
The Sad Saga of Silicon Graphics (1997) - gdubs
http://www.businessweek.com/1997/31/b35381.htm
======
fernly
From what I saw as a humble member of technical staff, the place was packed
with really smart technical people, some of the sharpest people I ever worked
with. One thing the management did well was to recruit and retain a very high
proportion of really good people in technical staff and the first line of
management. The result was some awesome (for its time) hardware and great
software (IRIX).

Top management was apparently locked-in to their original winning formula, to
build high-end equipment and sell it to the "professional" market that needed
its capacities. It was apparent to anyone technically aware that the narrow-
margin PC hardware was rapidly eroding the performance difference that
justified the higher-margin SGI gear.

I seem to recall that an in-house project to build an SGI graphics card for
the PCI bus was scuttled, with the result that several of the people who had
worked on it left to form a PC graphics card company.

~~~
Roboprog
Strangely, I worked at a place that did batch data processing on IRIX in the
mid to late 90s. While we didn't even use the graphics capability of the
machines, I did notice, at least in 95, that they were a hell of a lot faster
than PCs (although the DEC Alpha that I used at a previous job sure gave them
a run for the money).

I don't know what the price difference was between the servers, but in 99 we
got new servers from IBM. We learned from personal experience that the way to
pronounce IBM flavored unix is "aches" (AIX). I missed IRIX after that change
over, regardless of the hardware price-performance ratio. I also missed having
a workstation that ran the same architecture as the prod server. Sharing a dev
server sucks, as there's always some jerk who will fill up the disk.

------
martinpw
I was at SGI via a software subsidiary from 1996-2004 so just at the peak and
then riding down the long decline. I remember going to Siggraph in I think
1998 and seeing nothing but SGI machines in every booth on the show floor.

One thing I recall is that at one point everyone at the company was told to
read "The Innovator's Dilemma", which is of course the tale of large dominant
companies having their market share eaten from below. Some people say SGI
didn't see it coming - I think what was interesting was that they did see it
coming but still structural issues prevented the taking of any effective
action (for example salesforce commissions continued to encourage sales of
large systems rather than the low end machines they really needed to push at
the point.)

There was also an internal news group called sgi.bad-attitude where you got to
find out what was really going on in the company. I believe the idea was
brought over from Netscape via Jim Clark, but it was impressive to have a
forum where you could say just about anything and not be censored. That is
where I learned things were over long before it became apparent to the outside
world, or even much of the company.

~~~
mercer
> Some people say SGI didn't see it coming - I think what was interesting was
> that they did see it coming but still structural issues prevented the taking
> of any effective action (for example salesforce commissions continued to
> encourage sales of large systems rather than the low end machines they
> really needed to push at the point.)

It's interesting how knowledge of a (potential) problem often does not protect
against that problem. As a psychologist it's one of my biggest fascinations:
how people who work with addicts can become addicts themselves, how people who
know of the 'evils' of racism are still susceptible to it, or how people who
are professional psychologists do not deal with their own issues.

~~~
pionar
> how people who are professional psychologists do not deal with their own
> issues

My dad was owned a car mechanic's shop. One of the truisms in that industry is
that mechanics often have cars in the worst shape, because they're so busy
taking care of other people's cars that they just don't have the motivation or
time to deal with the problems of their own car. Perhaps a similar phenomenon?

~~~
lepht
> Another name for this is "vocational irony", which is a form of situational
> irony.

[http://tvtropes.org/pmwiki/pmwiki.php/Main/TheCobblersChildr...](http://tvtropes.org/pmwiki/pmwiki.php/Main/TheCobblersChildrenHaveNoShoes)

------
graycat
It's an old and standard story: High end, niche, special computer hardware is
soon overtaken by low end, broad market, common computer hardware.

Why? Because the low end, etc. has so many more customers that, so far with
Moore's law, etc., the much greater investment in progress in the low end,
broad market, common computer hardware wins against the much smaller
investment in the high end.

Or, as was explained to me once, as maybe no more than a hypothetical example,
invent a Lisp chip. Great. When running Lisp, beat the pants off all the
general purpose processor chips. But just wait until the general purpose
processor chips are a factor of 10 times faster and then lose out because the
small volumes of the Lisp chip can't keep up with, say, Intel heading for 7 nm
or some such.

Besides, for graphics, where get the big business volumes, for the high end
engineering graphics workstations for high end engineering or for millions of
bored boys not old enough to shave yet who just love playing video games?

~~~
yen223
See also: the iPhone vs Android phones.

