SGI Is Down, But Not OutSGI Is Down, But Not Out

After a brutal fiscal year, high-performance computer maker Silicon Graphics Inc. is upgrading its product line and bringing down prices in hopes of reclaiming some lost market share.

Cornell University, Oak Ridge National Laboratory, Pacific Northwest National Lab, the University of Minnesota, and the University of Washington have placed orders for Altix 3000 systems based on Intel's just-shipped Itanium 2 processors, some capable of supporting a larger, 6 Mbyte cache, SGI said last week. SGI next week plans to debut a lower-priced version of its RISC-based Onyx visualization computers designed to compete with inexpensive PC clusters. The system will support applications in auto manufacturing, medicine, and oil exploration.

SGI lost nearly $35 million during its third quarter ended March 28, as sales declined more than 30%, to $217.1 million. The company claims about 6% of the $4.7 billion high-performance computing market, according to IDC, behind Hewlett-Packard, IBM, and Sun Microsystems, and ahead of Dell Computer, which is gaining by selling clusters of PCs for technical applications. SGI is due to report fourth-quarter and year-end results on July 24.

"They lost share last year," IDC analyst Christopher Willard says. But SGI's NUMAflex technology, which provides a scalable, single-system image, remains a selling point. The company is in the running for grant money from the Defense Advanced Research Projects Agency, which wants to develop supercomputers that can sustain more of their peak performance over time.