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5018
|
dbpedia
|
0
| 34
|
https://collection.powerhouse.com.au/object/400279
|
en
|
Silicon Graphics Onyx I graphics computer
|
[
"https://collection.powerhouse.com.au/img/by-nc-nd.svg"
] |
[] |
[] |
[
""
] | null |
[] | null |
Computer, graphics production, Silicon Graphics Onyx 1, metal / plastic / electronic components, made by Silicon Graphics Inc, Sunnyvale, California, United States of America, 1994
|
en
|
https://collection.powerhouse.com.au/object/400279
|
The Onyx-1 is a specialised 'supercomputer' that marks a significant step in the development of computer graphics and animation production technologies used in television commercials and film production. Also known as a Reality Engine, the name of the graphics calculation card it used, it led the way in special-purpose computing systems using existing and newly designed devices to make the production of high-end graphics feasible within the time-frames and resolution requirements of the television and film industries. It is a good example from the short period in computing when large, very fast systems became available for commercial rather than military purposes. They were superseded by clusters of PCs. Most of the Geometry Engine's tasks are now carried out by the graphics display card of the modern PC, which has been driven by the needs of the computer game industry. It employs specially developed hardware (the 'Reality Engine') to carry out the mathematically intensive tasks of creating both fantastic and realistic 3D computer models of objects and creatures. Up until the mid-1980s computer graphics had to be produced on large-scale general purpose mainframe computers with purpose-built application software. Smaller systems, such as the graphics workstations used in architecture or the PC based systems used in 2D paintbox image making for corporate purposes, were extremely slow and of inadequate resolution when it came to graphic and animation work for film production. As the industry grew, new technologies had to be developed to allow the production industry's demands to be fulfilled. Australia has a significant reputation on the world stage for the quality of its graphics production and the development of high-end production software. This particular machine was imported by the Future Reality Company for Garner MacLennan Design (GMD), which at the time was a strong competitor for Animal Logic and was engaged in television commercials. When this particular machine was first brought into the country the Defence Department had to clear it as it was considered to be a supercomputer. Once it arrived at GMD it was upgraded to a 16 processor system and installed in the GMD facility in Crows Nest, Sydney.
|
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5018
|
dbpedia
|
1
| 78
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https://www.svb.com/
|
en
|
Banking for Innovation Economy
|
[
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] |
[] |
[] |
[
"Innovation economy",
"Innovation Banking",
"Innovation ecosystem"
] | null |
[] | null |
Silicon Valley Bank is the financial partner of the innovation economy; helping individuals and investors in the innovation ecosystem achieve extraordinary outcomes.
|
en
|
/apple-touch-icon.png
|
https://www.svb.com/
|
©2024 First-Citizens Bank & Trust Company. Silicon Valley Bank, a division of First-Citizens Bank & Trust Company. Member FDIC.
1 Free checking through SVB Edge available for up to three years from account opening on included services. Transactions processed, such as for overdrafts, NSF’s, returned and collection items will incur a fee as described in the Schedule of Fees. Click the ‘Learn More’ link above for additional terms and details on the free checking available with SVB Edge.
2 Money Market Accounts (MMA) are interest-bearing accounts unless otherwise stated. As of August 2023, a 5.10% annual percentage yield (APY) on the Startup Money Market Account is available for deposit balances of up to $4,000,000.00. If the Startup Money Market Account has deposit balances of $4,000.000.01 or more, a 1.00% APY will be applied to the entire Startup Money Market Account deposit balance. The APY or interest rate depends on the tier associated with the amount deposited in the MMA. You must deposit and maintain the applicable account balance to earn the disclosed APY. Please refer to the Deposit Agreement and Disclosure Statement issued at opening and any updates thereto for more details. Changes to the interest rate and APY on the MMA is at our discretion and are reflected in your account statement. Current clients with an existing Startup MMA opened before November 2022 are not eligible for this offering. Interest is calculated daily and credited monthly to the account. If you close your account before interest is credited for the month, you will not receive the accrued interest during the month the account is closed. Applicable fees, including those contained in the Product Sheets and Schedule of Fees and Charges provided at account opening, could reduce earnings on the account. Account maintenance fees may apply for each month your balance falls below a disclosed minimum.
3 Corporate and Business Card programs are subject to credit approval. See the SVB Innovator Card Agreement and Rewards Terms and Conditions for full program details. 2X Unlimited Rewards Points earnings are based on net purchases made on the SVB Innovator Card. Rewards points are not applicable to virtual cards. Click the ‘Learn More’ link above for additional terms and details on the SVB Innovator Card.
4 All loans and debt solutions are subject to underwriting, credit, and collateral approval. Information provided or referenced is for informational purposes only and no guarantee is expressed or implied. Rates, terms, programs and underwriting policies subject to change without notice. This is not a commitment to lend. Terms and conditions apply.
5 Foreign exchange transactions can be highly risky, and losses may occur in short periods of time if there is an adverse movement of exchange rates. Exchange rates can be highly volatile and are impacted by numerous economic, political and social factors as well as supply and demand and governmental intervention, control and adjustments. Investments in financial instruments carry significant risk, including the possible loss of the principal amount invested. Before entering any foreign exchange transaction, you should obtain advice from your own tax, financial, legal and other advisors and only make investment decisions on the basis of your own objectives, experience and resources.
|
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5018
|
dbpedia
|
0
| 63
|
https://aechelon.com/aechelon-technology-inc-to-support-silicon-graphics-onyx4-ultimate-vision-with-its-c-nova-image-generation-software/
|
en
|
Aechelon Technology, Inc. to Support Silicon Graphics Onyx4 Ultimate Vision with Its C
|
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[] |
[] |
[
""
] | null |
[
"aechelon"
] |
2003-08-01T17:31:20+00:00
|
MOUNTAIN VIEW, Calif. (August 1, 2003) — SGI (NYSE: SGI) and Aechelon Technology, Inc. today announced plans to optimize Aechelon Technology’s C-NOVA™ software-based runtime engine for the recently announced Silicon Graphics® Onyx4™ family of visualization systems with UltimateVision™ graphics, including support for vertex and pixel shaders. C-NOVA visual simulation software transforms commercially available computer graphics […]
|
en
|
Immersive Visualization Like No Other - Aechelon Technology
|
https://aechelon.com/aechelon-technology-inc-to-support-silicon-graphics-onyx4-ultimate-vision-with-its-c-nova-image-generation-software/
|
MOUNTAIN VIEW, Calif. (August 1, 2003) — SGI (NYSE: SGI) and Aechelon Technology, Inc. today announced plans to optimize Aechelon Technology’s C-NOVA™ software-based runtime engine for the recently announced Silicon Graphics® Onyx4™ family of visualization systems with UltimateVision™ graphics, including support for vertex and pixel shaders.
C-NOVA visual simulation software transforms commercially available computer graphics systems into rock-solid 60Hz frame rate, high-resolution, multi-channel image generators. The real-time load balancing of C-NOVA ensures sustained update rates of 60Hz or higher at very high display resolutions, and combined with Onyx4 provides the power and flexibility necessary to create extremely high-resolution environments. Even the smallest Onyx4 configuration can deliver 20M pixels of highly interactive graphics, enough to power two ultrahigh-resolution 10M pixel LCD displays. At the high end, Onyx4 can render over 100M pixels of display, enough to power the next generation of fully immersive environments.
“We are very excited by the potential of combining the power of shader technology with the real time capabilities of the Onyx platform in the next release of C-NOVA,” said John Quinn, president and CEO,
Aechelon Technology. “Onyx4 and C-NOVA have the potential of redefining the high end image generator space, reaffirming SGI’s leading position.”
“Aechelon Technology has delivered some of the world’s most advanced visual simulations on the Onyx platform, and we’re very excited about their plans to take their technology to the next level on the new Silicon Graphics Onyx4” said Lang Craighill, senior director for SGI’s Defense and Intelligence markets. “C-NOVA’s advanced features and capabilities along with Aechelon Technology’s innovative use of pixel and vertex shaders will be a perfect match with the Onyx4 architecture and scalable UltimateVision graphics. This combination will offer new levels of realism and training value at ground breaking price-points.”
Aechelon Technology’s C-NOVA runtime engine, and its C-RADIANT™ plug-in module for geospecific, multi-sensor image generation support, have been field proven in the Harrier AV-8B
Radar Night Attack Weapon System Trainer, at AFRL in the DMT Testbed and Night Vision Training Systems Labs and at NAVAIR Manned Flight Simulator. These products, together with the associated geospecific databases, have established a new standard for realistic image generation in training,
foreign-area familiarization and mission rehearsal applications.
This news release contains forward-looking statements regarding SGI technologies and third-party technologies that are subject to risks and uncertainties. These risks and uncertainties could cause actual results to differ materially from those described in such statements. The reader is cautioned not to rely unduly on these forward-looking statements, which are not a guarantee of future or current performance. Such risks and uncertainties include long-term program commitments, the performance of third parties, the sustained performance of current and future products, financing risks, the ability to integrate and support a complex technology solution involving multiple providers and users, and other risks detailed from time to time in the company’s most recent SEC reports, including its reports on From 10-K and Form 10-Q.
About SGI
SGI, also known as Silicon Graphics, Inc., is the world’s leader in high-performance computing, visualization and storage. SGI’s vision is to provide technology that enables the most significant scientific and creative breakthroughs of the 21st century. Whether it’s sharing images to aid in brain surgery, finding oil more efficiently, studying global climate or enabling the transition from analog to digital broadcasting, SGI is dedicated to addressing the next class of challenges for scientific, engineering and creative users. SGI was named on FORTUNE magazine’s 2003 list of “Top 100 Companies to Work For.” With offices worldwide, the company is headquartered in Mountain View, Calif., and can be found on the Web at www.sgi.com.
About Aechelon Technology
Aechelon Technology is a leader in real time computer graphics applications for training, simulation and
entertainment markets. The company provides COTS-based, high resolution, multi-channel, geo-specific image generators, OTW and correlated sensor databases and integration services. The company’s image generators are field proven, and are delivered with full logistics support and documentation. Aechelon Technology is headquartered in San Carlos, CA, has facilities in Madrid, Spain, and is found on the World Wide Web at www.aechelon.com.
For further information regarding this press release or Aechelon Technology, please contact:
John Quinn
Aechelon Technology
Aechelon Technology, C-NOVA and C-RADIANT are trademarks of Aechelon Technology, Inc. Silicon Graphics, SGI, Onyx, InfiniteReality and the SGI logo are registered trademarks and Onyx4 and UltimateVision are trademarks of Silicon Graphics, Inc., in the United States and/or other countries worldwide. All other trademarks mentioned in this press release are the property of their respective owners.
|
|||||
5018
|
dbpedia
|
3
| 36
|
https://www.computinghistory.org.uk/det/8312/Silicon-Graphics-SGI/
|
en
|
Computing History
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[
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"video games",
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"center computer history"
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2024-08-28T16:31:37+00:00
|
Silicon Graphics, Inc. SGI was a computing manufacturer that produced highperformance computer hardware and software from 1981 through 2009. SGI’s collaboration with game studio Rare and the....
| null |
Be_part_of_our_story...
We are a registered charity. Since opening in 2013, over 160,000 people, including 18,000 school pupils, have visited the Centre. Our visitors deserve a space which is engaging and inspiring, where they can feel a sense of adventure, exploration and wonder!
We have an ongoing need for small donations to support our work, major donations to move us forward as a charity and everything in between. Corporate partnerships are also welcomed.
Small donations can be made below or to make the absolute most of your donation, please do consider making a direct bank transfer. Contact us by email using admin@computinghistory.org.uk to ask for details. If you'd like to chat about supporting us please contact our Partnerships team.
All individual donations can also be Gift Aided, allowing us to claim an extra 25p on every £1 donated. Visit our Gift Aid page to complete a Gift Aid declaration.
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|
dbpedia
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3
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|
https://www.investopedia.com/insights/why-amd-intels-only-competitor-intc-amd/
|
en
|
Why AMD Is Intel’s Only Competitor (INTC, AMD)
|
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[] |
[
""
] | null |
[
"Adam Hayes"
] |
2017-05-24T15:05:00-04:00
|
Take a look at the history of competition between Intel and AMD.
|
en
|
/static/2.113.0/icons/favicons/anniversary/favicon.ico
|
Investopedia
|
https://www.investopedia.com/insights/why-amd-intels-only-competitor-intc-amd/
|
When it comes to buying a Windows-based laptop or PC, consumers are faced with only two real choices for the maker of the CPU (the central processing unit or "brains" of the computer): Intel Corp (INTC) or Advanced Micro Devices Inc. (AMD). Both companies were founded over 50 years ago in what has become the Silicon Valley part of California.
Yet, in half a century, no other major player has been able to dominate the semiconductor market segment the way these two companies have. We'll take a look at the history of competition between Intel and AMD and try to explain why AMD has been, and remains, Intel's only real competitor.
AMD and Intel: A Brief History
Intel was co-founded in mid-1968 by Gordon Moore, known for formulating Moore's Law, and by Robert Noyce, who helped invent the silicon integrated circuit. Both men were former employees of Fairchild Semiconductor, an early and influential pioneer in integrated circuit technology.
AMD was founded a few months later in 1969, also by former employees of Fairchild Semiconductor. The two companies have, therefore, a shared lineage and similar origins. Since then, they have been fierce competitors, both trying to one-up each other with the latest technology and most powerful processors to run the world's computers.
Industry Giants Compete
Soon after developing its x86 chipset and its initial public offering (IPO) in 1971, Intel became the dominant player in the microprocessor industry. As of August 2021, Intel's market capitalization is $213 billion, compared to AMD's market cap of $127 billion.
For much of its history, AMD has been the persistent underdog to Intel in the semiconductor space. Intel has tended to dominate all sectors of the CPU market, including high-end performance processors. AMD focused on lower-cost, budget-friendly middle- and low-range chipsets. For many years, Intel chips had the reputation of being more stable and easy to use for the average computer user. Meanwhile, sophisticated users who knew their way around a circuit board were able to tinker with AMD's chips, which could be overclocked (a method for getting a CPU to run at a faster speed).
For many years it seemed like AMD was destined to play second fiddle to Intel in microprocessor market share. Up until about 2016, AMD controlled around one-quarter of the CPU market, while Intel dominated more than 70%.
AMD Cutting into Intel's Market Share
In March 2017, AMD introduced its highly successful Ryzen microprocessor, positioning it as a more affordable alternative to high-end CPUs and a product capable of challenging the best of Intel's chips. The Ryzen microprocessor was a completely new design capable of breaking overclocking records while still being affordable for the budget-conscious consumer.
The speedy, high-performing Ryzen boosted AMD's sales. In 2019, AMD had 23% of the CPU market share, and by Q3 2021, the company had nearly 40% of the total CPU market. For desktop computers, AMD had 32% of the market in 2019, and as of 2021, the market share is 50/50 between Intel and AMD. Although AMD still lags behind Intel, the company's products are gaining market share.
Outside Competition Has Come and Gone
The reader could get the impression that Intel and AMD are the only computer processor manufacturers that matter. While this may be true for Windows-based computers, it is not true in general.
Texas Instruments Inc. (TXN), Qualcomm Inc. (QCOM), and Broadcom Inc. (AVGO) all make central processors. However, these companies have specialized in other segments of the consumer electronics market and have shied away from PCs. For example, these manufacturers supply the brains for many of the world's smartphones and tablets. Apple Inc.'s (AAPL) iPhone has used processors designed by Samsung and Taiwan Semiconductor (TSM). Meanwhile, Intel and AMD have focused on the PC and PC gaming markets (including video graphics cards or GPUs).
Historically, there was vibrant competition in the PC chip space, competing directly with Intel's x86 architecture. These companies have all since gone out of business or were forced out of the CPU market. Cyrix was one such company that began by marketing so-called co-processors combined with Intel 286 and 386 CPUs. Cyrix eventually started designing their own chipsets to compete with those primary processors in the early 1990s, grabbing up to 10% of the market share.
Unfortunately, Cyrix consistently found itself late to market behind upgrades offered by Intel and AMD and could not compete on raw performance. The company was sold to National Semiconductor in 1997 and stopped making x86 chips altogether soon after. VIA Technologies purchased some of the intellectual property of Cyrix from National Semiconductor in an attempt to break into the x86 market but also failed to gain any traction.
In the late 1990s, Integrated Device Technology (IDTI) introduced the WinChip, a low-power alternative to compete with x86 platforms. Intended for office use, the WinChip failed to perform when carrying out floating-point calculations and subsequently failed. IDT went on to specialize in chips meant for communication and radio frequency identification (RFID) applications. Only AMD and Intel remained as of the early 2000s by a substantial measure.
The Future
Intel and Advanced Micro Devices are continuously investing in technological enhancements of their products. Although both companies have several developmental projects, below are some of the key upgrades and enhancements expected in the future.
Intel
In August 2019, Intel responded to AMD's Ryzen technology by releasing its improved 10th generation Core processor, based on its new microarchitecture codenamed Ice Lake.
In 2020, Intel announced its 11th Gen Intel Core S-Series desktop, and H35 Laptop processors are designed to provide higher performance for desktop and laptop users. The high-performance is designed for gaming and heavy-duty creative production, such as video creation and editing.
In 2021, Intel launched its 3rd Gen Intel Xeon Scalable processors, which according to the company, delivers nearly 53% higher performance than its previous version. The processors have wide applications, including life sciences, financial services, and the manufacturing industry. According to Intel, the latest 3rd Gen Xeon processors "will power the next generation of supercomputers and high-performance computing systems."
In July of 2021, Intel announced a partnership with Microsoft Corporation to deliver enhanced mobile experiences on Windows-powered PCs. Intel also announced that leading cloud service providers, including Baidu, Alibaba, and Oracle, are offering services to their clients using Intel's latest 3rd Gen Intel Xeon Scalable (“Ice Lake”) processors. The company expects to earn an estimated $77 billion in full-year revenue by the end of 2021.
AMD
In May of 2021, AMD announced the company will introduce new gaming experiences to the automotive and mobile markets by partnering with industry leaders. For example, Tesla uses AMD Ryzen Embedded Processors and AMD RDNA 2 based GPUs to power the company's infotainment system in the Model S and Model X vehicles.
AMD announced that stockholders approved its $35 billion acquisition of Xilinx, which has complementary products to AMD. However, the acquisition would expand AMD's customer base, particularly in the defense and auto industries. The acquisition is expected to close by the end of 2021, pending regulatory approval and approval from the shareholders of AMD and Xilinx.
As a result, AMD expects full-year revenue growth of 60% and a gross profit margin of 48% in 2021 due to strong growth across all businesses.
The Bottom Line
In all likelihood, the two companies will continue to duke it out into the future, swapping places on the leader board as each one pushes the limits of innovation. If the past 50 years are an indication of what the future holds, Intel and AMD will doggedly pursue advancements in processor performance to the delight of gamers and computer users worldwide.
|
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5018
|
dbpedia
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0
| 62
|
https://www.domain-b.com/companies-organisations/firms-companies/silicon-graphics-to-sell-off-cray
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en
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Silicon Graphics to sell off Cray
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"Cray Research",
"Gores Technology Group",
"SGI",
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] | null |
[] | null |
NULL
|
en
|
icon-512.png
|
https://www.domain-b.com/companies-organisations/firms-companies/silicon-graphics-to-sell-off-cray
|
Computer maker Silicon Graphics is in talks to sell its Cray Research unit, better known for its range of supercomputers. SGI has been in talks with a little-known technology acquisition group called Gores Technology Group. The Cray machine was once talked of as one of the technological gems of the United States.
Gores was said to have originally offered $100 million for the struggling supercomputer maker but has lowered its offers since doing due diligence on Cray.
The California based SGI had announced in August that it had formed a separate business unit for Cray and that it was in active discussions with other companies to assume the operation of Cray through a partnership or another transaction.
Cray Research was founded in 1972 by supercomputing legend Seymour Cray, to develop the world's fastest general purpose supercomputers used for simulations of atomic explosions, weather forecasting, pharmaceutical design and other problems which require massive amounts of calculation.
SGI had bought over Cray three and a half years ago at a cost of over $700 million. Cray, once the largest maker of supercomputers, was making about $900 million in revenues and was the leading supercomputer company. Since then it has had problems partly due to a decline in U.S. research and defense budgets, one of its prime customers. Besides, the new and cheaper parallel systems were eating into its market share.
Some analysts feel that the merger proved disastrous for Cray since Cray and SGI had been competitors and were now partners.
Cray expects to have about 850 employees and $300 million in revenues, as a stand-alone company this year. It is also working on the successor to its current SV1 vector machine, called the SV2, which is due in mid 2002. The SV2 is a hybrid of Cray's vector technology with thousands of processors and has financial support and development assistance from the National Security Agency and other U.S. government agencies.
|
|||||
5018
|
dbpedia
|
1
| 96
|
https://mondo.com/insights/mass-layoffs-in-2022-whats-next-for-employees/
|
en
|
2024 Mass Layoffs: Detailed List & Reporting of Notable Company Cutbacks
|
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[] |
[
""
] | null |
[
"Sarah Magazzo"
] |
2024-06-18T15:35:18+00:00
|
Latest layoffs: Companies like IBM, Amazon, Google & Microsoft saw layoffs this year. Learn about mass layoffs & what to do if it happens to you.
|
en
|
Mondo Staffing Agency
|
https://mondo.com/insights/mass-layoffs-in-2022-whats-next-for-employees/
|
Mass layoffs are a difficult but common occurrence in the business world that leaves many employees wondering how they’ll be affected and what to do should they find themselves holding a pink slip.
While the current employment market in the US is strong — with low unemployment rates and high job growth — this could all change in the near future as many businesses struggle to adapt to the changing economy.
Taking all of this into account, many US companies have already begun mass layoffs this year.
What is a mass layoff?
The definition of a mass layoff is the termination of a large number of employees from an organization at the same time. Mass layoffs are usually due to economic downturns.
A “mass layoff” can be defined when the following occurs:
When at least 50 employees are laid off within 30-days or less resulting in the laid-off employees equaling more than one-third of the company’s workforce
500 employees are laid off within 30-days or less, no matter how large the company’s workforce
This can be devastating for both the individuals affected personally and the economy as a whole.
Everything you need to know about company layoffs this year:
Will there be more mass layoffs in 2024?
Notable companies with mass layoffs in 2024
Full list of 2024 company layoffs
Notable companies that had mass layoffs in 2023
Full list of 2023 company layoffs
Full list of 2022 company layoffs
What is the Federal WARN Act?
What to do if you’ve been laid off
Top industries to apply to after you’ve been laid off
Will there be more mass layoffs in 2024?
According to a report by Randstad RiseSmart, it is projected that a significant 92% of employers are preparing for layoffs in 2024, as they navigate the economic implications of the COVID-19 pandemic and adjust for potential overstaffing during this period.
In contrast, the emergence of new work trends, such as generative AI and sustainability practices, indicates a potential surge in job opportunities and shifts in certain job roles.
As the job market continues to evolve, it appears that there will be ample opportunities for those proficient in AI and flexible work structures, emphasizing the necessity for ongoing education and adaptability in a rapidly changing employment environment.
What companies have had mass layoffs in 2024?
GoPuff layoffs:
Gopuff, a fast-delivery startup, reduced its workforce by 6% on May 17, 2024, marking its fifth round of layoffs since 2022, as part of its strategy to achieve free cash flow positivity by the end of 2024.
The co-founders and co-CEOs are leading restructuring efforts to adapt to market conditions and meet investor expectations.
This move also signals potential challenges for other fast-delivery startups, impacting both their investors and workforce.
Peloton layoffs:
Peloton announced that CEO Barry McCarthy will step down, and the company will lay off 15% of its staff, or about 400 employees, to align spending with revenue.
McCarthy will serve as a strategic advisor while the company seeks a permanent CEO, with Karen Boone and Chris Bruzzo serving as interim co-CEOs.
This restructuring aims to reduce annual expenses by over $200 million by 2025, with significant cuts in payroll, marketing, and retail operations.
Despite the layoffs, Peloton continues to struggle financially, missing Wall Street expectations in its fiscal third-quarter results.
Walmart layoffs:
Walmart announced plans to cut hundreds of jobs at its headquarters and relocate most of its U.S. and Canada-based remote workforce to three main offices, with many moving to Bentonville, Arkansas.
The changes aim to strengthen Walmart’s culture and develop employees’ careers, though affected workers can choose to relocate or leave with severance.
This shift reflects Walmart’s move towards more in-person work after initially endorsing remote work during the pandemic.
Bristol Myers Squibb layoffs:
Bristol Myers Squibb plans to lay off 6% of its workforce, approximately 2,200 employees, as part of a restructuring aimed at saving $1.5 billion by the end of next year amid expiring patents for major drugs like Eliquis and Opdivo.
The company is also scaling back its drug development pipeline and consolidating its facilities to streamline operations and focus on high-potential products.
CEO Christopher Boerner emphasized that the cuts and portfolio adjustments are critical to bolster the company’s long-term growth, especially as it faces revenue impacts from new U.S. drug price negotiations.
These changes come as the company seeks to offset potential losses with recent acquisitions aimed at enriching its treatment pipeline, even as it undertakes significant debt to finance these deals.
Foxtrot mass layoffs:
Former employees of Foxtrot Market and Dom’s Kitchen & Market have filed a lawsuit against Outfox Hospitality, alleging the company failed to provide the legally required 60 days’ notice before abruptly closing all locations and laying off staff.
The class action lawsuit, filed in Chicago, seeks 60 days of severance pay and benefits for affected workers under federal and state Worker Adjustment and Retraining Notification Acts.
Workers, including named plaintiff Jamil Ladell Moore, were shocked to discover their employment terminated mid-shift or upon arriving for work, with no prior warning.
The sudden closures of all 33 Foxtrot and Dom’s locations across Chicago, Texas, and Washington D.C. came just six months after a company merger, leaving many employees jobless and without severance.
Tesla mass layoffs
Tesla is laying off over 10% of its global workforce amid declining sales and a competitive price war in the electric vehicle sector.
The company aims to cut costs and boost productivity as first-quarter deliveries dropped for the first time in nearly four years.
CEO Elon Musk and other executives have acknowledged the need for reorganization to prepare for future growth.
The layoffs coincide with the departure of key leaders and follow the cancellation of a planned budget car, reflecting broader market challenges.
Amazon advertising & cloud computing mass layoffs
Amazon’s cloud computing division, AWS, is reducing its workforce across the physical stores technology and sales and marketing departments amid a broader strategic realignment and slowing sales growth.
This follows Amazon’s decision to eliminate cashierless checkout technology in its U.S. Fresh stores, impacting teams responsible for innovations like Just Walk Out, Dash smart carts, and Amazon One palm-based payment technology.
The restructuring comes as part of Amazon’s largest-ever series of layoffs, which began at the end of 2022 and has affected over 27,000 positions across various segments, including Twitch, Audible, and Prime Video.
Phantom Auto mass layoffs:
Phantom Auto, a startup specializing in remote driving technology, is closing down after failing to secure additional funding.
Despite raising $95 million, the company faced difficulties amid a challenging fundraising environment and a shift in the autonomous vehicle industry’s momentum.
The company’s shutdown underscores the broader challenges and consolidations within the autonomous vehicle sector, highlighting the fragile nature of startups reliant on external funding for operations and growth.
U.S. Army mass layoffs:
The U.S. Army plans to eliminate around 24,000 positions, primarily vacant, to streamline its structure and improve capabilities, aiming to expand its active-duty numbers to 470,000 by 2029.
This move, part of a broader restructuring effort following a detailed force structure review, comes amid ongoing recruitment challenges, with significant shortfalls in new enlistees across the armed services in recent years.
Despite these cuts, including a reduction in engineering and various combat roles, the plan includes adding 7,500 new positions to enhance the force’s capabilities.
Vice mass layoffs:
Vice Media Group’s CEO announced layoffs of “several hundred” employees and plans to halt publishing on Vice.com, focusing on social channels and content distribution partnerships.
The company aims for a studio model, shifting away from its digital distribution strategy.
In a controversial town hall, CEO, Bruce Dixon was criticized for ending the call early due to employee reactions to the layoffs.
This move follows Vice filing for bankruptcy and being acquired by a group of lenders for $350 million.
IBM mass layoffs:
IBM is encouraging employees to volunteer for layoffs as part of a global job reduction effort, particularly targeting positions in Europe.
The initiative aligns with IBM CFO James Kavanaugh’s announcement of achieving a $3 billion annual savings goal by the end of 2024, significantly impacting Enterprise Operations & Support and Finance & Operations sectors.
Approximately half of the job cuts will affect European staff, with the company preferring voluntary redundancies to involuntary terminations.
This strategy is part of a broader workforce rebalancing aimed at enhancing productivity and aligning with in-demand skills like AI and hybrid cloud, maintaining the global workforce level through 2024.
BuzzFeed mass layoffs:
BuzzFeed has announced a 16% workforce reduction following the discounted sale of Complex Networks to Ntwrk, retaining only First We Feast.
This strategic decision, aimed at enhancing profitability and agility, comes amidst broader industry challenges, including BuzzFeed’s previous closure of its Pulitzer-winning news operation and a dramatic drop in its stock market valuation since going public.
CEO Jonah Peretti emphasizes the restructuring as a pivotal move for focusing on core brands like HuffPost and Tasty, aiming for a leaner operational model amid the digital publishing sector’s current adversities.
Nike mass layoffs:
Nike announced a reduction of 2% of its workforce, amounting to over 1,500 jobs, as part of a strategic restructuring aimed at focusing investment in growth areas.
The layoffs, to be implemented in two phases, will not affect retail or warehouse employees but are part of a broader plan to streamline operations, enhance efficiency, and adapt to a retail environment increasingly reliant on promotions.
CEO John Donahoe emphasized that this move is essential for reigniting growth and assured that affected employees would receive comprehensive support, positioning Nike to better serve athletes and the future of sport.
Salesforce mass layoffs:
Salesforce is laying off about 700 employees, approximately 1% of its global workforce, amidst a broader wave of tech industry layoffs, as reported by the Wall Street Journal.
Despite these cuts, Salesforce still has 1,000 open positions, indicating a strategic adjustment rather than a large-scale downsizing.
This follows Salesforce’s previous workforce reduction last year, where it cut jobs by 10% and closed offices, subsequently reporting increased revenue and raising its annual profit forecast.
Microsoft mass layoffs:
Microsoft laid off 1,900 employees, 8% of its gaming division, following its acquisition of Activision Blizzard.
The layoffs, part of a larger plan to reduce overlap, were announced by Microsoft Gaming CEO Phil Spencer, who emphasized support for affected employees.
Former Blizzard President Mike Ybarra and co-founder Allen Adham are also departing, with the company ceasing development of a new survival game.
Google mass layoffs:
Google has laid off hundreds of employees across various divisions, including core engineering, Google Assistant, and hardware teams responsible for products like the Pixel phone and Fitbit watches.
