SGI goes back to the future with new server

The SN-1, or "scalable node" system, is the first machine from SGI that will be able to use Intel's upcoming 64-bit Merced chip, due in the latter part of 2000. But following the same two-pronged strategy as Hewlett-Packard, the first versions of the SN-1 will be powered by SGI's current MIPS chips, said Beau Vrolyk, senior vice president of all SGI's products.

The new design is the flagship product for SGI's march into a future that the company's new chief executive, Bob Bishop, has said looks remarkably like its past. The company is leaving its Cray supercomputer division and Windows NT workstations behind as it tries once again to emphasize its high-performance servers, graphics computers, and number-crunching machines packed with processors.

When SGI was flying high, it was known for these high-performance computers, used by scientists and movie makers for special effects. The troubles at the company took another turn Monday with the surprise resignation of CEO Rick Belluzzo.

But moving to a new computer architecture is a risky business for the firm, which doesn't have a strong track record for shifting to new designs, said Technology Business Research analyst Jim Garden. The last time the company switched its high-end server line, demand for the older design dried up while SGI scrambled to meet its shipment schedules.

"If they force another transition on their users now, it could be pretty risky," he said. "As you bring out a new product, you basically shut off sales of the old product."

Another hurdle the company faces is remaining independent. Specialty computer makers like SGI are being snapped up by computing giants that want to expand quickly into new markets.

IBM is buying Sequent, EMC is buying Data General, and Compaq Computer bought Digital Equipment Corporation and Tandem. Sequent's chief executive Casey Powell has said smaller companies haven't been able to withstand the consolidation.

Though Bishop adamantly denies that SGI is for sale, analysts such as Merrill Lynch's Steve Milunovich said the departure of Belluzzo "may accelerate the sale of this company, assuming there are interested buyers."

Others agreed. "We see it as a going-out-of-business strategy, no matter what they say," observed TBRI analyst Joe Ferlazzo.

Married to Merced
The SN-1 computers are married to Merced, a chip whose delays have caused SGI extra expense, according to Belluzzo.

The company, though, is in a good position to benefit from Merced, Vrolyk said, chiefly because the chip is good at mathematical calculations and therefore is suited to SGI's large scientific computing customer base. Those number-crunching abilities are measured by a chip's "floating-point" performance, a term that refers to the method of performing the calculations.

"Those people will very rapidly look for the higher floating-point performance of the Merced chip and migrate more quickly" than business customers, Vrolyk said. SGI customers are "classic early adopters. The Merced chip is just perfect for them."

He acknowledged that the $8 billion-to-$10 billion scientific and computing market is dwarfed by the business market but said the business market is more cautious in adopting new chip designs.

Vrolyk declined to say when the new SN servers would arrive, but he said that MIPS-based SN systems are "not very far away." Systems stuffed with Merced chips probably will arrive "within a few months of Merced," he said. Systems with 128 processors likely will arrive by the late 2001 shipment date of Merced's successor, McKinley.

The SN series eventually will supplant SGI's Origin server line, which was responsible for one of the few bright spots in SGI's recent history. The company said strong sales of the Origin servers helped bring SGI to a profitable quarter after seven in the red.

Garden was cautious about SGI's strong endorsement of Merced. "The general belief is that Merced performance is going to be so-so. SN-1 is not going to really replace any Origin 2000s until McKinley is shipping," he said.

The Origin servers are now at their sweet sales spot Vrolyk said, with both business and scientific customers. They now come with as many as 256 processors and SGI is testing out a 512-processor model.

In order to get that many processors working, SGI has to create custom chips to handle all the internal communication inside the computers. Engineers also must write an operating system that can handle the design, but the programs running on top of that foundation don't have to be rewritten, Vrolyk said.

SGI is working hard to bring these multiple-chip features to Linux, a newly popular version of Unix, in time for the Merced rollout.

SGI uses its own method, called cache-coherent non-uniform memory architecture, or ccNUMA, to gang together dozens of processors. IBM essentially endorsed the viability of the method when it acquired Sequent, but Vrolyk said Sequent's design isn't able to transfer information to and from memory as fast as SGI's design.

All this technology is good, but it's hard to fund all that design work, Garden said. "It takes massive amounts of research and development to support a business like that," he said.

There's also a psychological risk in going to the new system, Garden said. SGI saw its fancy Windows NT graphics workstations as a "salvation," but because of technical and manufacturing difficulties, "it turned into a big dud," he said.