SGI CHIEF EXECUTIVE TRYING TO CURE ILLS

September 1, 2000

COMMERCIAL NEWS

Silver Spring MD. — The request came a year ago, and the recipient took just a few days to answer. Joe Wilcox reports that SGI’s board of directors wanted Bob Bishop to replace the departing CEO and to steer the company in a new direction. He took the weekend to think over the offer and started work that Monday – one year ago.

That’s the story according to Bishop, who met with CNET News.com at the offices of SGI’s federal government division outside of Washington, D.C. A year following his ascension to CEO, Bishop runs a very different SGI than predecessor Rick Belluzzo. It’s been a gut-wrenching year of tough decisions, many of which put Bishop in the hot seat with investors and Wall Street analysts.

The 18-year-old server maker, once known as Silicon Graphics, became a star among movie studios, government agencies and mechanical engineering departments in the early 1990s. In the mid-1990s, the company tried to expand from its core customer base, but it has since been forced to scale back its ambitions.

During his yearlong tenure, Bishop sold SGI’s Cray supercomputer operation, spun off its MIPS chip manufacturing division, and cut loose two major software divisions, including one immersed in video streaming across computer networks.

“The honeymoon period is over for Bob, and it’s do or die,” Technology Business Research analyst Jim Garden said. “We’re hopeful they can engage going forward and be viable, but we sense still a few potholes in the road.”

Those potholes include turning a company that by all appearances is running from profitability into one that can compete with the likes of IBM and Sun Microsystems selling big-iron servers.

The Mountain View, Calif.-based company, which employs about 6,800 people, got its start by selling servers to NASA and still pulls in nearly a quarter of its revenue from government agencies. The company is best known for selling servers used for compute-intensive operations, such as weather forecasting and computer animation. SGI servers, for example, were used for two recent movie releases, Disney’s “Dinosaurs” and “The Perfect Storm.”

SGI’s fiscal 2000 fourth-quarter results show a company still in crisis but on the mend. Revenue dropped 36 percent year-over-year to $534 million. The company lost $608 million for the quarter ended June 30, compared with a net income of $158 million a year earlier. “That works out to the largest quarterly loss in the history of SGI,” Garden said.

For the year, SGI had revenue of $2.3 billion, compared with $2.7 billion in 1999, but it posted a loss of $834 million, compared with a $54 million profit a year earlier.

The unloading of nonessential operations and retrenching along three areas – “stability, position and growth” – should make SGI profitable in fiscal 2001, Bishop said. He predicted revenue growth of 15 percent to 20 percent and a doubling of revenue within three years.

“Emotionally, the company has turned,” Bishop said. “Motivation in the company is quite high, and we’re refocused as a single-mission company.”

To reach its revenue goals, SGI has committed resources to two areas:

* Big servers that run on MIPS processors and on the company’s Irix flavor of Unix

* Open-source Linux running on Intel processors

Within five years, the company expects revenue to be even between the two areas, Bishop said. But Garden faulted the strategy, at least in how it applies to SGI-branded products. In unloading its assets, the company refocused on two niche markets: technical and creative computing users, and big data such as video archiving and production.

“SGI is following what we’ve dubbed the ‘back-to-the-future’ strategy – going back to where they were about five years ago,” Garden said.

SGI customers, like those for Apple Computer’s Macintosh, tend to be a close-knit and dedicated group. But the company’s mixed message on strategy has eroded the ranks of the faithful, Garden said. One problem is SGI’s flip-flop on Intel-based PC workstations. Once touted as the company’s salvation, SGI unsuccessfully tried to unload the product line.

The company’s decision to offer Linux on Intel processors also smacks against SGI’s core group of customers, although Bishop made it clear the company’s MIPS-Irix strategy is separate from anything it does with Linux. “We’re not putting Linux on MIPs,” he said.

“What I’m seeing in this back-to-the-future strategy is the user base may have become disenchanted,” Garden said. “That’s the problem we see with this…strategy and why they need to embrace the Internet strategy, which is a go-forward strategy.”