The layoffs, part of the company’s effort to reduce expenses and focus on artificial intelligence, follow a trend of tech job cuts seen in other major companies like Meta and Amazon.
CEO Sundar Pichai has been steering Google towards a sharper focus and cost reduction since July 2022, with the company having already conducted its largest layoff of 12,000 people in January 2023.
These recent layoffs are a continuation of Google’s organizational changes amidst a growing emphasis on generative AI.
Sports Illustrated mass layoffs:
The NewsGuild of New York and Sports Illustrated Union have filed an unfair labor practice charge against The Arena Group, alleging that the recent layoffs of around 100 people at Sports Illustrated unfairly targeted union-active employees.
The layoffs, which followed the revocation of the Sports Illustrated brand license by Authentic Brand Group, have been criticized by former CEO Ross Levinsohn, who resigned citing the board’s “abhorrent” and “feckless” actions.
This legal action comes amid accusations of union-busting tactics and negligence by The Arena Group, with some union employees immediately let go and others given 90 days’ notice.
Pixar (Disney+) mass layoffs:
Pixar, a Disney-owned animation studio, is set to undergo significant layoffs this year as part of Disney’s broader cost-cutting measures, which aim to increase efficiency and reduce streaming losses.
The layoffs, affecting employees hired for Disney+ content production, come despite Disney+ gaining 7 million new subscribers in Q4 and the success of Pixar titles like “Elemental” on the platform.
These changes reflect Disney’s strategy to streamline operations and focus on profitability in streaming, amidst industry-wide shifts in audience preferences and content delivery methods.
Universal Music Group mass layoffs:
Universal Music Group NV, the world’s largest record company with roughly 11,000 employees and known for artists like Taylor Swift and Drake, plans to cut hundreds of jobs in its recorded music division, which is its largest, as part of a broader industry trend of slowing sales despite previous growth from paid streaming services.
CEO Lucian Grainge is focusing on cost-cutting measures, including “cut to grow” initiatives, to improve profit margins while continuing to invest in new growth areas like geographic expansion and direct-to-consumer sales.
These layoffs are part of a wider retrenchment in the media and technology industries, with companies like Amazon and Warner Music Group also announcing job cuts.
Amazon Twitch mass layoffs:
Twitch has confirmed laying off more than 500 employees, approximately a third of its workforce, marking the second major layoff in less than a year after 400 jobs were cut in March 2023.
CEO Daniel Clancy stated that despite cost-cutting efforts, the organization remains larger than necessary for its current business size, with the company having optimistically sized itself for future growth.
This decision follows a trend of significant layoffs in the tech and gaming sectors, including cuts by Twitch’s parent company, Amazon, though Twitch streamers will not be directly affected by these changes.
BlackRock mass layoffs:
BlackRock Inc. is set to lay off about 600 employees, approximately 3% of its global workforce, to adapt to rapid changes in the asset management industry and reallocate resources.
The company is shifting focus towards ETFs, global expansion, and new technologies, aiming to transform into a comprehensive investment solution provider while also growing in alternative investments.
Despite these cuts, BlackRock, which faced challenges like market declines and investor skittishness over higher interest rates, still plans to increase its overall staff count by the end of the year as it expands certain business areas.
Companies with layoffs in 2024:
GoPuff layoffs: 6% of workforce laid off (May 2024)
Vacasa layoffs: 13% of workforce laid off (May 2024)
Peloton layoffs: 15% of workforce laid off (May 2024)
Luminar layoffs: 20% of workforce laid off (May 2024)
Motional layoffs: 40% of workforce laid off (May 2024)
Indeed layoffs: 8% of workforce laid off (May 2024)
Walmart layoffs: several hundred workers laid off (May 2024)
Bristol Myers Squibb layoffs: 6% of workforce laid off (April 2024)
Lululemon layoffs: 128 employees laid off (April 2024)
Brevan Howard Asset Management layoffs: ~9% of employees laid off (April 2024)
AI startup Stability layoffs: 10% of workforce laid off (April 2024)
Meow Wolf layoffs: 165 employees laid off (April 2024)
Take-Two Interactive layoffs: 5% of workforce laid off (April 2024)
Disney Marvel Entertainment & Marvel Studios layoffs: 15 employees laid off (April 2024)
Tesla layoffs: 10% of workforce laid off (April 2024)
McKinsey layoffs: 3% of workforce laid off (April 2024)
Neutrogena layoffs: 84 workforce laid off (April 2024)
Spirit Airlines layoffs: 260 pilots furloughed (April 2024)
Best Buy layoffs: Some employees laid off (April 2024)
Amylyx Pharmaceuticals layoffs: 70% of workforce laid off (April 2024)
Apple layoffs: At least 600 employees laid off (April 2024)
Amazon advertising & cloud computing layoffs: (April 2024)
Lands’ End layoffs: 10% of corporate workforce laid off (March 2024)
Stellantis North America layoffs: 400 employees laid off (March 2024)
Unilever layoffs: 7,500 employees laid off (March 2024)
Phantom Auto layoffs: 100% of workforce laid off (March 2024)
Deadspin layoffs: 100% of workforce laid off (March 2024)
Enthusiast Gaming layoffs: 25% of workforce laid off (March 2024)
Fidelity layoffs: 700 employees laid off (March 2024)
Fisker layoffs: 15% of workforce laid off (February 2024)
The Container Store layoffs: 2.5% of workforce laid off (February 2024)
Electronic Arts layoffs: 5% of workforce laid off (February 2024)
Bumble layoffs: 37% of workforce laid off (February 2024)
The U.S. Army layoffs: 5% of workforce laid off (February 2024)
Sony Playstation layoffs: 900 employees laid of (February 2024)
Expedia layoffs: 9% of workforce laid off (February 2024)
DCist layoffss: 15 employees laid off (February 2024)
NowThis News layoffs: 50% of union-represented employees laid off (February 2024)
Nickelodeon Noggin layoffs: 800 employees laid off (February 2024)
Morgan Stanley layoffs: hundreds of employees laid of (February 2024)
SiriusXM layoffs: 2% of workforce laid off (February 2024)
Grammarly layoffs: 16% of workforce laid off (February 2024)
Warner Music layoffs: 10% of workforce laid off (February 2024)
Amazon Pharmacy layoffs: ~300 employees laid off (February 2024)
CNN This Morning Show layoffs: 50 employees laid off (February 2024)
Snap layoffs: 10% of workforce laid off (February 2024)
Zoom layoffs: 2% of workforce laid off (February 2024)
Okta layoffs: 7% of workforce laid off (February 2024)
IBM layoffs: unknown % of workforce pending lay offs (February 2024)
Rivian layoffs: 10% of workforce laid off (February 2024)
BuzzFeed layoffs: 16% of workforce laid off (February 2024)
Nike layoffs: 2% of workforce laid off (February 2024)
Vice Media layoffs: several hundred jobs laid off (February 2024)
Toast layoffs: 10% of workforce laid off (February 2024)
Cisco Systems layoffs: 5% of workforce laid off (February 2024)
Continental layoffs: 3% of workforce laid off (February 2024)
Instacart layoffs: 7% of workforce laid off (February 2024)
Paramount Global layoffs: 3% of workforce laid off (February 2024)
Snapchat layoffs: 10% of workforce laid off (February 2024)
DocuSign layoffs: 6% of workforce laid off (February 2024)
Estee Lauder layoffs: 3-5% of workforce laid off (February 2024)
PayPal layoffs: 9% of workforce laid off (February 2024)
Deutsche Bank layoffs: 4% of workforce laid off (February 2024)
UPS layoffs: ∼2% of workforce laid off (February 2024)
YouTube layoffs: 43 workers laid off (February 2024)
Spotify layoffs: 17% of workforce laid off (February 2024)
Washington Post layoffs: 7% of workforce laid off (January 2024)
Block (Square) layoffs: 10% of workforce laid off (January 2024)
SolarEdge layoffs: ∼16% of workforce laid off (January 2024)
Macy’s layoffs: 13% of corporate workforce + 5 stores closing (January 2024)
iRobot layoffs: 31% of workforce laid off (January 2024)
Jamf layoffs: 6% of workforce laid off (January 2024)
Salesforce layoffs: 1% of workforce laid off (January 2024)
Paramount layoffs: Unspecified amount of workforce laid off (January 2024)
Business Insider layoffs: 8% of workforce laid off (January 2024)
TIME magazine layoffs: 15% of editorial staff laid off (January 2024)
SAP layoffs: 7% of workforce laid off (January 2024)
Vroom layoffs: 90% of workforce laid off (January 2024)
The Los Angeles Times layoffs: 20% of newsroom staff laid off (January 2024)
Brex layoffs: 20% of workforce laid off (January 2024)
X (Alphabet’s moonshot lab) layoffs: Undisclosed dozens of jobs laid off (January 2024)
Citigroup layoffs: 8% of workforce laid off (January 2024)
Prime Video & MGM Studios layoffs: undisclosed hundreds of workforce laid off (January 2024)
Macy’s layoffs: 3% of workforce laid off (January 2024)
Wayfair layoffs: 13% of workforce laid off (January 2024)
Riot Games layoffs: 11% of workforce laid off (January 2024)
TikTok layoffs: <1% of workforce laid off (January 2024)
Microsoft layoffs: 8% of workforce laid off (January 2024)
Levi Strauss & Co. (Levi’s) layoffs: 10%-15% of workforce laid off (January 2024)
REI layoffs: 2% of workforce laid off (January 2024)
eBay layofffs: 9% of workforce laid off (January 2024)
Sports Illustrated layoffs: <1% of workforce laid off (January 2024)
Discord layoffs: 15% of workforce laid off (January 2024)
Amazon Audible layoffs: 5% of workforce laid off (January 2024)
Pixar (Disney+) layoffs: <20% of workforce layoffs announced (January 2024)
NBC News layoffs: 1-3% of workforce layoffs (January 2024)
CitiGroup layoffs: 8% of workforce layoffs announced (January 2024)
Universal Music Group NV layoffs: Hundreds to be laid off (January 2024)
Google layoffs: <1% of workforce laid off (January 2024)
Amazon Twitch layoffs: 35% of workforce laid off (January 2024)
Treasure Financial layoffs: 60-70% of workforce laid off (January 2024)
Duolingo layoffs: 10% of contractor workforce laid off (January 2024)
Sharpie & Rubbermaid (Newell) layoffs: 7% of workforce laid off (January 2024)
Rent the Runway layoffs: 10% of corporate roles cut (Early 2024)
Unity layoffs: 25% of workforce laid off (January 2024)
Blackrock layoffs: 3% of global workforce laid off (January 2024)
Pitch layoffs: Two-thirds of employees laid off (January 2024)
BenchSci layoffs: 17% of workforce laid off (January 2024)
Flexe layoffs: 38% of staff eliminated (January 2024)
NuScale layoffs: 28% of staff laid off (January 2024)
Trigo layoffs: 15% of workforce laid off (January 2024)
Xerox layoffs: 15% of workforce laid off (January 2024)
InVision shutdown: Entire company by end of 2024 (January 2024)
VideoAmp layoffs: Nearly 20% of workforce laid off (January 2024)
Orca Security layoffs: Roughly 15% of staff laid off (January 2024)
Frontdesk layoffs: Entire 200-person workforce laid off (January 2024)
What companies have had mass layoffs in 2023?
Hasbro mass layoffs:
Hasbro, facing a prolonged slump in toy sales, is cutting nearly 20% of its workforce, with CEO Chris Cocks announcing the layoff of 1,100 employees, adding to the 800 jobs already eliminated earlier this year.
These layoffs, a response to persistent market challenges and declining toy sales post-pandemic, will occur over the next six months, as the company also plans to sell its eOne film and TV business and reduce its office footprint.
Despite these measures, Hasbro’s shares fell more than 4% in after-hours trading, contrasting with competitor Mattel’s optimistic outlook bolstered by the success of the “Barbie” movie.
State Street mass layoffs:
Boston-based financial services company State Street is laying off approximately 1,500 employees, a move announced by Vice Chairman and Chief Financial Officer Eric Aboaf and expected to cost between $175 million and $200 million in severance.
The company, which manages trillions in assets and had 42,000 employees as of September 30, is streamlining its organization for long-term success, despite not specifying if the layoffs will affect its Massachusetts workers.
This downsizing aligns with a broader trend in the banking sector, as reported by Reuters, with firms like Morgan Stanley and Bank of America also reducing their workforce due to economic challenges and interest rate hikes.
Zulily mass layoffs:
Zulily, a Seattle-based online retailer, has conducted its second round of layoffs within a year, as it and its parent company Qurate face declining revenues.
The company, which previously laid off staff in May and closed a Pennsylvania fulfillment center, is experiencing a significant drop in revenue, with a 28% decrease in the fourth quarter and a 38% annual decline.
These layoffs come amidst a broader trend of slowing e-commerce growth post-pandemic and are part of Qurate’s broader strategy to cut costs, including a 12% reduction in its workforce.
Stellantis (Jeep parent company) mass layoffs:
Stellantis plans to cut thousands of jobs at its Jeep plants in Detroit and Toledo, citing California’s stringent emissions regulations as a competitive disadvantage.
The company will reduce shifts at both plants, affecting over 3,600 workers, due to declining Jeep sales and a shift to a traditional two-shift operation.
Stellantis has been resisting carbon emission reduction efforts, arguing it could lead to substantial fines.
Amidst industry-wide cost-cutting and restructuring, Stellantis, slow in transitioning to EVs, blames the transition and regulatory challenges for the layoffs.
Spotify mass layoffs:
Spotify, the Swedish music streaming giant, is cutting 17% of its workforce, amounting to about 1,500 jobs, as part of a cost-reduction strategy.
CEO Daniel Ek emphasized the need for the company to become more resourceful and lean, following over-hiring during 2020 and 2021.
This layoff is the third in 2023, in a tech industry that has seen over 250,000 job cuts this year.
Despite these reductions and a shift in strategy towards audiobooks and podcasting, Spotify has struggled to turn a profit and is offering departing employees severance packages including five months’ pay and additional support.
Bill mass layoffs:
Silicon Valley’s Bill, a payment management company, has cut nearly 400 employees, about 15% of its staff, as part of a major restructuring aimed at improving profitability and reducing dependence on interest-rate sensitive revenue.
CEO René Lacerte explained that the layoffs, which include closing the Sydney office and consolidating resources in San Jose and Houston, are necessary to focus on key priorities.
Affected employees will receive severance packages including four months’ pay, health benefits, a half-year bonus, equity vesting, and immigration support, amidst a broader trend of layoffs in the tech sector.
ByteDance (TikTok parent company) mass layoffs:
ByteDance, the parent company of TikTok, is scaling back its gaming unit Nuverse after two years of lukewarm performance, despite it being one of the firm’s six core business units and a rival to Tencent and NetEase.
The decision to restructure and initiate mass layoffs, starting Monday, has left many Nuverse employees uncertain about their future, especially since the total number of layoffs has not been announced.
This comes after significant investments, including a $4 billion acquisition of a Shanghai studio.
Amazon mass layoffs:
In January, Amazon CEO Andy Jassy announced plans to cut 18,000 jobs worldwide, focusing on corporate and technology roles as part of a broader consolidation strategy.
This move, initially revealed in November 2022, began with layoffs constituting approximately 1% of the global workforce, or 3% of corporate staff.
In late April 2023, further layoffs occurred within Amazon Web Services (AWS).
Most recently, in November 2023, Amazon further reduced its workforce by cutting 180 employees from its gaming division.
Jezebel mass layoffs:
Jezebel, a prominent feminist blog, is suspending operations and laying off its staff as part of a broader restructuring by parent company G/O Media, announced CEO Jim Spanfeller.
Despite efforts to sell the publication and discussions with potential buyers, a new home for Jezebel couldn’t be secured.
This suspension, part of a wider industry trend of cutbacks amidst a challenging advertising climate, will result in 23 editorial staff positions being cut.
Dish Network mass layoffs:
Dish Network, based in Englewood, Colorado, is laying off over 500 employees due to evolving business needs and a strategic move for long-term success.
The layoffs come as the company faces a revenue dip to $3.7 billion and a loss of $139 million in Q3 of 2023. Employees affected by the restructuring will be notified within the week.
Dish, with a U.S. workforce exceeding 14,000, has not disclosed how many are Colorado-based.
Charles Schwab mass layoffs:
Charles Schwab has laid off about 5-6% of its workforce, roughly 2,000 individuals, amid efforts to cut costs and stay competitive.
These measures, part of a $500 million cost-cutting initiative announced in summer, largely target non-client-facing areas.
The exact number of layoffs wasn’t disclosed, but as of September 30, 2023, Schwab had 35,900 employees.
Splunk mass layoffs:
Cybersecurity firm, Splunk announced a layoff of roughly 7% of its global workforce, translating to about 500 employees, amid its upcoming acquisition by Cisco.
This comes after an earlier layoff of 300 employees in 2023, although CEO Gary Steele clarified that these decisions aren’t related to the Cisco deal.
Most affected employees are based in the U.S. and are expected to receive unspecified severance and healthcare packages.
The company, facing around $42 million in restructuring costs, remains tight-lipped on which teams will be impacted or the exact timing of the layoffs.
Bullhorn mass layoffs:
Bullhorn, a major player in the staffing industry, has announced a 9% workforce reduction, affecting roughly 144 of its 1,600 employees due to a downturn in the sector.
The company’s CEO, Art Papas, conveyed that while they had hoped to avoid layoffs, the staffing industry’s slowing growth post-pandemic necessitated the move.
Papas acknowledged the pain of parting with talented employees and assured that generous transition packages are in place to aid those affected.
Google (Alphabet) mass layoffs:
In January of, Alphabet, the parent company of Google sent a memo written by chief executive, Sundar Pichai announcing that 12,000 employees — roughly 6% of the global workforce — would be laid off.
In response to Google’s mass layoffs, workers in London offices staged a walkout in early April.
Then in September, several outlets reported that Google laid off “hundreds” of recruiters from the company followed by dozens of jobs in its news devision including a significant number of director positions in October.
Nokia mass layoffs:
Nokia, the Finnish telecom giant, announced plans to cut between 9,000 and 14,000 jobs by 2026, affecting up to 16% of its 86,000-strong global workforce, in response to a significant drop in profits and product demand.
This decision follows a disappointing third quarter in which sales decreased by 20% from the previous year, leading to a 70% profit decline.
Nokia CEO Pekka Lundmark stated the cuts aim to ensure long-term profitability and competitiveness amid market uncertainties, with plans to save $424m in 2024 and $318m in 2025.
Geico mass layoffs:
In October, Geico is cuts 6% of its national workforce, impacting approximately 2,000 employees, including 5.5% in Western New York, as revealed in a letter from CEO Todd Combs.
The decision aims to bolster long-term profitability and growth.
Affected employees will be notified on Thursday, with support including career coaching and resume assistance.
Unaffected staff will have mandated in-office days starting January 1, 2024, differing from recent remote work trends.
LinkedIn mass layoffs:
On October 16, LinkedIn announced it would lay off 668 employees from its engineering, talent, and finance teams due to slowing revenue growth, marking its second round of job cuts this year.
This reduction, affecting over 3% of its 20,000 employees, contributes to the significant job losses in the tech sector amidst an uncertain economic landscape.
Despite the cuts, LinkedIn reaffirms its commitment to investing in strategic priorities for future growth, aiming to continue delivering value for its members and customers.
Qualtrics mass layoffs:
Qualtrics is laying off 780 employees, which is about 14% of its workforce, to address organizational complexities brought on by rapid hiring, as revealed by an internal memo from CEO Zig Serafin.
The experience-management software company, with a pre-cut headcount of 5,500, aims to enhance collaboration and decision-making processes through this restructuring.
Besides the layoffs, several roles will be shifted or relocated over the next year, impacting every team within the company as per Serafin’s memo.
This move follows a pattern of tech companies reducing staff in recent years, amidst industry downturns post a pandemic-driven software boom.
Washington Post mass layoffs:
The Washington Post revealed plans to offer voluntary buyouts aiming to reduce staff by 240, prompted by a realization of overly optimistic revenue projections in recent years.
Interim CEO Patty Stonesifer conveyed the goal to improve the company’s financial health in the coming year.
This move follows a previous staff reduction nine months ago and aims to prevent harsher measures like layoffs, striving for a stronger position in 2024.
Despite past expansions, this decision underscores a shift in resource allocation to meet customer needs amidst critiques from the Washington Post Guild regarding the company’s business decisions.
Stitch Fix mass layoffs:
Since January, Stitch Fix has undergone two rounds of layoffs. The first round accounted for 15% of salaried positions, primarily in corporate and styling leadership, impacting about 330 individuals or roughly 4% of the total workforce.
This move followed a slowdown in revenue growth as the pandemic receded and consumers shifted their spending to physical stores, which also led to a 55% drop in the company’s stock value.
Now, a second round of layoffs is due to commence on December 1, with a phased approach set to continue through April 2024, marking the closure of their distribution center as per the notice filed with the Texas Workforce Commission.
This signifies an end to Stitch Fix’s operations in Dallas.
Epic Games mass layoffs:
Epic Games is laying off approximately 830 employees, equating to 16% of its workforce, due to financial instability, despite growing success with Fortnite’s creator ecosystem, which has garnered lower margins.
The company is divesting from Bandcamp, which is being acquired by Songtradr, and spinning off most of SuperAwesome, with its advertising business becoming an independent entity.
Epic is offering substantial severance packages to laid-off employees, including six months of base pay and healthcare coverage, among other benefits.
Meanwhile, core business ventures remain unaffected, with crucial projects like the next Fortnite Season and Fortnite Chapter 5 proceeding as scheduled as Epic continues to reshape its financial structure to aim for profitability and metamorphose into a leading metaverse company.
Talkdesk mass layoffs:
Talkdesk, a software company once valued at $10 billion, has undergone its third round of layoffs since last year.
While the exact number of affected employees remains undisclosed, the company had previously laid off up to 200 people in August 2022 and reduced its workforce again in early January.
CEO Tiago Paiva stated that despite the reductions, the company’s advancements in AI position them for continued innovation and they will still hire in “strategic areas.”
This move follows a trend in the tech sector, with several other software companies also announcing workforce reductions recently.
CVS mass layoffs:
CVS Health is set to eliminate approximately 5,000 non-customer-facing roles, less than 2% of its 300,000 employees, as part of a cost-cutting measure emphasizing healthcare services.
Those affected will receive severance, benefits, and outplacement services. Subsequent layoffs included over 500 employees in Connecticut, 157 in SoHo, and 140 in Massachusetts.
Despite being one of the nation’s largest drugstore brands with nearly 10,000 stores, CVS continues its corporate downsizing, impacting its corporate offices across various locations.
WWE mass layoffs:
World Wrestling Entertainment (WWE) recently streamlined its workforce, cutting over 100 positions after merging with UFC to form TKO Holdings.
Duplicate positions within WWE and its parent company, Endeavor Group Holdings, were eliminated.
WWE President Nick Khan mentioned that these workforce reductions are part of their transition into TKO Group Holdings.
Among those departing is WWE’s Executive Vice President of Development and Digital, Jamie Horowitz, who will join Omaha production, known for its “ManningCast.”
Vince McMahon, WWE’s owner, is rumored to return to the network to aid in media rights negotiations.
General Motors (GM) mass layoffs:
General Motors and Stellantis announced layoffs due to ongoing UAW strikes at three facilities.
GM laid off 2,000 workers in Kansas, and Stellantis laid off 68 in Ohio with the potential for 300 layoffs in Indiana.
As the strike continues, UAW warns more workers might join if negotiations don’t progress, with current demands including a mid-30s percentage pay raise.
Cisco mass layoffs:
After laying off 5% of its total workforce in December of 2022, Cisco notified employees in July that it would be laying off an additional 350 employees throughout Silicon Valley.
These employees comprised of mostly software engineering technical leaders, software engineers, project managers, and executive assistants were given the choice of leaving Cisco on either August 31 or October 16.
Airtable mass layoffs:
Airtable, a unicorn company valued at $11.7 billion, is laying off 237 employees, 27% of its workforce, as part of a strategy to target large enterprise clients and control spending.
CEO Howie Liu admits to getting caught in a post-COVID hiring spree, emphasizing the need for efficient growth and a more mature business approach.
The company, founded in 2013, aims to shift its focus from smaller clients to securing larger deals with customers having million-dollar-plus spend rates.
Grindr mass layoffs:
Grindr, the LGBTQ+ dating app, recently mandated its all-remote staff to commit to working from an office two days a week or face termination.
Since a return to office would mean many Grindr employees would have to move to Los Angeles, San Fransico, or Chicago, the policy resulted in 46% of the staff being let go after they declined the mandate, significantly impacting Grindr’s queer-friendly workplace culture.
Barstool Sports mass layoffs:
About 25% of Barstool Sports’ workforce will face layoffs, as reported by the New York Post.
Founder Dave Portnoy, who recently reacquired the site, expressed his aversion to firing people but emphasized the necessity of the move due to financial challenges.
Portnoy had previously sold Barstool Sports to Penn Entertainment only to repurchase it later, now owning 100% of the company.
He remains optimistic about the company’s future, vowing never to sell it again.
T-Mobile mass layoffs:
T-Mobile is cutting nearly 7% of its workforce, impacting around 5,000 corporate and tech roles, while retail and customer care positions remain untouched.
Despite promises of job growth after its 2020 Sprint merger, T-Mobile had a net decrease in employees by the end of that year.
CEO Mike Sievert cites the need to adapt to rising customer acquisition costs, and while no further company-wide layoffs are anticipated, affected employees will receive severance and a minimum of 60 days of transitional leave.
Salesforce mass layoffs:
Salesforce CEO Marc Benioff announced on January 4th that the B2B software company would be cutting 7,000 jobs, approximately 10% of its workforce, over the coming weeks.
Then, in August, the international company continued its job cuts in Ireland, part of a larger plan to prioritize profitability following a 10% reduction earlier this year.
This time, around 50 roles were impacted, separate from the initial companywide reduction.
The company aims to significantly reduce its headcount by the end of fiscal 2024 amidst a shift in focus towards margin expansion, echoing a trend of job cuts in other tech companies like Microsoft and Amazon.
Master Lock mass layoffs:
In late August, Master Lock informed the Wisconsin Department of Workforce Development of its plans to begin layoffs at its Milwaukee Manufacturing plant beginning in November and continuing until its closure in March 2024.
The decision to shut down, after over a century of operation since its foundation in 1921, will result in 325 — about 4% of employees — permanent layoffs.
The company emphasizes that the closure is a business decision and will collaborate with UAW Local 469 for a smooth transition for the affected employees.
Intel mass layoffs:
Intel is set to lay off over 300 employees in California, spanning roles in GPU software development, cloud computing, and AI, as part of its cost-cutting initiatives.
These layoffs come after Intel CEO Pat Gelsinger announced a significant spending reduction plan last year due to a demand slowdown, aiming for a company-wide transformation.
The affected positions include GPU software engineers, AI software engineers, cloud solution architects, and several managerial roles, with the layoffs impacting Intel’s Santa Clara headquarters, Folsom, and San Jose locations.
Tyson Foods mass layoffs:
Tyson Foods plans to close four plants nationwide, resulting in the loss of around 2,200 jobs.
Employees were informed in accordance with the WARN Act’s 60-day notice requirement for large-scale layoffs.
The company is making these significant cuts as part of its restructuring.
Yellow mass layoffs:
Yellow, a prominent U.S. trucking company with a 99-year history, has announced its closure due to financial struggles exacerbated by debt from numerous mergers and disputes with the Teamsters union.
The shutdown impacts nearly 30,000 jobs, including approximately 22,000 Teamsters members, and hundreds of nonunion employees were laid off as the company ceased accepting new shipments.
Despite the significant loss of jobs and revenue, the impact on the trucking industry is expected to be limited as many customers had already shifted their cargo to rival companies.
Anheuser-Busch mass layoffs:
Anheuser-Busch announced that it plans to lay off around 380 positions in its US corporate staff as it undergoes restructuring. The layoffs, affecting about 2% of the US employee population, will not include frontline staff.
The decision comes after Modelo Especial, brewed by Constellation Brands, surpassed Bud Light as the top-selling beer in the US for the second consecutive month.
Anheuser-Busch CEO, Brendan Whitworth, stated that the move was challenging but necessary to ensure long-term success for the organization.
Binance mass layoffs:
Amid a U.S. federal investigation, Binance, a leading crypto exchange, has been significantly reducing its workforce, with over 1,000 of its total 8,000 employees already dismissed in the U.S. and India.
The layoffs, which have affected customer-service workers heavily and are ongoing, could result in the company losing more than a third of its staff.
Microsoft mass layoffs:
In a memo sent to employees on January 18th, Microsoft CEO Satya Nadella announced that the company is making changes that will result in 10,000 jobs being eliminated through the end of March.
Then in July, it was announced that an additional 276 employees would be let go primarily in customer service, support, and sales, according to GeekWire which reported these layoffs first.
Niantic mass layoffs
Niantic, the creator of Pokémon GO, has laid off 230 employees, marking its second round of layoffs in a year.
The company is also discontinuing several projects, including NBA All-World and a Marvel-based game, following last year’s cancellation of four projects.
CEO John Hanke attributed the layoffs to a return to pre-pandemic revenue levels and underperforming new projects.
Disney / ESPN mass layoffs:
According to reports in May, the anticipated third and potentially final round of significant job reductions will commence before Memorial Day, impacting approximately 2,500 positions across the board.
These latest layoffs come after Disney CEO Bob Iger announced on February 8, 2023, that they planned to cut 7,000 jobs, representing more than 3% of its global workforce.
After Disney’s second round of layoffs in April totaling 4,000 jobs largely affecting ESPN divisions, the latest round began at the start of July affecting many well-known, and beloved on-air ESPN personalities.
Ford mass layoffs:
Ford Motor Company is reportedly preparing to lay off at least 1,000 salaried and contract employees, according to insiders who spoke to the Wall Street Journal.
The layoffs at Ford are expected to primarily affect the company’s software division, as well as its gas-powered and electric vehicle manufacturing sectors in an effort to align its staffing around “skills and expertise,” which would include hiring in key areas.
Uber mass layoffs:
In an internal memo, Uber recently announced that roughly 35% of its recruitment team — equalling roughly 200 recruiters — is set to experience layoffs in the near future as part of a company-wide restructuring.
The well-known on-demand ride service has made this decision to cut costs in response to the current economic conditions. This comes after the company has already reduced its recruitment staff through several smaller rounds of layoffs across various departments.
Spotify mass layoffs:
Spotify is laying off approximately 200 employees, about 2% of its workforce, in a strategic shift to better support its partnerships with global podcasters.
The decision, announced by Vice President Sahar Elhabashi, will affect employees in various locations, with those impacted receiving “generous severance packages.”
This move is part of Spotify’s broader effort to enhance its podcast unit, on which it has spent over $526 million since 2020 on acquisitions and high-profile sponsorships with figures like Meghan, Duchess of Sussex, and online personality Joe Rogan.
