SGI to debut NT product next year

In another stage of a long sweeping transformation of its technology offerings Silicon Graphics Inc. sometime next year will introduce its first workstations based on Microsoft Corp.'s Windows NT operating system and Intel Corp. processors.

The move to Windows NT is part of SGI's larger strategy to lengthen its reach in the technical computing arena.

During the last several years SGI has expanded its product line from high-end 3-D graphics computers - best known for running battlefield simulation applications and generating Hollywood special effects - to encompass a full range of workstations and servers.

"We want to be the leading technical workstation company period " said Robert "Bo" Ewald executive vice president of SGI's Computer Systems organization. "We have done extremely well in the graphics business and we want to expand on that to the broader technical arena."

SGI's Windows NT systems Ewald said will be high-performance in design differentiated with advanced graphics and media features for technical and creative professionals. "These efforts aren't replacements for our current Unix systems but represent additional opportunities beyond our growing Unix workstation business " he said.

According to Ewald SGI's strength is the server business with its presence in the market increasing as the servers get bigger. For example the company estimates it has a 25 to 35 percent market share at the low end of the technical server market a 40 percent share at the $1 million price point and a 60 to 70 percent share of the supercomputing business.

Complementary Tools

To complement this market SGI wants to provide data management and analysis tools. The company's technical users - whether scientific and engineering or battle simulation - "are generating a lot more data than they ever have " Ewald said. SGI is developing tools to manage the flow of data in battle simulation and other complex applications.

SGI also is developing data analysis tools to help users get more information out of their data. In July the company introduced the second version of MineSet a suite of data analysis and visualization tools.

In the federal market the growing product offering is bolstering SGI's business development efforts outside the specialized graphics-centric arena said Anthony Robbins vice president of SGI's government area.

For example earlier this year the Navy awarded SGI a blanket purchase agreement under its Tactical Advanced Computing-Joint Workstation program. With its Cray Research Inc. division the company also has a piece of all four awards under the Defense Department's High Performance Computing Modernization program. "In the past SGI hasn't participated in any of these [large procurements] " Robbins said.

The company also is looking to expand its presence in the civilian agencies beyond its installed bases in the Energy Department and NASA. "The [high-performance] server business in the civilian agencies is very important to them and a good opportunity for us " Robbins said. He declined to identify specific opportunities.

SGI's product strategy began paying off during the last year. This summer during the fourth quarter of its fiscal year the company reported its first quarter with a billion dollars in revenue.

SGI attributed much of that growth to the success of its midrange Octane workstations and its high-end Origin 2000 servers.

Federal Contribution

The federal government contributed significantly to that growth according to the company. SGI's workstation business in the government market grew by about 12 percent last year. In the defense imaging and geographic information sciences arenas its business grew 217 percent Ewald said.

However industry observers are not sure how SGI will fare in the years ahead particularly within the Windows NT market. In particular analysts said SGI faces the same problem every vendor offering Windows NT and Unix machines is encountering: differentiating between the two platforms especially at the low end.

With Windows NT growing steadily in power "your Unix boxes may not be that much more better than the NT boxes " said Greg Weiss a research analyst for graphics and workstations at D.H. Brown Associates Port Chester N.Y.

The Windows NT customer mind-set is that "they clearly settle for `good enough [performance] ' " rather than pay a premium for a Unix box Weiss said.

Customer Base

Jay Moore a senior research analyst for personal workstations at the Aberdeen Group said SGI is unlikely to draw new customers with a Windows NT product although it may satisfy SGI customers who are interested in the Windows NT platform. "People who are already devoted to NT by now have found a product or vendor they are comfortable with " Moore said.

At the low end of the market SGI does best in cases where "there are requirements for some kind of differentiation " Robbins said.

In any case the company recognizes the growing strength of the Windows NT/Intel product set and its appeal to customers. While SGI plans to continue focusing on its Unix/reduced instruction- set computing solutions it is not wed to any particular technology company officials said.

"If our customers are going to require us to go to an Intel-based NT solution we don't have a lot of emotional issues with doing so " Robbins said.

However MIPS SGI's RISC chip "will remain as our baseline processor " Ewald said. "The design target for MIPS is different than Intel [processors] emphasizing floating-point operations and high-system I/O " he said.

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