Having failed, in the words of CEO Rick Belluzzo, to turn its Cray Research Inc acquisition into a plus, Silicon Graphics Inc’s new bean counters will axe 1,000 of the company’s 10,500 staff, close plants and oversee the transition of the company’s key MIPS RISC-based graphics and supercomputer architectures to Intel Corp processors. Within a couple of years, it looks as if there will be no reason to buy a MIPS-based computer from SGI as its 3D graphics and visualization technologies will be available on WinTel systems costing a tenth of the price. They’ll also run a version of SGI’s 64-bit Irix Unix which will be up on Intel’s IA-64 instruction set chips in two years’ time. The first 32-bit WinTel Visual PC running the graphics technology on NT is codenamed The Borg and is due in the second half of this year. SGI says it will offer the functionality of its $35,000 MIPS/Irix Octane workstations for between $3,500 and $4,000. Belluzzo was at pains to argue though that SGI is not going WinTel, but the chilling subtext of yesterday’s news is an unmentioned cross-licensing agreement that gives Intel the right to build SGI’s graphics technologies into future versions of its CPUs. Although SGI gets rights to some unspecified Intel technology in return, Intel and its partners will clearly have the opportunity to eat all of SGI’s business in the very near future. We’re clearly watching the birth of another industry also-ran whose once feted technological prowess has been mortgaged to an Intel future and is destined to become a top-tier niche player at best. Former CEO Ed McCracken liked to say that his company built computers to make money, not count money, and that’s not going to change. SGI says it will never become a mainstream enterprise IT play, eschewing the types of industry and application-specific benchmarking other companies use to play leapfrog with each other.

By William Fellows

Most of the 45 million MIPS Technologies Inc RISCs sold last year went into embedded devices such as games consoles and printers manufactured by third parties. As it de-emphasizes its own MIPS future, SGI will sell 20% of MIPS in an IPO offering by the end of this financial year expected to value the concern at around $400m. The parts that will see out the last couple of years of SGI’s MIPS life – the R12000 and R14000 – will be upgraded every six to nine months, promised Belluzzo. The graphics technologies, including Onyx subsystems, will be revved every 12 to 18 months. SGI will also offload its Cosmo Software VRML unit to a third party or set it up as a free-standing subsidiary. Either way it won’t be investing in Cosmo after the end of its 1998 financial year this June.

Products, people, plants to be axed

The company’s 25 profit centers will be collapsed into six: NT and Unix workstations, high-end graphics, Origin and Cray servers; and services and support. They’ll be benchmarked against the competition. The desktop and server businesses will each account for around 40% of SGI’s revenue. It expects gross margins of 50%, operating expenses of 40%, and a 10% to 12% operating profit out of the server group, lower for the desktop group where operating profit will be between 7% and 9%. Currently gross margins are less than 40%, operating expenses are less than 30% and operating profit is less than 10%. Some buildings and possibly a manufacturing plant will be lost. Its sales force will be re-organized around six industries: communications, energy, entertainment, government, manufacturing and science. It will try to establish leadership or industry number two positions in a handful. There’s a hiring freeze in place and many of the company’s 5,000 products will be axed. It currently gets 75% of its annual revenue from 5% of its products. Component and some system manufacturing will be outsourced. The $750m cash pile will likely increase.

Hazy

Belluzzo left EVP and former Cray chief Bob Ewald – who must be alarmed at the fate of his former charge – to unveil the company’s technology roadplan. Within two years the company’s Octane and O2 workstation graphics technologies will be all be available on Intel IA-64 systems running on Windows NT or Irix. However they’ll get a fourfold performance boost with new MIPS chips by the end of next year. SGI says the Onyx2 technology family has at least a 15 year future ahead of it and will also get a fourfold increase in performance. It will be available on Irix-on-Intel by 2001 but not on NT. The company’s server and supercomputer strategy is more hazy, but for 2002 and beyond the company has already defined an evolution of its SN1 next- generation Origin interconnect technology that will support what it calls a super vector cluster architecture and perform up to 40 TFLOPS. What Ewald described as SV2 for super vector – although it’s previously been referred to as SN2 – will effectively supersede all four architectures SGI currently offers. It declined to say what instruction set SV2/SN2 supports but as SN1 supports Merced, SV2/SN2 will support Intel in some shape or form alongside vector processing, suggesting SGI and Intel are planning to co-develop a very high-end part incorporating vector processing for the supercomputer community. These systems will support vector, MPP and ccNUMA processing capabilities.

Fabric

To begin with, the 0.6 TFLOPS T90 and 0.006 TFLOPS J90 vector supercomputers will be migrated new generation of Cray’s CMOS chips that will deliver 1 TFLOPS in 2000 and 1.6 TFLOPS by 2001. ccNUMA clustering will be available for the vector processors later this year. The MIPS-based, 0.05 TFLOPS ccNUMA Origin servers will pick up R12000 and R14000 parts to deliver 0.1 TFLOPS in 2000 and 2 TFLOPS by the time it moves to IA-64 by the end of 2001. By that time the company will have expanded support from 128 to thousands of CPUs by incorporating the MPP technology from its 2.5 MFLOPS DEC Alpha RISC-based T3E system. Origin and T3E customers will be migrated to the Intel system running Irix and delivering up to 8 TFLOPS performance. This technology and the super vector systems will be migrated to SV2/SN2. The net of SGI’s server plans mean one-to-16 way systems will effectively run NT while everything above will be Irix. All will be ccNUMA distributed shared memory machines which use Craylink as general interconnection fabric and either MIPS or Merced based microprocessors. Some will boot big-endian Irix whereas others will run NT. SGI says it will provide across-the-board NT-Irix interoperability for integrating either system into their environment. Its commitment is to maintain a performance lead by a factor of two over Sun while its price/performance mark will remain double that of Sun’s. It estimates that with revenue of $2.89bn it has a 26% share of an $11.2bn market for Unix workstation, technical servers and supercomputers growing at 10% a year. It says 43% of the 500 sites in terms of raw performance available are SGI – 14 of the top 20 sites are its.

Secret OEMs

SGI’s plan to put Irix up on Intel must have been a swift one. This time last year CTO Forest Baskett and other engineers were telling us there was no plan to put Irix on Intel. SGI looks unlikely to get much help directly as no other companies use Irix. Other MIPS system vendors such as Siemens Nixdorf Informationssystemes AG’s Pyramid unit developed its own 64-bit Unix for its servers and is in any case set to move away from MIPS as soon as possible (CI No 3,388). NEC Corp’s ‘Golden Gate’ MIPS-based Unix operating system initiative has all-but petered out. Certainly SGI is not trying to set a Unix-on-IA-64 standard a la DEC/Sequent/Tandem; SCO or Sun. SGI says it’s being helped by Intel, Fahrenheit graphics buddy Microsoft Corp and some secret OEMs (NEC/SNI?).