Rolls Royce mass layoffs:
Rolls Royce is reportedly considering significant layoffs that could result in around 3,000 job losses, based on expert advice.
These layoffs come as a result of the latest Rolls Royce plan to streamline its operations. As part of this strategy, Rolls Royce is also reportedly considering consolidating its non-manufacturing departments across its civil aerospace, defense, and power systems divisions.
The report suggests that the layoffs at Rolls Royce could predominantly affect its non-manufacturing sector, potentially leaving around 6% of its global workforce unemployed.
JPMorgan Chase mass layoffs:
JPMorgan Chase announced in late May that it would eliminate approximately 500 roles before the end of the month, primarily in the technology and operations sectors.
These layoffs come at a time when the bank currently has around 13,000 job vacancies as JPMorgan Chase occasionally reduces its workforce throughout the year, even while recruiting thousands of additional employees for various roles.
Meta (Facebook) mass layoffs:
As of May 25th, Meta’s latest round of layoffs that could affect around 6,000 of its employees has commenced.
This comes on the heels of April’s layoffs that included 4,000 employees across multiple different platforms including Facebook, Instagram, and WhatsApp.
Prior to April’s cuts, it was confirmed in an early March announcement that Meta would be conducting a second round of layoffs that would potentially affect 10,000.
This second round of layoffs came after Meta’s first mass layoff in its 18-year history in November of 2022 which affected 11,000 employees.
Equating to roughly 13% of the Meta workforce, this latest round of layoffs is an attempt to support Meta CEO, Mark Zuckerberg’s proposed, “Year of Efficiency.”
Reasons for these layoffs point to decreasing demand as compared to pandemic peaks that resulted in the building of a large fulfillment arm of the company.
3M mass layoffs:
As a recession in the manufacturing industry looms near, the multinational conglomerate, news broke on April 25th that multinational conglomerate, 3M would begin mass layoffs of 6,000 of its global workforce.
These layoffs come as part of an internal restructuring of the company noting that these layoffs are expected to save 3M an estimated $900 million a year before taxes.
David’s Bridal mass layoffs:
Amidst rumors of a potential bankruptcy or sale, David’s Bridal announced it will lay off 9,236 employees across the United States.
According to the Wall Street Journal, David’s Bridal employs roughly 11,000 workers which would mean these layoffs account for more than 80% of its total workforce.
The layoffs are set to begin in spring and continue through the end of the summer.
Zoom mass layoffs:
Zoom CEO Eric Yuan announced layoffs of 1,300 employees, or 15% of its workforce, in an email on Tuesday, February 7th. As part of that announcement, Yuan said he will also reduce his salary by 98% this year, while other executives will see a 20% cut.
These layoffs will impact every department within the company, and laid-off employees are said to be receiving up to 16 weeks’ salary and healthcare coverage as severance.
Dell mass layoffs:
Due largely to the rapid reduction in the demand for PCs, as evidenced by a 37% decline in PC shipments in Q4 of 2022, computer manufacturer, Dell announced on February 6th it will be laying off 6,500 people from its workforce
At 5% of its global workforce, these layoffs come as another cost-cutting measure in addition to hiring freezes and travel restrictions the company had already put into place.
PayPal mass layoffs:
PayPal closed out January by announcing that it would be laying off 2,000 employees, making up roughly 7% of its workforce.
The layoffs, scheduled to take place over the first few weeks of February, come as a result of the company’s attempts to “right-size” its cost structure, and focus its resources on its “core strategic priorities,” according to the statement made by PayPal President, Dan Schulman.
IBM mass layoffs:
IBM announced on Wednesday, January 25th that it will be cutting roughly 3,900 positions, or 1.5% of its global workforce, as a result of the previously announced spinoff and sale of two business units.
This move is expected to cost the company around $300 million this quarter making IBM the latest tech giant to make significant cuts to its workforce.
Twitter mass layoffs:
On Friday, November 4th, 2022 Twitter laid off 3,700 employees — nearly half of its global employees — in its first round of mass layoffs.
Twitter’s mass layoff affected many departments, including the content moderation teams, sales, and advertising departments, and engineering & development divisions.
Twitter’s mass layoff of nearly 50% of its workforce was the largest mass layoff of 2022 by a tech company.
In a second round of mass layoffs, 200 — roughly 10% — of Twitter’s remaining workforce was laid off late in February of 2023, since then, leaving Twitter sued for mass layoffs.
Spotify mass layoffs:
The latest in a slew of tech company mass layoffs in January, Spotify announced that it would be letting go of 6% of its global workforce.
In the message sent to employees that was also posted online, CEO Daniel Ek announced changes to high-level management and cited the need for speed and efficiency as some of the driving forces behind these “organizational changes.”
With roughly 6,600 global employees the 6% layoffs would account for roughly 400 of Spotify workers.
DirecTV mass layoffs:
DirecTV announced that it would be laying off 10% of its management which accounts for about half of its total workforce. In a memo sent on January 6th employees were made aware of the layoffs and reports say that the affected workers’ last day is January 20th.
After losing roughly 400,000 subscribers in Q3 of 2022, DirecTV continues to struggle to keep up with streaming entertainment services.
“The entire pay-TV industry is impacted by the secular decline and the increasing rates to secure and distribute programming,” a DirecTV rep said in a statement. “We’re adjusting our operations costs to align with these changes and will continue to invest in new entertainment products and service enhancements.”
Vimeo mass layoffs:
Popular video-hosting platform Vimeo plans to lay off 11% of their employees in January. This round of layoffs is on top of the 6% laid off in Juley, 2022.
CEO Anjali Sud stated the staff layoffs were necessary to give the company “financial flexibility,” while also noting “It is also the right thing to do to enable Vimeo to be a more focused and successful company, operating with the necessary discipline in an uncertain economic environment.”
Companies with layoffs in 2023:
Nu Skin layoffs: 5% of workforce laid off (December 2023)
Hasbro layoffs: 20% of workforce laid off (December 2023)
State Street layoffs: 3% of workforce laid off (December 2023)
Zulily layoffs: 12% of workforce laid off (December 2023)
Twillio layoffs: 5% of workforce ladi off (December 2023)
Tidal layoffs: 10% of workforce laid off (December 2023)
Moonbug Entertainment layoffs: 5% of workforce laid off (December 2023)
Stellantis layoffs: 1% of workforce laid off (December 2023)
Spotify layoffs: 17% of workforce laid off (December, 2023)
Bill layoffs: 15% of workforce laid off (December, 2023)
ByteDance mass layoffs: undisclosed number laid off (November 2023)
Jezebel mass layoffs: 100% of workforce laid off (November 2023)
Dish Network mass layoffs: 3.5% of workforce laid off (November 2023)
Charles Schwab mass layoffs: 5-6% of workforce laid off (November 2023)
Starz layoffs: >10% of workforce laid off (November 2023)
Siemens Healthineers mass layoffs: 1% of workforce laid off (November 2023)
Stroock & Stroock & Lavan mass layoffs: 27% of workforce laid off (November 2023)
Shipt mass layoffs: 3.5% of workforce laid off (November 2023)
Shell mass layoffs: .2% of workforce laid off (November 2023)
Medical Solutions mass layoffs: 10% of workforce laid off (November 2023)
Faire mass layoffs: 20% of workforce laid off (November 2023)
Panera Bread mass layoffs: 3% of workforce laid off (November 2023)
Condé Nast & Vox Media mass layoffs: 5% of workforce laid off (November 2023)
Splunk mass layoffs: 7% of workforce laid off (November 2023)
Master Lock mass layoffs: 4% of workforce laid off (November 2023)
Bandcamp mass layoffs: 50% of workforce laid off (October 2023)
Bungie mass layoffs: 8% of workforce laid off (October 2023)
Beam Therapeutics mass layoffs: 20% of workforce laid off (October 2023)
Bullhorn mass layoffs: 9% of workforce laid off (October 2023)
Shipt mass layoffs: 3.5% of workforce laid off (October 2023)
Nokia mass layoffs: 16% of workforce laid off (October 2023)
Geico mass layoffs: 6% of workforce laid off (October 2023)
Rolls-Royce mass layoffs: 6% of workforce laid off (October 2023)
Flexport mass layoffs: 20% of workforce laid off (October 2023)
Qualcomm mass layoffs: 2.5 % of workforce laid off (October 2023)
LinkedIn mass layoffs: 3% of workforce laid off (October 2023)
Ally Financial mass layoffs: 5% of workforce laid off (October 2023)
Qualtrics mass layoffs: 14% of workforce laid off (October 2023)
Washington Post mass layoffs: 9% of workforce laid off (October 2023)
Epic Games mass layoffs: 16% of workforce laid off (September 2023)
Talkdesk mass layoffs: 20% of workforce laid off (September 2023)
General Motors (GM) mass layoffs: 1% of workforce laid off (September 2023)
Center for Antiracist Research mass layoffs: 50% of workforce laid off (September
WWE mass layoffs: 12% of workforce laid off (September 2023)
Cisco mass layoffs: .4% of workforce laid off (September, 2023)
Airtable mass layoffs: 27% of workforce laid off (September 2023)
Slalom mass layoffs: 7% of workforce laid off (September 2023)
Grindr mass layoffs: 46% of workforce laid off (September 2023)
Roku mass layoffs: 10% of workforce laid off (September 2023)
PDC Energy (Chevron) mass layoffs: 33% laid off (September 2023)
Barstool Sports mass layoffs: 25% of workforce laid off (August 2023)
Farmers Insurance mass layoffs: 11% of workforce lad off (August 2023)
T-Mobile mass layoffs: 7% of workforce laid off (August 2023)
Twiga mass layoffs: 33% of workforce laid off (August 2023)
Intel mass layoffs: .2% of workforce laid off (August 2023)
BlueRock mass layoffs: 12% of workforce laid off (August 2023)
AppFolio mass layoffs: 9% of workforce laid off (August 2023)
Tyson Foods mass layoffs: 1% of workforce laid off (August 2023)
Emergent Biotech mass layoffs: 15% of workforce laid off (August 2023)
Rapid7 mass layoffs: 18% of workforce laid off (August 2023)
CVS mass layoffs: <2% of workforce laid off (August 2023)
KuCoin mass layoffs: 30% of workforce laid off (July 2023)
Yellow mass layoffs: 100% of workforce laid off (July 2023)
Kape Technologies mass layoffs: 30% of workforce laid off (July 2023)
Entertainment Tonight mass layoffs: 10% of workforce laid off (July 2023)
Anheuser-Busch mass layoffs: 2% of workforce laid off (July 2023)
BioGen mass layoffs: 11% of workforce laid off (July 2023)
FibroGen mass layoffs: 32% of workforce laid off (July 2023)
Allina Health mass layoffs: 1% of workforce laid off (July 2023)
Binance mass layoffs: 12% of workforce laid off (July 2023)
Walgreens mass layoffs: .16% of workforce laid off (July 2023)
Niantic mass layoffs: ~28% of workforce laid off (July 2023)
Ford mass layoffs: 1% of workforce laid off (June 2023)
Robinhood mass layoffs: 7% of workforce laid off (June 2023)
Uber mass layoffs: 1% of workforce laid off (June 2023)
Grubhub mass layoffs: 15% of workforce laid off (June 2023)
Spotify mass layoffs: 2% of workforce laid off (June 2023)
Rolls Royce mass layoffs: 6% of workforce laid off (May 2023)
JPMorgan Chase mass layoffs: .2% of workforce laid off (May 2023)
Paramount mass layoffs: 25% of workforce laid off (May 2023)
Shopify mass layoffs: 20% of workforce laid off (May 2023)
Morgan Stanley layoffs: 5% of workforce laid off (May 2023)
David’s Bridal layoffs: 83% of workforce laid off (April 2023)
Roku layoffs: 6% of workforce laid off (March, 2023)
Lucid Group layoffs: 18% of workforce laid off (March, 2023)
Meta layoffs: 13% of workforce laid off (March, 2023)
Twitter layoffs: 10% of workforce laid off (February, 2023)
Twillo layoffs: 17% of workforce laid off (February, 2023)
Roomba layoffs: 7% of workforce laid off (February, 2023)
Disney layoffs: 3% of workforce laid off (February, 2023)
Zoom layoffs: 15% of workforce laid off (February, 2023)
Dell layoffs: 5% of workforce laid off (February, 2023)
HubSpot layoffs: 7% of workforce laid off (February, 2023)
PayPal layoffs: 7% of workforce laid off (February, 2023)
IBM layoffs: 1.5% of workforce laid off (January, 2023)
Gemini layoffs: 10% of workforce laid off (January, 2023)
Yankee Candle layoffs: 13% of office workers laid off (January, 2023)
3M layoffs: <1% of workforce laid off (January, 2023)
Spotify layoffs: 6% of workforce laid off (January, 2023)
Google (Alphabet) layoffs: 6% of workforce laid off (January, 2023)
Microsoft layoffs: 4-5% of workforce laid off (January, 2023)
Amazon layoffs: 1-2% of workforce laid off (January, 2023)
Carta layoffs: 10% of workforce laid off (January, 2023)
Coinbase layoffs: 20% of workforce laid off (January, 2023)
DirecTV layoffs: 5-6% of workforce laid off (January, 2023)
Salesforce layoffs: 10% of workforce laid off (January, 2023)
Vimeo layoffs: 11% of workforce laid off (January, 2023)
Goldman Sachs layoffs: 8% of workforce laid off (January, 2023)
Compass layoffs: size of layoffs not immediately known (January, 2023)
Stitch Fix layoffs: 20% of workforce laid off (January, 2023)
What companies had mass layoffs in 2022?
DoorDash mass layoffs:
On November 30th a company spokesman for DoorDash confirmed that the company will layoff approximately 1,250 employees — representing 6% of the company’s staff. CEO Tony Xu called the mass layoff “the most difficult change to DoorDash that I’ve had to announce in our almost 10-year history.”
DoorDash’s stock price is down more than 60% since January, 2022.
Zillow mass layoffs:
Citing continued declines in the housing market, online real estate services company, Zillow laid off 300 employees at the end of October 2022.
At roughly 5% of its overall employees, these layoffs come as a result of mounting fears of an impending recession.
Netflix mass layoffs
The streaming giant’s subscriber count continues to shrink and as a result, Netflix has laid off 150 workers accounting for about 2% of its workforce in June.
Citing slowing revenue as the reason for slow company growth, Netflix representatives explain that these layoffs come as the result of a business need and not due to any personal performance issues of those being let go.
Carvana mass layoffs
In one of the largest mass layoffs this year, Carvana cited a recession in auto sales as the main driver in laying off 2,500 employees in November.
Reports of this mass layoff have revealed that these 2,500 Carvana employees were made aware of layoffs via Zoom.
Coinbase mass layoffs
The cryptocurrency exchange platform announced that it would be laying off 18% of its workforce in June.
CEO Brian Armstrong cited a possible recession, a need to manage costs, and growing “too quickly” during a bull market as reasons for laying off almost one-fifth of the Coinbase workforce, leading many to wonder if this is a sign of things to come for the crypto industry at large.
Compass & Redfin mass layoffs
As the housing market remains as volatile as ever and interest rates continue to rise, Compass, a real estate brokerage, announced that it would be laying off 13% of its employees in November — this after Compass laid off 18% of its workforce in June.
Redfin, another real estate brokerage feeling the effects of declining home sales, announced that it will be cutting its workforce by 8% in June, 2022.
These layoffs come as both companies have been struggling to keep up with the slowing housing market.
Companies with layoffs in 2022:
Cisco layoffs: 5% of workforce laid off (December, 2022)
DoorDash layoffs: 6% of workforce laid off (November, 2022)
Candy Digital layoffs: 33% of workforce laid off (November, 2022)
Redfin layoffs: 13% of workforce laid off(November, 2022)
Amazon layoffs: 1% of workforce laid off beginning (November, 2022)
Meta layoffs: 13% of workforce laid off (November, 2022)
Twitter layoffs: 50% of workforce laid off (November, 2022)
Zillow layoffs: 5% of workforce laid off (October, 2022)
Peloton layoffs: 12% of workforce laid off (October, 2022)
DocuSign layoffs: 9% of workforce laid off (September, 2022)
Taboola layoffs: 6% of workforce laid off (September, 2022)
Snapchat layoffs: 20% of workforce laid off (September, 2022)
Outbrain layoffs: 3% of workforce laid off (July, 2022)
Lyft layoffs: 2% of workforce laid off (July, 2022)
The Mom Project layoffs: 15% of workforce laid off (July, 2022)
Opensea layoffs: 20% of workforce laid off (July, 2022)
Substack layoffs: 14% of workforce laid off (June, 2022)
Ninantic layoffs: 8% of workforce laid off (June, 2022)
MasterClass layoffs: 20% of workforce laid off (June, 2022)
Bird layoffs: 23% of workforce laid off (June, 2022)
Superhuman layoffs: 22% of workforce laid off (June, 2022)
Cameo layoffs: 25% of workforce laid off (May, 2022)
Robinhood layoffs: 9% of workforce laid off (April, 2022)
Virgin Hyperloop layoffs: 50% of workforce laid off (February, 2022)
Peloton layoffs: 20% of workforce laid off (February, 2022)
Beachbody layoffs: 10% of workforce laid off (January, 2022)
What other companies had mass layoffs last year?
Although not technically a “mass” layoff (more than 1/3 of the company or more than 500 employees laid off in 30-days) the following companies have seen large layoffs in 2022:
DocuSign layoffs this year
DocuSign announced in September that it plans to cut around 9% of its workforce.
Like many other major corporations making mass layoffs, DocuSign says these layoffs are a part of a major restructuring plan ahead of the expected recession.
Ford Motor Company layoffs this year
Ford announced in late-August plans to lay off 2,000 salaried workers and 1,000 contract workers across the US, Canada and India — with a large percentage of these layoffs occurring in Michigan.
The layoffs will be effective September 1, 2022 according to a company spokesman.
7-Eleven layoffs this year
7-Eleven laid off at least 880 corporate employees in July at offices in Ohio and Texas. A company spokesman said these layoffs were the result of an ongoing “integration process” after it bought rival Speedway in 2020.
Shopify layoffs this year
According to the WSJ, Shopify plans to lay off approximated 1,000 employees, roughly 10% of its global workforce.
In an internal memo on July 26, CEO Tobi Lutke told employees his belief that post-pandemic e-commerce would continue to grow did not come to fruition, noting “It’s now clear that bet didn’t pay off. Ultimately, placing this bet was my call to make and I got this wrong.”
Vimeo layoffs this year
Popular video-hosting platform Vimeo laid off 6% of their employees in July. CEO Anjali Sud stated the staff layoffs were necessary to give the company “financial flexibility,” while also noting “after assessing the challenging market conditions and uncertainty ahead, I believe this is the responsible action to take.”
Tesla layoffs this year
In late June, Tesla laid off 229 employees largely from it’s Autopilot team — with the majority being hourly workers, which is surprising given that CEO Elon Musk stated earlier in the year layoffs would be targeted at salaried positions.
Loom layoffs this year
While not technically a “mass” layoff, video messaging and collaboration service Loom recently laid off 34 members of its relatively small staff accounting for 14% of its overall workforce.
While Loom hosts 14 million monthly users, these layoffs are said to be a part of the company’s overall strategy for more sustainable growth moving forward.
What is the WARN Act?
The Worker Adjustment and Retraining Notification (WARN) Act is a US law that requires employers with 100 or more employees to provide a 60-day advance notification of plant closings and mass layoffs.
The act aims to provide employees with sufficient time to seek alternative employment or retraining opportunities, ensuring a smoother transition during such challenging times.
What to do if you’ve been laid off
While you may be overwhelmed by what to do after being laid off, there are a few important things you should do immediately after.
If you’ve recently been laid off, be sure to take care of these three things immediately before figuring out what to do next…
Tip 1: File for unemployment immediately
Filing for unemployment is the first step you should take if you’ve been laid off. You can usually file for unemployment online, simply by providing information like your Social Security number, driver’s license or state ID number, and contact information for your previous employer.
Tip 2: Health insurance options
Exploring your health insurance options after being laid off is also important. If you were previously covered by your employer, you may be eligible for COBRA, which allows you to keep your health insurance for a certain period of time after leaving your job.
Tip 3: Retirement savings
If you had access to a 401k contribution plan at your former employer, you have the option to cash out your 401k, though this option is usually not advised as certain penalties can be incurred.
There is also the option to roll the account over into an IRA but take the time you need to decide which option is best for you with a licensed finance professional.
Top industries to apply to after you’ve been laid off
Once you’ve taken care of those 3 housekeeping items to stay afloat while you search for your next job, take some time to update your resume, start networking, and consider the following industries in high demand for talented professionals.
Tech Industry
The tech industry is always in need of talented professionals and there is no sign of that changing anytime soon. Companies like Google, Amazon, and Apple are always on the lookout for top talent in fields with top salaries in data science, software engineering, and product management.
Digital Marketing Industry
The rise of social media and online advertising has led to a boom in the digital marketing industry. Companies are in need of talented marketers to help them reach their target audiences online in new and innovative ways.
With countless, in-demand roles with top salaries in social media and digital marketing, now is a great time to consider a career as a social media coordinator, digital marketing manager, and more.
Creative Industry
The creative industry, which includes roles with top salaries in web design, graphic design, and copywriting, is also in high demand.
Companies are always looking for creative professionals to help them stand out from the competition. If you’re a creative professional who has recently been laid off, consider pursuing a career in the creative industry.
For a complete breakdown of all the top Tech, Creative & Digital Marketing salaries, download our Annual Salary Guide.
Are companies laying off in 2024?
While employment trends continue to change and evolve and many companies have experienced mass layoffs, economists say that this won’t necessarily be the norm moving forward.
Recent U.S. employment numbers show that employment rates remain steady and although certain sectors have been hit by layoffs harder than others, these companies are largely those that saw larger than average growth throughout the Covid-19 pandemic.
If you’ve been affected by mass layoffs in 2024, remember you still have plenty of options.
There are many industries that are still hiring and there are many things you can do to improve your employability.
Be sure to file for unemployment, explore your health insurance options, and update your resume before applying to jobs in high-demand industries like tech, digital marketing, and the creative arts.
With a little effort, you’re sure to find yourself gainfully employed again in a fulfilling role.
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2006): The Complete History and Strategy
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How NVIDIA cheated death in the early days to invent modern graphics processing
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Ben: Hello Acquired listeners. We were coming at you with a little bit of an announcement, some late breaking news. We recorded this episode, what David, a week ago?
David: Yeah, a little over a week ago. We got some time travel going on here. I feel like I'm Jensen in a deepfake video Keynote.
Ben: We sit here. It's Saturday, March 26th. We're getting ready to release this episode in about 24 hours. We want to tell you, we've got something that you don't want to miss. Save the date of May 4thâStar Wars dayâfor something in Seattle, Washington. We hope to be able to see you in person. We'll be able to share more soon. But for now, save the date.
David: Consider this our save-the-date card that we're sending to each and every one of you.
Ben: Yup. All right, now on to NVIDIA. Welcome to season 10, episode 5 of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert. I'm the co-founder and managing director of Seattle-based Pioneer Square Labs and our venture fund, PSL ventures.
David: I'm David Rosenthal, and I am an angel investor based in San Francisco.
Ben: And we are your hosts. It is the eighth largest company in the world by market cap. When NVIDIA began in 1993, it made computer graphics chips in a brutally competitive and low-margin market. There were 90 undifferentiated competitors all doing basically the same thing at the same time. And yet today, they have an 83% market share of standalone GPUsâthat's graphics processing units for those of you starting with us from square oneâthat are supplied for desktop and laptop computers.
David: Ben, you're telling the whole story here.
Ben: Sorry, I'll tease a few things here. Not only that, but of course, followers of NVIDIA know that they recently pioneered a completely new marketâthe hardware and software development tools to power machine learning, neural networks, deep learning, all of this in the cloud and the data center, which obviously is proving to define this whole decade of computing.
As David and I began our research, we realized this really could be a book and a thriller of a book since the co-founder and CEO Jensen Huang really has bet the whole company three separate times, nearly going bankrupt each time. But obviously, as we reflect back here today, that certainly did not happen.
David: All right, here's everything you need to know about Jensen. The CliffsNotes before we talk for six hours about him. The dude used to drive a Toyota Supra, like the Fast and Furious style, like a death machine, and he almost died. He got in a huge accident.
Ben: Just one more way, he is like Elon Musk.
David: Oh, man, crazy.
Ben: Because we have way too much here for one episode, we'll save the stories on machine learning for next time. Today, we are going to tell the wild story of NVIDIA's founding to its rise in prominence powering the computer graphics and gaming revolution. This really is a story of true invention and innovation. It reminds you that engineering breakthroughs really do push our world forward.
In saying that, to set some context, this is a story that takes place from about 1993 to the mid- to late-2000s. As hyped as NVIDIA has been over the last five years, obviously, with the stock run up and everyone's excitement around the company, I think Jensen is still an underrated CEO. Even graded where the NVIDIA Bowls have put him, I think Jensen is one of those people where if you know about him, you know what we're talking about and you have unbelievable reverence, but I think not enough people really know.
David: Just one more Jensen quote before we get into the episode: "My will to survive exceeds almost everybody else's will to kill me." Amazing.
Ben: Listeners, before we begin our parallel processing and graphics rendering journey, we want to introduce you to our presenting sponsor, Vanta, the leader in automated security and compliance. As you know from previous episodes, we are huge fans of Vanta and their approach to SOC 2, HIPAA, GDPR, all the compliance stuff. We have the CEO and co-founder Christina Cacioppo back with us today to help analyze her own company.
Christina, I know long before Vanta, you were at Union Square Ventures from 2010 to 2012. You were really starting to be at the forefront and see how software was going to make it so companies could get way more leverage on people, money, and all the resources they have at their disposal to accomplish so much more so much faster. Was that an inspiration to what ultimately became Vanta?
Christina: Definitely, especially in retrospect. I think when I was at USV, I didn't know the word SaaS. That's a reflection on me not at USV at all. What we called it or how I thought about it was developer tools.
This was 2010â2011. This was like, is it too niche? How many of these people are there? All their customers are startups. Clearly, that's not sustainable. How do you sell new age tools to old companies? Being on the inside of USV, I saw the traction of an early Twilio or Mongo.
You're just be like, oh, no, people haven't caught up yet, like this is very much a real thing. I think I just saw that a little bit earlier, the market broadly. Coming into Vanta, I just deeply believed a go-to market focused on startups can work. There are pros and cons of any, but you get fast iteration cycles and that works. You don't have to worry about selling to IBM when you're a five-person startup.
Ben: Right. With tools like Vanta and last season's sponsor, Pilot, you have this ability to get so much more of your internal focus exclusively on the thing that makes your company great.
Christina: Right. You don't have to become an expert in compliance, or in financial accounting, or whatever it is. Think of Vanta very much the mold of a Jeff Bezos, like you should focus on what makes your beer tastes better, not on the electricity you need to to produce the beer. I think the Vanta version of that is you should focus on your product, what makes it special, not on how it becomes compliant.
Ben: Our thank you to Vanta, the leader in automated security and compliance software. If you are looking to join Vanta's over 2000 customers to get compliance certified in weeks instead of months, click the link in the show notes or go to vanta.com/acquired for a 10% discount.
Listeners, after you finish this episode and you're thinking to yourself, gosh, I wish I could talk about this with people, we have good news for you. You can do that with 11,000 other smart members of the Acquired community at acquired.fm/slack. If you're dying for more after this and you're like, I can't wait for part two, I need some more stuff in the meantime, search Acquired LP Show in the podcast player of your choice.
Here's a new thing. If you haven't rated or reviewed this podcast yet, I think the last time we mentioned this was years ago, Spotify in their mobile app just added the ability to rate. If you listen to Spotify, you should totally leave us a little rating in there. If you're on Apple podcasts, leave us a review. We really, really, really appreciate it when you help share your experience as a listener with others.
All right, listeners, this is not financial advice. We may hold positions in things we discuss on the show. This is for entertainment and informational purposes only. David, take us in.
David: We start in February of 1963. Whatâs going on in Silicon Valley in 1963? Fairchild had already started (I think) and Silicon Valley was underway, but it was early days. We start not in Silicon Valley, but in...
Ben: Taiwan?
David: Yes, the southern part of the island of Taiwan with the birth of Jen-Hsun Huang, later Americanized to Jensen Huang. His dad was an engineer for the air conditioning company, Carrier. You see those big industrial air conditioning units on buildings and stuff.
When Jensen is four, his dad goes on company training to America, to New York City. He was like, wow, this is amazing. I want my kids to grow up here and to have all the opportunities that are available. He comes home, Jensen's four. Jensen has an older brother who's a couple years older. Nobody speaks English. His mom gets an English dictionary and picks 10 words every day, grills the two kids, quizzes them, and teaches them English out of the dictionary.
If you listen to Jensen, where's that accent come from? Because it's not what you would think. The family ends up moving to Thailand a few years later. When they're living in Thailand and Jensen is nine, they finally decided that this is the right time to send the kids to America.
The parents can't move to America yet. They don't have enough money, but they found a boarding school in America that is cheap enough that they can afford. It is called Oneida Baptist Institute and it is in eastern Kentucky, the sticks of Kentucky. Jensen would later say that he and his brother were the first foreigners to attend this school and they're pretty sure they were the first Chinese people ever in the town of Oneida.
It turns out that the reason that this school, OBI (Oneida Baptist Institute) was so cheap was it's actually not a prep school. It's a reform school. This is a school for troubled kids. It's a reform school. Jensen's roommate, when he shows up as a 9-year-old, is a 17-year-old kid who had just gotten out of prison and was recovering from 7 stab wounds that he got in a knife fight.
Ben: Classic American journey right here.
David: And amazingly, this is so Jensen. They become great friends, even though this kid is eight years older than him, twice his age, basically, from a way different background. Jensen helps him with math and he gets Jensen into weightlifting. You see Jensen today and you're like, that dude is jacked.
Ben: He is jacked.
David: He's been weightlifting since he was nine years old. It's about his time in Oneida. Now, I don't get scared very often. I don't worry about going places I haven't gone before. I can tolerate a lot of discomfort. Boy, does that play out in his life, as we will see.
It's pretty awesome. Actually, now, he and his wife Lori have given a few million dollars to the school. It's an amazing institution now. You can see Jensen gave the commencement address in 2020. We're going to link to this in the sources. It's pretty awesome.
After a couple of years at OBI, his parents are finally able to save up enough money to afford to come to the US themselves. They moved first to Tacoma, Washington, great state of Washington. Then they move a little farther south down to the suburbs of Portland, Oregon. Jensen and his brother go home. They live with them. They go to public school there.
Jensen continues his American upbringing. He gets really into table tennis. He places third in the junior nationals in table tennis and he gets his picture in Sports Illustrated. Pretty basic.
