SGI's plight reflects rapid growth, strategy discord: as McGracken steps down as chief, his interests are also blamed for woes

Article Abstract:

The interests and inclinations of Silicon Graphics (SGI) Chmn and CEO Edward R. McCracken played a significant role in the computer manufacturer's financial slide, according to insiders and outsiders. SGI's current market capitalization stands at $2.6 billion, compared to rival Sun Microsystems' $12.3 billion amount. This represents a dramatic turnaround since 1994, when SGI exceeded Sun in value. Guiding SGI had evolved into hands-on, operations-oriented skills that conflicted with McCracken's interests in strategy and creativity. Problems multiplied when influential COO Tom Jermoluk departed SGI in 1996 to join a Silicon Valley startup. McCracken, CEO since 1984, acknowledges an error in hiring a successor to Jermoluk. SGI required strong oversight as it shifted into wider business applications such as high-powered workstations and servers. Other pitfalls include too-rapid growth, overly ambitious expansion plans and high-level strategy discord, according to the insiders and outsiders.

Company executive, Computer executives, Company Business Management

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Linux operating system gets big boost from support of H-P, Silicon Graphics

Article Abstract:

Silicon Graphics Inc. and HP announce they will use free Linux operating system software in some of their server computers built around microprocessors from Intel Corp. The operating system, developed by Linus Torvalds in 1991, has become quite popular because of its celerity, simplicity and because its 'source code' blueprints are available, allowing modifications to be made. Computer makers are under pressure to incorporate Linux in some of their servers. Silicon Graphics and HP also must honor the contracts they have with Microsoft and the Linux software is a direct threat to Microsoft's Windows NT software. A contract arrangement with Red Hat Software Inc. allows HP to offer Linux software on some of its server computers. There are no plans to incorporate Linux in desktop computers because the software can still only be used by those with technical knowledge.

Product development, California, Hewlett-Packard Co., HWP, UNIX

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Staying independent may be hard for SGI; stock declines nearly 13%; firm seen as niche player with uncertain future

Article Abstract:

Silicon Graphics Inc. (SGI) is looking toward an uncertain future. Chairman and CEO Richard Belluzzo announced his resignation on Aug. 23, 1999 and leaves to head Internet operations at Microsoft. Robert Bishop has been appointed Mr. Belluzzo's successor at SGI and immediately stated that he was not planning to ready the company for sale. SGI, a 'second-tier' computer maker, has lost market-share in the high-end graphics computer market and many analysts feel it will be unable to compete if it remains an independent entity. SGI, with assets of $1.8 billion, $571 million of which is cash, would be a sweet takeover target for a larger computer company. Robert Bishop, SGI's largest individual stockholder, says that his plans include rebuilding SGI not selling it, with a commitment to a revised company strategy announced at the beginning of August.

United States, Strategy & planning, Executive changes & profiles, Human resource management, Appointments, resignations and dismissals, Company business management, Company personnel management, Belluzzo, Richard, Bishop, Robert

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