SGI Sets Sights On Turnaround

grub wrote to us about an article about SGI, and its ongoing battles to turn its corporate fortunes around. The company's been doing interesting stuff for a long time - here's to hoping they stay around.

Comments

The demise of corporatized Linux

[b.foster]

Having been on the internet since the late 1980s, and a Linux user since 1993, I have seen many changes that Linux has brought to the computing world. I saw Linux grow, from an alternative server OS to a viable contender for the desktop; I saw mindshare grow, from my niche LUG to Wall Street to the audience of Jay Leno's show. Change is often good, and I wouldn't trade the resources that our community has today for the comfort of the close, friendly Linux community of yesteryear.

Unfortunately, the economics of a capitalist society are changing things, and the results are a mixed bag. On one hand, far fewer professional programmers will be employed, full time, to develop open source software that everyone can use for free. On the other hand, though, Corporate America will no longer control key parts of the Linux development effort. As it stands right now, many Linux coders are dependent on corporations for their paychecks; and these corporations choose which projects the open source coders get to work on, and how those projects are to develop. The funding is always welcome, but it has come at the expense of independence from the capitalist society that we shun. Linux was never about money; it was about coders developing the best product they can out of pride and the desire to make their hard work available to everyone.

Companies like SGI, Corel, and LNUX have corrupted the open source ideal. Money is power and power corrupts. Although SGI's contributions to Linux development cannot be understated, nor can their influence be ignored. And when they inevitably go out of business, it will be another nail in the coffin of high end computer graphics, and another notch for freedom in the axe of the open source movement. But life is often bittersweet.

Bill

Save SGI!

[Renraku]

Since SGI obviously has some workings in the field of graphics and chip manufacturing, what if they were to join up with one of the companies like Nvidia or AMD? We could see some much more powerful chips at much lower prices if they did that. They could even write Linux/open source drivers, making the hardware much more compatable with different machines.

I just don't see a way for them to do it..

[jcr]

SGI is caught in the classic problem that killed DEC, and is killing Tandem, Stratus, DG, and many others: the performance of the lowend is improving so quickly that we can do things on $1K machines that used to require $1M machines.

I have a friend who had an idea that could have saved them. When he was at SGI, he pointed out that machines that were optimized for graphics had to have great I/O performance, which would also make them great performers in another I/O intensive task: running RDMS engines like Oracle and Sybase. SGI management wasn't interested.

So, SGI employees and stockholders lose out, and the rest of us gain another lesson in the dangers of rigid thinking.

-jcr

Re:I just don't see a way for them to do it..

[foobar104]

SGI is caught in the classic problem that killed DEC, and is killing Tandem, Stratus, DG, and many others: the performance of the lowend is improving so quickly that we can do things on $1K machines that used to require $1M machines.

In a way, you're right. Every day I deal with the fact that SGI computers aren't cost-effective for general purpose tasks like file serving or database applications.

But at the same time, you've pointed out the reason why SGI is trying to do what they're trying to do. Some tasks that could previously only be done on SGI workstations can now be done on cheap(er) PC-type computers. I'm thinking of 3D modeling and image exploitation specifically, but there are lots of other examples, too.

So okay, SGI needs to get out of the desktop workstation business except where they can justify it. So they're doing that.

But there are some tasks that you've never been able to do cost-effectively on a PC-type system. Like high-definition or film compositing and editing. Sure, you can do film-resolution work with After Effects or Final Cut Pro, but it'd be so slow that you couldn't turn a profit doing it. So instead you buy a half-million-dollar Onyx and go to sleep every night on a big pile of money.

Now, for the first time, there's a desktop workstation that's capable of doing most of what an Onyx can do: Octane2. So now SGI is going to a lot of those customers that have Onyxes and asking them if they'd like to buy three or four smaller systems that do 80% of what the Onyx can do to augment their existing stuff. And many of them are saying yes, because (and this is the key) they already know they can be profitable doing it.

Of course, when SGI pushes down too far into the market space, they tend to get spanked a little. If you're doing standard-definition video editing, or god forbid compressed, you can do most of what you need with an Avid or Final Cut Pro on a G4. So SGI loses a lot there.

The trick: find the sweet spot, where the market is broad enough that you have a lot of customers to call on but not so broad that you get beat on price-performance, and sit there.