His parents continued their academic discipline. Jensen's super smart, obviously. He ends up skipping two grades. Then going to college, he goes to State College. He goes to Oregon State University just down the road a little bit.
Ben: And he got there when he was like 16, right?
David: He got there when he was 16 because he had skipped a couple grades. He loves math, so he decides he's going to major in electrical engineering at OSU. He totally falls in love in more ways than one.
The first way that he falls in love is he just thinks electrical engineering is the coolest thing in the world. He becomes one of the top students in the school. He talks about how he gets mad at the professors because they don't use enough precision when talking about exact numbers.
Ben: Which he later comes to say that he respects the opposite position. I think some of the NVIDIA employees call it CEO math when he rounds all the numbers and he's like, reflecting back, I do understand what the professors were trying to show. The details only matter if you understand the big picture first.
David: That's so Jensen, he understands. My employees get mad at me when I round the numbers and you see your math, like I get it. I appreciate precision, too, but the big picture is what matters here.
The second way he falls in love is with his lab partner in electrical engineering fundamentals. His lab partner, Lori, who goes on to become his wife. It's such a cool story. He graduated in 1984. She graduated in 1985. They moved down to Silicon Valley. Jensen joins AMD as an equivalent of a chip design PM. It's very engineeringâheavy, but he's kind of like a PM. He's helping as a junior manager of a process for developing a chip. He's working on a then blazing fast one megahertz CPU chip.
Ben: Yeah, he talks about this. He's talking about how slow one megahertz is. He refers to it and says, you can even see it coming. It's about how fast it was.
David: You could see it coming from a long way, and still coming, and still coming. Amazing. Of course, now, he makes literally the fastest chips in the entire world. He starts at AMD. He starts at night working on a master's degree in electrical engineering at Stanford. It ultimately takes him eight years to finish this master's.
He works all the time that he's at AMD and then at LSI Logic where he goes to. We can talk about it in a sec. He ultimately does graduate right before they start NVIDIA. This is a super cool bit of trivia. Did you go back and watch the Don Valentine view from the top?
Ben: No, I didn't.
David: Lecture at GSP? I watch that once a year, every year. Every time thereâs an excuse.
Ben: Is that the one where he holds up Alfred's resume?
David: Yup, when he holds up Alfred Lin's resume. Also Easter egg in that talk, that was the day that the Jensen and Lori Huang Engineering Center at Stanford was dedicated. Don says Jensen did a building. Pretty awesome.
Ben: I did watch, he walks in and gives a talk at Stanford. I think it's the first time that Jensen has given a talk since the building opened. And he says, I've donated, we have this nice building now, so I have no more money.
David: I'm penniless. Right, Jensen. It's so great.
Ben: Just to set context for people, if you look at his NVIDIA shares, he's worth about $20 billion right now.
David: I think he owns 3 ½ percent of NVIDIA or something like that. Yeah, he's not penniless. Okay, he works at AMD for a couple years. While he's working there, probably from working on this chip that is so fast, you can really see it coming, he realizes that designing chips is really freaking hard. Intel can do it, AMD can do it. But there are not many companies. It's all full stack at this time. TSMC didn't start till 1987.
Ben: Not only are you manufacturing in-house, but for the most part, the process of designing a chip is a manual one. These companies each have their own institutionalized internal way of working that you design and layout the elements of a chip.
David: Jensen talks about, when he was in school, the reason he wanted to go to AMD was he thought this was so cool that you could do it all. Once he's actually at AMD, he realizes it's actually not cool. It would be cooler if you could be really good at a certain part of the stack and have tools, platforms, and other companies to allow anybody to make chips.
Ben: Yeah, if there were design tools to help you make chips.
David: After a couple of years, his officemate at AMD leaves and goes to join a startup called LSI Logic, which had just gotten public. We've talked about it on the show. Made Don Valentine and Sequoia the then largest venture return in an IPO in history, maybe the largest venture return ever in history when they went public of $153 million on day one.
Ben: Boy, has venture changed as an asset class.
David: I'm trying to think that fund probably would have been Sequoia Fund II or III, maybe. I bet the fund was $10â$15 million. It is probably roughly 10X the fund in one day. Pretty awesome.
What was LSI? It was one of the first and was the premier ASICs company. ASIC, Application-Specific Integrated Circuit companies. What they did and what that meant was they basically made custom design chips for other companies. That's what Jensen's thinking about.
The custom design chips that they would make these ASICs would be for a very, very specific function that would be integrated into other systems, like defense companies, Lockheed Martin and the like. But lots of other companies now too are coming to LSI Logic and they got their ASICs companies in saying, hey, we want to create these systems of chips. You help us design the chips to go into the systems and we'll use processors from Intel, too. It really helps democratize making end-product systems.
Ben: Right. The idea with ASICs is really, if you're not saying, hey, there's going to be a general-purpose computer that needs to power that can be super flexible and people might have all kinds of applications that run on it, but more inefficient in order to get that flexibility chip. Hey, I know the exact thing that this chip will do and it will only ever do this. We can actually literally hardcode that right on the chip. The actual design of the physical chip can be for this one specific thing, so it's super efficient at this one low level thing.
David: Yup. The legacy of ASICs today, still around, still use both ASICs, but the legacy is FPGAs, Field Programmable Gate Array chips that some might say are sort of a bear case for NVIDIA these days. We will get to that far, far, far down the road.
Sun Microsystems was one of their biggest customers. Thatâs how Sun got started and made the chips for their workstations. In fact, Jensen when he shows up at LSI, Sun is just starting and coming to LSI. He gets put on the project and he basically embeds with Sun in the early days of Sun Microsystems to help them build up the chips for what would ultimately become the SPARCstation 1, Sun's first big workstation product.
Over the next few years, he pretty much exclusively works with Sun while he's at LSI logic. He works directly with Andy Becktolsheim who's the founder of Sun and with Vinod Khosla. He became super well-known, and developed quite a reputation as somebody who can really take these visions for chips and these customer requirements from Sun, and turn it into reality and production.
One day, right around Thanksgiving in 1992, Jensen has finally, after eight years, finished his master's degree at Stanford. Stanford is quite, quite glad that he finished before this happened. Two of Jensen's buddies who he's become close with at Sun, Chris Malachowsky and Curtis Priem, who in Jensen's own words describes them as really, really fantastic engineersâwhen Jensen says that, he means itâthey come to Jensen and they're like, we're not super happy at Sun, the two of us. We have an idea that we want to talk to you about. Jensen's like, well, sure. Let's go meet at my favorite spot, Denny's.
Ben: Really?
David: The man loves Denny's. He worked at Denny's in high school. He's always going to Denny's. He orders The Super Bird, I think, is his go-to dish. He's so folksy. I love him.
As they go all have dinner at Denny's, Chris and Curtis pitch him on their idea, which their idea is pretty good. It's pretty good. Tell me as a venture capitalist if you would fund this idea back then in late 1992. They see 3D graphics are really becoming a thing.
Remember, this is the era of Sun, LSI Logic, all this stuff. It's also the era of Silicon Graphics right down the street. Right there in Silicon Valley, SGI. So many great things that come out of there, Jim Clark, Netscape, all this great stuff.
Ben: Jurassic Park.
David: Jurassic Park is about to come out. It came out in 1993. There's this huge demand for 3D graphics. The way 3D graphics are done, you need SGI workstations. You need super custom, very high-end, very expensive stuff, only something with the budget of either the military or a Jurassic Park can afford to do this, but people love it. The consumers love 3D graphics.
Ben: Not to mention, where are we in the evolution of video game consoles at this point?
David: We're still in the Super Nintendo days. We're not at 3D console graphics yet. That's coming very shortly. What is happening is the PC wave is really cresting right now.
Ben: We're a year-and-a-half from Windows 95 coming out.
David: I remember doing this, I bet you do too, or kids in 1992â1993 doing on their PCs. They're playing Wolfenstein 3D and Doom. Doom came out in 1993. These are taking the world by storm and they're made by id Software in Texas, John Carmack, and John Romero. But Carmack is doing incredible feats of engineering to get 3D graphics to run on consumer PCs. It took somebody of Carmack's caliber to make this happen and the market loved it.
The idea that Chris and Curtis has, they're like, we're really great chip engineers. Jensen, you're a really great chip PM, essentially. Let's make a graphics card. Let's make a chip that can accelerate the graphics of a normal PC to enable 3D graphics like SGI is doing with professional workstations. to enable them for consumer hardware PCs. We know that people love games. This will help the entire industry take off. It sounds pretty good, right?
Ben: And you're not even saying that they're going to try and make it so you can develop games on a PC. You're saying just so you can play games on a PC, right?
David: Both. Mostly, you can play games on the PC, but then you're also going to have to create all the APIs, SDKs, and developer ecosystem for developers to access this new hardware on PCs, but they'll just develop on PCs. It's really about getting the hardware into consumers' hands so that they can actually play this stuff. What do you think? Sounds like a good pitch?
Ben: What you're basically asking me to believe, 1990 to me, is that video games on PCs are going to be a thing that there's going to be a big economic wave around that lots of consumers are going to want to do this. They're going to want to do it on PCs instead of on Super Nintendo and dedicated systems. Maybe.
David: I have this proof point of id Software, Wolfenstein, and Doom, right there. Millions of people are doing this.
Ben: But still maybe, because it's not clear that video games are going to be a giant market. It could be a kid market and it could be the case that, do you really need to totally change the development environment or can there be five or six different Dooms out there, there are five or six Carmacks who are all independently geniuses and can figure out how to do all the graphics on their own? Maybe, but there's a leap of faith.
David: Yeah, definitely a leap of faith. Not totally obvious, but still, I think this was pretty fundable at this moment in time. The other thing that was going on was in Silicon Valley of these peripheral companies, people building chips and cards that plug into consumers' PCs, this was in full swing. There are companies making sound cards. There are companies making networking cards. There are companies making serial port cards. God knows what.
Ben: There's already an accelerated computing wave here, where people are saying, there's some reason to do something specialized off the CPU that needs its own integrated circuit, that vendors are making custom and there's a market to make custom stuff as a vendor for PCs that takes a workload off the CPU.
David: Yup. The pitch is we're going to make a custom graphics card. Take a graphics workload off the CPU, specifically for gaming.
Ben: Great.
David: Okay. Yeah, it was pretty much a brain dead yes. But as you alluded to at the top of the show, the problem when something is a brain dead yes for a venture capitalist is that it's a brain dead yes for lots of venture capitalists. Lots, and lots, and lots of companies get funded to do this.
Back to Denny's that night. NVIDIA is the first. They are the first dedicated graphics card company. They all decided, the three of them, that they're going to go in on this. Jensen goes to the CEO of LSI Logic, walks into his office, and tells him that he's going to resign. He's going to go start this company with two engineers from Sun and this is what the business plan is going to be. Do you know who the CEO of LSI Logic was?
Ben: No.
David: It was a man named Wilf Corrigan, who was previously the CEO of Fairchild Semiconductor.
Ben: No way.
David: Damn right.
Ben: Don Valentine, obviously, was the biggest investor in Sequoia and was in LSI Logic. Did he know him from Fairchild?
David: Yeah, they were colleagues back in the day.
Ben: Okay.
David: And then the biggest exit in Sequoia's history to that point in time. Wilf says, let me get this straight. He says to Jensen, you're going to go build these graphics cards, and just like you were saying there, Ben, who's going to use these and what for? He's like, well, they're going to be on PCs, they're for gaming, they're for a bunch of kids.
Wilf hones in on the critical question. He's like, well, who makes PC games? Is there a developer ecosystem for this? That's kind of like, we think if we build it, they'll come. Remember, he was at Fairchild. He's felt like he knows when to make silicon for specific applications.
Wilf says, all right, you'll be back, I'm going to hold your desk. But in the meantime, before you go, I'm going to call up Don. You've done good work for me, I'm going to call up Don. He calls up Don and he's like, Don, I got a kid who's going to come see you, stand by.
Ben: This is a lesson for all founders and aspiring founders out there. Getting a reference from the CEO of a portfolio company is a really good way to come in with a venture capitalist already leaning toward investing, especially if you're referred to by the top performing company of all time in their portfolio. It's kind of hard for Jensen to mess up this pitch with the recommendation that he's coming in with.
David: It's literally impossible because he goes to see Don. You know Don. Don sits down and he's like, so? And Jensen completely botches the pitch. He gets really nervous.
Ben: At this point, I think he had a partially written business plan. He had bought a book on how to start a business and was three chapters into the book, but decided not to finish. He started writing the plan, but he didn't finish the plan. He comes into this meeting and just barfs all over Don.
David: Yes, exactly. Jensen's walking out the door. He's totally dejected. Don stops him and says, well, that wasn't very good, but Wilf says to give you money. Against my best judgment, based on what you just told me, I'm going to give you money. But if you lose my money, I'll kill you. Classic Don line. It's so good.
The deal happens. Sutter Hill comes in because again, at least it's all dramatized. At the end of the day, this is a hot deal.
Ben: This is two episodes in a row for us with Sutter Hill.
David: I know. Oh, geez, they're so good. It was a hot deal. They wanted in. This fits central casting at this point in time.
Ben: They invested a million each, is that right? For a total of two?
David: So $2 million total round. I don't know who invested what. I assume a million each, but $2 million total round at a $6 million post-money valuation. Remember everybody, this is the eighth most valuable company in the world right now. It started at a $6 million post money valuation.
They're getting things ironed out. There's just one problem. They don't have a name for the company yet. Jensen, Chris, and Curtis, they've just been working on the business plan, but they don't have a name. They need to incorporate the company.
They were saving the files that they were working on for the chip design for the first graphics chip as dot-NV, NV being short for next version. They're like, we like that. We're always working on the next version here.
They start looking around in the dictionary for words that have NV in them. It's probably a very short list and they find the Latin word, invidia, which means envy. They're like, great, we'll be the envy of the industry. Invidia will drop the I at the beginning, so we start with NV. This is awesome.
Ben: Of course, they picked green. Later on, they can have that marketing campaign of green with envy.
David: Be careful what you wish for here, though, because, again, as we've been saying, literally, 89 other companies get funded within a couple months to go do the same thing.
Ben: It's a very clever name, also the notion of vid being in there, that it's video. That's another thing that they want to do. It's the classic Rich Barton empty vessel name. There are enough things that it could mean and we're going to fill it with meaning. Because they're doing a thing here that 89 other people are also simultaneously doing.
It is kind of a new frontier that they need to invent and then own thought leadership in that area. They do need to quickly build a brand, not only with consumers, but with PC manufacturers. Jensen, the way he describes it is their vision, although he doesn't like the word vision because he thinks it's exclusionary to people, so he said, our perspective is that they want to enable graphics to be a new medium to tell stories.
The way that he articulates at the time why video games today are a $180-billion-a-year industry, bigger than Hollywood, bigger than music. It's the biggest entertainment medium, but at the time, he had this thesis that you really can't, through computer graphics, tell stories today. But if you could, it's really interesting because it's not pre-recorded. It can be new and different every single time you enjoy it. It's also the only medium of entertainment that can be networked. Therefore, it's the only one that can really be social and interactive.
Our reason for being is to create 3D graphics as a form of artistic storytelling for the future. Everything will be in service of that. I think that's not really what they are today, necessarily. It's a piece of what they are today, but that kept them going for the first 20 years of their existence.
David: And baked into that is, again, Wilf hit onâand you did too to your credit, you're a very good venture capitalistâyou hit on really the key problem with this first iteration of NVIDIA, which is, they have to go evangelize to developers to like, yeah, there's id and there's Carmack out there, but not a whole lot of other PC game developers out there.
There's not a whole lot of other 3D PC game developers at this time. There are 2D PC game developers, but they got to convince a whole lot of people to go learn how to do 3D game development for PCs. That's like, we're going to enable storytelling on them. To do that, they have to go write their own APIs, SDK, and development framework to develop for this new graphics chip that they come out. They have to make a whole bunch of technical design decisions that they want the industry to standardize on.
Ben: Right. This is a case study of what happens when you get more clever than the rest of the industry.
David: Exactly. At first, things started off really well. Remember, this is super hot. They're the first company. They're funded by Sequoia and Sutter Hill. They land a big deal with Sega to power their arcade consoles and their next-generation home console to be the 3D graphics engine of what would ultimately become the Sega Saturn. As we know from our Sony episode...
Ben: Not quite the Sega Genesis.
David: Not quite the Sega Genesis. The problem is, NVIDIA and Sega, they're working together, they make a bunch of these design decisions. People probably know you create 3D graphics. You use polygons, that's why people are always talking about polygons in this industry. They have to decide on a primitive for the polygon. They're like, oh, well, we'll use quadrilaterals for vertices. Anybody who knows anything about video game development now, it's like, that's not how it's done.
Ben: I'm pretty sure people talk about triangles.
David: Yeah. I'm pretty sure if you look at NVIDIA's amazing headquarters building today, it's made out of triangles in homage to game developers, not quadrilaterals. This becomes a pretty big problem. Things go along for a while. It's been fine for about a year. NVIDIA's leading and they got this big Sega deal.
Ben: There's not a reason to need standards yet. The industry isn't complex enough yet to necessitate a whole bunch of collaboration and a set of tools that everyone standardizes on using. You're like, okay, well, we're just going to put this chip in our game console and ship the game console. We're the only people that make an SDK, we being Sega. Everyone will have to standardize on this thing anyway, so great. But obviously, the ecosystem gets much more complex much more quickly and it sure would be nice to have some kind of compatibility.
David: Here's what happens. Curtis, Chris, and Jensen weren't the only people in Silicon Valley that saw that kids want to play games on PCs. With Doom, Microsoft is like, oh, that's interesting. We like selling PCs. There are all these graphics cards companies out there now that are doing this. What we do as Microsoft, we really want to encourage this in the ecosystem. We create standards.
Ben: We would love it if Windows developers could be able to easily develop for all these new machines shipping with all these advanced graphics capabilities. Let's make that as easy as possible for those developers.
David: Yeah. Developers want to do 3D graphics directly into Windows without any of this crufty middleware from some no-name company like NVIDIA out there. Why don't we just bake these APIs right into Windows directly for 3D graphics? We'll call it Direct3D. Of course, anybody who knows about the history of this, that becomes DirectX.
Ben: DirectX made some pretty different design decisions than NVIDIA had made. Is that right?
David: Yeah, so they use triangles because triangles make sense. Now NVIDIA is really up a creek. All of their Camino, the 89 other competitors out there that started later, most of them are like, sure, I'm going to jump on board to this Microsoft ecosystem. I would be dumb not to.
It standardized on this completely different paradigm than NVIDIA. They've got Sega. They've got this one customer. Then in 1996, Sega was like, yeah, we're not so sure about this quadrilateral thing either.
Ben: And just so that this doesn't feel arbitrary why are we talking about this, we're going to say at a super high level on 3D graphics here, rather than really going into the weeds. A triangle is the fewest vertices in a shape that you can have while still creating a two-dimensional shape. It serves as a basic building block, where, assuming you can draw enough triangles and make the triangle small enough, you can form any other shape, any other curved surface. It's the most fundamental building block that you could use to create something that is perceived as 3D.
David: Yup. NVIDIA at this point, they're halfway down the road of developing the next chip that they think Sega is going to adopt for what ultimately would become the Dreamcast. NVIDIA was calling the NV2. When Sega comes back and says, we're switching horses, we're not going to do this, they're screwed.
For so many reasons, everything we've discussed, there's also in the interim year-and-a-half since NVIDIA started, the price of memory dropped because, thank you, Moore's Law. NVIDIA's chips were designed to be super, super tight on memory. The memory cost about $200 in component parts to go into their chips. Their competitors have more memory that's costing them $50.
Ben: That was just in that one iteration. It's interesting to note that NVIDIA, by being first and not projecting out the exponential change that would come from Moore's Law, was actually at a disadvantage. Because they didn't get a chance to watch and see where the standards were adopted, so they picked their own lane and went off in their own direction, which ended up not being what everyone else picked, which put them at a disadvantage. But second of all, everyone else's cost structure was way lower or at least everyone else could see that the cost structure was getting way lower. NVIDIA designed for a constraint that was no longer true by the time everyone else came out with their stuff.
At this point, Jensen and his co-founders had to look at each other and say, okay, do we scrap everything we did? And if so, how do we not make this mistake again? How do we make sure that in future generations, we premeditate the exponential curve of Moore's Law and prices coming down and design for things that are two, three, four generations beyond what we actually have available to hardware right now?
David: When all this goes down, the company has about nine months of runway left. Literally anybody else, you pull the plug. It's over. Everything in the deck is stacked against you, like your F'd. I can't imagine sitting there dreaming up a way out of this. But Jensen, God, he's such a G. He's like, no, we're not going out like this.
When you hear Jensen talk today about NVIDIA's culture, he says that intellectual honesty is the cornerstone of NVIDIA's culture. This is what he's freaking talking about. He sits down with Curtis and Chris. Remember, they're engineers.
They've recruited NVIDIA a hundred-plus engineers into the company at this point and sold them on this technological vision of how we're going to define the industry, we set the standards. We're not going to use some off-the-shelf stuff. It's all toast. Jensen's like, guys, this is a pipe dream. We need to throw it all out if we're going to survive.
The only thing we can do is standardize on the same Microsoft Direct3D as everyone else, same architecture, and our only shot is just to compete on performance and try to become the best chip out there in this now sea of commodity chips. His co-founders don't want to do this. This is not an exciting vision for a Silicon Valley engineer.
Ben: When your CEO comes to you and says that, what they're basically saying is, look, if my job was strategy and your job is execution, the strategy failed, so we just now need to literally out-engineer all of our competitors. We need to be smarter at engineering decisions, so we can be more performant at a lower price point using less energy than our competitors.
Microsoft being Microsoft had all the developer attention. And because Microsoft set a standard, NVIDIA realized, look, we have no ability to uniquely get our own developers, at least at that point in the company's history. So we must just on our left, look and see all the developers are coming from Microsoft using this API, on our right is all the same consumers. We have to compete just head to head on raw engineering ability with everyone else.
David: You're saying engineering ability. But remember, this is essentially a commodity at this point. Really, it's not just engineering ability. It's how fast you can ship. How fast can you design the next generation of chips? And can you ship it before everybody else? Because everybody knows what's going to be on that ship.
Ben: And why is it? What fundamentally was it about graphics cards that made it a commodity?
David: At this point, all the other peripheralsâand we're going to get into this in a secâthere was nothing that special about it. They all did the same thing, which was take polygon-level, 3D graphics processing out of the CPU and onto this other chip on the motherboard. Just like sound cards were doing the same thing for sound, just like networking cards were doing the same thing for networking.
It was just like, what's the price performance ratio of doing that? The interfaces and the programming language, that's all standardized by Microsoft. You're just a commodity hardware.
Ben: What GPUs actually do or did, at least in this point in time, say, okay, the system is going to feed me in basically point clouds, like vertices that make polygons that represent like a 3D world and my job as the GPU is to, as fast as I can, in the highest resolution that I can or I suppose a standard predetermined resolution, output a 2D thing that goes on the screen?
I turned 3D stuff into 2D stuff. I have to do that better than other things that I'm competing against, where basically all of us are. When you say commodity, you mean limited by Moore's Law and doing right up to the edge of what integrated circuit manufacturing techniques enable us to do.
David: Yup. Everybody knows what this means. They got to ship faster than their competitors. They also got to ship faster than their competitors because they're about to go bankrupt. They draw up this plan. They're trying to thread the tightest needle possible here.
They have to lay off 70% of the company, which they do. They go down to about 35 people. Everybody who's staying knows we now have to design from scratch and ship a new chip before our runway runs out, which is nine months. You can't do that on a normal chip design cycle.
Ben: It takes two years, right?
David: Yeah. With these fabless chip companies, the way they would design chips is they would work on the design, they would send them over to the fabless company, the fabless company would produce some prototypes, they'd send them back, they test them, they go back and forth a few times.
Ben: You mean the foundry would produce some, like the TSMC, or the Samsung, or the GlobalFoundries.
David: Now importantly, NVIDIA is not using TSMC at this point because they can't. TSMC only works with the best and NVIDIA is not the best. They're using secondary foundries. That process takes a long time. Then at the end of it, when you're sure you got the design right, then you do what's called a tape-out of the chip.
Ben: I love this term, by the way.
David: It harkens back to literally when you used to tape masks to do the photolithography on the chip back in the day, but it just means finalizing the design.
Ben: But you actually do run it on some prototypes first. The foundry sends back some, hey, thanks for the designs, here's the chip, run your tests on it, and make sure everything does what you think it does. That process takes two years to get a full iteration on.
David: Yup. They're like, we can't do this. Jensen's like, here's what we're going to do. I've heard about these new technologies, some new machines out there that enable emulation of chips. In our case, we're going to use it to emulate the graphics chip that we're designing. It's all in software and it works.
Ben: They're startups, but they exist.
David: The problem is, when you emulate it in software, it's really slow. When you play a game, when you're looking at your computer monitor or whatever, it's refreshing 30 to 60 times a second. If you're a professional gamer, you probably have a go on it, like 120 times frames per second. This emulator runs at one frame every 30 seconds. They're going to have to debug this thing in software to save this time going at one frame every 30 seconds.
Ben: It's just insane.
David: That's brutal.
Ben: They're basically making this trade-off of, okay, if we want to ship something in nine months, we don't have time to actually have it execute on the hardware. We are going to make the trade off of our testing being mind-numbing, like running whatever our graphics tests are, where we're looking for this certain specified output. We need to plant someone in front of a screen to watch the new frame render once every 30 seconds and look again some tests to verify that the output is correct. If it is and this person does that mind numbing work, and sits there just observing, and observing, and observing, then we will go right to manufacturing without ever producing a physical prototype and ship that.
David: That is exactly what they did. They had spent a million dollars just to get the emulator hardware and software to do this.
Ben: I think they had generated some revenue, but it was still a third of the cash that they had in the entire bank account.
David: They go down to six months until they cash out in the company. They get it done in a few months and then they call up their foundry. I don't know if they're using United or one of the other foundries in Taiwan, not TSMC. They're like, all right, we tape this thing out and send it to production. The foundries were like, you guys sure about that? They're like, yup, we're sure. Make 100,000 units.
Ben: If I'm remembering right, I think NVIDIA basically was the only customer of that emulation software. That was a startup that really wasn't fully proven yet. NVIDIA was like, look, we literally have no options.
David: Yeah, they were the only customer and then that company went out of business after. The chip they designed is now the advantage. This is lunacy, what they're doing. Obviously, they have to do it because their back is against the wall.
The advantage of this, though, is they are now designing this chip with the same set of assumptions about what technology is available as all their competitors, but their competitors are working on those designs. They're not going to be able to get them out for 18 to 24 months. NVIDIA is going to get the same generation of design out in six months. This chip is called the RIVA 128. It's what they call it. It is a freaking beast in every sense of the word.
Ben: It's big.
David: It's big. It's extremely powerful relative to anything else on the market.
Ben: More powerful than any customers are telling them they want.
David: Yeah, way, way more powerful. But it comes with some downsides. With great power comes great responsibility. Because they built this thing in such a manner, it barely works. There are a lot of stuff wrong with it. I forget the exact number of this, but essentially, Direct3D at the time had something like 24 or 25 different ways and techniques.
Ben: These are the blend modes?
David: Yeah. I think that's what it was, blend modes. The RIVA only works about two-thirds. One-third of it just freaking crashes. It doesn't work.
Ben: I thought even worse than that. Basically, I think NVIDIA had to launch a campaign, going around to all the different developers and being like, come on, what do you really need more than these eight for? What are you really going to do where you need to use that fancy stuff? Do us a favor. For this generation of the chip, these eight work great. You're going to love them. They're so good. Just use those.
David: This is so, so great because people do it. They learn about the market. In the first iteration of NVIDIA, we're going to build all this technology. We're going to drive the market. They didn't know anything about the market. They were just making all these assumptions about what people wanted.
But now, Jensen's actually going into these developers trying to convince them to do this. They all do it. Why did they do it? Because the only thing that matters is performance. Consumers are going to buy hardware and games based on the quality of the graphics. This is being discovered for the first time. People are willing to make a lot of compromises in service of performance. NVIDIA's the first one that figured this out because they have to go around and do this, and developers all get on board.
Ben: To be clear, it's because the consumers are making the buying decision on what graphics card they buy.
David: It's a completely interrelated system where the consumer is making all of the decisions. That's where the demand is, the consumer is deciding what hardware to buy. That's what NVIDIA's business is.
Ben: Whether they're buying it as a fully built computer from the OEM or whether they're buying the card put in later themselves, they're making a decision on what graphics card goes in the computer.
David: Exactly. The game developers are making decisions on what graphics cards to support and how to build their games with the assumption of what's my target market of consumers? Who do I think will this game run on? You need to have at least an X-level performance rig in order to run my game in its fullest form.
Ben: The developers are premeditating what graphics cards are going to be out in the market when their games launch. They're saying it's going to be the most performant one at the right price point, so whatever the mass market is, we have to target that. If youâre telling us that we're going to test it and it turns out that yours is the best performance per price, performance per watt, or whatever, if it's the most efficient card, then people are going to buy that one, so we must target that card.
David: And they're going to buy my game. I remember that this is a few years later. This is a trope that happened. There was a game called Crysis. Do you remember this?
Ben: Oh, yeah. What's the relationship between Crysis and Far Cry?
David: Far Cry was the first game, the Crysis Engine, and then Crysis also. It was super convoluted. Basically, my perception of this thing was when Far Cry came outâthis was mid-2000sâthe graphics were unbelievable. If you had a rig powerful enough to run it, just unbelievable. The game itself was total crap. I don't think I ever played more than 10 minutes of it.
Ben: I'm pretty sure if your computer didn't support it, there were all these videos that people would record of building a tower of a thousand gasoline barrels and then shooting it. Because it was too complex for their graphics card to handle, their computer would just freeze. That was the failure mode of Far Cry with non-performant chips.
David: This is how the hardcore gaming industry evolves. Far Cry sold so much software and so much hardware just because people wanted to attempt to experience that level of graphics. That's what the developers are starting to figure out. They're like, all right, well, you can ship this thing. We'll use only those eight blend modes whatever it takes because graphical performance is the most important thing.
It works. They sell one million units of the RIVA 128 within four months. I should have looked at what the MSRP was, but that is a lot of revenue.
Ben: Yeah, no kidding. What year was this?
David: This was 1997.
Ben: It's an interesting era. The Internet is a thing. We still have a few more years until the dot-com bubble crashes. PlayStation 1 is out, but PS2 is not out yet, I think.
David: With that, the gaming market bifurcated into the console market, which was standardized, and you knew it was all going to work. Then, the hardcore PC gaming market, which just had so much revenue potential even though it was smaller in terms of numbers because people are willing to spend so much money on this stuff.
At the end of this, NVIDIA has now figured out these dynamics of the PC gaming market, and they now have a process within the company to design and ship each next generation of their hardware in a six-month timeline while the rest of the industry is on an 18â24-month timeline.