But the company’s Linux plans are very much about the Internet, Bishop said. “Linux will be the gateway to broadband Internet,” he said.

With Linux entrenched on Web servers, delivery of movies and other forms of entertainment over broadband is a natural fit, Bishop said. “Instead of e-commerce we should be talking about media commerce, or m-commerce,” he said.

SGI’s chief executive believes the company’s history providing compute-intensive servers, which are popular among movie studios, makes it a natural fit in the m-commerce era.

“That’s a story that’s very similar to the one they’ve been telling for years, although Linux is different,” Gartner’s McGuckin said. “For SGI to attach as much as it has to Linux – essentially tying their wagon to the Linux star – that’s a very risky endeavor on their part.”

Garden sees other problems, such as that many service providers are starting to do video streaming over the Internet and have already settled on servers from Sun or are using Intel processors. “Where the rubber meets the road, somebody else is already entrenched,” he said. Still, Bishop remains energized, particularly as he looks at SGI’s product lineup.

SGI last month introduced the long-awaited Origin 3000 server. The server is built around a modular architecture of, in SGI lingo, bricks for swapping in CPUs, communications slots, graphics accelerators, hard disks and other components. The Origin 3000 uses a technology called nonuniform memory architecture (NUMA). IBM also offers NUMA technology, which distributes memory into numerous small islands instead of one large block and in SGI’s design can accommodate as many as 512 CPUs.

“There’s no question they can build powerful servers,” McGuckin said. “The problem comes in the price tag, the third-party software vendors and just the whole visibility SGI has in the market. Competitors who a year ago couldn’t touch SGI in terms of performance are quickly catching up.”

As an example, McGuckin pointed to next-generation, big-iron servers due from Hewlett-Packard in September and from Sun in about nine months.

For Bishop then, the year ahead may pose as many difficulties as his first on the job, McGuckin said. Bishop said he is ready. “We’re going to battle here. We’re going to war.”

============================================================

Subscribe to HPCwire's Weekly Update!

Be the most informed person in the room! Stay ahead of the tech trends with industy updates delivered to you every week!

SODALITE: Towards Automated Optimization of HPC Application Deployment

May 29, 2020

Developing and deploying applications across heterogeneous infrastructures like HPC or Cloud with diverse hardware is a complex problem. Enabling developers to describe the application deployment and optimising runtime p Read more…

By the SODALITE Team

What’s New in HPC Research: Astronomy, Weather, Security & More

May 29, 2020

In this bimonthly feature, HPCwire highlights newly published research in the high-performance computing community and related domains. From parallel programming to exascale to quantum computing, the details are here. Read more…

By Oliver Peckham

DARPA Looks to Automate Secure Silicon Designs

May 28, 2020

The U.S. military is ramping up efforts to secure semiconductors and its electronics supply chain by embedding defenses during the chip design phase. The automation effort also addresses the high cost and complexity of s Read more…

By George Leopold

COVID-19 HPC Consortium Expands to Europe, Reports on Research Projects

May 28, 2020

The COVID-19 HPC Consortium, a public-private effort delivering free access to HPC processing for scientists pursuing coronavirus research – some utilizing AI-based techniques – has expanded to more than 56 research Read more…

By Doug Black

What’s New in Computing vs. COVID-19: IceCube, TACC, Watson & More

May 28, 2020

Supercomputing, big data and artificial intelligence are crucial tools in the fight against the coronavirus pandemic. Around the world, researchers, corporations and governments are urgently devoting their computing reso Read more…

By Oliver Peckham

AWS Solution Channel

Computational Fluid Dynamics on AWS

Over the past 30 years Computational Fluid Dynamics (CFD) has grown to become a key part of many engineering design processes. From aircraft design to modelling the blood flow in our bodies, the ability to understand the behaviour of fluids has enabled countless innovations and improved the time to market for many products. Read more…

Supercomputer Simulations Explain the Asteroid that Killed the Dinosaurs

May 28, 2020

The supercomputing community has cataclysms on the mind. Hot on the heels of supercomputer-powered research delving into the fate of the neanderthals, a team of researchers used supercomputers at the DiRAC (Distributed R Read more…