At the other end of the spectrum, there's the really high end. The Grand Challenge type stuff, like the project that motivated ASCI Blue Mountain at Los Alamos. If you're going to try to simulate a nuclear explosion instead of just setting one off and watching the pretty colors, you're going to need a computer that is several hundred times bigger than anything that had ever been built before. So there's an opportunity there to sell some of your big iron to the government, and (more importantly) to fund some R&D that will then trickle down to your commercial products so you can get back to beating the competition on features instead of fighting over price.

So yeah, in a way you're right. The low end keeps getting better. But as it does, we keep thinking of things to do-- both commercially and in the sciences-- that the low end can't handle. It's like swimming in the ocean. The waves are moving under you, and if you just sit still you're going to get dunked. But if you swim in the right direction at the right speed you can stay at the crest of the wave. That's the trick: to stay on the crest of the technology wave.

Re:Market woes

[MrDelSarto]

SGI equipment is not and never was in the same ballpark as a $AU1200 PC. A Beowulf cluster of 1024 PC's is not the same as an Origin 3000 of 1024 processors. Read about ccNUMA.

In terms of desktop processing, the I/O bandwidth of an O2/Ocatane can not be compared to a PC. In essence, that's where they differ from a PC with a GeForce. That's not to mention the video/audio hardware that comes built in that is well integrated into IRIX and for the most part well documented.

In general, with SGI you get what you pay for.

SGI is a great company (I've worked there) that's built on a culture of doing cool things with technology. They just seem to have made a lot of bad decisions. They seem to be returning to their core business now, i hope it works -- how many quaters have then been going to turn a profit next quater now?

Re:sgi & windows...

[skotte]

While i cant agree more about MIPS/IRIX being their best idea to date ... i gotta say, the wintel boxes they made are/were the best i'd ever used. we had a visual workstation 230 and a 320 in the office, both running NT, and they totally ran circles around any other windows machine in the building (comapqs and HPs mostly)

so yeah .. NT was their worst idea to date .. but boy they did it right.

oh yeah -- did i mention they came with DETAILED instructions on how to setup a dual boot? probably my fFavorite part :)

Re:Irix and Linux

[Xandis]

I think the comma is left-out rather than misplaced since the comma after Linux is fine (I think). Add a comma after 'Unix operating system' and you get that they are focusing on Irix and Linux...rather than having Irix being a version of Linux !!

They have moved from NT but the problem for SGI is that they have also lost time and money with their misguided attempts at doing "other things." Hopefully, the new demand (and money) from government will give them an extra lease on life that can be properly used to build a solid profitable company.

Since the stock is so cheap, it would be nice for some heavy hitters to buy them and make it a private company and some time in the future, if ever, they can take the company public.

SGI needs to do a lot more R&D to ensure that it doesn't lose to others with deep pockets and they also need a clear strategy to determine the proper future of Irix vis a vis Linux.

Being private will take a lot of pressure off their shoulders and allow them to focus on building something sustainable. I wouldn't be surprised if their best bet is to become a smaller research focused software company and letting hardware be handled by others.

Re:SGI

[Anonymous Coward]

You wrote That's six year old technology, baby. And the rest of the world is just now starting to catch up. Guess that's why SGI has been selling the same graphics hardware for all this time. Because they can.

I am reminded of the saying "Never attribute to malice that which may be attributed to stupidity."

SGI sold the same stuff for years for several simple reasons. I know, I was there watching this drama unfold. Basically the issues were as follows:

• followon project mismanagment: It took how many years to get odyssey out the door? Bali never really made it out. The 6 year old technology is being sold because the followon technology never got to a salable point
  
• an insane merger: causing SGI to focus inward on battles it should have never fought, and made it take its eyes off the market. In 1995 they commented that they had the largest number of web servers around, and didnt understand why. Amazing.
  
• lossage of quality people: competing with the Dot-Bombs was hard.
  
• layoffs of large fractions of unpopular teams: So if your VP lost some turf wars, during the layoff penalty phase, your team got whacked.
  
• general cluelessness and management malaise: Why SGI hired some of its senior management... I will never know. It seems as if they wanted to fail. Mr. Coleman was the prime example of this.
  
• product transitions: such as when they transitioned the odyssey team to nVidia, and they all left.
  

No, SGI sold 6 year old technology because it had no other choice, not because it could. I remember some benchmarks towards the end where PC's with simple graphics cards from nVidia were completely destroying the Octane on graphics and computing intensive tasks at a major OEM customer of SGI's. I can run performer town on my laptop in 1280x1024 mode faster than I can on my old O2. Inventor screams on my desktop, on par with my old Octane2.