Ben: Necessity is the mother of invention.
David: To say this is huge is the understatement of the century. It's huge for this market, but nobody even saw this at the time. Jensen didn't see this and nobody saw this.
They're now shipping relatively doubling essentially the performance in each generation with their hardware and they're shipping it every six months. You think about Moore's Law. Moore's Law was that the number of transistors on the chip equating to the compute power available at a given price point to the market would double every 18â24 months. NVIDIA is now on a cycle starting in 1997â1998 where they are doubling the performance that they are delivering at a given price point to the market every six months.
Ben: It's fascinating. They're also competing on a different vector than the CPU manufacturers. It's amazing. We've made it an hour into the episode and haven't talked about this yet, but the magic of GPUs is that they're very, very parallel. CPUs, for anyone who's taken a low-level computing class, you know that every time the clock ticks, an instruction can run and things move through the long chain of operations that can happen within the CPU. It's advancing things serially through the processor.
David: It's serial processing.
Ben: It can read from a register or can add two things together, but it's all happening serially.
David: It's like the I Love Lucy famous one where the chocolates are coming down the factory pipeline and you had the CPUs to wrap each individual chocolate one and then the next one.
Ben: Yes, exactly. With graphics processing, the magic of it is that it's super parallelizable. There are all these things that need to be outputted to the screen that do not depend on each other. You can do them independently so the vector that they're competing on is really like, oh, we canâand that would be years before they would really get to thisâadd more and more cores or find more ways to execute more instructions simultaneously to parallelize these tasks.
I think at the time, people thought really the only big use case for parallelization is graphics. Let's put a pin in that for now, but it's worth knowing that the thing that they're doing is figuring out how to process more things in parallel faster.
David: Yes. Graphics cards, like NVIDIA is making at this point in time, are really good at in-parallel lighting the pixels on a screen 30, 60, or 120 times a second with the images that are being fed to them from the game or the graphics program which is living all in the CPU land. You're a game developer and you develop in Microsoft Direct3D becomes DirectX or OpenGL, the open-source competitor to this. All that logic is really happening in the CPU realm.
What that means is if you think back to games from this time, think of console gamesâPlayStation 1, even PlayStation 2, N64. You look at the graphics in those games or PC games from the time too, they're all the same. All the lighting is all pre-done. When you're a game developer, you set the scene. You'd never see a character running around carrying a torch and that torch impacting the rest of the environment. It's all set in advance. No intelligence is happening at the GPU level with the screen. It's just lighting up the pixels.
Ben: Basically, in order to make it easy for developers, the software development kit is written at such a high level that you don't really get enough control to make your game stylistically different. You just get to lay out the items on the screen.
David: It's all the same and flat. Maybe you can program that hard code to be like, oh, time of day might change and that might change the way things look. But you're hard coding what they look like. No computation is happening. If you're playing a game today, even in the most basic mobile game or whatever, you're seeing dynamic lighting and shadingâwhich we'll get into in a secâall over the place.
GPUs are a really important commodity, but they're a commodity. There are not a lot of smarts happening here, no programming. But NVIDIA has figured this out. They can now ship on a six-month time cycle. They're starting to really take huge market share. Now, a lot of people start paying attention to them in a good way. TSMC who wouldn't even return Jensen's calls back in the dayâthere's this amazing story. Did you watch the TSMC 30th Anniversary celebration?
Ben: I did.
David: This is so good. It's three hours on YouTube.
Ben: This is worth a brief aside. This is how much Morris Chang from TSMC has. He gets the CEOs on the stage of NVIDIA, ARM, ASML, Qualcomm, and Broadcom?
David: Yup. I don't think Lisa from AMD was there.
Ben: No. It's basically everyone but AMD, the pillars of the TSMC ecosystem. Morris is playing interviewer. It's very entertaining to watch.
David: It's like a celebration of Morris and TSMC. It's amazing. In the section with Jensen, they tell the story of how NVIDIAâat this point, it's got to be TSMC's biggest customer, they've been tied at the hip foreverâall came to be. After the RIVA 128 hits and has become a big success, Jensen writes a physical letter and addresses it to Morris Chang in Taiwan.
Ben: Because he can't get in touch through any of the salespeople.
David: Exactly. They've all just been ignoring him, as well they should because they were a left-for-dead startup in a sea of startups. The letter gets to Morris, he opens it, and he reads it in Taiwan. He does the most Morris Chang thing possible. He calls up Jensen on the phone right there. The phone rings as they tell the story in the NVIDIA office. This is in the middle of their trying to mad scramble as a startup to ship these RIVA 128s that are coming in. They're testing them all by hand in the office because none of this stuff was fresh off the line. It's not been tested. It's chaos.
Jensen picks up the phone. He's like, yeah, who's this? Morris is like, hello, this is Morris Chang at TSMC. I got your letter. Morris says that there's silence on the other end for a couple of seconds, and then he hears Jensen yelling, everybody shut up. Morris Chang is on the phone. Amazing.
Ben: That's how TSMC became the manufacturer of NVIDIA chips.
David: Yup. The next year, the two companies signed a huge multi-year deal for TSMC to become the primary foundry for NVIDIA and still are today. Jensen and Morris are super close. It's a landmark deal for both companies.
With now an actually really good foundry as their partner and this super unique chip development process, NVIDIA just keeps accelerating. In 1999, they rebrand their products. They use the NV1 first and then the RIVA 128.
They actually ran a little contest of what they should name the products and the winning name is Geometry Force which they shorten to GeForce which anybody who buys a graphics card knows. The NVIDIA GeForce is still the brand name they use for their gaming cards today and is probably one of the most respected brands in the gaming ecosystem. It's because this card that they ship, the first GeForce in 1999âit's the GeForce 256âis so powerful. It has 5X better graphics performance than anything else on the market.
Ben: They call this the first GPU. Don't they say we're inventing the GPU?
David: They call it a GPU. Before this, the term GPU didn't exist. It was these were graphics cards or graphics chips.
Ben: I think Sony had used it for the PlayStation, but no one's marketing this idea.
David: They market this as the graphical processing unit. On the one hand, that's marketing bravado. On the other hand, that is a very loaded statement to make. Why so? What do Jensen and NVIDIA mean by this?
With Intel, you think chips. They're almost like a biotech company today, one of the big pharma companies. Or put another way, was another version of the Microsoft embrace, extend, extinguish thing. They would see there are all these peripherals, sound cards, networking cards, graphics cards, and all the stuff we've talked about. They would let all these flowers bloom and be like, oh, yeah, just plug into the PCI slots on our motherboards. No big deal. We're an open ecosystem. We want everybody to flourish. Then, they would see which of these peripherals got consumer traction, and then they would just turn them into a component in the motherboard.
Ben: And thus began the wave of being able to buy a PC with an Intel motherboard and integrated graphics.
David: Before that, integrated sound and integrated networking. It was so fun doing this research. Remember the company Creative and the Sound Blaster cards?
Ben: Oh, yeah.
David: I remember buying tons of that stuff. Then at a certain point, you stopped buying Sound Blaster cards.
Ben: You're like, oh, the motherboard does 90% of what I needed to do. Why would I spend extra money on a separate thing?
David: Exactly. Intel just sits back and watches all this happening. They integrate a game over for the startups.
Ben: There were reasons for specialized stuff. I remember buying a special network card because the integrated networking capability of the motherboard on my Mac 8500 or something wasn't as fast as if you bought a dedicated PCI card that could be a faster networking card. Graphics cards would become that same thing where the integrated graphics for most people was good enough unless you were a gamer, in which case, you'd go buy your own graphics card or you'd buy it directly from the OEM when they were making the computer and shipping it to you.
David: But wait a generation or two, even if you have the most demanding performance for home networking, you're not buying that separate networking card.
Ben: These things are dead-end businesses.
David: And there's no reason why graphics cards wouldn't be the same. Jensen and Intel coming out and being like, we're a graphical processing unit (GPU) is a big middle finger to Intel and this whole CPU-dominant world.
Ben: It really wasn't true yet. It wasn't a processing unit in the same way that a CPU is a processing unit where people could write software for it in a way that created a meaningfully different experience for people using the software.
David: Yup. This is where Jensen is just such a master strategist and NVIDIA is so great. This whole orchestration of a bunch of things all hit over the next couple of years. First, NVIDIA goes public. They've now shipped, the RIVA 128 was a huge hit, and this new GeForce 256 is flying off the shelves. They go public at the beginning of 1999 at a $600 million market cap, a 100X return from the $6 million post-money valuation on the Sequoia and Sutter Hill round. That gets them some more capital.
Behind the scenes, they're working and are in talks with Microsoft. Microsoft's got a secret project that they're working on at this time, the Xbox, which we talked about a lot on the Sony episode and so many times on the show. Microsoft comes to NVIDIA. They're like, we want you to be a key supplier of the GPU for the Xbox.
They do a huge $500 million a year deal for NVIDIA to supply the graphics for the Xbox with a $200 million advance. The chip that they use is a modified version of this incredible new chip that NVIDIA is working on.
Jensen sounds like Steve Jobs talking about this. The GeForce 3, which introduces, for the first time, programmable shaders and lighting on the GPU. Everything we just talked about. The GPU massively parallel can light all these pixels, but it's essentially just taking instructions that are pre-hardcoded and baked in on what the lighting is going to look like. Now, you can program for these GPUs and you can make dynamic lighting in games and 3D graphics that are calculated.
Ben: This is game-changing. The way to think about it is those "GPUs" were fixed-function graphics accelerators. They would be able to map textures onto a set of polygons, but you couldn't do the thing that you're talking about, David, custom lighting, a lot of that sort of stuff to actually program at the GPU level, what is happening.
This is like, of course, it's cool because it's a wave of new consumer experiences that can happen, because every game developer can stylistically put their own stamp on games. But it's a totally different metaphor for the computer architecture, where suddenly, you can program a GPU. I guess that's why they're calling it a GPU. This is different than a graphics card.
David: And NVIDIA develops in conjunction with this. They call it CG. Literally, they extend the C programming language with graphics, libraries, and capabilities to directly program graphics, lighting, and shaders for the GPU. This makes that marketing, oh, this GeForce 256, it's a GPU.
Now it's real. This is a graphical processing unit that is intelligent, that is maybe not every bit as important as the CPU yet, but this is the stake in the ground of, this is no sound card. This is not going to get commoditized.
Ben: Do you know if this was the GeForce FX or if the GeForce FX was a similar version of this that was available to PC?
David: That's a good question. The GeForce 3 was the PC version of this.
Ben: Okay. This move to programmable shaders was a bet to the company move. It was Jensen's answer to, how do we get out of this commodity business and do something unique and different. I'm pretty sure they were months away from cashing out again by pulling this move because of how aggressively they had to staff this very new type of product that we're inventing.
David: Yeah. Back to that original quixotic vision for the company of we're going to create an industry, we're going to create the APIs, the SDK, the interface with it, we're going to do all this, now they're doing it. They're doing it with Microsoft this time, instead of against Microsoft, so an A+ move there. The amount of capital investment that went into this was enormous. At this point, Intel is like, we might have a problem here.
Ben: Right. It's going to be more difficult than we thought to just take whatever these people are doing and integrate it directly into our motherboards.
David: Yup. Irony of ironies, Jensen presses this even further. He does a big partnership with AMD.
Ben: It's worth knowing here when you're saying AMD because people probably know AMD and NVIDIA are big competitors today in the GPU world.
David: Not yet.
Ben: Right. AMD primarily made CPUs at this point. They made processors and competed with Intel. They hadn't yet bought ATI, which is where the Radeon business comes from. That's all the graphics stuff that they do today.
David: Yeah, ATI at this point was the number two competitor to NVIDIA. Actually an amazing story, too, was a Canadian company started in the 80s and pivoted into graphics cards. I feel like there's a lesson in here. We can talk about this in the playbook.
When all the VCs funded these 90 Silicon Valley startups to go make 3D graphics cards, the only two surviving ones were NVIDIA, which went through this hellish journey, and then these Canadian guys that were totally out of the ecosystem and did it in a more bootstrapped way and evolved into this space.
Ben: Jensen has a great quote about this. He's giving this lecture at Stanford years later. He says, "When technology moves this fast, if you're not reinventing yourself, you're just slowly dying." You're slowly dying, unfortunately, at the rate of Moore's law, which is the fastest of any rate that we know.
It's so clarifying of how he thinks about why NVIDIA needed to do these three complete transformations of the companyâbet it all, risk it allâbecause if you're not, you're one of those 89 companies.
David: Exactly. Intel's like, holy crap. We might have a problem here. This is not a problem for Intel.
Ben: It just is a thing they're going to have to deal with, instead of it being part of their extinguish strategy.
David: Intel is used to at this point just like Microsoft at this point. Oh, sure. You want to go make WordPerfect, we'll let you do that. We'll see these great applications and then we'll go make our own. That's what Intel's doing. Now this is the first example of Intel's going to have some trouble doing this on their own.
They actually, at first, come out with their own dedicated Intel GraphicsâGPUs, graphics cardsâcompeting as separate cards. I don't know that Intel has ever done that. I'm maybe speaking out of turn here, but as far as I know, this is not a common strategy for Intel. It's usually integrated into the motherboard and the CPU.
They come out with their own external cards right around this time, 1999, to directly compete and they suck. These are some of the worst reviewed graphics cards in history.
Ben: Talk about not your core competency.
David: Not your core competency.
Ben: And it really illustrates how different NVIDIA's approach was to what graphics cards had been before, and building programmable shaders, and creating CG, which was a little bit of an early strategy and something they would later do with CUDA. But really understanding that like, oh, we can differentiate our hardware not only with interesting hardware features but by building software on top that only works with our hardware, but makes it really great for developers to develop for our thing.
David: Intel does make a big push and this actually ends up becoming a great strategy for them into integrated graphics. They do try and integrate this, but it's never good enough for the high-end. It's only good enough if you don't care about graphical applications for laptops and the like. And that's great.
That's a big market for them for a long time, especially leading into mobile, although Intel and mobile is a story for another day. But for the hard core market, and that's making it sound too small, for the market of anybody who cares about graphical performance and quality, which is not just gaming at this point. It's 3D modeling, it's architecture. It has lots and lots of high-performance graphical computing applications.
It's this dynamic and it sets up just like Moore's law. Whatever the current maximum is, it's not enough. It's never enough. You always want more. As good as graphics are today, it'll never be good enough.
Ten years from now, game graphics will make today's graphics look silly. We'll all be in the metaverse or the omniverse if NVIDIA has their way, but it still won't be good enough. It's Moore's Law. You always want as much performance as possible.
Ben: Yup. All right, David, it's time for you to tell us about one of our favorite companies.
David: Indeed, it is. It is time for the next iteration of our insurance 101, brought to you by our amazing friends at Vouch. Today, we are talking about directors and officers' insurance. Last time we talked about E&O, today we're talking about D&O. This is one that Ben and I can speak to very personally.
Ben: I have been insured under D&O many times.
David: Me too.
Ben: And usually the process sucks.
David: The non-Vouch process does suck. If you've ever been on the board of a company, you know what we're talking about here. If you don't know what we're talking about, literally, I can't stress this enough. You absolutely need to have this in your company.
Ben: In fact, if you get venture funded, most venture firms will tell you, we cannot wire unless you promise to get D&O Insurance within 60 days or something of that term sheet.
David: Yup. A condition of closing the round from any credible venture firm is always going to be, you must have this in place. If you are running a company, you are an officer of a company, a board director of a company, and you do not have this in place, like literally just stop right now, pause this, you'll be here, go to vouch.us/acquired. Click the link in the show notes. Get it, I'm serious, right now. You do not want to not have this.
What is D&O? Why do you need it so badly? This is insurance that protects the directors and officers of the company, personally, from liability arising from any lawsuits against the company. If the company gets sued, in many cases, you see this all the time, the plaintiffs will name the company as the defendant, but also the CEO, the individual members of the board, maybe officers of the company.
This insurance protects you from the personal liability arising from that. It's bad enough if your company gets sued, but the worst case scenario is the company goes bankrupt. If you are named as a defendant, all of your personal assets are on the line, so you absolutely need this.
You may be thinking, isn't this the whole point of a company, or an LLC, or whatever your structure is to limit your liability personally from the company? Yes, but there are plenty of cases where the veil of the corporation can be pierced and you can be personally liable.
Say you're a VC board member of a company. Somehow, you're not even trying to do anything nefarious. You get some information from a pitch deck of a competitor to that company. Accidentally, you're not thinking about it or whatever. You disclose some of that information to the company or on the board of, the competitor finds out, they can sue you personally for that and the company. You are on the hook. So step one, get this insurance in place no matter what to protect yourself.
But part of the reason we love Vouch so much here at Acquired is not only do they make it way, way, way easier than in the past to get this in place, it's specifically designed for startups and tech companies. Vouch is D&O Insurance. It covers a couple other really relevant items that most traditional legacy players do not.
One is cap table disputes. This is super important. Say there's a falling out with co-founders or amongst the company in the venture capitalists, who has what shares, who invested, et cetera. You've got personal lawsuits flying about all over the place, Vouch will protect against that.
The second is intellectual property protection, which is super commonâpatent infringement, trademarks, copyright. If you get named personally as a defendant, Vouch will protect against that whether you're bootstrap, seed stage, growth, or public. If you're public, my God, I hope you already have this in place or you are grossly negligent.
Ben: Do you know what public company that we have covered on Acquired at length does not have D&O Insurance philosophically?
David: I believe that is Berkshire Hathaway.
Ben: Yes. Warren's perspective is we all should have a whole lot of skin in this game. That is not the vast majority of people's perspective.
David: And that is not one that I personally think is worth taking, but I get where he's going with it. Unless you're Warren Buffett, but even if you are, for God's sakes, Warren, protect your family.
Ben: Warren, go to vouch.us/acquired and get yourself some D&O Insurance. My God.
David: It takes 10 minutes. So great. Vouch is the best, vouch.us/acquired. Everybody, if you use that link, you will get 5% off your coverage. They're the best. We love them. Thank you, Vouch.
Ben: Thanks, Vouch.
Okay, David. Xbox comes out, NVIDIA has a card in there that is the GPU of the Xbox that has programmable shaders. Rather than literally just spitting out triangles to put on screen, they actually are running these little programs in shaders. It's super cool. What happens after that?
David: Basically, the company goes supernova in a good way at this point in time. The fiscal year then ends January 31st, 1999. This is right before they go public or right as they go public. They did $158 million in revenue.
The next year, the fiscal year ended January 31st, 2000. The calendar year in 1999, they did $375 million in revenue, more than double that year. The next year, they do $735 million in revenue. The year after that, which is basically the calendar year 2001, the year the Xbox comes out, they do just about $1.4 billion dollars in revenue.
Ben: Which makes them the fastest semiconductor ever to reach a billion in revenue and gets them added to the S&P 500.
David: Indeed. The company's essentially ninth year of existence. They're already doing over a billion dollars a year in revenue.
Ben: Throughout the company's history, they basically have these 6- to 10-year epochs. During those, they have a meteoric rise when they do something contrarian that's off the rest of the industry. Then it starts to taper and they need to figure out how to reinvent themselves again.
We saw it for the first time before the competitors come in. Then the competitors come in and then we see it again with them figuring out we got to do the emulated version of letting our engineers design the chips and lay out the chips so we can be faster than everyone. Then everyone catches up and they have to do it again with programmable shaders, launching those to the industry, and then they have these few amazing years.
After that, there is kind of a plateau again. You can see it in their revenue, they did obviously close to $2 billion as we moved through 2001. They stayed reasonably flat for a few years after that. I think they eventually did $2.8 billion in 2005, but it was barely profitable. They never lost money, but net income for each of those years was only a couple of hundred million or less.
It's not like they're this super free, cash flow positive company. They're not adding to their cash pile in a meaningful way. You can start to see competitors figure out programmable shaders, too.
David: Yup, ATI, of course. Then in 2005, I think it was AMD...
Ben: That's when they start shopping around. 2006 is when the transaction actually happens.
David: They buy ATI. Of course, now, AMD is the main competitor to NVIDIA. We're going to tell those stories in the next episode, but basically, a little teaser on what's going on here, they kind of take their eye off the ball in the gaming market. Maybe that's too harsh. I don't know what Jensen would say about that.
Right around this time, something ultimately becomes pretty amazing that happens, which is they've achieved the dream at NVIDIA. They've created a programmable GPU. It is truly a GPU. It rivals the CPU. This is the model they have driven forth.
This new industry of computer graphics enabled a whole generation of storytellers to program their GPUs and tell stories. A whole new class of users and developers starts to tinker around with these GPUs. Jensen likes to tell a whole story that's probably apocryphal, but we'll repeat it here as a little teaser for next time.
Right around the early 2000s, a quantum chemistry researcher at Stanford calls up Jensen. He's like, I need to thank you because I do this work in my lab on the supercomputers that we have at Stanford. I write these models for the molecules that I'm researching. It takes a couple of weeks to finish the computation on these models.
My son, who's a gamer, told me that I might want to try going over to Fry'sâthe local electronics storeâand buy a bunch of your GeForce cards. So I did and that I should try porting my models into CG, into your graphics computer language and just see what happens. I did it and my computation finished in a couple hours.
I waited a couple weeks for the supercomputer here at Stanford to finish. I checked the results and they were identical. So I just want to thank you, Jensen, for making my life's work achievable in my lifetime. For sure, it's something that Jensen made up. Maybe did, maybe didn't.
Ben: He's probably cobbled together from a few different people's experiences.
David: Probably. It's a composite, but every word of it is true in spirit.
Ben: Yes, there is a whole industry called scientific computing or a whole segment that NVIDIA would be able to address in the future. They need a whole lot of tools to be built for them to be able to really use GPUs for all those purposes and more with machine learning and everything else. But right now, yes, you are buying off-the-shelf GeForces, here in this mid-2000s era and trying your best to sort of hack them together to do your super parallel processing task that is not specifically building a cool video game.
What's interesting is the industry perception around this time was that NVIDIA had started to focus on this high-performance computing segment and that they were starting to take their eye off the ball in gaming. People were starting to think like, oh, maybe ATI is actually more interesting as a gaming-specific graphics card maker at this point.
You mentioned this AMD-ATI deal. We all think of the AMD Radeon at this point. You don't think about the ATI Radeon, which I think they retire the ATI brand in 2009. But AMD's first choice was actually NVIDIA. AMD tried to buy NVIDIA to make that their graphics line. It was possible because it's not like the stock was blowing up at this point in time. It had a few years of reasonable stagnation before we got into late 2006â2007.
Certainly, people didn't see the machine learning market. People didn't really see the scientific computing market. It was like, hey, maybe this company needs some guidance from a smart company like us, AMD. They make the offer and there's the cover story on Forbes. We'll put in the show notes, but there's this article that comes down called Shoot to Kill.
Jensen, in this merger acquisition talk with AMD, insisted that he be the CEO of the combined company. That is the thing that blew up the deal, and instead AMD went and bought ATI, and the rest is history.
David: Oh man. That is such a good âwhat would have happened otherwise.â We use that to transition into analysis for this one.
Ben: Yeah, let's do it. I thought it'd be fun to do narratives. Let's take it from this point in time. The AMD-ATI deal has just happened. We're looking forward, it's 2006. What's the bear and bull case for the company?
I thought an interesting data point to ground this discussion would be that, if we look at the gross margins today for NVIDIA, which we will talk on our whole next episode about everything they do that's so insanely differentiated, they sell their GPUs at a hardware business with a 66% gross margin. Back in 2004, that gross margin was only 29% that they were able to command as a premium on their cards.
You can see, all of their economic potential was being competed away and they weren't doing anything to differentiate in a way to get any sort of pricing power. You make that 29%, then you need to use that to pay all your overhead, fixed costs, your engineers, develop the next product, and pour it into R&D. Sure, they had a few great years of doubling in revenue after going public, but it's not looking great right now in 2006.
David: Yes, and there's also another reason why their gross margins are so low in those years following 2001. They made this deal with Microsoft to power the Xbox. And it was absolutely the right strategic decision to power the Xbox, to get Microsoft's support in creating CG for programmable shaders, and protect themselves from Intel. But if you're going to deal with Microsoft, they're going to extract their pound of flesh.
You'll note, there are three game consoles in the history of game consoles that NVIDIA has powered. The original Xbox, the PlayStation 3 which we'll talk about next time, and the Nintendo Switch. They have not done any others. People are always asking Jensen about this one.
He's diplomatic about this because it's a crappy gross margin business. There's a $500 million a year revenue deal with Microsoft. $500 million a year when their whole company revenue is a billion. Is $500 million a year a very low gross margin revenue?
Ben: Yeah. I think the way that he talks about this opportunity in the talk that I watched him, give it names. But he says, people always asked me, they come to me and say, Jensen, why aren't you making this great game console a GPU? What a waste? Why wouldn't you do that?
He always talks about it like, there are a lot of things we could spend our resources doing. If I don't think that we can do anything really unique and special and really change the world, then we have better things to spend our resources on. That is kind of Jensen speak for like, no, there are crap margins in that, I'm not doing that.
He is right that given a finite amount of resources, you have to allocate your capital and your resources in the most optimal, both short-term cash flowing way, but also a long term strategic way. It seems from their analysis, especially recently with game consoles, sure, we might be able to make some low margin revenue on it, but it's not strategic for us long-term to do that.
David: It's probably, at this point in time, a little too much of an exaggeration to say that they're out of the fire and into the frying pan, having solved their Intel existential strategic challenge and ending up now at odds with Microsoft. That's too much, but there's a lot of truth to that.
If you're looking at this stock in those years, especially as revenue starts to flatten, and a big part of that is coming out of towards the end of the Xbox generation of consoles leading into the Xbox 360, which of course NVIDIA does not power, that's a lot of gaming top line revenue going away. Meanwhile, they're spending tons of resources investing in this new high power computing segment for these researchers. I hear a little bit like, okay, Jensen, do you really know what you're doing here?
Ben: And in 2006, Intel launched or announced this project, Larrabee, where they're going to be a full-fledged GPU maker. This is a totally second foray of Intel's really into this.
You're like, okay, you've had to be this commodity, where you're living on Intel's motherboard. Customers are only choosing to buy your product when the integrated card isn't good enough for them. The person that makes the integrated card is now announced they're going to be a real honest-to-goodness GPU maker. Are you betting the farm on scientific computing?
David: How big is that market?
Ben: The answer is yes. That is also the bull case. It turns out, scientific computing would be so much more than scientific computing. The acceleration of all the other things in our computing world that has been very advantageous to become parallelizable. I will leave it there, so I don't have too many spoilers. But that is 100% the bull case and 100% of what happened.
David: Yeah, it's interesting. We're working on an episode two with Hamilton Helmer and his colleague, Chenyi, at Strategy Capital about power.
Ben: Specifically with platforms on how to apply power to platform businesses.
David: It probably won't be out yet when this episode comes out, but it'll be coming out shortly thereafter. They make the point and it's a very, very valid one that when you climb the mountain as a founder and a company of finding product/market fit, it's very different than climbing the mountain of then having to go develop power. It's a whole second journey that you have to go on.
Ben: It's a whole second invention. At this point, NVIDIA had definitely found product/market fit, but had not yet found their source of power.
David: If you're looking at this company at this moment in time, especially as revenues flattening, coming off the Xbox contract, OPEX is going way up investing in this sort of speculative new area, I can totally see looking at this and being like, wow, this is yet another Silicon Valley startup that had immense product market fit, top line revenue soared. But now we're coming to the end of that and there's not a lot of power as defined by sustainable economic profit, operating cash flow coming out of this thing.
Ben: As we talk about power here, what power do they have? For listeners who are newer, this is really the, what is it that enables the business to have persistent differential returns in a sustainable way, be more profitable than their closest competitor? They really didn't have power.
I'm trying to think which of the seven powers can we make the best case that they did have. It's not switching costs. Switching costs are crazy easy.
David: Switching costs is interesting. I think they were trying really hard to develop it. They did a really good job. They made CG in collaboration with Microsoft. CG works on NVIDIA products, but it's not like CUDA today to flash forward to next time.
Ben: Yeah. They had the inkling of how they could get power, but it was not yet implemented.
David: And Microsoft didn't have a lot of interest in helping NVIDIA create huge switching costs there.
Ben: Right, because Microsoft wants to play Switzerland. Like, hey, anyone that is an application developer for Windows should be able to use whatever hardware is on any PC in a really great way, so we want to commoditize all of our suppliers.
David: Maybe an attempted switching cost that was not fully realized. I think they probably thought and did (for a while) have process power in this six-month shipping cycle that none of their competitors can match for a while. But certainly the delta of NVIDIA's shipping cycles versus competitors compressed over time.
Ben: Okay, playbook. I have one big one that we have not discussed. We sprinkle in lots of playbook themes, but there's one to me that I want to call out and draw through line to something that's happening with NVIDIA today. That is simulation.
There's a thing that we're going to talk about a lot in the next episode, which is totally changing the world as we know it, which is things that we used to have to do physically we now do in simulation.
An obvious example of this is, Boeing doesn't take every part and throw it into a wind tunnel. Maybe Boeing does, but the zillion new space startups certainly don't do that. They simulate the atmospheric effects on stuff. It happens way faster and it lowers your iteration time.
Another one is drug discovery. You look at how fast we came up with Coronavirus vaccines. Simulation is an absolute miracle. Everything in our world is being compressed ten times, a hundred times faster, because we're able to simulate it rather than needing to do it in the real world.
The interesting thing is a lot of that is actually powered by a lot of the machine learning advances that NVIDIA is doing in today's world with cool things that you can do on GPUs. But the reason I'm talking about it in this episode is that DNA comes from the fact that in order to survive when they had nine months left, the way that they saved themselves was with simulation. It became very clear to the company very early on, the benefits of being able to simulate something rather than having to do it in the real world.
David: Similarly, a playbook theme I wanted to highlight that we have not talked about explicitly yet is just the power of democratizing tools for developers. Jensen really saw this back in his AMD days before going to LSI Logic. The ability for NVIDIA to use a software emulator to design their chips and then, of course, the massive, massive strides that the EDA industry has made since then.
NVIDIA itself, we haven't really talked about it as much, but Jensen, Chris, and Curtis's original vision did come true. They created a new artistic platform for artists to tell their stories. Without this industry and all the hardware and software tools that went into creating it, you would have to be John Carmack to tell a story in this medium.
There are very, very few John Carmacks out there in terms of being gifted enough developers, and surrounded by storytellers, too, and being a great storyteller himself to be an artist. NVIDIA talks about this now in their marketing materials to be Da Vinci and Einstein together in one person.
Ben: Yeah, it reminds me of the people that do like the crazy cool art in Microsoft Excel by painting each of the cells a different color. You had to be that type of person to be a game developer in Carmack's era because it was esoteric as hell to be able to actually figure out how to make this hardware do what you want.
David: Another big one I want to highlight, I just keep thinking back to the original time when NVIDIA was funded. I wonder if they're really honest with themselves. What would Sequoia and Don Valentine think about that? They made the wrong venture bet.
