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SGI's Rise and Decline

JUNE 7, 1993
Time Warner Cable chooses Silicon Graphics (SGI) to develop technologies for its high-profile interactive television trial in Orlando.

SGI reports its first billion-dollar sales year.

AUG. 23
Nintendo agrees to use SGI technology in its future video-game player.

JAN. 6, 1994
CEO Ed McCracken is named co-chair of Clinton's National Information Infrastructure Advisory Council, leaving COO Tom Jermoluk to run daily operations.

JAN. 27
Co-founder Jim Clark leaves to start Mosaic Communications, later renamed Netscape.

At an executive offsite in Monterey, Calif., McCracken challenges the company to increase annual sales growth from 36% to 50%.

DEC. 14
Eight months late, Time Warner finally launches a downsized interactive-TV trial in Orlando.

FEB. 7, 1995
SGI buys software companies Alias Research and Wavefront Technologies for $500 million in bid to stave off Microsoft.

SGI introduces new Indigo workstations, hoping they will generate $1 billion in sales this fiscal year.

SGI reports 45% growth in sales for fiscal 1995, ended June 30, to $2.2 billion, and a 58% jump in profits, to $225 million--the 12th strong quarter in a row.

OCT. 19
Blaming a recent sales-force reorganization, SGI reports first-fiscal-quarter revenues lower than expected--$595 million vs. expected $650 million.

Sun steals some of SGI's Hollywood thunder by announcing that Pixar Animation Studios used 117 Sun computers to help produce graphics for the film Toy Story.

JAN. 17, 1996
SGI reveals that shortages of graphics chips from Toshiba caused revenues to rise only 22%, to $672 million, under original forecasts of $760 million.

Sun makes overture to buy SGI, but initial feelers go nowhere.

FEB. 26
SGI buys Cray Research for $767 million.

SGI reports another disappointing quarter--this time because partner NEC can't produce enough SGI-designed MIPS chips.

Chief Operating Officer Tom Jermoluk resigns to become CEO of @Home, a startup building a high-speed backbone for delivering Internet content over cable TV systems.

SEPT. 25
Partly because of a $10 million charge to replace thousands of defective MIPS microprocessors, SGI says it will report first-fiscal-quarter results well under expectations.

OCT. 7
SGI introduces $6,000-and-up O2 workstation to compete against high-performance PCs.

OCT. 17
SGI reports a first-fiscal-quarter loss of $22 million on sales of $766 million, up only 1%.

JAN. 28, 1997
At SGI board meeting, directors tell McCracken to get SGI back on track.

JAN. 27
SGI introduces midrange Octane workstations, completing transition to all-new products, but they're not ready to ship in volume.

FEB. 18
SGI's sale of computers that end up in a Russian nuclear bomb design facility prompts a federal probe.

Intel Chairman Andy Grove announces the ''visual computing'' era for powerful PCs, stealing SGI's onetime tagline.

APR. 17
SGI announces seventh consecutive earnings disappointment. The stock plummets 24%, to 12 7/8, its lowest point in more than four years.

Chief Financial Officer Stan Meresman and Mike Ramsay, senior vice-president in charge of desktop computers, leave in a reorganization. Former Cray President Robert Ewald takes over all computer manufacturing and engineering.

Dataquest Inc. says first-quarter NT workstation shipments boomed 242%, compared with only 10% unit growth for Unix workstations.

To save money, SGI asks 7,000 U.S. employees to take two extra days off before the July 4 holiday.

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Updated July 25, 1997 by bwwebmaster
Copyright 1997, Bloomberg L.P.
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