~~~
mercer
Interesting. Perhaps this is why I Apple appears to be focusing even more than
previously on being a high-end consumer product company more than relying on
its vertical integration and solid hardware.

There might not be room for an SGI in a world of rapidly improving, cheap,
low-end technology, but there might always remain a place for a 'BMW/Porsche'
company.

------
rdtsc
I was an intern at a CAD company back in the late 90s, and saw how in a short
period of time SGI workstations had been replaced by Windows NT machines with
better and faster graphics cards.

You could tell SGIs were nice, a good solid build, but their time was over.
They were way too expensive. I think we even leased them because buying them
was too prohibitive.

But I did have fun discovering by accident the file manager from Jurassic Park
( [http://fsv.sourceforge.net/](http://fsv.sourceforge.net/) ) on it. For
whatever reason, I remember being really excited about that.

~~~
Animats
It was a surprisingly fast transition. I was working on physics engines for
animation back then. In 1997, I visited Sony Pictures Imageworks in LA, where
they had about 90% SGI workstations, 10% NT machines. Two years later, the
ratio had reversed.

What killed SGI workstations was the gamer graphics boards caught up with the
high end. There used to be a high end graphics market - SGI, Evans and
Sutherland, Dynamic Pictures, Fujitsu, Lockheed. It was killed when the low
end got good.

SGI might have survived that, but they made a number of bad decisions,
including a sale/leaseback real estate deal with Goldman Sachs which locked
them into long-term leases at the worst time in the market. SGI tried selling
a PC that ran Windows NT, for something like $12,000. I told their sales guy
that wasn't going to fly. It didn't.

Most of Google's buildings in Mountain View are old SGI buildings. The
Computer Museum was SGI's Digital Studio division, which never accomplished
much other than installing networks for some animation studios.

~~~
dagw
I still remember back in 1999 when an animator at a studio a worked at showed
up with a brand new Geforce card he'd just bought. We grabbed one of our NT
machines, popped out whatever high end card was in it, put in the Geforce card
and started up Maya. Watching Maya run well enough to get real work done on a
card that cost a fraction of what a 'real' graphics card cost was pretty
amazing. Hell for many of our common work loads there was no real difference
in performance at all. Combine that with the recently released Pentium 3 CPUs
and you could build yourself 3D graphics workstation out of cheap commodity
parts that could really hold its own.

------
_delirium
A minor bit of the story that postdates this 1997 article: in the late '90s,
SGI's strategy to recapture the high-end workstation market was to hitch their
horse to Intel's new Itanium architecture, which they thought would allow them
to position their boxes as a cut above the performance of commodity x86
workstations. That strategy may or may not have worked if the Itanium actually
had x86-beating performance, but since Intel never delivered a performant
Itanium it definitely didn't work.

------
nla
This article does not even scratch the surface.

Sorry but Win NT had nothing to do with it.

Sale/lease back of the campus to Goldman who then turned around and sold to
Google for 3x what they paid for it.

2 bankruptcies. You don't even want to know what went on there.

The whole thing was a giant train wreck.

------
mathogre
Can you say Vermel? VRML? That's Virtual Reality Markup Language. SGI was the
champion of VRML, with Sony a somewhat distant second. It was really cool.
Imagine 3D multi-media environments in a web browser. You could download 3D
clip art for free. :D While SGI optimized VRML for the O2, it worked
acceptably on a _cough_ Windows machine. For a while, each week SGI produced 2
VRML animations with "Floops".

I was into VRML. It was great. We even had a couple SGI reps visit our
company, demonstrating VRML and the O2.

Then one day they dropped support of VRML. That was the day I walked.

~~~
agumonkey
Hehe it's weird and sad that this was too much too early. Computers, OS and
browsers couldn't do much with VRML at the time, even though it's almost a
fully reactive, js scriptable, 3D DOM. Also the web wasn't as mainstream, so
VRML was in the fog (I only got to use it in college and because I was a CGI
fan)

------
gebl
SGI's biggest mistake was selling Cray Research's business division to Sun.
These became Sun's E10k machines and got them a tun of business outside of the
desktop workstation market. It is probably what kept Sun around so long and
why Oracle wanted to buy them.

[http://articles.baltimoresun.com/1996-05-18/business/1996139...](http://articles.baltimoresun.com/1996-05-18/business/1996139090_1_cray-
research-sun-computers-business-computer)