In a market like that, we see it all the time. Look at Web 3.0 right now. If there's a team coming out of Solana and FTX or let's make up an imaginary example, making some new vision for a class of applications in Web 3.0, they're going to get term sheets from everybody and then there's going to be a million copycats the next day.
Ben: It is the beauty of proliferation and then consolidation. Buffett has, I think it's in a 2000 Fortune article that he wroteâit's weird that I know that, but I think that's rightâin an op-ed about how there were, whatever it was, 70 car companies before we narrowed it all the way down to Ford, GM, and Chrysler.
The airlines were sort of the same way. There's this proliferation, there's no one who can really differentiate, no one can build any power, and so you only have a few survivors left. In general, they compete on pretty low margins when there are only a few left. Their defensibility comes from their scale.
I think, open question, if that's sort of how the graphics market necessarily matured. But you're absolutely right to self-reflect on the time when Sequoia and Sutter Hill invested to say, would you make that type of bet again? You backed one of the two winning horses out of 90. Should you do that and just say, we're betting on amazing founders?
David: This is the nuance. I think what is so cool and part of the fun of the art and the science of what we do, the company they backed was wrong. I think a lot of the GPs at Sequoia and certainly Mark Stevens, who was one of my professors at GSB, who was on the board for Sequoia and still on the board, have held their shares personally to this day. That's one of the best venture investment returns of all time, full stop period.
Ben: Anything going from a $6 million valuation to the eighth largest company in the world, definitionally, has to be one of the best of all time.
David: Right. They were wrong, intellectually, and yet they were right. Why were they right? They were right because, frankly, of Jensen.
Ben: It's a reasonable enough market. The question is, what are you better off doing what they did and investing at the proliferation phase on someone you believe is going to figure it out and have a good shot at being one of the winners? Or should you wait until consolidation and just pay that much higher price in order to back one of the ones that are already running away with the market?
David: And back then in the day, there was no option.
Ben: There were no stages of venture capital. There was, you raise your venture capital and then hopefully you're profitable enough to go public.
David: They did raise some more money in between that initial $2 million and going public. I think they raised 20 million in total, but there wasn't a lot of window. I think it was Sequoia and Sutter Hill that put that capital in for the rest of that $20 million.
It's really interesting to think about these cases. Take Sequoia and Sutter Hill, too. Specifically, they've gotten it right so many times, but it's not a straight line. What's the lesson from that?
Ben: Yeah. And the magic was that Jensen really figured it out early that they were in a business that was totally at the mercy of Moore's Law. In having that initial realization as early as they did with the proliferation of competitors, and everyone doing the triangles, DirectX and what, that taught them the lesson early enough that, oh, we are in a business where we must be reinventing. There is no way to stay ahead other than ruthless self-examination and completely ending and rebounding the business.
David: Yup, ship faster and reinvent.
Ben: Yeah. That, to me, is why they survived.
David: If you think about the class of companies that are the greatest venture returns of all time, some of them are like NVIDIA, where you look at the team, you look at the business plan, the thesis originally. It wasn't a straight line, but it worked out. But then some of them are, Sequoia, even used to talk about this on their website, The Misfits, the ones that look unfundable. The early Solana team starting in the crypto winter, building a new blockchain...
Ben: Steve Jobs smelling bad, that sort of thing.
David: Right. Plenty of venture firms, but I have to hand it to Sequoia over history, too. They've done a really good job of doing both of these. They do the Steve Jobs and they do the Jensen's.
Ben: Okay, before we move to grading, I'm going to plant a seed with you, David. It's a fun trivia question. Do you know the company was a startup that in 2006, NVIDIA invested in?
David: Oh, I do. This is a really good one.
Ben: Hold on an answer.
David: We'll hold it.
Ben: Okay. Listeners, before we finish up here and jump to that answer and grading, I want to thank our good friends at the Softbank Latin America Fund. Softbank, as you know, created this fund with a simple thesis. Latin America is totally overflowing with innovative founders and amazing opportunities, but historically has been short on the ingredient of capital.
Softbank, unbelievably, has invested $8 billion in over 70 companies. They have one huge takeaway, which is not super obvious at first, but in retrospect, makes tons of sense that LatAm is not so much about disruption as it is inclusion because the majority of the population is underserved in every category. From banking to ecom, to transportation, most businesses as well are just underserved by modern software. There's just so much to build for so many people in Latin America.
An amazing example of this is their portfolio company, Banco Inter. You should recognize this name because last season, we actually talked with the CEO, Joao Menin. It's an unbelievable story of legitimate digital transformation.
If this is your first time hearing about Banco Inter, they're accelerating the shift to online financial solutions, and expanding access to banking, and investing services in a region, obviously, where over half the people over the age of 15 still don't have a bank account. They're lowering the historically expensive cost of doing banking really by becoming a digital-first bank, even though they're a multi generational, physical bank.
David: Really, all of SoftBank Latin America, I was catching up with Shu and Palo, who run it just this week. It's such a great example of what we were just talking about. This is such a bright spot in the venture capital period and in Softbank. The Latin America investing ecosystem when these guys started several years ago, nobody was there. It was the misfits. It was crazy to go think and invest in this.
Ben: And they've attracted so many more dollars from everyone else, too, by lighting the fire in this region. They really are the OG LatAm investors and are such a power there. To learn more, you can click the link in the show notes or go to latinamericafund.com. If you're interested in joining a company there, or starting a company, or perhaps co-investing in the region, definitely reach out to Shu, Paulo, and that team.
David: They're the best.
Ben: All right, David, so what is the company that they invested in?
David: Ben, you are talking about Keyhole.
Ben: Yes, I thought you would know. I love this little foreshadow before we get to grading because I think it's so interesting that Jensen basically saw the potential of Keyhole. Without sharing what Keyhole became, I think astute listeners will know.
David: We've talked about it on Acquired.
Ben: And we've done an episode. Basically, this company that can't raise any money from anyone else comes and pitches Jensen. He's like, oh, my God, I see this is the future. This is a simulation. You are creating a model of the earth in software and people can just navigate around the earth. Now that I've given it away...
David: A graphical model of the earth.
Ben: Yes. Google acquired it, it became Google Earth. NVIDIA was one of the early investors. That really goes to speak to where Jensen and the leadership team at NVIDIA saw their business going from this point forward, where it was all about simulation. It was all about using massively parallel computing to build brand new experiences to enable research. I don't think there was any machine learning going on. I think it was all the graphical use of the chip, but this gets into the omniverse stuff that they're doing now.
One of the main reasons that I think they invested was because he wanted just to stay alive so they could keep
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HPE Buys SGI for $275 Million: How Far the Mighty Have Fallen
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2016-08-14T19:24:00+00:00
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NEWS ANALYSIS: SGI used to be Google. Ironically, Google, which used to be SGI's tenant, now owns SGI's sprawling former campus; now HPE will soon own SGI.
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eWEEK
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https://www.eweek.com/innovation/hpe-buys-sgi-for-275-million-how-far-the-mighty-have-fallen/
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eWEEK content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.
Picture this: The newly elected president and vice president of the United States are visiting Silicon Valley to introduce themselves to key movers and shakers, pledging the full support of Washington in promoting U.S. innovation and name-dropping IT products worldwide.
They fly into Moffett Field Naval Air Station in Mountain View on Air Force One and Two, respectively, select a hot company and stage a media event to make their speeches to fire up the crowd, investors and Wall Street.
Might this be the scene next February with a new U.S. president? It could happen, but this event is exactly what took place on Feb. 22, 1993, when newly inaugurated President Bill Clinton and Vice President Al Gore visited Silicon Valley. They thanked everybody for their help in getting elected, pledging their support of the fast-growing industry that was then pre-Internet Silicon Valley.
The location of choice for the media event? Twelve-year-old Silicon Graphics Inc., the hottest and most successful company in the business. I was there that day covering the event, met the POTUS and was impressed at the power and influence of SGI on a world stage.
Much Has Changed in a Mere Generation
My, how things have changed.
In a tech deal Aug. 10 that didn’t cause nearly as much talk as Donald Trump’s daily controversial campaign remarks, Hewlett Packard Enterprise announced that it is buying SGI for $275 million in a bid to grow its capabilities in data analytics, high-performance computing and the cloud. HPE will add a number of much-needed new customers to its roster of users. It also will bolster its workstation lineup that’s already being used by studios such as DreamWorks for making high-end CGI (computer-generated imaging) movies.
However, those who knew SGI way back when had to be shaking their heads when they heard the news. The sum of $275 million for an IT company—especially for one with a longtime international reputation and a lot of very sophisticated IP—is now basically equal in value to a golden parachute for a departing CEO or board chairman.
That pile of intellectual property includes a lot of the innards of Google Maps, for example. Much of that IP was created by people at SGI who have since migrated to Google. The long-distance cameras designed for use in satellites were astonishing; I personally had a demonstration shown to me several years ago.
Secretive three-letter federal agencies have been buying SGI imaging software and photography equipment for years and using it for some very interesting international government projects that we can’t talk about in public, or else we might get a scary visit by men in black suits.
Sale Price an Embarrassment
The announced sale price of $275 million is embarrassing, even though the company filed for bankruptcy in 2009 and had many of its assets acquired by Rackable. Acquisition companies now commonly spend a billion and more for startups that have merely one app. Look up WhatsApp, Waze, Instagram and a couple dozen other examples if you don’t believe it.
SGI used to be Google. Ironically, Google, which used to be SGI’s tenant, now owns SGI’s sprawling former campus—and a lot more additional office space—in east Mountain View, Calif., next door to what is now Moffett Field Federal Air Base, where Clinton and Gore once flew in to say hi to SGI CEO Ed McCracken.
SGI was the flagship of the IT industry in the 1980s and ’90s, along with others that included Sun Microsystems, DEC and Compaq. It could seemingly do no wrong—until innovation slid underneath and pulled the rug out from under it.
SGI’s then-super-powerful, $40,000 workstations were used by Hollywood studios such as Universal and Sony Pictures to create 3D-like videographics for blockbuster films such as “Jurassic Park,” “Twister,” “Jerry Maguire,” “Lost in Space,” “Men in Black” and a list of others. NASA, the FBI, the CIA and large research institutions bought specialized software and SGI’s Iris and Crimson workstations to get heavy analytics-type computing jobs completed.
SGI Now Only a Skeleton of Its Former Self
Now SGI’s skeleton is housed in a nondescript, ’80-era corporate building on the fringes of Fremont, Calif., and remaining staff will probably be moved into an obscure corner of HPE’s Palo Alto campus. This build-down from the high-rent district is the direct result of a downturn that began when Intel and Microsoft created Wintel servers and desktop PCs in the early ’90s and never looked back.
Within a decade, the lighter, faster, cheaper Wintel machines and desktop workstations had undercut the big, heavy SGI machines, and the market shifted irrevocably away from the established vendor. SGI was left with good IP but fewer and fewer customers.
SGI’s problem was that it couldn’t look forward and make adjustments, being far too invested in its powerful but pricey and proprietary workstations that only deep-pockets companies could afford. Sun Microsystems, founded one year after SGI in 1982, faced the same conundrum (overly expensive, proprietary workstations and servers) before it floundered and was bought by Oracle in January 2010 for $7.4 billion. That, in looking back, turned out to be a pretty good exit.
Lessons Learned?
What’s the lesson SGI teaches us? There are more than one, certainly, but the main thought has to be this: No matter how healthy you believe your business is, you must continue to operate it as though your top competitor is gaining on you. You also must continue to look for new markets for your IP, and you must always look for innovative ideas—not only from within the house, but outside as well.
And you must never, ever rest on your past accomplishments. Celebrate them, yes, but you must keep moving ahead into new territory.
Question: Can Google, one of the world’s most powerful and successful companies at the moment, be displaced by another company years from now, like its predecessor?
Answer: If it learns the lesson from its former landlord, no. If it doesn’t, history certainly can—and will—repeat itself.
Editor’s Note: This story was corrected 8/15 to replace “Rackspace” with “Rackable.”
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What Happened to the Silicon Graphics Company?
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2024-07-05T07:29:58+00:00
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The fascinating tale of Silicon Graphics Incorporated (SGI), a pioneer in the realm of computer-aided design, visualization, and high-performance computing.
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Quantum Zeitgeist
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This is the fascinating tale of Silicon Graphics Incorporated (SGI), a pioneer in computer-aided design, visualization, and high-performance computing.
In the early 1980s, SGI revolutionized the industry with its innovative graphics workstations, which enabled designers and engineers to create complex 3D models with unprecedented speed and accuracy. The company’s flagship product, the IRIS workstation, was a game-changer, powering the Graphics Library software that provided a standardized API for developers.
SGI’s influence extended beyond CAD users, as its technology found applications in film production, aerospace, and automotive industries. Who can forget the iconic visual effects in movies like “Young Sherlock,” “Terminator 2: Judgment Day,” and “Jurassic Park”? These cinematic marvels were made possible by SGI’s cutting-edge technology.
However, despite its early successes, SGI struggled to adapt to changing market trends and increasing competition from lower-cost PC-based solutions. The company’s failure to innovate and diversify its product line led to declining sales and financial struggles.
The acquisition of Alias Research by SGI is often cited as an example of the importance of strategic mergers and acquisitions in the technology industry. The deal enabled SGI to expand its product offerings, increase its market share, and stay competitive in a rapidly evolving industry landscape.
Unfortunately, SGI’s experiences also serve as a cautionary tale for companies undergoing mergers and acquisitions, highlighting the need for careful planning, integration, and adaptation to changing market conditions to ensure long-term success.
In 2006, SGI filed for Chapter 11 bankruptcy protection and underwent significant restructuring efforts. The company emerged from bankruptcy in 2007 but eventually ceased to exist as an independent entity, with its remnants acquired by Hewlett-Packard in 2016.
Despite its demise, SGI’s legacy lives on in modern computing through its influence on graphics processing units, computer-aided engineering, and high-performance computing. The OpenGL API, developed by SGI in collaboration with other industry partners, remains a widely-used standard for 3D graphics rendering.
As we reflect on the rise and fall of Silicon Graphics Incorporated, we’re reminded that innovation and adaptability are essential for survival in the rapidly evolving technology landscape.
Back to the 1980s
In the annals of computer history, few companies have left as indelible a mark as Silicon Graphics Inc., or SGI for short. Founded in 1981 by a group of visionaries, SGI was instrumental in revolutionizing the field of computer graphics, bringing to life breathtaking visuals that captivated audiences worldwide. From the earliest days of CGI in films like “Tron” and “The Last Starfighter”, to the iconic workstations that powered the creative industries, SGI’s innovative spirit and technological prowess earned it a revered status among professionals and enthusiasts alike.
However, behind the scenes, a complex tale of innovation, hubris, and ultimately, decline, unfolded. At its peak in the mid-1990s, SGI was riding high on the success of its high-performance workstations, which had become the de facto standard for industries such as film, architecture, and engineering. But beneath the surface, warning signs were beginning to emerge. The company’s attempts to expand into new markets, including consumer-level graphics cards and even a foray into video game consoles, would ultimately prove disastrous. Meanwhile, the rise of commodity hardware and software alternatives began to erode SGI’s market share, leaving the once-mighty company struggling to stay relevant.
One of the key players in SGI’s founding was James Clark, a renowned computer scientist who had previously worked at the National Center for Supercomputing Applications. Alongside Ed McCracken, another co-founder, Clark brought a wealth of expertise in high-performance computing and graphics processing. The duo’s vision for SGI was to create machines that could tackle the most demanding tasks in fields like scientific visualization, computer-aided design, and digital video production.
As the company grew, other luminaries joined the ranks, including Cray Research founder Seymour Cray, whose eponymous supercomputer company would eventually merge with SGI in 1996. The confluence of these brilliant minds helped shape the course of SGI’s history, but ultimately, even their collective genius could not stem the tide of change that was sweeping through the industry.
SGI founders’ early innovations in computer graphics
Silicon Graphics Incorporated (SGI) founders Jim Clark and Ed McCracken pioneered innovations in computer graphics in the late 1970s and early 1980s. One of their earliest achievements was the development of the Geometry Engine, a high-performance graphics processing unit that enabled fast rendering of 3D graphics. This innovation led to the creation of the IRIS 1000, SGI’s first commercial graphics workstation, which was released in 1983.
The IRIS 1000 was a significant improvement over existing graphics systems, offering unparalleled performance and capabilities for its time. It was powered by the Geometry Engine, which provided a 10-fold increase in graphics performance compared to other systems available at that time. The IRIS 1000’s advanced features included support for 3D transformations, hidden surface removal, and Gouraud shading.
In the mid-1980s, SGI continued to push the boundaries of computer graphics with the introduction of the IRIS 2400, which further increased performance and added new features such as texture mapping. This innovation enabled the creation of more realistic and detailed 3D models, revolutionizing fields such as computer-aided design (CAD), scientific visualization, and video game development.
SGI’s innovations in computer graphics also had a significant impact on the film industry. In 1985, SGI systems were used to create the groundbreaking special effects for the movie “Young Sherlock Holmes,” which was one of the first films to extensively use computer-generated imagery (CGI). This marked the beginning of a new era in visual effects, with SGI’s technology playing a key role in shaping the industry.
Throughout the 1980s and 1990s, SGI continued to innovate and expand its product line, releasing new workstations such as the IRIS Indigo and the O2. These systems further increased performance, added new features, and enabled the creation of even more complex and realistic 3D models.
In the late 1990s and early 2000s, SGI faced significant challenges, including increased competition from other graphics companies and a decline in demand for its high-end workstations. Despite these challenges, SGI’s legacy as a pioneer in computer graphics continues to be felt today, with its innovations influencing generations of graphics professionals and shaping the course of the industry.
Silicon Graphics Incorporated’s founding and early success
In the early 1980s, SGI introduced its first product, the IRIS 1000, which was a 3D graphics terminal that could be connected to a host computer. This product was followed by the IRIS 1400 and IRIS 2000, which were more powerful and feature-rich versions of the original. These early products helped establish SGI as a major player in the emerging market for 3D graphics workstations.
SGI’s big break came in 1985 when it introduced the IRIS 3000 series, which was the first family of workstations to integrate 3D graphics, CPU, and memory into a single unit. This innovation led to widespread adoption of SGI’s products across various industries, including film and television production, where they were used to create visual effects for movies such as “Terminator 2: Judgment Day” and “Jurassic Park”.
Throughout the late 1980s and early 1990s, SGI continued to innovate and expand its product line. In 1988, the company introduced the IRIS Indigo, a lower-cost workstation that brought 3D graphics capabilities to a wider range of users. This was followed by the introduction of the Indy workstation in 1993, which was designed for entry-level users.
SGI’s success during this period was fueled by its focus on innovation and its ability to deliver high-performance products that met the needs of demanding industries such as computer-aided design (CAD), video production, and scientific visualization. The company’s commitment to research and development helped it stay ahead of competitors and maintain its market leadership.
In 1995, SGI went public with an initial public offering (IPO) that raised $340 million, further solidifying the company’s position as a leading provider of high-performance computing solutions.
Company’s pioneering role in the CGI film industry
Silicon Graphics Inc played a pivotal role in the development of Computer-Generated Imagery in the film industry. In the late 1980s, SGI’s high-performance workstations and servers enabled filmmakers to create complex CGI sequences that were previously unimaginable. The company’s technology was instrumental in the production of several groundbreaking films, including James Cameron’s Terminator 2: Judgment Day and Steven Spielberg’s Jurassic Park.
SGI’s hardware and software solutions allowed visual effects artists to work more efficiently and effectively, enabling them to create more sophisticated and realistic CGI elements. The company’s systems were capable of handling massive amounts of data and performing complex calculations at high speeds, making them ideal for the demanding task of generating CGI imagery.
In the early 1990s, SGI formed strategic partnerships with several leading visual effects companies, including Industrial Light & Magic and Digital Domain. These collaborations enabled SGI to tailor its technology to meet the specific needs of the film industry, further solidifying its position as a leader in the field.
Despite its pioneering role in the CGI film industry, SGI faced significant financial challenges in the early 2000s. The company’s high-end workstations and servers were increasingly being replaced by more affordable and capable commodity hardware, leading to a decline in sales and revenue. In 2006, SGI filed for bankruptcy and underwent a series of mergers and acquisitions, ultimately becoming part of Hewlett-Packard in 2016.
The legacy of SGI’s contributions to the CGI film industry continues to be felt today, with many of its innovations and technologies remaining essential components of modern visual effects pipelines. The company’s pioneering work in this field has enabled filmmakers to push the boundaries of what is possible on screen, creating immersive and engaging cinematic experiences for audiences worldwide.
SGI’s impact on the film industry extends beyond its technical contributions, as it also played a key role in shaping the aesthetic and creative direction of CGI-heavy films. The company’s technology empowered filmmakers to experiment with new visual styles and storytelling approaches, leading to the development of innovative genres such as sci-fi and fantasy.
SGI’s workstation market dominance in the 1990s
Silicon Graphics Inc dominated the workstation market with its high-performance computers designed for demanding applications such as computer-aided design, video editing, and scientific visualization. SGI’s workstations were renowned for their exceptional graphics capabilities, processing power, and reliability.
The company’s success can be attributed to its innovative hardware and software technologies, including its proprietary Graphics Language and the InfiniteReality graphics subsystem. These technologies enabled SGI’s workstations to deliver unparalleled performance in graphics-intensive applications, making them the go-to choice for professionals in fields such as engineering, video production, and scientific research.
SGI’s market dominance was further solidified by its strategic partnerships with leading software vendors, including Autodesk, Adobe, and IBM. These partnerships ensured that SGI’s workstations were optimized to run popular CAD, video editing, and other applications, thereby expanding their appeal to a broader user base.
However, despite its market leadership, SGI faced significant challenges in the late 1990s, including increased competition from low-cost PC vendors and the rise of commodity graphics cards. The company’s high-end focus and premium pricing strategy made it vulnerable to disruption by more affordable alternatives.
In an effort to revitalize its business, SGI underwent a series of restructuring efforts, including layoffs, divestitures, and a shift towards lower-cost, more standardized products. However, these measures ultimately failed to stem the decline, and in 2006, SGI filed for bankruptcy protection.
The remnants of SGI were subsequently acquired by Rackable Systems, which continued to develop and market SGI-branded products until 2009, when the brand was phased out in favor of the parent company’s own branding.
Cray Research acquisition and its impact on SGI
Cray Research, a leading supercomputer manufacturer, was acquired by Silicon Graphics Incorporated in 1996 for approximately $740 million. This acquisition marked a significant shift in the high-performance computing landscape.
The acquisition of Cray Research provided Silicon Graphics with access to Cray’s expertise in designing and building high-end supercomputers, which complemented Silicon Graphics’ strengths in visualization and graphics processing. The combined entity aimed to create a comprehensive platform for scientific simulations, data analysis, and visualization.
Before the acquisition, Cray Research had established itself as a pioneer in the supercomputer industry, with its first system, the Cray-1, released in 1976. Throughout the 1980s and early 1990s, Cray continued to innovate, introducing new architectures and systems that pushed the boundaries of computational performance.
The acquisition also led to significant changes within Silicon Graphics’ organizational structure. The company established a new subsidiary, SGI/Cray Research, which focused on developing high-performance computing solutions. This move enabled Silicon Graphics to expand its product portfolio and tap into the growing demand for supercomputing capabilities in fields such as weather forecasting, genomics, and materials science.
However, the acquisition ultimately failed to yield the expected synergies, and Silicon Graphics struggled to integrate Cray’s technology and personnel into its operations. The company faced significant financial challenges, including declining sales and increased competition from other high-performance computing vendors.
In 2000, Silicon Graphics sold the Cray Research subsidiary to TPG Capital, a private equity firm, for approximately $100 million, marking the end of Silicon Graphics’ foray into the supercomputer market.
Shift to low-cost, high-performance computing solutions
The shift towards low-cost high-performance computing solutions has been driven by the increasing demand for efficient and affordable processing power in various industries, including scientific research, data analytics, and artificial intelligence. This trend is evident in the rise of cloud-based services, such as Amazon Web Services and Microsoft Azure, which offer scalable and cost-effective computing resources.
The decline of Silicon Graphics Inc., a pioneer in high-performance computing, serves as a cautionary tale in this context. Founded in 1981, SGI was renowned for its innovative graphics workstations and servers, which powered various fields, including computer-aided design, video production, and scientific visualization. However, the company’s failure to adapt to changing market trends and its reliance on proprietary hardware led to its downfall.
In the early 2000s, SGI’s business model was disrupted by the emergence of commodity-based computing solutions, such as Linux clusters and grid computing. These alternatives offered comparable performance at a fraction of the cost, rendering SGI’s high-end systems less competitive. The company’s attempts to transition to more affordable products were unsuccessful, ultimately leading to its acquisition by Hewlett-Packard in 2006.
The shift towards low-cost high-performance computing solutions has been facilitated by advancements in processor architecture, memory technologies, and software frameworks. For instance, the development of graphics processing units has enabled the acceleration of compute-intensive tasks, such as machine learning and data analytics, at a lower cost than traditional central processing units.
The proliferation of open-source software frameworks has further democratized access to high-performance computing. These frameworks enable developers to harness the processing power of heterogeneous architectures, comprising CPUs, GPUs, and field-programmable gate arrays, without being tied to proprietary hardware or software ecosystems.
The convergence of these trends has given rise to innovative startups and initiatives, which aim to develop affordable and efficient computing solutions for various industries. These developments are poised to transform the landscape of high-performance computing, making it more accessible and cost-effective for a broader range of users.
Increased competition from commodity hardware vendors
Silicon Graphics Inc, a pioneer in high-performance computing and visualization, faced significant challenges in the late 1990s and early 2000s due to increased competition from commodity hardware vendors. The company’s proprietary hardware and software solutions, which were once considered premium products, became less competitive as PC-based systems improved in performance and affordability.
One major factor contributing to SGI’s decline was the rise of Linux clusters, which offered a cost-effective alternative to SGI’s high-end systems. As Linux distributions matured and cluster management tools improved, researchers and scientists began to adopt these solutions for their computational needs, reducing their reliance on SGI’s proprietary platforms. This shift was driven in part by the availability of low-cost, high-performance CPUs from vendors like Intel and AMD.
Another key factor was the increasing power and affordability of commodity graphics processing units (GPUs). As GPUs became more capable of handling general-purpose computing tasks, they began to encroach on SGI’s traditional territory. The introduction of NVIDIA’s CUDA platform in 2007 further accelerated this trend, enabling developers to harness the parallel processing capabilities of GPUs for a wide range of applications.
SGI’s struggles were also exacerbated by its own internal issues, including a complex and fragmented product line, high research and development expenses, and a failure to adapt quickly enough to changing market conditions. The company’s attempts to restructure and refocus its business ultimately proved unsuccessful, leading to its eventual acquisition by Hewlett-Packard in 2016.
The rise of cloud computing and the increasing adoption of hybrid and heterogeneous architectures have further eroded the demand for traditional high-performance computing systems like those offered by SGI. Today, researchers and scientists can access scalable, on-demand computing resources through cloud providers like Amazon Web Services and Microsoft Azure, reducing their need for expensive, proprietary hardware solutions.
The legacy of Silicon Graphics Inc serves as a cautionary tale for companies operating in the rapidly evolving landscape of high-performance computing and visualization. As commodity hardware vendors continue to drive innovation and reduce costs, traditional players must adapt quickly to remain competitive.
Failed attempts at diversification into consumer markets
Silicon Graphics Inc (SGI) was a pioneer in the field of computer-aided design (CAD) and visualization, known for its high-performance workstations and servers. In the 1990s, SGI attempted to diversify into consumer markets with its Indy and Indigo2 computers, which were designed to be more affordable and user-friendly than its traditional workstation products.
However, these attempts ultimately failed due to a combination of factors, including poor marketing, inadequate distribution channels, and intense competition from established players in the consumer market. The Indy computer, for example, was launched in 1993 with a price tag of around $1,000, which was still relatively expensive for a consumer-oriented product.
Another factor that contributed to SGI’s failure in the consumer market was its inability to adapt its business model to the lower margins and higher volumes characteristic of consumer electronics. As a company accustomed to selling high-end workstations to professionals, SGI struggled to adjust to the more competitive pricing and distribution dynamics of the consumer market.
SGI’s foray into consumer markets also coincided with significant changes in the computer industry as a whole. The rise of PC clones and the increasing power of Intel-based processors eroded the performance advantage that SGI’s proprietary MIPS-based processors had once enjoyed. This shift in the technological landscape further undermined SGI’s attempts to establish itself as a major player in the consumer market.
In addition, SGI’s focus on diversification into consumer markets may have distracted the company from its core business of serving professional users. As a result, SGI lost ground to competitors such as Sun Microsystems and Hewlett-Packard in the workstation market, which had traditionally been its bread and butter.
Ultimately, SGI’s failed attempts at diversification into consumer markets contributed to its decline as an independent company. In 2006, SGI filed for bankruptcy and was subsequently acquired by Rackable Systems, a server manufacturer.
Mergers and acquisitions, including Alias Research
The merger with Alias Research was strategic, as it allowed SGI to tap into the growing demand for 3D graphics and animation in industries such as film, television, and video games. The combined entity leveraged Alias’ expertise in 3D modeling and SGI’s strengths in high-performance computing and visualization. This synergy enabled the development of innovative products, including Maya, a 3D computer animation, modeling, simulation, and rendering software that became an industry standard.
However, despite its initial success, SGI struggled to maintain its market position due to increased competition from lower-cost PC-based solutions and changing customer preferences. In 2006, SGI filed for Chapter 11 bankruptcy protection and underwent a significant restructuring process. The company emerged from bankruptcy in 2007 but continued to face financial challenges.
In 2008, Rackable Systems, a provider of data center infrastructure, acquired SGI’s assets for approximately $42.5 million. The merged entity was rebranded as Silicon Graphics International Corp, with a focus on providing high-performance computing and storage solutions for data centers and cloud environments.
The acquisition of Alias Research by SGI is often cited as an example of the importance of strategic mergers and acquisitions in the technology industry. The deal enabled SGI to expand its product offerings, increase its market share, and stay competitive in a rapidly evolving industry landscape.
SGI’s experiences serve as a cautionary tale for companies undergoing mergers and acquisitions, highlighting the need for careful planning, integration, and adaptation to changing market conditions to ensure long-term success.
Financial struggles and decline of SGI’s fortunes
Silicon Graphics Inc was once a leading manufacturer of high-performance computing systems, but it faced significant financial struggles in the early 2000s. In 2001, SGI reported a net loss of $115 million on revenue of $647 million, citing declining sales and increased competition from lower-cost PC-based workstations. This marked a significant decline from its peak in the mid-1990s when it was valued at over $7 billion.
One major factor contributing to SGI’s financial struggles was its failure to adapt to changing market trends. The company had traditionally focused on producing high-end, proprietary systems, but the industry was shifting towards more affordable and standardized PC-based solutions. As a result, SGI’s sales declined as customers turned to lower-cost alternatives.