By Oliver Peckham

COVID-19 HPC Consortium Expands to Europe, Reports on Research Projects

May 28, 2020

The COVID-19 HPC Consortium, a public-private effort delivering free access to HPC processing for scientists pursuing coronavirus research – some utilizing AI Read more…

By Doug Black

$100B Plan Submitted for Massive Remake and Expansion of NSF

May 27, 2020

Legislation to reshape, expand - and rename - the National Science Foundation has been submitted in both the U.S. House and Senate. The proposal, which seems to Read more…

By John Russell

IBM Boosts Deep Learning Accuracy on Memristive Chips

May 27, 2020

IBM researchers have taken another step towards making in-memory computing based on phase change (PCM) memory devices a reality. Papers in Nature and Frontiers Read more…

By John Russell

Hats Over Hearts: Remembering Rich Brueckner

May 26, 2020

HPCwire and all of the Tabor Communications family are saddened by last week’s passing of Rich Brueckner. He was the ever-optimistic man in the Red Hat presiding over the InsideHPC media portfolio for the past decade and a constant presence at HPC’s most important events. Read more…

Nvidia Q1 Earnings Top Expectations, Datacenter Revenue Breaks $1B

May 22, 2020

Nvidia’s seemingly endless roll continued in the first quarter with the company announcing blockbuster earnings that exceeded Wall Street expectations. Nvidia Read more…

By Doug Black

Microsoft’s Massive AI Supercomputer on Azure: 285k CPU Cores, 10k GPUs

May 20, 2020

Microsoft has unveiled a supercomputing monster – among the world’s five most powerful, according to the company – aimed at what is known in scientific an Read more…

By Doug Black

HPC in Life Sciences 2020 Part 1: Rise of AMD, Data Management’s Wild West, More 

May 20, 2020

Given the disruption caused by the COVID-19 pandemic and the massive enlistment of major HPC resources to fight the pandemic, it is especially appropriate to re Read more…

By John Russell

AMD Epyc Rome Picked for New Nvidia DGX, but HGX Preserves Intel Option

May 19, 2020

AMD continues to make inroads into the datacenter with its second-generation Epyc "Rome" processor, which last week scored a win with Nvidia's announcement that Read more…

By Tiffany Trader

Supercomputer Modeling Tests How COVID-19 Spreads in Grocery Stores

April 8, 2020

In the COVID-19 era, many people are treating simple activities like getting gas or groceries with caution as they try to heed social distancing mandates and protect their own health. Still, significant uncertainty surrounds the relative risk of different activities, and conflicting information is prevalent. A team of Finnish researchers set out to address some of these uncertainties by... Read more…

By Oliver Peckham

[email protected] Turns Its Massive Crowdsourced Computer Network Against COVID-19

March 16, 2020

For gamers, fighting against a global crisis is usually pure fantasy – but now, it’s looking more like a reality. As supercomputers around the world spin up Read more…

By Oliver Peckham

[email protected] Rallies a Legion of Computers Against the Coronavirus

March 24, 2020

Last week, we highlighted [email protected], a massive, crowdsourced computer network that has turned its resources against the coronavirus pandemic sweeping the globe – but [email protected] isn’t the only game in town. The internet is buzzing with crowdsourced computing... Read more…

By Oliver Peckham

Global Supercomputing Is Mobilizing Against COVID-19

March 12, 2020

Tech has been taking some heavy losses from the coronavirus pandemic. Global supply chains have been disrupted, virtually every major tech conference taking place over the next few months has been canceled... Read more…

By Oliver Peckham

DoE Expands on Role of COVID-19 Supercomputing Consortium

March 25, 2020

After announcing the launch of the COVID-19 High Performance Computing Consortium on Sunday, the Department of Energy yesterday provided more details on its sco Read more…

By John Russell

Supercomputer Simulations Reveal the Fate of the Neanderthals

May 25, 2020

For hundreds of thousands of years, neanderthals roamed the planet, eventually (almost 50,000 years ago) giving way to homo sapiens, which quickly became the do Read more…