~~~
i_am_ralpht
SGI wouldn't have been able to manage that business as well as Sun did; at
least the E10K was successful somewhere.

~~~
bcantrill
This is absolutely true. SGI was trying to decide between shutting down Cray
BSD entirely or shunting it off to Sun -- who was really the only possible
buyer (their product was based on SPARC and Solaris, even when at Cray). So
SGI wasn't going to make a nickel off of that product, and as such, it remains
one of the best acquisitions in the history of the industry: purchased for
less than $10M (I'm not sure the exact figure was ever disclosed), that
product line did $1.2B in top line in its first year at Sun -- and it's hard
not to have fond memories of that year. (Speaking personally, debugging a
nasty performance problem on an E10K in December of 1997 helped to directly
inspire DTrace[1]; I will always remember that machine fondly, despite its
many quirks.)

[1]
[http://queue.acm.org/detail.cfm?id=1117401](http://queue.acm.org/detail.cfm?id=1117401)

~~~
gebl
Right. Selling to Sun was the right thing for getting some nice hardware out
there. Just saying, it gave Sun quite a competitive edge - probably bad idea
from a business perspective. I was at Sun in that timeframe too, but not
working on the E10ks :-)...

------
Tloewald
Back in the day, we used to laugh at how awful IRIX was (a colleague who used
an SGI box to run an F-18 flight simulator said IRIX leaked 512MB of RAM a day
on idle -- back when 512MB of RAM was more than any desktop computer had; we
had SGI sales reps visit our office and just getting their presentation
software to work (on their hardware) was a major production. Essentially, once
3D acceleration went mainstream the writing was on the wall -- within 3 years
of the first 3dfx video cards, a game box had more graphics horsepower than
tens of thousands of dollars worth of SGI junk, and 3DS Max was enormously
more productive for most things than Power Animator/Maya (Maya has improved a
lot).

The company I worked at in 1999 did the special effects for season one of
Farscape on SGI. They were underbid on season two by a factor of two by Animal
Logic (across the street) doing everything on fast PCs running 3DS Max.

 _Edit_ : and when the writing was on the wall, SGI decided to go downmarket
and fight Apple on its home turf -- porting its software to NT and competing
against PC workstation vendors already running AutoCAD and 3DS Max. This
allowed everyone to see the emperor had no clothes -- SGI's NT boxes were half
as fast and twice as expensive as name brand competitors, and they were
charging $20k for a software license.

~~~
gdubs
> a game box had more graphics horsepower than tens of thousands of dollars
> worth of SGI junk

Interestingly, at least one of those game boxes (Nintendo 64) was actually
powered by SGI technology. [1]

1:
[http://en.wikipedia.org/wiki/RCP_(chip)](http://en.wikipedia.org/wiki/RCP_\(chip\))

------
davepeck
My first full-time job out of college was as an engineer at SGI in Mountain
View. This is now Google's campus!

It was the summer of 1999. You can imagine how it went.

In retrospect, there _was_ a silver lining:
[https://davepeck.org/2009/02/11/the-luckiest-bad-
luck/](https://davepeck.org/2009/02/11/the-luckiest-bad-luck/)

------
fit2rule
Still got my SGI machine. I boot it up every now and then, just to have a
wonder about what it would have been like if SGI had just pushed a bit harder,
made a laptop, beaten Apple to the "coolest unix workstation vendor in the
world" target, and so on. Frankly, I'd rather be typing this message on an SGI
laptop than a MacbookPro, but that's history for you.

~~~
justincormack
There was a Sun laptop around then, although very expensive.

~~~
ibisum
There were a couple of SGI Indy laptop prototypes in the works too, but I
guess they didn't go anywhere. But .. just imagine this, all you althist'ers:
what if SGI had been the one to release the tiBook, instead of Apple, and for
a good price? Would we all be going into SGI stores and drooling these days? I
bet that could've happened .. the spirit was there at SGI, even if the
management wasn't. (It should also be noted that a lot of that spirit went
elsewhere when SGI exploded: Transmeta, Nvidia, AMD, etc. Some good SGI talent
even went to Apple! So .. there is a bit of SGI DNA all over the place these
days, in fact ..)

------
mmpozulp
This is a really interesting article. SGI used to be a king in the Bay Area
and you can still see the history if you look around. Some of Google's signs
on their Mountain View campus outside of the former-SGI buildings are purple.
Supposedly because they never changed it from the SGI purple or the sign
changed but the purple stayed as a nod to the legacy of SGI.

------
doomlaser
Strange fact: Google's headquarters in Mountain View is the old campus of
Silicon Graphics. When i was there in 2007, you could still see traces of the
old SGI logo in certain places.

