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

SGI still around?

[BWJones]

Other than its ability to run on cheap (price and often quality) hardware, I still don't understand SGI's movement to Linux. I guess that I am showing my ignorance here, but it seems to me that Apple and SGI are in similar situations right now in some respects. Both companies historically have relied on income from the hardware side of things while making a closed OS/hardware system that for each of their respective markets is very effective. The difference between Apple and SGI however is that SGI already has a UNIX OS with a GUI (however difficult it is to manage but VERY extensible and powerful), and Apple is developing UNIX with a GUI (easier to manage, more powerful in some respects, etc etc etc...). Both companies need major transitions to survive, but why Linux/Intel? IRIX is already mature, stable, fast, with great graphics capabilities and IO capabilities, so I ask again, why move to Linux and Intel?

Both companies obviously want to benefit from the open source paradigm while still remaining in business with proprietary OS's. (I am guessing here for SGI as I assume that they will make their OS on a proprietary linux model) The approach Apple is taking certainly makes sense to me by developing a UNIX OS that includes the opensource Darwin, but I am totally clueless as to what SGI is doing here. What makes Linux more attractive than simply continuing to develop IRIX and putting more effort into improving, simplifying some features, and pushing development for IRIX on perhaps less expensive hardware? (among other changes to their business model) Again it seems to me that SGI is making another crucial mistake here as the developers that have tapered off work for IRIX have not for the most part started developing for Linux (although I know of a few examples), primarily they have lost ground to Wintel. (thus
their misguided attempt at Wintel/SGI boxes I guess)

In short it appears that they are trying to make Linux/Intel into what they already have in IRIX/MIPS, only with cheaper hardware which seems awfully dangerous to me for both end users and the company.

I believe that by 2005 SGI will no longer be in the low to mid-range workstation market. This market will belong to perhaps Linux/Intel or OSX/PowerPC. Right now for what my maintenance contracts cost me for a single SGI Octane, I can purchase a new G4 WITH a 22in Cinema display YEARLY! This is not even talking about the $40k initial acquisition costs.

SGI will survive in the server market and high end visualization market if they are not acquired by someone else. After all SGI's market cap is only around 585 million last time I checked.

Re:SGI still around?

[foobar104]

I believe that by 2005 SGI will no longer be in the low to mid-range workstation market.

I'm not sure how you define that market, but for my money SGI isn't in it now.

SGI's workstation products include O2+ (a special purpose machine), Octane2 (definitely high end), and Onyx 3000 (the highest of the high). There's going to be a new product coming early next year-- this is not a secret, although the details and case color are-- that sits below Octane2 on the price graph, but it isn't going to be a low- or mid-range desktop computer either.

takeover candidate = ibm? Re:SGI still around?

[StandardDeviant]

A takeover of SGI does seem pretty likely at this point. Here's some reasons why I suspect IBM would snap them up:

1. IBM has a much larger market cap and a fairly healthy balance sheet (this gives them the resources)
2. One of IBM's most profitable business sectors (or so a little birdy told me) outside of consulting is big iron and high performance computing, which is right up SGI's alley.
3. IBM has a large product base and customer base that center around Unix already
4. if IBM is serious about a Linux push, SGI is a source of skilled engineers who have also been working on Linux in the enterprise
5. it'd be one less competitor for all those cushy big-gov/big-edu contracts that IBM loves

Just idle speculation on my part. Sun is more of a pure-play Unix vendor, and thus might seem more appropriate as a takeover initiator, but I don't think their financial reserves are high enough to do it. Further, they're more of a "one-os, one-platform" company than IBM and would probably have a harder time assimilating the SGI folks/products.

Jeez, if SGI goes tits up, how many Unix (commercial) vendors will be left? Both HP and Compaq seem to be treating their unix offerings as an afterthought compated to cheap shitty PCs and winprinters. I guess just Solaris and AIX. God save us all from AIX being the only Unix out there...;-)

SGI's Failing Points

[Lethyos]

Yes, I definitely agree that SGI has done some killer things. They revolutionized the graphics industry and demonstrated that computers can be made to do visual effects never dreamed of. Their systems are powerful tools for research. All in all, they've been quite swell.

But, we don't need them anymore. Nor do we want them.

SGI offers big, expensive, proprietary solutions, that like Microsoft, lock you into their product line with little or no hope of escape. Let's discuss the reasons.

1. Lack of extensibility. SGI boxen typically do not scale well, and if they do, much of your hardware has to be replaced to accomplish any scaling. Ever try to upgrade an Indy? And O2!? I certainly understand that in any upgrade, sacrifices of existing hardware must be made, but they are no champions of modularity.

