BUSINESSWEEK ONLINE : FEBRUARY 1, 1999 ISSUE
INFORMATION TECHNOLOGY

How Belluzzo Aims to Refocus Ailing SGI


THE NEW CEO HAS A FIX-IT PLAN...

DRIVE SALES
As he did at HP, Belluzzo hopes to drive low-end sales with Silicon Graphics' first Windows NT computers, unveiled on Jan. 11. At the same time, he's developing n ew ways for customers to use SGI's more powerful Unix servers, such as putting supercomputers in hospitals so surgeons can see high-resolution simulations of heart-bypass surgery.

REVAMP OPERATIONS
To get in line with lean-and-mean rivals, he has sold two of four factories and plans to outsource production of 95% of SGI's computers. He also slashed $200 million of the operating budget and implemented tough new procedures for everything from hiring to demanding strict return-on-investment analysis on new projects.

CHANGE THE CULTURE
His ''Get Serious'' campaign includes banning dogs at work and forbidding salespeople from making unrealistic promises to customers. And to end technology leaks, he sued three start-ups staffed by SGI alums.


...BUT HUGE OBSTACLES REMAIN

COMPETITION
Given the vastly improved performance of rival computers, there may not be enough customers who care about SGI's snazzy graphics. SGI must also counteract plummeting sales of its Cray supercomputers by selling more of its Unix Origin servers in a market crowded with strong Unix rivals.

EXECUTION
Slow-moving SGI will be hard-pressed to meet the rapid product cycles of the Wintel market. It took SGI 27 months to deliver its first NT workstation, while rivals churn out new NT models every six months.

TIMING
Belluzzo is casting his lot with the Wintel standard just when Microsoft's Windows NT 5.0 and Intel's Merced chips--both expected to boost NT sales--have been delayed.



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