The Business Blog at Intuitive.com

Dave Taylor has been involved with the Internet since 1980 and is widely recognized as an expert on both technical and business issues. He has been published over a thousand times, launched four Internet-related startup companies, has written twenty business and technical books and holds both an MBA and MS Ed. Dave maintains four weblogs: The Business Blog at Intuitive.com, Ask Dave Taylor, Dave On Film, and Attachment Parenting Blog. Dave is an award-winning speaker, sought after conference and workshop participant and frequent guest on radio and podcast programs.

Silicon Graphics files for Chapter 11 Bankruptcy

It's another harbinger of the end of the first major wave of computing companies in the Internet business: today long-time graphics darling Silicon Graphics threw in the proverbial towel, filing for bankruptcy. First HP struggles and jettison's Fiorini after the disastrous Compaq acquisition, then Sun Microsystems wakes up and breaths a sigh of collective relief after long-time cross-eyed navigator Scott McNealy finally steps down from his position at the helm.

But Silicon Graphics. Ah, SGI, I knew you back when, when you were the coolest hardware company in Silicon Valley, when just seeing your logo inspired people towards hardware lust in an era when there wasn't much exciting happening in the world of Unix and workstations, when the X Window System and its crummy UI was the state-of-the-art (except at Xerox PARC, but no-one ever listened to PARC scientists until some curious folk from Cupertino wandered in one day).

And now, finally, SGI is giving in to the inevitable tides of change, after years of struggling. SGI was one of the first major Unix vendors to see the impending change wrought by Linux showing up too: as I recall, SGI was the first major Unix vendor to offer Linux as an alternative operating system.

After being the premier vendor for all the computer graphics and special effects houses in Hollywood and beyond, Silicon Graphics really understood that it was their custom applications, their rendering engines, shading, smoke, lighting, and other toolkits that made their computers sexy, not the core operating system (are you listening yet, HP?)

Speed and great libraries, that was what really defined SGI's systems, and their acquisition of MIPS to get them fast and powerful RISC-based processors, that was another bold stroke (even if IBM had its RISC research at Watson and HP was coming out with its own Spectrum RISC systems). Toss in a free operating system -- Linux -- and the SGI machines were ready to really rock 'n roll, even as the dotcom era imploded the entire industry.

But a funny thing happened along the way: Intel kept innovating at a furious rate and its chips got faster and faster, as other hardware vendors kept creating faster memory, faster buses, integrating more on-board and generally creating the so-called supercomputer on a board, then on a chip. (and Motorola? They got sidetracked by cellphones somewhere on the way to their chip fab facility)

When your computer is fast enough, having the most efficient, most well-written graphics libraries suddenly isn't quite so important, and SGI has died from that most common of tech ailments: an inability to innovate faster than the industry.

Ironically, one of the misbegotten survival attempts at SGI was the acquisition and later sale of Cray Supercomputers. What supercomputers had to do with graphics workstations never quite lined up in my head, but heck, SGI was cool and Cray was awesomely cool, so what did it matter?

I still remember how astonished I was the first time I booted up an SGI workstation. Imagine, they didn't just have the 500 status lines of a Unix boot scroll along on the screen, but had a graphical interface to it, had rendered graphic elements on its windowing system, had proof that the graphics on a computer could be pretty and aesthetic, not just utilitarian.

And, finally, don't forget that if it wasn't for former SGI CEO James Clark and his vision in hiring a grad student named Marc Andreessen from the University of Illinois, Urbana-Champaign to help found a company called Mosaic Communications, later renamed Netscape after UIUC lawyers got testy, we probably wouldn't have the Web in the form we know it at all.

I'll miss Silicon Graphics and the era it represented.

As an ironic postscript, last I heard it's Google that's buying up all the gorgeous SGI buildings in Silicon Valley. You can draw your own conclusions about the death of aesthetics and the meaning of this next evolutionary step in the industry.

Sources: Reuters and CNet.

Blogging Notes: Om Malik categorizes this aptly as the curse of commoditization, and Paul Kedrosky says it's a reminder of how few tech companies survive changing market eras. Amen. Meanwhile, Techdirt aptly points out that when SGI was delisted from NASDAQ a year ago, no-one even cared, and Techspot says "I feel we just won't be seeing any new tricks out of them".

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