Features:

EXCLUSIVE INTERVIEW WITH SGI'S MARKETING VP GREG ESTES
by Alan Beck, Editor-in-Chief

To learn more about the changes noted in the HPCwire article "SGI RESTRUCTURES: CUTS TO $100M QUARTERLY" (see Vendor Spotlight in this issue), we interviewed the firm's marketing VP Greg Estes.

HPCwire: How many employees were affected, in which positions, and in which GEOs primarily?

ESTES: This is a restructuring of our organization to match the product strategy and financial model of our company. This will affect approximately 600 employees or 16% of the overall workforce. Combined with the earlier May restructuring, this results in 1,000 fewer employees or a reduction of 25% of the workforce worldwide.

HPCwire: Will there be layoffs in all functions and/or locations?

ESTES: All of our functions and organizations across the board will be affected, but customer-facing positions (sales, in other words) will be affected the least. Most of the reductions will take place in our Mountain View headquarters.

HPCwire: What is SGI's business strategy moving forward?

ESTES: SGI has had a target focus since its inception on technical users: scientists, engineers and creative types. We don't try to sell e-commerce machines to EBAY or be the servers behind Bank of America's ATM machines.

• We continue to focus on technical users in our five key vertical markets:
• Government and Defense,
• Science, which includes everything from bioinformatics to weather prediction to education and research,
• Manufacturing, which is Automotive, Aerospace and General Manufacturing,
• Energy, which is primarily oil and gas research, and
• Media, which is broadcast and production.
• We think these target markets will continue to serve us well, especially with the dot com bubble has burst that has caused customers to have an increased focus on their strategic core. Meaning, they are investing in product R&D and development of new approaches to gain competitive advantage in the market. They also have to invest in managing and harvesting the explosion of data that is occurring across these marketplaces.
• We believe that we occupy a unique position in the market. Customers like NASA tell us they couldn't do what they do without SGI. We have specific technical attributes of our hardware and software that make us well-suited for the technical space. For instance, our machines can support up to a thousand processors that share a single memory space, which is distinctly different from the way other vendors build their products.

HPCwire: And your product strategy?

ESTES: Recently, we've entered the Linux market and it's taking off for us quite well. We took our supercomputing architecture and married it to Intel's Itanium 2 processor and Linux. The result is a machine we call Altix that is literally the world's most powerful Linux computer. This is important for a number of reasons:

• It's attracting the attention of the Linux community because it provides a quantum leap in what can be accomplished using Linux. (We recently announced a program extend Altix servers to encompass a record 128 processors within a single instance of the Linux operating environment. Currently, a single node scales to 64 processors.)
• It's put SGI back at the forefront of the performance curve; continually leading in industry benchmarks, an Altix machine compares very favorably to an IBM Regatta or an HP Superdome.
• Because it's based on Intel processors and Linux, Altix is an industry-standard system for which we can create a much larger ecosystem. For instance, you can run Oracle on an Altix where SGI hasn't had a current port of Oracle for several years.
• Altix allows us to partner with Intel as a marquee player even though we are not a volume partner. They can claim the fastest supercomputer running Itanium 2 processors with our Altix system.
• Altix won "Best of Show" at LinuxWorld upon debut and was recently recognized as Linux Journal's "Product of the Year."

A second strategic focal area for us is in storage. Our storage business is growing in absolute terms even though we've had declining revenues, so of course it's becoming a much larger part of our business. We think the reasons are threefold:

• One, our customers are experiencing a data explosion as I mentioned earlier.
• Two, we have unique technology that allows our customers to connect systems from a variety of vendors (Windows, Linux, IRIX, Macs) to our system in a Storage Area Network but with one important difference from conventional SANs: We have a shared filesystem, that allows customers to have both fibre channel access speeds and they can work on the same files without making copies.
• Our shared filesystem, which we call CXFS, allows customers to see the content as one single file in their SAN, they do not have to copy files across platforms/operating systems. Customers can realize huge savings since they do not need as much storage (for storing multiple copies) and enables faster workflow throughout their facilities/organizations.
• The third reason is that with these storage solutions we have something compelling to offer new customers, or customers that haven't purchased SGI in some time.

The third and last key product strategy I want to highlight for you is in our visualization area. One major change for us that we just announced last month is our use of third-party graphics technology in our high-end visualization system. Specifically, we're using best-of- breed industry-standard graphics cards and marrying them to SGI- developed hardware and software. The result is a sharp increase in performance and a sharp decrease in price. We'll also be able to move this technology to Linux at the appropriate time.

HPCwire: How is your strategy different than a year ago?

ESTES: We didn't have Altix, storage is taking off, and we just introduced a new line of visualization products with the Onyx4 UltimateVision, Silicon Graphics Tezro systems.

HPCwire: In effect, you now are supporting two operating systems and two processors with a smaller workforce. How are you making sure this cut won't effect SGI's ability to ensure on-time product delivery and new product transitions?

ESTES: During the past year we have successfully hit our delivery targets for new products, shipping systems based on MIPS processors running IRIX as well as Itanium 2 processor-based systems running Linux. What's most significant is that the core design for SGI systems is based on global shared memory and built on NUMAflex. This system architecture was designed for MIPS/IRIX products and is leveraged across our Linux line as well.

HPCwire: What markets or customers still rely on the IRIX/MIPS platform? Which are moving to Altix?

ESTES: Among our target industries, the sciences, specifically universities and national labs, have been the early adopters of Altix. We are beginning to see early pick-up in manufacturing and energy markets as well. We expect government and defense as well as the media industries to continue for some time to stick with IRIX; wanting features such as OS maturity and the capture of specific HPC applications that differentiate IRIX from Linux. Clearly, there is customer demand for both types of systems and we're not going to force customers into a migration. If they want to move, great; we can help them get there. If they want to stay on IRIX, that's fine too; we'll continue to upgrade and ship Origin systems for years.

HPCwire: What is Silicon Graphics' product roadmap for both product lines?

ESTES: You can expect to see continued roadmap enhancements for the Origin line with faster processors and larger caches. There will be ongoing product line support well through the end of the decade.

• For Altix, you will see upgrades to new Intel processors as they are released and an expanded portfolio of products. SGI continues working with ISVs to tune their Linux applications to take advantage of Altix' advanced system architecture. We already have over 60 of the leading, commercially available technical codes ported to Altix, over two-thirds of which have optimized for the platform.
• New generations of Onyx-class systems utilizing Linux and Intel processors and UltimateVision graphics are planned for 2004.

HPCwire: Will the entire Silicon Graphics product line eventually move to Intel processors? When?

ESTES: That's not our plan. We're focused right now on bringing value to our customers on both product lines, with clear differentiation between us and our competition in terms of scalability, shared memory, I/O performance and visualization support.

HPCwire: Has Altix damaged sales of Origin or other current MIPS/IRIX products?

ESTES: In fact, Altix has helped Origin sales. The new line has given the company opportunity to re-engage with customers, some of which ended up expanding their Origin environments. As intended, Altix has been a complementary offering.

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