2. Proprietary hardware. SGI hardware, for its consumer price-level equivalents is not all that great. You can spend $16,000 on one or maybe two decent SGI systems, or you can buy 10-15 high-powered PC's and cluster them. You get the advantages of redundancy too. Another problem here is repair work. Nobody but SGI and SGI certified technicians can repair their hardware. Worse still, only SGI and a few licensed vendors manufacture SGI hardware replacements. More money here. And then there is Irix...

3. Proprietary OS and software. Irix is a disgrace. Certainly, it's a great performer, but because it's geared specifically to SGI hardware. Take Linux and optimise it to the same level and write good drivers, and you'd have not just a strong contender, but a superior OS. However, it's just not there and SGI doesn't want it to be. They're too proud of their OS and they want Irix tools to remain Irix-only so SGI software vendors can't take their products to other markets without tough costs. Since everyone does servers these days, SGI doesn't mind having Linux run on Challenge or other volume servers. Besides, everyone who wants Big Iron for www.hugefuckingcompany.com uses Sun anyway.

All in all, what SGI does for huge costs can be done in the PC scene with a fraction of the price. Perhaps not in Linux yet, but certainly in Windows with products from NewTek and ReelMagic for example. With nVidia around pumping out killer graphics hardware, what do we really need SGI for? I guess the only reason I can see is that they produce big solutions (who else will build a C.A.V.E. for you?). Can anyone clue me in on what it is exactly SGI does that we can't do everywhere else these days?

Re:SGI's Failing Points

[Graymalkin]

What the fuck are you talking about? Do you know anything about SGI hardware or software?

1. Saying SGI boxes do not scale completely invalidates any thought you've ever had in your life. Have you ever seen an Onyx/Origin system before? You add a brick and have twice the processing horse power or add 10 PCI (or any periphrial connection you ca nthink of) slots to do anything you want. You don't even have to turn the system off to add anything to it. Origins scale from 2 processor to 128 processor systems at the drop of a fucking hat. Using the Indy and O2 for your examples is just jackassery. Neither of which were designed for easy upgrades. Later revisions of the O2 when the Octane was released were easy as could be to upgrade. You turn the system off and slide out a processor modules and replace it with a new one. Voila.

2. Clusters fucking suck. Jesus get it through your Beowulf worshiping head that clusters are not the answer to all computation problems. LANL might build a bix cluster of PC systems to solve some embarrassingly redundant set of equations big fucking whoop. The big SGI systems are cache coherent and have messaging latencies measured in nanoseconds. A processor on one end of a 512 processor machine can talk to another processor with similar latency that a PC based system can talk to its own RAM. It is trivial to write software that spawns processes onto multiple nodes in a cluster, ccNUMA systems run as if their far flunt components were a single machine.

3. Linux cannot do that. If it COULD do that it would no longer be Linux and certainly would not be portable outside of SGI's hardware. Do you seriously think you can get good performance out of off the shelf software? Hell no. Optimizing software and good drivers doesn't mean anything. You've bitten far too deeply into Linux hype if you think it is even a contender to the grand daddy Unix systems.

Bringing up NewTek and ReelMagic cards is just fucking ridiculous. Wow you can have a hardware video processor that uses a PCI bus. That's rad...until you've seen an Origin in action running more than a dozen pipelines feeding 8 display channels. Try that with a PCI bus and see what happens. Nobody buys SGI for the logo.

Make a pretty case, sell on the name.

[Snowfox]

Is it just me, or should SGI still be able to sell based on the name, if they take a rational desktop approach?

A pretty, curvy plastic case with the SGI logo prominently displayed, and they could probably compete with Dell for workstation products, while adding 10-15% just for the name.

I work in video games. Many of us, especially my artist coworkers, have worked with SGI extensively in the past. They miss the SGI platform, many with a fondness on par with that of the typical Linux, Mac or Amiga fanatic. And these people do have a voice when it comes to purchasing. If these guys thought they could get "An SGI that runs Windows," but at a sane price (they missed this part with their Windows endeavors), they'd jump on it.

Hell, I'd probably get one too, just for the novelty of it. A bona-fide SGI running Linux just feels cooler than generic PC hardware, even if I know the internals are identical.

There's probably a lot of money to be made in selling branded PC hardware. When Gateway bought Amiga, they could have probably sold thousands more units just by replacing front panels with something stylish and Amiga-esque, flashing a set of BIOSes with a snazzy "Amiga Phoenix" or similar logo & tossing a UAE CD and a Boing! mug in the box. There was no need for them to look into reinventing the PC, just like it was silly of SGI to go about trying to reinvent the PC when they tried shipping Windows products. Commodity hardware is rocketing forward so fast that most any attempt at creating custom hardware for your own PC products is purely daft. It's all about presentation.

Certainly, pretty cases wouldn't have to be SGI's only business line, but it could certainly be a source of safe & easy revenue to help turn things around.