Silicon Graphics bets future on Irix, NT

Belluzzo spent 22 years of his career at Hewlett-Packard Co. As executive vice
president and general manager of its $35 billion computer organization, he was responsible
for PCs, printers, plotters and scanners in addition to larger systems and consulting

He will try to bring Silicon Graphics back to profitability as it embarks on a new line
of business: desktop workstations built on Intel Corp. processors and running Microsoft
Windows NT.

Until now, the 16-year-old company built RISC workstations and midrange servers that
run Unix. Worldwide revenue last year was about $270 million.

In April, SGI announced an agreement with Intel to incorporate the Pentium II processor
as well as Intel’s forthcoming 64-bit chips and architectures in new SGI systems.

Belluzzo has a bachelor’s degree in accounting from Golden Gate University.

Susan M. Menke, GCN’s chief technology editor, interviewed Belluzzo from his Idaho
hideaway, where he said he occasionally works.

What’s more

Favorite place to work: Idaho hideaway

Last book read: “I didn’t.
It’s been

Last movie seen: “I can’t

Nickname: Rocket Rick

GCN: What’s your
business plan for Silicon Graphics in the government?

BELLUZZO: We’re trying to transform the company around what it’s done really
well in the past—visualization and high-performance computing.

In April, we started to define five elements: our vision, our market focus of which
government is a big part, our product strategy, our profitability and doing a better job
of infrastructure.

We’re well on the way to making the changes in direction in visual and
high-performance computing.

I want SGI to become the leader in integrating high-performance computing with big,
data-intensive applications.

You combine them with visual computing and make data into insight.

We’ve done divestitures and looked at our cost structure and changed our product
road map. We feel pretty good about where we’re headed in market focus.

Historically, our government business has been mostly federal. Probably half is Defense
Department and intelligence business, but we increasingly see opportunities outside the
federal space.

One big area of focus is strategic business analysis, extracting information from large
databases and data warehouses. That has a lot of application in state and local
governments, so we’re increasing our emphasis there.

GCN: Whose data warehousing
software do you use?

BELLUZZO: We tend to partner with companies such as Oracle Corp. and other database
suppliers, but we do have a data mining tool called MineSet that helps extract and
communicate information graphically.

We mostly work with partners, but we do have some of our own software to deliver a more
compelling solution.

GCN: What do your DOD and
intelligence customers do with your hardware and software?

BELLUZZO: We’re seeing simulation and flight training. We’ve done some work
with NASA on the Mars Pathfinder mission, and some work with the Census Bureau. The
National Institutes of Health uses our systems to investigate medical techniques. The
National Weather Service is another customer.

It seems like I have visited almost every federal agency in the last few months. I have
been to Washington once or twice a month seeing how agencies use our graphics desktop
systems, our Origin servers and our [Cray Research Inc.] supercomputers.

The government segment is the largest portion of our business and the area we’ve
been the most focused on. The federal segment is more than 20 percent.

GCN: You have updated your 64-bit
Irix operating system and announced plans to develop products using Intel chips. You seem
to be pulling back a little from extending the supercomputer line you acquired from Cray.

BELLUZZO: One of the two pillars we’re going to lean on is high-performance
computing, so we have not backed away. But we have determined that supercomputing needs to
be redefined.

The market has been under incredible pressure.

We’ve talked about how to bring together the strength of our Origin distributed
computing products with traditional supercomputers and, over time, develop a more
integrated environment.

SGI’s shift to Microsoft Windows and Intel is only on the desktop. In addition to
Unix desktop computers, we’re also going to make desktop systems that run Microsoft
Windows NT.

GCN: But you’ve spun off Mips Technologies Inc., which makes your workstation
and server processors.

BELLUZZO: We spun off the consumer part, which makes the processors for Nintendo and
consumer devices we don’t think are central to our business.

GCN: Your plans to jump onto the
Intel desktop follow several years behind companies such as Hewlett-Packard Co. and
Intergraph Corp. of Huntsville, Ala. Is there enough business for all the Unix companies
and all the PC makers?

BELLUZZO: There’s definitely plenty of business.

The product we bring out will be very distinctive. It will be in many ways what you
expect of a PC in price points and its ability to run applications, but we intend to have
an SGI product with the graphics and functions that make it really unique.

GCN: Is there a name for this yet?

BELLUZZO: Not yet.

We intend to build in the basic graphics technology, the work we’ve done with
Microsoft Corp. on Fahrenheit [rendering library] and a number of other elements.

GCN: Will it be a multiprocessor?

BELLUZZO: I don’t want to get into details, but it will be a high-performance
machine. Just think of graphics, media and performance. They are what will distinguish it
from the basic, run-of-the-mill PC.

I would argue that products from Hewlett-Packard, Dell Computer Corp. and Compaq
Computer Corp. are not really workstations. They’re high-end PCs. Ours will be more
than a fast PC.

GCN: Are you targeting mainly
graphics professionals?

BELLUZZO: Initially, we will aim at the higher end. We haven’t decided how deep we
will go into the marketplace.

GCN: Meanwhile, what’s going
to happen to your Unix business?

BELLUZZO: The real need today is for products that we call visual workstations. Our
whole desktop strategy is led by visualization. We’re going to apply that to the Unix
desktop as well as to the NT desktop. We’re going to present them both in a way that
gives them as much interoperability and compatibility and consistency as possible.

GCN: What are your plans for the
64-bit Merced chip?

BELLUZZO: We’re moving Irix to Merced. The delay in Merced will certainly affect

GCN: How about Java and the Web?

BELLUZZO: Java is an important development environment. We’ve worked to integrate
it in our offerings and will continue to do that.

GCN: Do you expect any year 2000
effects on your installed base?

BELLUZZO: We have a year 2000 program that, if customers work with us on, they’ll
be fine. You can find out more of the details about our consulting services on our Web
site [].

GCN: What’s your opinion on
industry’s year 2000 liability?

BELLUZZO: I think it’s a serious issue that people have been working on for some
time. I don’t know about other people’s products, I’m focused on SGI
products, and we’re doing the best job we can to make sure that internally we handle
the year 2000 with all our suppliers and that externally we have the right program.

We’re a young company; we don’t have a lot of legacy to deal with. I know
it’s a growing issue for the government because of the huge number of legacy systems.

GCN: What is the future of
operating systems?

BELLUZZO: Let’s start with Irix. We think it will continue to play an important
role on the desktop and will be extremely important in the server environment. Our servers
and supercomputers scale up to very large configurations.

NT is very important on the desktop, and we will continue to evaluate it as an
operating system for other areas. But our focus today is Irix for servers and
supercomputers, and Irix and NT on the desktop.

GCN: How about the future of
monitors? CRTs or LCDs?

BELLUZZO: The LCD is definitely going to grow in importance because of space and other

GCN: Some of your competitors are
turning away from making hardware and becoming more like software developers. Is there any
chance you might step out into new kinds of applications?

BELLUZZO: Not so much. We’re a client-server and supercomputer company. We’re
involved in a number of areas where we do use some of our own software, but we don’t
intend to become an application software provider in any significant way.    


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