In short, SGI was lapped. They never got a clue once they lost it, and they thought their shit didnt stink. The reality is that their products are slower than PCs in many cases, and most of their competitors are better/faster/more likely to survive. The only real thing that SGI has going for it these days is its large scale graphics, which no one else can do. They can drive display centers like no one else.

But then again, in typical SGI fashion, they will be sitting on their collective asses waiting for the business to find them, rather than hunting down the business. Right now their CEO is running around telling the world that "we are doing better". Not "Hey world, we have the best visualization technology around, so we have help you solve your problems before they get to be problems". Only one of these is a sales pitch intro. The other is begging for handouts.

SGI and marketing, wow factor

[green pizza]

SGI has always had a hard time trying to market itself. They've typically made endless incorrect assumptions and end up preaching to the choir. And yet, the wow factor that made the company and it's little cube logo a legend in the late 1980s is still there, abeit in a slightly different manner.

True, not everyone needs 512 or 1024 CPUs running on a single system under a single kernel. Or 16 graphics pipelines. But there are those that do. Which is why, shortly after the introduction of the Origin 3000 two years ago, an entire convoy of the machines were sent to Fort Meade.

It's almost as though SGI has gotten used to the high end, as though their technology (HW, SW, APIs, SDKs) no longer impress themsleves. Nowhere else, not even E&S, can a person find a platform that can drive up to 128 display channels (16 pipes x 8 channels per pipe) with perfect sync, or even at all. O2K and O3K (and more recently, O300 and Octane2) can drive multiple displays from one or more graphics pipelines. Raw, per-CPU performance isn't anything to write home about, but the thruput and latencies are perfect for generating insane 3D and mixing it with streams of HDTV... or anything. Think of a way-cool use of video and 3D. Now increase the complexity and choose, oh, 4 camera viewpoints. Maybe an additional display for stats and another for an "operators station". Easy with O2K/O3K (aka "Onyx" when gfx are invloved). It can be done and it's proven. They've been doing this sort of thing since you and I were using our "cutting edge" unaccelerated 2D graphics cards running at an "insane" 1024x768.

A pair of old demos SGI likes to show off are sometimes called "from space to your face", in which over 500 GB of sat photo textures are shuffled thru one or more InfiniteReality graphics pipes to provide a realtime "bungie jump" from the moon to earth and back. INSANE. 60fps/60hz locked. 4 huge disk RAIDs composed of dozens of drives grinding away like mad to keep the textures coming. WILD STUFF. All in a day's work.

SGI isn't about buzzwords or about wizbang marketing. It's about providing modular solutions to some of the most challenging problems. They've been there to provide HW and SW to those wishing to work on the cutting edge. In 1988 they were selling 3D workstations. In 1991 folks were doing crazy 3D and video mixing. Today their hardware can be used to drive gobs of displays and to shuffle huge amounts of data. Sure, the desktop PC in 2007 will be able to do the same thing. By then, PCs will be able to drive gobs of high end gfx subsystems, and even a cheap graphics card won't sneeze at several GB of textures loading and unloading every second... but until then, for those that need this TODAY, there's SiliconGraphics.

Let's hope SGI is here tomorrow to show us even more cool things.

SGI, in search of a purpose

[Animats]

SGI, as others mentioned, has the basic problem that the low end ate the high end in graphics and servers. They're a high-margin company in a business that went low-margin. Few companies survive that.

SGI has changed direction so many times in the past five years (moving into servers, deemphasizing graphics, selling NT workstations, deemphasizing servers, dumping the NT workstation line, reemphasizing graphics, acquiring Intergraph's line of overpriced NT workstations...) that customers can't rely on them following through on anything. And that doesn't even include the Cray acquisition and dismantling.

I noticed the remark in the article: "In its cost-cutting measures, SGI sold its nine buildings and leased back six of them." That's so SGI. This is right after they finished the new, zowie HQ building in Mountain View, and emptied out the fancy Silicon Studios building.

One big SGI success is Alias/Wavefront's Maya. That's one of the very few examples in the history of high-tech when a company bought two technology companies and actually got them to work together. Maya was a major advance, and dethroned Softimage|3D as the lead package in high-end animation. That's an incredible result from a merger.

Of course, they had to sell Maya on NT to make any money. So it didn't do much for SGI's hardware business.