"SGI" no longer a nickname
Silicon Graphics officially changes its name to SGI in a new corporate identity strategy intended to grow the company's customer base.
The workstation maker, based in Mountain View, California, said it wants customers to know they develop and offer more than just graphics and 3D work stations. Recognized for its breakthrough computer graphics on the Jurassic Park film, SGI said it's moving to reposition the company's products and services in the marketplace.
Its new trade name--SGI--is a significant element of the branding strategy that consolidates separate product brands under subbrand categories, the company said in a statement.
The company's revamped Web site introduces the new name with upbeat music while the letters S, G, and I in big, bold print, pop up on the screen. Above the song and dance reads, "Silicon Graphics is now." The front page of the Web site reads: "That's short for Servers, supercomputers, and Graphic workstations that enable breakthrough Insights."
"Those of us who follow workstations think this is sort of a ho-hum announcement," said Jay Moore, analyst at the Aberdeen Group in Boston. "But, strategically, it's probably a bigger deal than more people want to believe."
Research for the identity strategy was conducted over the past year by San Francisco-based Landor Associates, which found that while SGI's products were accepted as "innovative" and "visionary," the company was still viewed as a "niche-oriented, high-performance 3D graphics workstation provider," with little recognition in the servers and supercomputers areas.
The company said its servers and supercomputers business generates about 50 percent of its product revenue.
"SGI put a lot of research into this and I agree with their research," said Moore. He added that people did associate SGI with just graphics and workstations, but for customers beyond that core base who don't realize that SGI does much more than that, this name change is more important than it seems.
Last March, shares of Silicon Graphics took a hit when it warned of a wider-than-expected loss for its third quarter earnings. The company blamed a slow ramp-up of its new visual workstation computers as a result for the wider loss. The company's stock dropped 20 percent on the news.
Its new identity strategy also is part of an effort to help turnaround the company.
"The move to create a corporate identity that reflects our position is a logical next step in the company's turnaround," Rick Belluzzo, SGI's CEO, said in a statement.
And as SGI gains more attention from a wider customer base, having the new name will probably work to its advantage, Moore said. He added that although the impact of the name change strategy will probably not immediately add to the company's revenue or financial outlook, the fallout from the new name will most likely have some effects on the company financially about a year from now.