Another significant factor was SGI’s high research and development expenses. In 2001, the company spent $143 million on R&D, which accounted for approximately 22% of its revenue. While this investment was intended to drive innovation and stay ahead of competitors, it put a significant strain on SGI’s finances.
SGI also faced challenges related to its business model. The company had traditionally relied on selling high-margin systems to a small number of large customers, but this approach became less viable as the market shifted towards more standardized and lower-cost solutions.
In an effort to address its financial struggles, SGI underwent significant restructuring efforts, including layoffs and divestitures. In 2002, the company sold its Alias Research subsidiary, which developed 3D graphics software, to Accel-KKR for $57 million. This move was intended to help SGI focus on its core business and reduce costs.
Despite these efforts, SGI continued to struggle financially. In 2006, the company filed for Chapter 11 bankruptcy protection and underwent a debt-for-equity swap, which reduced its debt by approximately $250 million. However, this restructuring effort ultimately failed to restore the company’s financial health, and SGI was acquired by Rackable Systems in 2008.
Bankruptcy filing and subsequent asset sales
Silicon Graphics Inc, filed for Chapter 11 bankruptcy protection on May 8, 2006. At its peak in the mid-1990s, SGI’s market capitalization reached $7 billion, but the company struggled to adapt to changing market conditions and increased competition.
The bankruptcy filing was a result of SGI’s inability to restructure its debt and reduce operating costs. The company had accumulated significant debt due to declining sales and failed investments in new technologies. In 2005, SGI reported a net loss of $147 million on revenue of $343 million, further exacerbating its financial woes.
Following the bankruptcy filing, SGI’s assets were sold off to various companies. Rackable Systems Inc, a server manufacturer, acquired SGI’s product lines and intellectual property for approximately $42 million. The deal included SGI’s high-performance computing products, such as servers and storage systems, as well as its visualization software.
In addition to the asset sale, SGI also sold off its Alias research division to private equity firm Accel-KKR for around $57 million. The Alias division was a leading developer of 3D graphics and animation software, with clients including major film studios and video game developers.
SGI’s demise was attributed to a combination of factors, including increased competition from low-cost PC manufacturers, failure to adapt to changing market conditions, and poor strategic investments. The company’s struggles served as a cautionary tale for the technology industry, highlighting the importance of innovation and adaptability in rapidly evolving markets.
Legacy of Silicon Graphics Incorporated in modern computing
The legacy of SGI can be seen in modern computing through its influence on graphics processing units, computer-aided engineering, and high-performance computing. The OpenGL API, developed by SGI in collaboration with other industry partners, remains a widely-used standard for 3D graphics rendering. Furthermore, the company’s pioneering work in scalable multiprocessing has had a lasting impact on the development of modern server architectures.
The demise of SGI serves as a cautionary tale for technology companies, highlighting the importance of adaptability and innovation in the face of rapidly changing market conditions.
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The Regional Advantage of the Silicon Valley and Its History
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San José State University
Department of Economics
applet-magic.com
Thayer Watkins
Silicon Valley
& Tornado Alley
USA
The Regional Advantage of
the Silicon Valley and Its History
Introduction
In the 1970's both the Route 128 complex of Boston and the Silicon Valley were centers of high technology industry, but by the 1980's the Route 128 area was stagnating while the Silicon Valley, after experiencing economics shocks, was moving ahead to become the unchallenged global leader in high technology. The difference in the two areas was not in resources or location but in their commercial culture. Route 128 firms tended to be insular and proprietary, whereas the Silicon Valley firms were open and linked by social and economic networks which enabled them to adjust to the vissitudes of market shifts. Route 128 was more highly dependent upon federal government contracts than Silicon Valley and, when government contracts declined with the moderation and end of the Cold War, Route 128 found it hard to adapt to the civilian market.
The Origin of the High Technology Centers
During World War II the Federal sought the development of high technology weaponry at top universities such as the Massachusetts Institute of Technology (MIT), Stanford University and the University of California at Berkeley. There was a desire on the part of both the Federal Government and these universities to continue the relationship. In some cases the research during the war was carried out in research organizations set up organizationally within the universities but physically separated from the campuses for security reasons; e.g., Lincoln Laboratory at MIT. After the War these research laboratories were made more independent of their universities and began to function as businesses. They were however businesses that were primarily dependent upon government contracts.
The Boston area had a long tradition of technology and the new research laboratories had to fit into the business environment of the area. Santa Clara County was still primarily agricultural at the end of the war and was not constrained by the institutional arrangements of business the way the new businesses were in the Boston area.
Some small comments on the history of the two areas are appropriate at this point. Ms Saxenian mistakenly asserts that the Silcon Valley area was most famous for "its apricot and walnut orchards," rather than its orchards of French plums which were used to make prunes.
The topgraphy of Boston with its river channels and bays make local travel difficult. In additional to the natural difficulties of the terrain Boston has a terrible, hap-hazard street pattern rather than anything approaching a rectangular grid. It is alleged that this street pattern arose because the early residents of Boston paved the meandering cowpaths to make roads. Therefore it was a major undertaking to travel from one side of the metropolitan area to the other. To remedy this situation the traffic planners decided to build a peripheral roadway, called Route 128, that would allow travelers to skirt the dense, difficult traffic conditions of Boston. Businesses quickly realized the advantages of locating close to Route 128. New businesses, particularly the the high technology companies, chose location near Route 128. Branches of major corporations such as Sylvania and RCA were located on Route 128. But startup companies became the most significant factor in the economy of the area. Ratheon rose to prominence in the Route 128 area. By 1970 Route 128 was the major center of electronics development in the U.S., but most of that development was financed by Federal Government contracts.
In the 1970's, as the space race and the Vietnam War wound to a close, military contracts for the Route 128 area dropped significantly. This decline in contracts produced a severe recession in the Route 128 area. The unemployment in high technology industry rose to 20 percent in the early 1970's.
The development of minicomputers saved Route 128. Ken Olsen, who had been working at Lincoln Laboratory left Lincoln with two other engineers in 1957 to found Digital Electrons Corporation (DEC). They worked on ways to reduce the size of computers and the result of their efforts was the minicomputer, a computer the size of desk instead of the size of a room. By 1977 DEC had 41 percent of the world's sales of minicomputers.
Some of the other computer firm operating in the Route 128 area were:
Digital Equipment Corporation (DEC) founded by Ken Olsen in 1957
Wang Laboratories, founded by An Wang of Harvard University
Computer Control Corporation, a subsidiary of Ratheon that was purchased by the Honeywell Corporation of Minneapolis, Minnesota
Data General Corporation (DG), a startup founded in 1968 by Edson DeCastro who had previouly worked at DEC
Prime Computers, founded in 1972 by William Poduska who had previously worked for the minicomputer division of Honeywell
Computervision, founded by Philippe Villers to manufacture minicomputers as components for Computer-Aided-Design (CAD) and Computer-Aided-Manufacturing (CAM) systems.
Although the first (DEC) and third largest manufacturers of minimcomputers in the world in the 1970's were located in the Route 128 area, the second largest, Hewlett-Packard (HP) was located in the Palo Alto area in California, in the area that later became known as "Silicon Valley."
Competition and Community in the Silicon Valley
Business was conducted according to traditional lines in the Route 128 area. Suits were the only proper attire during business hours for the professionals. Employees socialized only within the company and social contacts with people outside of the company were viewed with suspicion as potential leaks of trade secrets. In contrast, in the Silicon Valley dress codes were looser and communities of friendships existed across company lines. People changed jobs frequently in the Silicon Valley whereas in the Route 128 area professionals seldom changed jobs.
Many of the founders of companies in the Silicon Valley originally came from the Midwest. Although they may have gone to college and later worked on the East Coast they did not really accept the East Coast formality and stuffiness. They found the casualness of California more to their liking. They also felt freer to experiment with new institutional arrangements in California.
The eight engineers that left William Shockley's firm to create Fairchild Semiconductor were the crucial catalyst in the development of the Silicon Valley. Fairchild Semiconductor became the training center for technological entrepreneurs. There was a high degree of cooperation and sharing of experience among the entrepreneurs and professional in the Silicon Valley. Some of this comraderie may have been a continuation of relationships that had originated as students in the top technical universities such as Stanford.
The sense of community that existed among the technical people of the Silicon Valley was not just a pleasant social phenomenon. It enable Silicon Valley firms to solve technical problems more easily and rapidly than technical people who were limited to contacts with other employees of their company. This flexibility and adaptibility in the long run gave Silicon Valley an adaptibility and flexibility that was more important to the survival of the industry than any possible loss of trade secrets. Saxenian quotes Wilf Corrigan, the founder of LSI Logic, who expresses it in terms of people thinking of themselves as working for Silicon Valley rather than a particular company.
The frequent changes of jobs in the Silicon Valley necessitated and re-enforced the community of relationships that existed. In contrast, the formality of business relationships in the Route 128 resulted in technical people being reluctant to change jobs.
The success of technical people who left career jobs to become entrepreneurs made it easier for others to take the risk of starting their own companies. There was also more of a willingness to invest in startup companies. Often those providing the venture capital were the successful entrepreneurs of the past. The office complexes on Sand Hill Road near the Stanford campus became a major center of venture capital.
The end result of the ease with which companies could be formed resulted in a large number of small companies. By 1980 there were about three thousand electronics firms in the Silicon Valley, 85 percent of which had less than 100 employees and 70 percent had less than 10 employees. The community that existed among the employees and entrepreneurs of Silicon Valley was extended to a community of interest among the companies. Cross-licensing arrangements were common.
The fact that there was a diverse technical workforce and an abundant supply of technical services and parts also contributed to the ease with which entrepreneurs could startup companies. This is the power of the agglomeration of Silicon Valley.
Saxenian notes that, in addition to Stanford and the University of California at Berkeley, San Jose State University has been a major supplier of trained technical personnel for the Silicon Valley.
It is interesting that a high technology complex developed around Stanford but not around UC-Berkeley. It may be a result of the anti-business political climate of Berkeley.
The Hewlett-Packard (HP) Business Model
HP pioneered a business structure based upon project teams involving open-ness and participation rather than hierarchy. A high degree of internal communication was important. HP encouraged managers to "wander around" and get acquainted with employees and their progress on their projects.
Intel, which was founded by Robert Noyce and others from Fairchild Semiconductor, had a organizational arrangement similar to HP. HP emphasized the notion of a corporate family whereas Intel, while promoting decentralization, still encouraged competitive striving for excellence.
In HP and Intel professional employees were given stock options to contribute to their sense of the unity of the sucess of their company and themselves.
The Route 128 System
Massachusetts was the site of centuries of business enterprise and innovation. Family and corporate histories were long and important. The business ideal was the self-sufficient company, insular and hierarchical. This model of business was regarded as tested and true, the proper form of operation. Yet despite an early lead in transistor technology and production Route 128 lost decisively to the Silicon Valley.
Ken Olsen, the founder of DEC, attributes the closedness of business firms in New England to puritanism. Stability and frugality were highly valued. Risk-taking was looked down upon and failure was an ineradicable blemish on a person reputation. In contrast, in the Silicon Valley risk-taking was admired and failure was a temporary setback but not a calamity. And when the Silicon Valley entrepreneurs made a fortune they spent on luxuries, sometime ostentatious luxuries. Consequently a fortune was more valuable to the entrepreneurs in the Silicon Valley; it meant a definite improvement in lifestyle. In the Route 128 area getting rich did not mean a change in one's standard of living. It is no wonder there was less risk-taking along Route 128. Also the spending of the fortune-makers in the Silicon Valley contributed to the prosperity of the local economy.
Ms Saxenian quotes the founder of Convergent Technology about his experience in the Silicon Valley after having worked for eleven years at DEC:
There is no way I could have started Convergent in the Boston area....When I started Convergent, I got commitments for $2.5 million in 20 minutes from three people over lunch who saw me write the business plan on the back of a napkin....In Boston, you can't do that. It's much more formal. People in New England would rather invest in a tennis court than high technology.
The Relation of the Two Areas
to Their Universities
MIT, secure in its reputation as the top engineering university in the world, gave very little help to the Route 128 bunsinesses. The businesses had to pay $50,000 to have access to MIT's research findings and educational facilities. Gordon Bell of DEC said, "Every time I went to MIT I got sick because they wanted our money but we could never get joint projects going." In contrast Stanford charged only $10,000 for access to research findings and a special recruiting relationship. Employees of companies which paid the fee were able attend research meetings. Gordon Bell of DEC said his company had closer relationships with Stanford and UC-Berkeley, despite their distance, than with MIT. In California there was an extensive community college system and a state university system that supported high tech industry, whereas in Massachusetts there was not.
Business Organizations in the Two Areas
and Their Relation to Local Government
In the Route 128 area the business organizations focused their efforts on getting reductions of state and local taxes and emphasized that their continued presence in the area was dependent upon the level of taxes. The success of such efforts tended to starve local governments of resources for infrastructure projects that might have enhanced the desirability of the location. In contrast, in Silicon Valley firms like HP worked with local government to solve community problems.
Digital Electronics Corporation (DEC)
Although DEC was the leader in minicomputer production it was not a typical Route 128 firm. DEC located in Maynard, Massachusetts, a small town of 10,000 without convenient access to Route 128. DEC executives used a helicopter for quick access to the outside world. DEC was an island to itself without a relationship even with the town of Maynard.
DEC's operational procedures were a modification of the traditional New England business. The founder, Ken Olsen, down played hierarchy and formality. Work was carried out in project teams. In this way DEC was more like the Silicon Valley firms. DEC emphasized very strongly loyalty. In return, DEC had an unofficial policy of no layoffs. But, as Ms Saxenian points out, such a policy has the effect of making success within the company depend more on relationships with managerial staff than solving technical problems or dealing with the outside world. Ultimately the key decisions were made by Ken Olsen and the top elite.
When Edson DeCastro left DEC to found Data General (DG) there was a bitterness between the companies that has lasted for decades. DEC threatened to sue DG over the theft of proprietary technology. DG has sued other companies over such issues. The net result is that each firm in the Route 128 area aspires to vertical integration and insularity. They value security more strongly than opportunity.
The Decline of Route 128 and
the Rise of the Silicon Valley
The Route 128 firms had an early dominance of the electronics industry in the 1950's, both in vacuum tube and transistor technology. In 1959 the employment in electronics in the Route 128 area was almost triple the employment in electronics in the Silicon Valley. But thereafter employment in electronics in the Silicon Valley was rising exponentially whereas employment in the Route 128 area, although fluctuating, was on a steady decline. By 1980 employment in electronics in the Silicon Valley was more than three times that of the Route 128 area.
The technology in electronics began to change so rapidly that there was not much advantage to being an established business in the industry. Being an old firm often meant being committed to an obsolete technology. For example, the Philco Corporation created an automated line for manufacturing transistors in 1958 but by 1963 its technology was obsolete and the investment was not recoverable. Philco left the industry.
The Route 128 firms sought to produce their semiconductor devices within the company so the area lost the economies of scale advantages that accrued to the Silicon Valley economy of having such devices produced by specialized firms.
Silicon Valley's Deviance from Its Winning System
Initially the firms in the semiconductor industry in the Silicon Valley produced customed-designed integrated circuits under contract with customers. The disadvantage of this arrangement is that the production runs were relatively small. The advantage was that the firms were not subjected to relentless competition which drives down the price and eliminates profits necessary for research and development.
But there was one product which did become standardized and Silicon Valley firms thought could be produced as a commodity. That product was computer memory chips. Intel introduced 1 K Dynamic Random Access Memory (DRAM) chips in 1970. Many other firms soon entered the market and price competition became fierce. In 1974 the size of the chips was increased to 4K and to 16 K in 1975. The innovations in size were made by Intel but other firms quickly matched these. By 1979 there were 16 firms in the 16K DRAM market; five of them were Japanese. The size and price competition continued to escalate. By 1984 Japanese firms introduced the 256K DRAM chips and when U.S. producers tried to match the Japanese prices they suffered substantial losses and by 1986 had dropped out of the market. There was a loss of 25 thousand jobs in the Silicon Valley.
It is easy to get paranoid about unfair competition from Japan. There is first of the problem of Japan, Inc., the network of government and private industry that turns economic competition into a political equivalent of war and tries to find ways to negate the rules of the market place. Political manipulation of interest rates and the exchange rate to produce an undervalued currency can give an insurmountable advantage to a country's producers. Lifetime employment makes labor costs a fixed cost and results in a firm being willing to continue sales at price levels that would cause other firms to drop out of production. Control of access to domestic markets can enable a firm to sell at a lower cost to foreign buyers than to domestic buyers. All of these could have been involved in the lower prices for Japanese memory chips. But the key to the Japanese success in the memory chip competion was simpler and more innocent.
Integrated circuit devices are produced by creating many copies of their circuitry on a silicon wafer. Production costs depend upon the number of wafers processed. Some of the chips in a wafer may be defected so the output of the process depends upon the proportion of the chips on a wafer that are good, the yield rate. Cost per unit are thus inversely proportional to the yield rate. Japanese producers gave greater attention to quality control and achieved substantially higher yield rates than the American producers and consequently the cost per unit device produced was about half that of the American producers.
But initially the American producers did not understand the nature of the problem. At the height of the price competion the Silicon Valley abandoned their tradition of collaboration with suppliers and customers and tried to push the cost cutting off onto the suppliers. The antagonisms that developed interfered with the solution of design problems and thus made things worse rather than better. The American producers tried to rely upon high volume and the economies of scale and this approach did not work. Silicon Valley firm's strength was in their creativity and agility in finding new products and improving them ahead of the competition rather than in the brute force economics of the production of commodity items.
Silicon Valley firms left the field of DRAM chips but Intel had created a new product that became the basis for an entirely new industy. That product was the microprocessor. This was a complex integrated circuit that could be programmed. Thus a customer who wanted a specialized device did not have to have an integrated circuit custom designed and produced in a small batch. Instead the microprocessor could be programmed to produce the same result and the microprocessors were produced in quantities in which some economies of scale could be achieved. However Intel did not stop with one microprocessor. They constantly redesigned and improved their microprocessor. The first was the 8080 followed by the 8086, then the 80286 and 80386.
The microprocessor was not invented with the personal computer industry in mind but quickly some realized that the micropressor was, in effect, a computer on a chip. The history of the personal computer is told elsewhere.
DEC's achievements in the minicomputer field were outstanding, but they have been forgotten in the wake of the even more spectacular developments in personal computers. In 1965 DEC introduced the PDP-8 (Programmed Data Processor) that sold for only $18,000 when the price tag for computers had recently been in the hundred thousand dollar price range. The PDP-8 was four times faster than its rivals. But in 1969 Data General offered its NOVA with double the speed and memory capacity of the PDP-8. DEC came back in 1977 with its VAX-11/780 super-minicomouter that had the power of a mainframe computer at a fraction of its cost. Both DEC and DG strived and to a large degree achieved vertical integration, but this made them vulnerable to technical breakthrough elsewhere in the same way that their development of minicomputers weakened IBM.
The VAX line of DEC and the NOVA of DG both had proprietary operating systems which limited access to programs developed by the general programming community. At the time the development of proprietary systems seemed the natural approach. It was only later with the proliferation of the personal computer that people began to understand the power and importance of open systems; i.e., the development of standards such as operating systems that enabled users to share their work. Even when customers began to show a preference for open systems the Route 128 companies stuck with their proprietary system approach.
The expansion of the minicomputer industry in the 1970's created a boom in the economy of Massachusetts. The boom had ended by the mid-1980's and in the late 1980's 50 thousand jobs were lost by the Route 128 firms. The major competition for the Route 128 firms was the Silicon Valley, but the real enemy of the Route 128 area firms was their organizational structure that was inappropriate for the dynamic field of computer technology.
Silicon Valley firms, relying upon components and services available in the market, were able to develop new models and even new product lines far, far faster than the Route 128 firms which insisted upon developing everything in-house and effectively had to re-invent the wheel.
The Route 128 firms not only failed to communicate effectively with the market they often failed to communicate internally. Saxenian cites the case of DEC cutting its scheduled production run on a personal computer from 250,000 to 100,000 but the divisions producing components for this computer continuing to produce 250,000.
In 1985 DEC set up a research laboratory in Palo Alto but largely ignored the information and insights this operation gained by being in the Silicon Valley.
William Poduska created the Route 128 firm of Prime Computers. After Prime was well launched Poduska left Prime to start Apollo Computer. Apollo introduced the workstation computer to the world in 1980. Sun Microsystems of the Silicon Valley entered the workstation field in 1982. Despite this two-year lag Sun Microsystem, the archtype of the aggressive and agile Silicon Valley startup, won the workstation market away from Apollo.
The early 1980's began the era of the personal computers based upon the microprocessor pioneered by Intel. Route 128 firms remained committed to the minicomputer architecture with custom-made integrated circuits for central processing units. They could not except the grim reality that technological innovations can make past technology, no matter how wonderful it once was, obsolete and as dead as yesterday's newspaper.
In contrast the Silicon Valley, although running away with the new technology of the microprocessor, did not seem to be wedded to any particular technology or product. As times changed Silicon Valley firms seemed to be able to adapt, experiment and recombine endlessly. It was a much healthier institutionally than Route 128. Saxenian cites a very eloquent statement by Tom Hayes, an executive of Applied Materials and a founder of Joint Venture. Hayes said:
Our aim is to build a comparative advantage for the Silicon Valley by building a collaborative advantage...to transform Silicon Valley from a valley of entrepreneurs into an entrepreneurial valley.
Restricted Opportunity on Route 128
Saxenian states the problem very succinctly:
Although...Route 128's independent-firm-based system had provided economic scale and organizational stability that were valuable in an earlier era, by the 1980's they served primarily to discourage adaptation. The committment of local companies to vertical integration meant that technical capabilities and know-how ...remained locked up within large firms. The paucity of horizontal communications stifled opportunities for experimentation and learning while traditional corporate structures limited the development of managerial initiative and skill....This may have imposed a minor inconvenience to large firms, it bacame a significant disadvantage for start-ups and small firms that were unable to learn about or acquire state-of-the art components or services as rapidly as their West Coast counterparts.
It did not take the talented people long to realize the land of opportunity for them was not along Route 128 but instead in Silicon Valley.
Although Silicon Valley lost the price war on memory chips to the Japanese producers there were still important markets left. There reappeared a market for custom-designed chips, or as they were now called Application-Specific Integrated Circuits (ASIC's). The aggregate market for these amounted to something comparable to the memory chip market in revenue. Instead of seeking profits in terms of economies of scale the custom chip makers gained profits from the differentiation of their products. The new chip startups produced one to two hundred different types on "mini-fab" production lines with runs of ten to ten thousand chips in constrast to commodity product "mega-fab" runs of millions of the same chip.
In the 1980's there was a new generation of startups in the computer industry of the Silicon Valley. Some of these were:
CompanySpecialty Sun Microsystemsworkstations Silicon Graphics3D graphic
workstations MIPS Computer
SystemsRISC architecture
computers MasParmassively parallel
computers Tandemfail-safe computer
architecture Pyramid Technology
There were also major startups in the Silicon Valley in the 1980's in fields such as computer peripherals and software.
Proprietary Versus Open Systems
Prior to the 1980's most computer firms, as a matter of course, created proprietary operating systems and software for their computers. This resulted in their customers not being able to use software from other systems. In contrast, the computer manufacturers which used standardized operating sytems such as UNIX and DOS enabled their customers to tap into a vast supply of software created by third parties. This was a tremendous benefit then and now is considered essential. The use of standardized operating systems is called the open system approach. Sun Microsystems was a major proponent of open systems. They made a virtue out of a necessity. During its startup phase Sun Microsystems did not have the resources and credibility to develop proprietary systems and was not sure that anyone would accept such software written by people who seemed to graduate students.
The Bottom Line
Saxenian presents a very telling comparative statistic for Route 128 versus Silicon Valley. In 1990 HP and DEC, respectively the outstanding companies of the Silicon Valley and Route 128, both had revenues of $13 billion. But from its $13 billion HP had net earnings of $771 million while DEC on its $13 billion had a $95 million loss. In 1992 DEC had $2.8 billion quarterly loss and founder Ken Olsen had to resign.
The Virtual Corporation
Michael Dell uses the term "virtual corporation" to denote the phenomenon that Saxenian describes as a blurring of the boundaries of the firm. This is what occurs when a company works closely with its customers to satisfy the customers needs. On the other end a corporation can also mesh its needs with those of its suppliers. The company has a notion of what it wants and the supplier knows what it can supply. Sometimes the supplier knows of alternate products which will achieve largely the same results at a low costs. The firm knows the tradeoffs that are important. By working together the firm and its supplier may be able to achieve optimum results which are not even considered in an arms-length relationship between firm and suppliers.
Silicon Valley firms frequently limit their purchases from any one supplier to keep themselves from becoming excessively dependent upon one source of a crucial input. Likewise firms also try to avoid becoming excessive dependent upon any one customer.
Saxenian gives an interesting example of firm-supplier symbiosis in the case of electronics assembly. Some firms such as Flextronics began to do contract assembly work, what was called "board stuffing." In the 1970's these board stuffing specialists were small and low tech. The client provided the components and the directions. By the 1980's firms like Flextronics had developed special equipment and could provide expert guidance in the selection of components. When a state of confident trust developed between the electronics firm and the board stuffers the firm could turnover much of the selection and procurement of components to board stuffing specialist. The board stuffing firm might also assume responsibility for testing of the finished devices.
This type of operation involving component selection, procurement and testing is called "turnkey." Flextronics ultimately played a role in design of printed circuit boards the company "stuffed." Some technological advances were also made in assembly. The traditional assembly operation was the soldering of wires that passed through holes in the circuit boards. A new method was developed, called "surface mount technology," (SMT) which involved the fastening of wires to the boards with epoxy cement. This method allowed for mounting components on both sides of a board. This method was pioneered by the Silicon Valley firm of Solectron. This technology involved a large capital investment and would not likely have been developed in vertically integrated firms.
Another example of firm-supplier synergy is the relationship between HP and Weitek. Weitek designed ultra-high-speed chips for faster numerical computation. HP purchased Weitek chips for its computers. But Weitek achievements were being limited by the state of its chip fabricating operation, its foundry. HP discerned that Weitek using HP higher quality foundry could produce better chips for HP. HP opened its foundry to Weitek to use to produce chips not only for HP but also for other Weitek customers. This was a highly beneficial arrangement for both Weitek and HP.
Source:
AnnaLee Saxenian's Regional Advantage
Harvard University Press 1994
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Fire in the Valley
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[
"magazine-2.01"
] | null |
[
"Michael Goldberg",
"Andy Greenberg",
"Matt Burgess",
"Vittoria Elliott",
"David Gilbert",
"Condé Nast"
] |
1994-01-01T12:00:00-05:00
|
Silicon Graphics is the hottest computer company in Silicon Valley, but founder Jim Clark has a bigger vision:to make it a dominant player in consumer electronics. Will he succeed, or will SGI melt down, consumed by its own ambition?
|
en
|
https://www.wired.com/verso/static/wired/assets/favicon.ico
|
WIRED
|
https://www.wired.com/1994/01/sgi/
|
Silicon Graphics is the hottest computer company in Silicon Valley, but founder Jim Clark has a bigger vision:to make it a dominant player in consumer electronics. Will he succeed, or will SGI melt down, consumed by its own ambition?
- Silicon Graphics is the hottest computer company in Silicon Valley. - It owns the 3-D computing market, having sold $1 billion of workstations in 1993. - Its boxes helped make Jurassic Park the biggest grossing movie of all time. - And it has just launched Indy, a $5,000 computer that threatens to eat Apple's and Sun's lunch. - Founder Jim Clark has a bigger vision, however: to make SGI a dominant player in consumer electronics. - SGI will supply the server-to-set-top system for Time Warner's Orlando interactive test. - And its chip will power Nintendo's 1995 64-bit games boxes. - Will Clark succeed in turning SGI into a $10 billion business? Or will SGI melt down, consumed by its own ambition?
Four years ago, Jim Clark almost left Silicon Graphics.
When SGI's founder began telling his executives that the future lay in things like cable-TV boxes and digital game players, he got a rather icy reception. "I was kind of a lone voice," he says. "I was babbling about cable television - and into the wind for a lot of the time. The reaction I got was, 'Well we're not a consumer electronics company. Why do we care about cable-TV boxes? Who cares?' "
Clark, who is SGI's chairman, is sitting at his desk in a cozy upstairs corner office at SGI corporate headquarters; from his window he can view a few of the seventeen modern brick and glass buildings that comprise the company's sprawling Mountain View, California campus. He is wearing a light blue striped shirt unbuttoned at the neck, charcoal gray slacks, and black loafers. He is tall and thin, has a head of blond hair, and the brainy look of a college professor, which he once was, in a past life, before he became a Mercedes-driving multimillionaire.
When Clark says something he finds amusing, he throws his head back and laughs. He grins a lot. At 49, he has a surprisingly young, inquisitive, almost boyish face.
At the moment, though, he's neither laughing nor grinning. "Most people here couldn't see it," he says. "Three years ago, it was even said, 'You're nuts. If you want to do that, you maybe ought to do that on your own.' "
It wasn't the first time Clark's ideas had met with skepticism. It was the same kind of resistance he came up against in 1981, when he tried to interest IBM, DEC, and others in the original interactive 3-D graphics technology that had motivated him to form SGI.
"I think that Jim, to use that horribly overused word, is a visionary," says Robert Herwick, a technology analyst at Hambrecht & Quist. "He's probably the only one who really believed ten years ago that that technology would end up in the home."
Ironically, SGI became so successful making high-end graphics workstations that many executives at the company lost sight of Clark's broader vision. "I've come to conclude that at companies, as they get large, management simply cannot and will not look at new opportunities," he says.
For Clark, SGI is a 3-D interactive graphics company, not a box maker. In the beginning, SGI was going to make graphics terminals hooked up to mainframes; but Clark steered it into the workstation business when he realized early on that terminals were going the way of silent movies and record players. But whether it's terminals, stand-alone workstations, or television sets is really beside the point.
"SGI always came at it from the point of view of the graphics, that's what's important," says Denise Caruso, editorial director of Friday Holdings in New York.
"Jim Clark is always looking for every opportunity to offer higher quality visualization, whether over a cable in a home, in a 3-D game, or in the creation of multimedia," says Herwick. "They take a very broad view of the markets they serve."
The workstation business became a gold mine for SGI, whose earnings ballooned from $167 million in 1988 to just over a billion for the fiscal year ending June 30, 1993.
By the end of the '80s Clark was looking beyond high-end workstations, gazing into the future, setting his sights on entering the still nascent world of "convergence" that will fuse computers and television. His only ally was SGI chief scientist Mark Hannah, one of a small group of Stanford University students who started SGI with Clark in 1981. (Hannah helped develop the original architectures - the Geometry Engine ASICs - that handle most of the graphics processing in SGI's machine.)
