SGI: Going Broadband or Bust?

In the Web's first inning, Silicon Graphics Inc. was the potential home-run hitter that struck out

In the Webs first inning, Silicon Graphics Inc. was the potential home-run hitter that struck out. But CEO Robert Bishop, who has run the company for the last two years, sees a brilliant Internet future for SGIs high-performance Unix systems in delivering rich broadband content. That market hasnt yet materialized, though, and for now SGI must survive the current tech-spending drought without sustaining much more damage: This month, the company eliminated about 1,500 more jobs — reducing staff to 4,000 — after it laid off 1,000 employees earlier this year. Bishop spoke with Matrix Editor Todd Spangler.

In the near term, whats your biggest challenge?

What we have to be able to do is ride through the current macroeconomic downturn and make sure were still here when the economy comes back. Cash flow and profitability are intensely on our mind right now. For us, its a survival issue.

Would you say SGI missed an opportunity with the Internet?

Yeah, because in 1994, we ran 50 percent of the worlds Internet sites. The World Wide Web started with Tim Berners-Lee at CERN, which was an SGI site, and we were quite close to his work and his efforts. So we did have insight into what was happening, but we stayed confined to the scientific and engineering space. We didnt follow the path into the commercial space, and you could argue that that was a mistake. . . . However, we do have a rendezvous in the future with the Internet. Its on the roadmap. When the Internet really becomes broadband, we have some very interesting capability we can deliver over the bandwidth.

Why will SGI be a competitive player in the broadband world?

Its in the performance of our servers. You have to be able to stream coherent, cohesive content to hundreds of thousands of users. Thats the expertise weve developed because weve serviced all these Hollywood studios — [Walt] Disney [Pictures], Pixar [Animation Studios], ILM [Industrial Light & Magic] — who wanted the same thing. The Sun Microsystems of the world are still dealing with the narrowband, document-oriented Web. Im talking about when the content is fully visual, immersive, interactive. That, to me, is where SGI fits in, because the need for processing is going to increase a thousandfold. The idea of a fully immersive Internet is within five years from where we are now.

But couldnt you sell servers to Web sites today?

Well, we do handle some of the Internets biggest sites. We are Travelocity.coms entire Web site. The issue is we dont do the thousands or millions of sites out there. . . . We do have an emerging opportunity to take our high-density server products, based on the low power consumption of our MIPS [million instructions per second] chips, and put those things together for ISPs and ASPs [application service providers]. If we had the right marketing partner or OEM [original equipment manufacturer] partner, wed take that technology into the ISP space. Were in dialogue with several potential partners.

What will be your pitch to service providers?

The current problems we have solved are really big data problems. The satellites of NASA generate 1 terabyte of data per day, and we manage all of that. The question is, when will the ISPs need that? Something tells me it will be pretty soon. We think as that world stumbles with [managing] big data, we are the only answer.