SGI names new CEO

Silicon Graphics Inc. has tapped long-time Hewlett-Packard Co. exec Richard Belluzzo to be its new chairman and CEO.

Belluzzo formerly served as executive vice president of HP's Computing Division, a post he assumed in the summer of 1995. At HP, he oversaw operations for all of HP's computer products, including printers, plotters, scanners (PC workstations and consulting), as well as the software and services group.

HP said today that Chairman Lew Platt would serve as interim head of the computing division.

SGI (SGI) has struggled in recent months, and yesterday declared a $31 million net loss for the second quarter, due in part to restructuring charges. Last October, SGI announced plans to lay off 850 of its employees -- 250 independent contractors and the rest regular staff members. At the time, SGI estimated it would take a charge of about $50 million.

SGI, which has been losing market share in the workstation business to Sun Microsystems Inc. and others, said its server business grew 11 percent year over year, with the potential for stronger growth.

"Silicon Graphics is an exciting company in a rapidly growing industry," Belluzzo said in a release. "The company is well-positioned with superb technology, a respected brand, powerful capabilities in visualization and high-performance computing, a strong product line soon to span Windows NT as well as UNIX, a large installed customer base and talented employees. I am delighted to have this unique opportunity and I'm confident I can provide the leadership to help Silicon Graphics improve its performance and achieve its extraordinary potential in the years ahead."

Analysts were mixed about his future at SGI.

"Is this a positive for SGI? Definitely," said Jerry Sheridan, analyst at Dataquest in San Jose, Calif. "One of the other things I think he'll bring is dual experience from technical and commercial side that will definitely be a plus. SGI has historical strength in the technical and entertainment markets, and they were just making inroads into the commercial arena. Rick will bring that experience with him."

But others said that Belluzzo may be hampered by his HP upbringing.

"It looks like SGI needed a turnaround manager and HP is not the place you would go for a turnaround manager," said Rob Enderle, analyst at Giga Information Systems. "To do what they need to do to move SGI forward will probably require layoffs, cutbacks, and things that very difficult for someone with an HP heritage to do, simply because they don't do a lot of that. He'll be learning on the job and that's risky."

Enderle pointed to the troubles that former HP Vice President Bob Frankenberg had when he took over the top spot at Novell Inc. "Frankenberg was learning on the job and that clearly didn't work well," he said.

Analysts were mixed about his future at SGI.

"Is this a positive for SGI? Definitely," said Jerry Sheridan, analyst at Dataquest in San Jose, Calif. "One of the other things I think he'll bring is dual experience from technical and commercial side that will definitely be a plus. SGI has historical strength in the technical and entertainment markets, and they were just making inroads into the commercial arena. Rick will bring that experience with him."

But others said that Belluzzo may be hampered by his HP upbringing.

"It looks like SGI needed a turnaround manager and HP is not the place you would go for a turnaround manager," said Rob Enderle, analyst at Giga Information Systems. "To do what they need to do to move SGI forward will probably require layoffs, cutbacks, and things that very difficult for someone with an HP heritage to do, simply because they don't do a lot of that. He'll be learning on the job and that's risky."

Enderle pointed to the troubles that former HP Vice President Bob Frankenberg had when he took over the top spot at Novell Inc. "Frankenberg was learning on the job and that clearly didn't work well," he said.

Belluzzo replaces SGI chairman Ed McCracken, who announced his intention to step down in October.

SGI, based in Mountain View, Calif., can be reached at www.sgi.com/.