LinuxWorld: SGI shifts from NT to Linux

As expected, SGI Tuesday announced a broad restructuring plan, one that scales back the range of the company and will result in the loss of as many as 1,500 employees.
Written by Carmen Nobel, Contributor

The plan includes a few major actions, indicative of the company's plan to bet big on the Linux operating system. "We're putting more energy into fewer focuses," said SGI Chairman and CEO Rick Belluzzo during a press conference this afternoon. "It's about focus -- simplifying our business and extending our reach." Referring to "the new world order that's caused by Linux," Belluzzo announced the following plans:

* The company will spin off its Visual Workstation line of Windows NT-based workstations into a separate business. SGI (formerly Silicon Graphics) got into the NT business just 18 months ago, but the initial manufacturing process was a nightmare of late shipments, and sales proved disappointing.

Now, SGI plans to partner with another computer company to jointly assume responsibility for the NT product line. Officials said the partner will be revealed in the next 90 days.

* SGI also will form a separate business unit for its Cray family of high-end computers and for its future vector-based products. SGI is looking for partners to run this business, but plans to follow its current road map for the Cray products.

* SGI will create a business unit based on broadband Internet systems. This will include server hardware among other devices.

* SGI will spin off its MediaBase media streaming application, engineering teams and technologies to a newly formed company in which SGI will hold a significant minority stake.

* With the help of Veritas Software, SGI will work to add key features of its Irix operating system to the Linux platform. Currently, Irix runs on the MIPS platform. Once SGI switches entirely to Intel's IA/64 platform, that will be the end of Irix.

* SGI is also forming an alliance with NEC to increase its market share in Japan.

The company met with financial analysts in New York Tuesday to discuss the changes. SGI shares recently fell $3 1/4, or 20 percent, to $12 15/16.

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