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

To: Thomas A Watson who wrote (5501)	1/8/1999 1:16:00 PM
From: Thomas A Watson	Respond to of 14451

This article speaks well to the negatives SGI faces in the open archetecture WINTEL world. But Linux will make it a dynamite unix workstation. But Linux is a joke OS according to all expert technically illiterite folks. news.com Tom Watson tosiwme Remember it's a terrible thing to infect an intel processor with a borg virus.

To: Thomas A Watson who wrote (5501)	1/9/1999 7:11:00 PM
From: ramin shahidi	Read Replies (2) \| Respond to of 14451

Folks, For those of you interested, here is how I see VPC's market potential. Before I start, I must say that I am an SGI share-holder/developer and end-user and I sincerely, do not wish anything but prosperity for this company. But allow me to play devil's advocate during this note. Pricing: In my last note (couple of weeks ago), I estimated that the price of VPC would run something around $6-7K. Now, it looks like, I was wrong. Please pay attention to the following: The base price is under $4k (lets say 3.5K) + the 128M RAM probably is not adequate for the group of end-users this box is targeting, so you probably need to buy another 256M RAM (not a major expense though); + VPC does not come with the Fast SCSI HD option! which means if you are running NT, you better purchase the fast SCSI option + the flat panel monitor (you can save yourself ~1-1.5K by going with a normal monitor) + upgrade to 450PII (if available) + speakers + software + customer and parts support + tax. If you get a calculator and add these up, you see that we are talking about $6-8K minimum, depending on the monitor. Based on this pricing, I would estimate the dual 400-450PII VPC-320 would range something between 10-14K. The Market.. With such price range, SGI certainly can not reach Homes, or normal office staffs, managers, etc... The "left-overs!" consist of a very low percentage of the market, that are mainly engineers, designers, animators, maybe architects, imaging specialists, etc.. So, I don't understand what all the hype is about. Integraph has been fighting a losing battle, to make money in this market, for years. If SGI is counting on this product, to get itself out of mud, I have to say that the odds are against it. I would suspect that VPC would sell great in the first 2-3 quarters, but then the sells will hit a plateau. Just like O2s did couple of years ago; because whether running O2-UNIX or VPC-NT, the targeted market size is the same, and the price is relatively as high (note that, since 96, all the prices have been slashed in half). Frankly, I think SGI has a better chance of making something out of their Flat Panel line, than their VPCs. Software Developers: For Graphics Board/Architecture-dependent 3-D software developers, SGI's closed graphics sub-system (eventhough it is fantastic) can only be considered as a disadvantage. With 6-8K price range you have at least two other (open system) NT options: HP-FX or Intergraph-3D and they are both excellent platforms for any 3-D/texture intensive applications. I don't know anybody (in the NT/PC developers society,) that would prefer to develop on a board that is constrained to a particular platform. In short, the NT market is are all about flexibility, cost effectiveness, and marketing. VPC unfortunately comes short in each category. Having said that, I have no doubt that this box has superior graphic capabilities, and in the NT world can be considered "Ferrari of Cars'. But again, if I am in the automotive biz, I much rather be selling VWs. Sorry about the long note... --Ramin