By Oliver Peckham

Steve Scott Lays Out HPE-Cray Blended Product Roadmap

March 11, 2020

Last week, the day before the El Capitan processor disclosures were made at HPE's new headquarters in San Jose, Steve Scott (CTO for HPC & AI at HPE, and former Cray CTO) was on-hand at the Rice Oil & Gas HPC conference in Houston. He was there to discuss the HPE-Cray transition and blended roadmap, as well as his favorite topic, Cray's eighth-gen networking technology, Slingshot. Read more…

By Tiffany Trader

Honeywell’s Big Bet on Trapped Ion Quantum Computing

April 7, 2020

Honeywell doesn’t spring to mind when thinking of quantum computing pioneers, but a decade ago the high-tech conglomerate better known for its control systems waded deliberately into the then calmer quantum computing (QC) waters. Fast forward to March when Honeywell announced plans to introduce an ion trap-based quantum computer whose ‘performance’ would... Read more…

By John Russell

Leading Solution Providers

SC 2019 Virtual Booth Video Tour

AMD
AMD
ASROCK RACK
ASROCK RACK
AWS
AWS
CEJN
CJEN
CRAY
CRAY
DDN
DDN
DELL EMC
DELL EMC
IBM
IBM
MELLANOX
MELLANOX
ONE STOP SYSTEMS
ONE STOP SYSTEMS
PANASAS
PANASAS
SIX NINES IT
SIX NINES IT
VERNE GLOBAL
VERNE GLOBAL
WEKAIO
WEKAIO

Contributors

Fujitsu A64FX Supercomputer to Be Deployed at Nagoya University This Summer

February 3, 2020

Japanese tech giant Fujitsu announced today that it will supply Nagoya University Information Technology Center with the first commercial supercomputer powered Read more…

By Tiffany Trader

Tech Conferences Are Being Canceled Due to Coronavirus

March 3, 2020

Several conferences scheduled to take place in the coming weeks, including Nvidia’s GPU Technology Conference (GTC) and the Strata Data + AI conference, have Read more…

By Alex Woodie

Exascale Watch: El Capitan Will Use AMD CPUs & GPUs to Reach 2 Exaflops

March 4, 2020

HPE and its collaborators reported today that El Capitan, the forthcoming exascale supercomputer to be sited at Lawrence Livermore National Laboratory and serve Read more…

By John Russell

Cray to Provide NOAA with Two AMD-Powered Supercomputers

February 24, 2020

The United States’ National Oceanic and Atmospheric Administration (NOAA) last week announced plans for a major refresh of its operational weather forecasting supercomputers, part of a 10-year, $505.2 million program, which will secure two HPE-Cray systems for NOAA’s National Weather Service to be fielded later this year and put into production in early 2022. Read more…

By Tiffany Trader

‘Billion Molecules Against COVID-19’ Challenge to Launch with Massive Supercomputing Support

April 22, 2020

Around the world, supercomputing centers have spun up and opened their doors for COVID-19 research in what may be the most unified supercomputing effort in hist Read more…

By Oliver Peckham

Summit Supercomputer is Already Making its Mark on Science

September 20, 2018

Summit, now the fastest supercomputer in the world, is quickly making its mark in science – five of the six finalists just announced for the prestigious 2018 Read more…

By John Russell

15 Slides on Programming Aurora and Exascale Systems

May 7, 2020

Sometime in 2021, Aurora, the first planned U.S. exascale system, is scheduled to be fired up at Argonne National Laboratory. Cray (now HPE) and Intel are the k Read more…

By John Russell

TACC Supercomputers Run Simulations Illuminating COVID-19, DNA Replication

March 19, 2020

As supercomputers around the world spin up to combat the coronavirus, the Texas Advanced Computing Center (TACC) is announcing results that may help to illumina Read more…

By Staff report

  • arrow
  • Click Here for More Headlines
  • arrow
Do NOT follow this link or you will be banned from the site!
Share This