~~~
frik
related strange fact: SGI sold Cray Research's business division to SUN,
Oracle bought Sun and now Facebook's headquarter is the old campus of SUN.

~~~
chubot
It's interesting but not really that strange. How many buildings/campuses in
the Bay Area do you think could house companies the size of Google, Facebook,
Sun, or SGI?

Random guess: less than 50.

------
patkai
Do you guys remember the Disclosure movie, I think 1995? It was the coolest
SGI advertisement ever. I actually watched the movie again last year, and it's
still cool! Exactly at that time we had both Macs and SGI workstations at the
university and the Macs didn't even come close.

------
NoPiece
Interesting that Linux doesn't come up once in the article, and that it is the
equally doomed Sun that is perceived as the competitor (and WinNT).

~~~
otterley
In 1997 Linux didn't support SMP (multiple CPUs) yet, while Irix (SGI),
Solaris (Sun) and Windows NT all did. So it wasn't a good fit at the time for
server and high-end workstation installations.

Sun had the lion's share of Internet server installations at the time, but
Microsoft's IIS was beginning to nip at their heels. Linux was what we played
with at home, because it was "close enough" to what we worked on at the
office, but didn't require us to spend thousands on hardware.

~~~
camperman
Support for SMP in the kernel was introduced in version 2.0 which was released
in June 1996. It wasn't that mature but it was definitely there. It was only
by 1999-2000 with version 2.2 improvements and a bunch of consumer-level dual-
core boards like the Abit BP6 that Linux SMP really started becoming popular
and usable for workstations.

------
at-fates-hands
_For Jermoluk 's part, he says he does not recall the incident. ''Am I guilty
of getting drunk a few times?'' he asks. ''Sure. Probably inappropriately at
times? Yeah. Did I party hard? Sure.'' But he also adds: ''Was I leading a
wild life? No. I was working too hard, man.'' Even Jermoluk's critics say this
never impaired his job performance, but such overindulgence by the company's
No.2 rattled some employees' confidence. ''People aren't used to seeing the
president get drunk,'' says a former executive._

It's funny to think this was pretty common during the first dot com boom and
bust years. I had an executive at Best Buy tell me a few years back about how
the bust changed a lot of attitudes with how executives should act in front of
the company employees.

------
another_jerk
in retrospect, thank you SGI, for XFS filesystem.

[http://xfs.org/](http://xfs.org/)

------
Roboprog
It's funny how this article bemoans the state of Apple. I suppose at the time
after languishing under the Pepsi salesman for a decade, they were in trouble.
Now, Apple is pretty much the primary source of graphics workstations running
unix.

------
ddingus
Ahhh IRIX.

Best computing experience I've ever had. R.I.P. SGI.

------
coldcode
"Now, McCracken and Ewald have a chance to avoid Apple's fate." Since I was
there at Apple while SGI was imploding, it's fun to read what people said then
and see what happened. It wasn't fun at the time of course.

------
tbyehl
I keep an O2 on a shelf in my man cave. Wish I'd snagged an Origin 2000 rack
when they were plentiful and cheap-ish on eBay about 10 years ago.

I'd always wondered how SGI missed the Internet wave relative to Sun. Around
the time of this article I started working for a web hosting company that was,
aside from my team of IIS upstarts, entirely run on SGI. Prior to that I'd
worked for a content company that was running on Tandem-badged SGI systems.
And before that I was with an ISP which was a motley mix of Sun, BSD, and
Linux but had just purchased a pair of Onyx systems to handle Usenet services.

~~~
kjs3
AOL had vast numbers of SGI machines of all types, both servers and
workstations.

------
cartoonfoxes
Their industrial design was so gorgeous it makes me cry. I have an Octane2 at
home, and what I wouldn't give for that kind of build quality, design, and
integration in a modern workstation.

~~~
leetrout
Does is still operate?

Mine is not booting- I don't remember the POST but the fans do turn on. I
tried reseating the ram the last time I was bored and pulled it out of the
closet.

I would really like to see the IRIX UI brought up to modern standards. I
almost feel like I'm looking at it when I look at launch pad in OS X.

