but there is still a viable market for the high-end systems. Remember that MPP's were going to kill vector machines in the late 80's/early 90's. Didn't happen. I have yet to see a "killer micro" that can beat the T3D in interprocessor comms while scaling to >256 processors, i.e. beat a machine that was made obsolete in 1995. T3E is 4x faster (on my code), and cheaper to buy and operate. >The SGI execs used as part of their >justification, the assertion that "if we hadn't bought >Cray then Sun would have". Can you imagine anything >more assinine? Agreed. I would have worried more about IBM or HP. Or an independent Cray, seeing the soft sales at the high-end, targeting the low-end more and hurting Power Challenge sales. >SGI had guys like McCracken saying things >like "we don't want to sell our stuff to banks or >insurance companies. Banks and insurance companies are >boring!" McCracken did and said things which, for a CEO, >should be criminal. He was that out of it. That was an extremely stupid thing for McCracken to say. Never turn away customers with big cheque books - receiving lots of money is never boring! :-) >To make matters worse, Cray's technology was >not generally transferable to the commercial arena. Unicos has a lot of nice tech useful for any data center. The memory bandwidth and interprocessor comms stuff is maybe of more use to scientific markets but is still useful to have in the commercial world. "Craylink" was just marketing. We'll have to wait and see what the next generation Origins, which will have Cray input to their design, are like. >SGI should divest itself of Cray as quickly as it can. Maybe that would be best. But I do think it is very sad when the "best" course of action for a company is to sell bits and then try to be bought by the competition. If I were CEO, I would much prefer to build up the business and buy or bury the competition. Ed

To: Patrick Gainer who wrote (4866)	5/15/1998 12:17:00 AM
From: Justin Banks	Read Replies (2) \| Respond to of 14451

Patrick - As a business decision, it was a stupid one. With all due respect, without knowing how SGI revenue is broken down, you have no idea how much the Cray division, products, manufacturing facilities, and knowhow, contributes toward the bottom line. I would presume that those that are privy to this information are capable of making an informed decision. Their actions, or lack thereof, speak volumes. -justinb