~~~
martinpw
There is a project called 5dwm which was an attempt to get an IRIX-like UI on
Linux. I tried it once and it got me all nostalgic. I don't think it is being
maintained or updated though

------
metaobject
IRIX was how I got hooked on zsh. There was something beautiful about the
toaster-like O2 that I had on my desk. That machine had some rather impressive
graphics abilities (for the time) and was a pleasure to use. It was similar to
modern-day Apple products in its beauty.

~~~
joezydeco
I always always jealous of those workstations.

To this day whenever I set up a new desktop I always make the window titles
with black italics on a grey stripe. Just because that was _so cool_.

------
peter303
repeated with every new tech platform, e.g. Balcberry and samrtphones

in this case PCs with GPUs because an order of magnitude cheaper than graphics
workstations

------
jldugger
In 1996-7, I was on a junior high team to do virtual stock investing using
mail in scantrons. We were terrible, and stock pickers. The stock I lobbied
for: SGI. Singly the worst investment choice on the team. In 2000'ish, I
decided to join some yahoo portfolio challenge and threw the initial pool into
Geocities and jumped into a high tier spot.

Junior year of college, someone in the dorm went about running a portfolio
challenge, and my roommate and I slowly realized the way to win was
volatility, and I eventually found an earnings report calendar on Yahoo that
was essentially our rosetta stone to winning, because the guy's system let
people buy in after hours at market close prices. Wake up a few minutes before
market open, search the earnings calendar for stocks up in after hours
trading, and place your entire portfolio in one with a huge earnings surprise.
I think someone else was front running the guy's system by using a feed 5-10
minutes ahead of the Yahoo API he was using, to find a series of 1 percent per
five minutes trades.

In retrospect, these sorts of 'whoever has the most in 3 months wins!'
competitions teach novices how to gamble and cheat, rather than allocate
assets prudently. These days my retirement portfolio sits in low cost index
funds.

~~~
Retric
Or go pro. People make 100's of billions of dollars every year 'cheating' in
the stock market... Some of it's even completely legal. Find a hedge fund
that's a little slow to update their purchase price based on market changes
and eat them alive. Figure out when large trades are going to happen and
remove liquidity at the right time etc etc.

~~~
KMag
> Find a hedge fund that's a little slow to update their purchase price based
> on market changes

This doesn't even really make sense. What's the "purchase price" of a hedge
fund? Getting money into and out of hedge funds is a long process, not
amenable to latency arbitrage.

Do you mean mutual funds or ETFs instead of hedge funds?

In the case of mutual funds, there used to be mutual funds with European
holdings that used European closing prices when trading in or out of the fund
at the US close, allowing arbitrage based on after-hours trading. However,
that bug got fixed decades ago.

In the case of ETFs, they are priced by the market, so there's no such thing
as the ETF itself being slow to update its price.

EDIT: Actually, I think instead of "their purchase price" you mean "their
order limits". In most major equity exchanges, one doesn't know who's on the
other side of the trades, so one wouldn't "find a hedge fund" to trade
against, but rather "find a pattern of trades" to trade against. One typically
wouldn't know if that pattern represented a hedge fund, a bank, etc., or maybe
several different market participants that in aggregate produced an
exploitable trading pattern.

~~~
Retric
Yea, that could have been more clear. If a large fund want's to maintain say
5% apple stock and 5% IBM in their portfolio and consistently balances their
portfolio based on a set interval after market changes or even at the same
time every day you could discover the pattern and exploit the behavior.

EX: In the next 1/2 a second their going to go from selling at 15 to buying at
16 that's almost free money.

------
icantthinkofone
And I was there. And everyone knew who the girl was. And everyone was just too
cocky and had parties on campus where toilet bowls would get broken.

I haven't read the article beyond seeing the names and dates. I'll look at it
in the morning and tell you more.

EDIT: Had some time after all and just finished reading it. I can't add any
more than was in the article but I can verify about half of it from my own
time there but I was gone by 1984.

------
frozenport
I spoke with old timers at Cray and they were all shocked by the laxs work
ethic at SGI: people coming back from months of paid vacation and not being
sure it they worked there anymore.

~~~
i_am_ralpht
The Cray guys had their own funny culture as well, though. Cray was incredibly
process-based, whereas SGI was entirely seat-of-the-pants product driven.
Merging those two cultures was incredibly painful; ultimately the Cray guys
won out and SGI became process driven[1]. There's a really twisted article in
Wired after Cray got spun out where they complained about all the money they
got from SGI because it came with sandals and pets-at-work-allowed rules.

From the Cray culture (and some of the Cray employees) we got the IRIX release
train, where we'd ship a new QA'd release every quarter. If a feature wasn't
ready it just got pushed out to the next release, no big deal (sometimes this
didn't work out; bizarrely one of the biggest screwups came from the CXFS guys
who were working in the old Cray campus in Eagan, MN).

[1]: Though as I read Zero to One it's interesting to see Theil's perspective
on process-vs-product outlook. Definitely the product-driven SGI was the more
optimistic one.