"If not for Mark I think I probably wouldn't be here today," Clark says. "I had an interest that I felt was important for the company, and if the company did not share that feeling I was going to go someplace else."
He leans forward in his chair and says with intense conviction, " 'Cause I thought it was vital to what I perceived to be the right future for the company. With any given company, there are always several possible futures. I have to think I've done SGI a big service - pulling it by the hair into these new markets."
Digital Dinos
Jim Clark is arrogant, driven, cunning, and - as one industry analyst puts it - "very persuasive." He possesses a keen intellect, and is one of a new breed of '90s Silicon Valley entrepreneurs who refuse to let themselves be seduced by their own success.
Clark is not afraid to publicly dis a company like Apple, much as Steve Jobs once mocked IBM.
"Apple," Jim Clark will sigh, as if he were talking about a horse on its way to the glue factory. "They're not doing anything... Apple blew it."
Then, with a dismissive wave of his hand, and just the hint of a grin: "I think they're in serious trouble."
Earlier this year, Silicon Graphics placed an ad in Cinefex, a special- effects magazine. The ad depicted people in the foreground sitting at computer terminals while in the background a Tyrannosaurus rex rose out of scaffolding. The text read: "Helping build a better dinosaur."
These days, when most people think of Silicon Graphics, they think dinosaurs. The company's revolutionary workstations, as you might have heard (unless you've been vacationing on Mars), were used to create the mind-boggling dinos that scared the pants off millions and millions of moviegoers who saw Jurassic Park.
Those digital dinos symbolize SGI's preeminence as the platform for creating state-of-the-art 3-D special effects. But the entertainment business currently accounts for less than 10 percent of SGI's sales.
From the introduction of the first $80,000 SGI workstation in 1984 (with a computing speed of one third MIPS), engineers, architects, doctors, automobile designers, defense contractors, and scientists - not to mention animators - have embraced SGI's standard of 3-D visualization.
Until recently, Clark has been able to avoid head-to-head competition with HP, Sun, DEC, and others because those companies underestimated the importance of 3-D graphics. "HP and all the other workstation vendors kind of left the door open in one particular segment of the market," says Robert Weinberger, marketing manager for HP's workstation group. "SGI was smart enough to recognize that and rush through."
Executives at HP and Sun concede that Clark created a niche for his company, refining and improving on his proprietary technology, quietly finding a market among an elite group of accounts. Through the later half of the '80s and into the '90s, SGI engineers successfully created ever more powerful high-end boxes, while also introducing less and less expensive workstations, all of which network together easily and can run the same programs.
Surprisingly, only very recently have SGI's competitors started seriously chasing after SGI's market share. "I think they'll be up against competition like they've never seen before," says Mike Gero, a product manager at SoftImage Inc., whose products were developed for the SGI platform. "It seems like in the past six months to a year, other vendors have really looked to address this particular market."
"Visual computing has been a niche and SGI has flourished in that niche," says Bob Pearson, Sun's director of advanced desktop systems marketing. "But now it's becoming mainstream and the rules of a mainstream game are different than they are for a niche game. It's volume, price points, distribution. It's easier for Sun or HP to duplicate what SGI has done at higher volume and lower price points."
The entire workstation market is a $10 billion to $15 billion dollar business, of which SGI currently has about 8.6 percent, according to International Data Corp. (Sun is the major player, with 33 percent of the market.) But Clark wants to helm a $10 billion company by the end of the decade. He's known for years that SGI can't afford to live or die by the workstation.
"You can't afford to get too comfortable," says Mark Hannah. "Look what happened to IBM. Things change; the world changes. There's always a threat out there."
Or as Clark succinctly says, "I don't want to be the Cray computer of the '90s."
The Jim and Mario Show
A 3-D image of Mario the Plumber's head dominates a movie screen located at one end of the Peacock Room in San Francisco's ritzy Mark Hopkins hotel.
Mario is talking. An exaggerated Italian accent fills the room. "Jeeeemy," he says, "I may be a big star, but I don't let it go to my head."
"Mario, I'd like to be the first to welcome you to your new home at Silicon Graphics," says Clark in a bemused, fatherly way, as he stands at a podium to the right of the screen. "I think you're really going to have a nice, happy time here."
"Oh thank you so much Jeeemy," answers the animated version of Nintendo's leading man.
It's mid-August, and dozens of business reporters are sitting through this embarrassingly silly presentation, most of them diligently taking notes.
They have to come to be briefed on some surprising news from two companies that have, in very different ways, profoundly influenced the modern world. Nintendo, known for making billions of dollars selling the modern-day equivalent of the pinball machine, is joining forces with Silicon Graphics.
Today's announcement makes public another piece of a complex puzzle that Clark has been painstakingly assembling for the past two years. Until this year, Silicon Graphics wasn't exactly on the tip of everyone's tongue. Those aware of SGI viewed it as the company whose powerful workstations were used for mechanical engineering, computational chemistry, molecular modeling, and movie special-effects work.
Those computers - with intriguing, some say sexy, names like Indigo, Crimson, Onyx, and now Indy - don't even look like the competition. In place of the boring beige plastic boxes that house most CPUs, SGI has used a deep blue-violet for the original Indigo, teal for the Indigo2, reddish- orange for the Crimson - colors that seem to give off a luminous, almost magical glow as they sit on a desk.
Their latest model, Indy, even comes with a "gray granite" monitor that would fit into a trendy underground nightclub. "They come up with hip names and hip appearances," says Jim Morris, who is vice president and general manager at Industrial Light and Magic (ILM), George Lucas's special effects laboratory. "That makes people feel like they're with the current exciting product."
Yet it's not hype that SGI has been selling. The internal architecture of SGI's high-end boxes - the ones used by the likes of ILM and NASA - was a breakthrough when introduced in the early '80s, and advances in the architecture's design have kept them at the cutting edge.
Clark's machines were built with one overriding goal: to allow the 158,720 pixels that form a color image on a high-end monitor to re-form at least 30 times per second. Achieving that goal allowed for realistic 3-D visualization. His breakthrough was to build graphics processing into the machine's custom chips, or ASICs, allowing them to generate fast enough processing speeds to create 3-D interactive graphics.
And what are the key components that comprise an SGI high-end workstation? A MIPS chip (SGI purchased MIPS in 1992), SGI proprietary ASICs (the "Geometry Engine"), and SGI's Graphics Library (GL), some of which is built into the hardware.
The newer, less expensive boxes - Indy and lower end Indigo2 Extreme workstations - are cleverly designed so that some of the graphics processing can be done by the MIPS chip without the need for ASICs.
The company's flashy packaging makes sense for computers that are dominating Hollywood special-effects houses. (And Indy is fast becoming an important development platform for the next generation of video games.) In addition to Jurassic Park, SGI supercomputers were used to do the Terminator 2 special effects, in which the metallic archvillain transformed itself into various human forms and inanimate objects.
Other films that relied on SGI technology include The Abyss, Beauty and the Beast, Total Recall, In the Line of Fire, and Cliffhanger. It was SGI hardware that allowed Michael Jackson to morph himself into a black panther at the end of his "Black or White" video. Lucas plans to use SGI computers "to the nth degree" for the production of his Star Wars prequel trilogy, slated to begin within the next four years.
At ILM in Marin County, California, three temperature-controlled rooms bear silent witness to the importance of SGI in the contemporary worlds of film and television.
The rooms hold $15 million worth of networked SGI CPUs; that's nearly 100 computers. "Anybody that's doing effects now in the film business is using SGIs or is about to," says Morris. "In the entertainment business SGI machines are the digital production cornerstone."
In fact, Morris says, SGI computers have become a status symbol. "There's nothing cooler that you can say than, 'Yeah we've just ordered $4 million of SGI equipment.'"
All Hell Broke Loose
Silicon Graphics has been phenomenally successful. And even as it has dominated the 3-D workstation market, SGI has been widening its reach.
The company has taken a number of risks during the past two years. Last year it acquired MIPS Computer Systems Inc., which designs (but doesn't manufacture) the microprocessors used in SGI computers; MIPS chips are also used by such hardware manufacturers as AT&T Federal Systems Computer Division, Control Data Systems, NEC, Olivetti, Siemens, Nixdorf, and Sony Microsystems.
Although Wall Street initially questioned the wisdom of acquiring MIPS, the consensus these days is that it was a smart move, one that has given the company more control over its destiny. "From a long-term strategic point of view, it has given them total control over the MIPS architecture," says Hurwick, "and as a result, the MIPS architecture is being evolved in ways that are directly supportive of SGI's strategy."
In January of 1993 SGI also introduced a line of supercomputers that is already biting into a market once owned by such old-line supercomputer and mainframe manufacturers as Cray Research and IBM.
As it turns out, these shiny new SGI Power Challenge computers can double as super-fast multimedia servers to store and deliver on demand various digital media - movies, TV shows, games, and much more - to digital cable- converter boxes that will be making their appearance in some US homes beginning next year.
Additionally, this past summer the company unveiled Indy, which is less expensive, faster, and provides more for the money than anything currently available from competitors such as Apple. For example, Indy comes with a built-in camcorder for video conferencing.
Analysts, software developers, and SGI's competitors question this recent diversification. "They are juggling a hell of a lot of balls," says HP's Weinberger. "Too many balls for a company their size."
But such developments were dwarfed by a string of recent high profile events. 1993 was the year, says SGI president and CEO Jim McCracken, that "all hell broke loose."
It began last February, when President Clinton and Vice President Al Gore arrived at the company's Mountain View headquarters - with several hundred reporters in tow - to announce the administration's new technology policy. Commenting on SGI's management approach, Clinton said, "I think government ought to work like you do."
Two months later, in April, ILM and SGI announced they had teamed up to form the Joint Environment for Digital Imaging, or JEDI, with a goal of creating entirely digital movies. Other companies, such as James Cameron's Digital Domain and Kodak, are in the digital filmmaking business too. Still, Lucas has described the alliance as "the beginning of the revolution in the film business."
In June, it was announced that Time Warner had picked SGI to provide hardware and software for an experiment in interactive TV that the media giant will make in Orlando, Florida in April.
And then Jurassic Park was released.
By the late fall the company seemed to be in the news every week. On September 28, The Wall Street Journal reported that an interactive shopping channel to be tested as part of Time Warner's Orlando experiment (it will make use of SGI servers and cable-converter boxes) will "allow cable viewers to enter catalog 'stores,' to view merchandise in full-motion video, and to make purchases on demand."
SGI Targets America's Living Rooms
In the Peacock Room, Clark, McCracken, and a Nintendo executive explain that the two companies are joining forces to work on Project Reality. Together they will create the next generation of Nintendo 3-D video games. The 64-bit machines, built by Nintendo using SGI chips, are expected in 1995 and will sell for about $250.
After the presentation is over, reporters fire questions at the executives. Most focus on the new video-game player. When will it be finished? What about compatibility with older Nintendo products? That kind of thing.
No one bothers to ask why Clark is aligning Silicon Graphics with a video- game company. McCracken says simply, "We're not doing this because we want to get into the video-game business."
What then?
During the past ten years, Nintendo sold a hundred million video game players and three quarters of a billion video game cartridges. The company's products are, it claims, in 40 percent of all American homes. SGI would like to get into what McCracken calls "a vast new market."
Certainly there is much money to be made. SGI will get a royalty from every Nintendo player and piece of software resulting from the collaboration; Clark believes SGI will net hundreds of millions of dollars (more than the company's current annual profit) from the deal.
But there's more to this than bags of cash. Four years ago Clark saw the future; the future, he concluded, would belong to computer companies whose core technology becomes a standard in the consumer electronics market. (He was not alone. Companies ranging from Apple to HP have also been moving in that direction.)
Clark also understood that SGI had neither the marketing savvy nor the financial resources to compete with consumer electronic giants like Sony and Phillips.
Therein lies the shrewdness of the Time Warner and Nintendo deals, deals Clark boasts he deserves sole credit for both instigating and closing. Rather than battling it out in the relatively small PC market - some five million PCs were sold in the US during 1993 - Clark is going straight for the masses. If all goes as planned, Time Warner and Nintendo will place millions upon millions of Clark's computers into homes all over the world.
"It's like extending our product line down to $250," says Clark, "without having to be in that market ourselves."
As with the game players it's working on with Nintendo, SGI will provide the guts of the Time Warner set-top cable converter box, but they will be manufactured by Scientific Atlanta. While it might seem surprising that SGI, known for its stylish packaging, would let other companies box its hardware, it makes sense if you remember that Clark sees himself in the graphics business.
SGI's past experience in the rather esoteric graphic workstation market provides no assurance that it can design products simplistic enough for the average couch potato to grok.
"I'm not convinced that they can pull off the set-top box," says Friday Holdings' Caruso. "Part of what they're doing for that is the user interface. They don't know anything about user interface for consumers. Nobody in the computer business does. The fact that these people are kidding themselves into thinking they know how to do this is terrifying to me.
"It's not like you're walking into a proven market," Caruso continues, "where you know there are 50 million people who are just waking up every morning saying, 'I've got to have interactive TV today.' They don't know what it is. They don't know to want it."
HP's Weinberger thinks SGI's high-profile move into new areas could prove disastrous. "Now what does that say to one of their mechanical design customers, say a major automobile manufacturer, who sees all of this and starts saying to himself or herself, 'Oh, geez, sounds like that's their future, that's what they're betting on, that's where they're gonna put their investment.'
"Well, they're going to drop Silicon Graphics like a hot rock long before Silicon Graphics realizes one penny of revenue from the (new 64-bit game machine) - that's well off in the future," continues Weinberger. "And that's the challenge. Big worldwide Fortune 1000 companies want to make sure that the things they're buying today are mainstream strategies for that vendor. And the noise I hear from Silicon Graphics is, 'Gee it isn't. It's something we've been doing, but now we're doing something else."
All of which Clark seems to understand; none of which has deterred him. You don't have to talk to Clark for long to discover just how important he thinks these two deals are for SGI. They are, he says, his obsession. Clark believes that the very future of his company rests on his new partners' abilities to bring SGI technology successfully into America's living rooms.
"If SGI doesn't create more volume," he says quietly, "then it will die."
The Virtual Shopping Mall
"Interactive home shopping," says Mark Hannah. His brown eyes light up. A big smile appears on his face.
While the President of the United States talks about creating high-tech "information superhighways" that will revolutionize America, Hannah has a more pragmatic idea of how those superhighways will be used by most Americans - at least in the short run.
Hannah ticks off his fingers as he sits on a couch in his office in Building 2 on the SGI campus, counting: "Interactive home shopping, video on demand, and games."
"I think the biggest application of the superhighways will be entertainment," agrees Ed McCracken.
Conventional wisdom now has it that the money - the really, really big money - lies in successfully wedding computer technology and entertainment. As The New York Times reported in late September, it is now estimated that a $3.5 trillion business is "beckoning on the horizon."
Sure, some egghead kids may use the superhighway to "plug into an electronic library," as Vice President Al Gore put it while visiting SGI. But recent activity to stake claim to a piece of that superhighway, such as the recent $21 billion plus Bell Atlantic acquisition of Tele- Communications is about less lofty bits.
"It's just a lot easier leap to think that people will want to watch movies on demand," says Hannah. He rubs his neatly trimmed beard and adjusts oval- frame glasses.
"No real training involved there," chuckles the scientist. "Instead of going down to the video store, you select a movie on the screen. And so that seems to me like the path of least resistance to really establishing a large market for these technologies."
Volume, Volume, Volume
By 1989, Clark was imagining two possible scenarios for SGI. Basically, if the company didn't get its technology into consumer markets, it would eventually be relegated to the fringes, profits would shrink, and survival would be difficult.
On the other hand, what if he could make deals that would place SGI computer architecture and the company's MIPS chips in mass-marketed consumer items? This would create a demand in the tens of millions for those chips, a gigantic leap above current sales of half a million per year.
Clark would have volume, and volume, and well, let Clark himself explain it. "Why is volume important?" he asks rhetorically. "Because if you don't get volume, the guy who does get volume is going to end up setting the standard and, to a lesser and lesser degree, people will want to use your microprocessor."
He leans back in his chair. "Instead, they're going to want to use the one that has the most software on it," he says.
The repercussions of this scenario would be profound for SGI. The company could become a major player in the new digital media marketplace; it could grow into the very profitable company Clark envisions by the end of the century.
Of course there are those - certainly SGI's competitors - who think all of this is just a pipe dream. "The odds against SGI doing that are quite high," says Bob Pearson, director of advanced desktop systems marketing for Sun. Pearson worked at SGI from 1984 until 1988.
"The MIPS chip doesn't necessarily lend itself to very high-volume, low- cost production," he continues. "Most chips don't. It's very complicated to get a chip that now costs $400 down to, say, a $20 price point."
But if Clark has doubts about where he is taking SGI, he isn't showing them. "I feel there's a certain inevitability to everything that I talk about," he says.
"It's not as if I'm pointing the way in some grand visionary sense. I think it's inevitable. Okay, so I happen to see that it's going to happen better than somebody else, perhaps. I feel like I do. But it's going to happen whether I'm here or not. So why not help it happen a little quicker, and help the company make money out of it."
Now he's grinning: "And I wouldn't mind if I made a little in the process."
The End of the PC?
"This deal says we're coming up from underneath - squeeze play," says Clark.
The SGI-Nintendo press conference is over. Clark has left the stage and is now standing in the middle of an adjacent room where a half dozen of his computers are being used to demonstrate some of their amazing graphics capabilities.
At one workstation, a boy who looks about 12 is mesmerized by a 3-D flight simulator. In a rear corner of the room, a man whoops it up as he rides a virtual reality pterodactyl through simulated 3-D images of a prehistoric landscape.
Above the noise of jungle sounds and the hum of supercomputers, Clark is on a roll. "Eventually people will ask, 'Can I get my word processor and my spreadsheet and a few other applications on this other platform?' As soon as they can, they'll stop buying PCs. I don't know how long that will take. It may take five years, may take seven years.
"But the PC doesn't have an indefinite life," he continues. "Just like the Model T didn't. Or the Model A. They produced the Model A for eleven years. No change. Eleven years! And I view the PC as the Model A of computers. It's been a terrific product. Made some people a lot of wealth."
Through his wire-frame glasses, Clark's eyes gleam. And then, like someone who is simply stating the inevitable, he adds, "But it isn't forever."
The New Paradigm
"The first day I went to speak to Jim, he pointed to a picture of an airplane he had up on the wall," says Kurt Akeley, who was a Stanford University student at the time. "And Jim said, 'I'm going to make this move.'"
The year was 1979. Jim Clark, who had recently taken a job at Stanford as an assistant professor of computer science, had a plan to build a better mousetrap. He'd come up with what SGI president Ed McCracken now calls "a new paradigm."
While developers at other computer companies were "using the paradigm of the desktop," Clark imagined something else. Using his hands to draw a rectangle in the air, McCracken says, "Jim Clark's idea was that the screen would be a window into a three-dimensional, virtual reality world."
That was Jim Clark's vision. And his motivation?
"I was 35 and poor," he says frankly. And, he hastens to add, he had no interest in spending the rest of his life dealing with the politics of academia.
"I love the metric of business," says Clark. "It's money. It's real simple. You either make money or you don't. The metric of the university is politics. Does that person like you? Do all those people like you enough to say, 'Yeah, he's worthy'?"
Clark raises both arms and then, like Saturday Night Live's Wayne and Garth, makes bowing motions as he says, laughing, "We're not worthy, we're not worthy."
Born in 1944, Clark grew up in the small west Texas town of Plainview. He was good at math, "played around with ham radios," and even built one, but found school a bore. He dropped out of high school when he was a junior and in 1961 joined the Navy. It was there that he discovered his aptitude for technology. That inspired him to go back to school.
"I became excited by the challenge of understanding how things work, understanding the world," says Clark. "It struck me as fascinating, that you could actually write down some equations that would predict how the world was going to behave."
By the early '70s he had landed at the University of Utah to pursue a PhD in computer science. It was there that he studied with Ivan Sutherland, considered to be the father of interactive computer graphics.
When he reached Stanford, Clark knew he wanted to do more than just teach. With financing from the Defense Advance Research Projects Agency, Clark and a team of students in graduate programs at the university, including Mark Hannah and Kurt Akeley, spent three years working with a "maniacal" intensity on the ASICs they named the "Geometry Engine."
After a halfhearted attempt at selling this breakthrough technology to an established computer company, Clark raised $500,000 himself (he eventually secured $20 million in funding) and SGI was born.
"I concluded after talking to DEC and IBM and all these companies that they didn't understand how to use what we had in the first place, so they would surely screw it up," says Clark. "Since they didn't feel the passion for getting these kinds of graphics into computers, what was I going to do? Try to convince them for three years while I died?"
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https://www.abortretry.fail/p/the-rise-and-fall-of-silicon-graphics
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The Rise and Fall of Silicon Graphics
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"Bradford Morgan White"
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2024-04-04T00:02:09+00:00
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or How a Rebellious Youth Briefly Conquered the World
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en
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https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F8421cfb8-5a60-4304-8b12-47afc58be862%2Ffavicon.ico
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https://www.abortretry.fail/p/the-rise-and-fall-of-silicon-graphics
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James Henry Clark was born on the 23rd of March in 1944 in Plainview, Texas. Clark’s family was far from wealthy. His father was fond of drinking and couldn’t keep a job. His mother worked at a local doctor’s office making about $225 per month (around $2605 in 2024). Clark’s parents divorced while Clark was still young, and while that salary may seem fine if low adjusted for inflation, Clark’s mother would only have received $175.50 ($2032) after income tax and social security tax, and it was the sole income for a woman and her three children. For himself, Clark was a bit rowdy. His high school highlights include setting off a smoke bomb on the band bus, smuggling a skunk into a school dance, telling his English teacher to go to Hell, drinking, and drag racing. Given the era, I imagine that the drinking was accompanied by chain smoking.
That times were different is… inadequate verbiage. For all the unruly behavior, Clark was only suspended from school twice. On his second suspension, young Clark decided he’d not be returning to school. He chose to join the US Navy and convinced his mother to sign the permission forms. Of course, this is Jim Clark, and the initial days of his naval career didn’t exactly go well. Clark had never taken a multiple choice test. He thought that for many questions more than one of the answers were at least partially true and therefore selected them. The officers in charge of test administration thought that Clark was attempting to fool the computer that checked the answers, and he was immediately sent out to sea with other delinquent recruits where he was given poor treatment, and rough and disgusting chores. The experience of Naval life lit a fire in Clark, and he chose to advance his station in life. He began learning about electronics, taking some general educational courses, and offering loans to other sailors at up to forty percent interest.
His first step was to get his General Education Diploma, which he did. He then enrolled at Tulane. Clark did well at Tulane but transferred to the University of New Orleans from which he received his BS and MA in Physics. He then attended the University of Utah where he earned his Ph.D. in computer science in 1974. From 1974 through 1978, Clark was employed as an assistant professor at UC Santa Cruz, but he left to become an associate professor at Stanford in 1979.
Early in his time at Stanford, Clark worked on a project with Xerox PARC with support from ARPA to develop three dimensional graphics. This led to the creation of the Geometry Engine. In “The Geometry Engine: A VLSI Geometry System for Graphics,” Clark also makes specific reference to Marc Hannah and Lynn Conway as being valuable contributors to the effort. What was the Geometry Engine? It was a special purpose microprocessor that handled matrix math along with point mapping. It featured an instruction set suitable both to 2D and 3D graphics, could generate quadratic/cubic curves and conic sections, worked with both vector and raster based systems, and operated in either integer or floating point systems as needed. In fewer words, Jim Clark and his team at Stanford along with the folks of PARC invented the GPU.
Clark founded Silicon Graphics Inc on the 9th of November in 1981, and he left Stanford early in 1982 to pursue building the company full time with just $25000 in funding (around $85000 in 2024) from a friend and the contents of his own accounts. Accompanying Clark in this adventure were Kurt Akeley, Dave Brown, Tom Davis, Mark Grossman, Marc Hannah, Herb Kuta, Rocky Rhodes, and Abbey Silverstone. While SGI knew they would deal in computers outfitted with a powerful GPU, they did not know precisely what else those computers should feature. As a result, Clark asked potential customers what they’d like to see in a workstation. While at least one potential customer was interested in VMS, NASA’s new Advanced Supercomputing division was very interested in UNIX and they were willing to pay. The division’s director at the time spoke with Clark, and (verbally) committed to purchasing at least eighteen workstations in their first order.
As things began to come together around a product plan, Mayfield invested in the young company. As the development and production of workstations is rather expensive, Clark and SGI’s other founders were forced to sell more and more of the company’s ownership to keep operating. The first product to ship was the IRIS 1000, where IRIS meant Integrated Raster Imaging System, in November of 1983. This machine was intended for use as a terminal for a VAX-11 and featured a Motorola 68000 clocked at 8 MHz with 768K RAM, a Geometry Engine clocked at 6 MHz capable of over six million geometric floating point operations per second, and a 10 Mbps ethernet NIC. The cabinet of the IRIS 1000 was ten inches wide, twenty one inches tall, twenty seven inches deep, and when fully assembled weighed in at one hundred pounds with a ten slot backplane. This machine was followed by the IRIS 1200 which was the same machine but with a twenty slot backplane. These were followed by workstation models 1400 and 1500 in April of 1984 which upgraded the CPU to the Motorola 68010 clocked at 10 MHz with 1.5M of RAM. These machines were differentiated from one another in the size of HDD they featured with the 1500 having been larger. The 1400 featured a 72MB winchester disk, while the 1500 featured 474MB of SMD. Both of these ran a UNIX SVR4 variant with BSD enhancements called GL2, and they featured twenty slot backplanes. The main system boards in these four machines were licensed from Andy Bechtolsheim just before he founded Sun Microsystems. The 1000 and 1200 used the PM1 and the 1400 and 1500 used the PM2. These were not cheap systems with the IRIS 1000 having a price of $22500 (around $67200 in 2024) and the 1400 having a price of $35700 in 1984 (around $106600 in 2024). These twenty slot machines were eighteen inches wide, twenty nine inches tall, and twenty seven inches deep, and fully assembled weighed in at two hundred pounds. By the time the first of these machines sold to Carnegie-Mellon University’s Electronic Imaging Lab, the founders of SGI owned very little of their company.
From nearly the first day that SGI’s hardware was on the market, software developers began trying to exploit the machines’ graphics capabilities. A rather prominent example of this was Wavefront Technologies in Santa Barbara led by Bill Kovacs, Larry Barels, and Mark Sylvester. Their first product was called Preview and launched in 1984 on SGI’s hardware. Their customer list included Universal Studios, NBC, NASA, and Electronic Arts. Naturally, this also informs us that these companies were using SGI hardware.
Given the outline of his youth, it isn’t very surprising that Clark was a hands-off kind of manager. He would hire the brightest minds he could, set a general target, and then let people go after it however they saw fit. There are two narratives for what follows. The first and most common that I’ve read was that Mayfield didn’t much care for Clark’s management style and they brought Ed McCracken formerly of HP in as CEO. The second narrative states that Clark didn’t care for running the company and brought McCracken in on his own accord. Whatever the case, McCracken stated of Clark:
Jim's not a day-to-day person. He works in his own time frame. He takes complex things and makes it simple. It might take a month, a day, or a year. He gets in these moods for a while where he's almost unavailable. He's most effective when he's in that mood.
In August of 1985, the company introduced the IRIS 2000 series of workstations. These machines were all based upon the the PM2 system board featuring the Motorola 68010 clocked at 10 MHz with a floating point coprocessor (SKYFPM-M-03). Naturally, these all featured the graphics engine as well. The IRIS 2000 and 2200 were ten slot backplane, shipped without a disk, and were intended for use as terminals. The 2300 and 2400 were twenty slot backplane and shipped with winchester disks. The IRIS 2500 was rackmount and used SMD disks. The 2000 series used a Geometry Engine clocked at 8 MHz. A few months after the initial launch of these upgraded machines, SGI launched the turbo line. This included the 2300T, 2400T, and 2500T which featured the IP2 system board with a Motorola 68020 clocked at 16 MHz, an FP1 floating point unit, and 2MB to 16MB of RAM. The RAM of the turbo units used a newer, faster, local bus. As a result, the RAM between turbo and non-turbo systems could not be mixed. This was an important bit of information as SGI did offer turbo upgrades for non-turbo systems that would then require the purchase of expensive proprietary memory.
In January of 1986, SGI made their initial public offering raising $17.2 million (nearly $49 million in 2024) with trading having started at $3 per share and topping $30 on the day. The following month, the company introduced the IRIS 3000 line. These are very similar to the IRIS 2000 turbo machines but with Enhanced IRIS Graphics. These featured either ten or twelve Graphics Engines clocked at 10 MHz with either eight or thirty two bitplanes depending upon configuration. The 3000 line could be ordered with either winchester disk drives, ESDI drives, or SMD.
Also in 1986, Control Data Corporation and Silicon Graphics signed a deal under which CDC would resell IRIS machines under CDC’s own branding. As far as I know, no complete listing of which models sold under what naming survives today, but it is known that the IRIS 3130 was resold as the CDC Cyber 910. This would make it a machine with twelve GEs at 10 MHz and ESDI drives.
In March of 1987, Silicon Graphics announced a new machine that marked a major transition for the company. The Professional Iris was a RISC machine built around the R2000 from MIPS Computer Systems (another project started at Stanford and spun out as its own company) clocked at 8 MHz. The company’s press release read:
The first member of the Iris line is the 4D/60, a RISC superworkstation with a 32-bit 8 MHz CPU from MIPS Computer Systems. It offer performance three times that of the Silicon Graphics Iris 3100 series. The graphics performance has been enhanced with 38 custom and semicustom graphic chips. It performs 140,000 32 bit three dimensional floating point transformations per second and renders over 4,500 100-pixel polygons per second with smooth shading and hidden surface removal. It offers 24 colour bit-planes for more than 16 million colours; four user-accessible system planes for overlay or underlay, menu and windowing functions; a 24-bit Z-buffer enabling hidden surface removal with greater accuracy and realism; high-level primitives such as splines and surfaces for more accurate renderings; and a multi-mode graphics windowing environment.
Standard configuration includes 4Mb CPU, eight colour bit-planes for 256 colours); four system planes, a Weitek-based floating point accelerator board; a 170Mb ESDI disk and controller; a 19″ 1,280 by 1,024 60Hz non-interlaced colour monitor; keyboard and mouse; and a floor-standing chassis with 12 VME slots and a 1,000-watt power supply.
Software compatible with the previous generation, it runs Unix System V.3 with a base price of $74,000.
The Professional Iris line included the 4D/60 mentioned in the press release followed by the 4D/50, 4D/70, 4D/80, and 4D/85. All of these featured the R2000 CPU with a floating point coprocessor. The 50 and 60 had an R2000 clocked at 8 MHz, while the 70 was at 12.5 MHz, and the 80 and 85 were clocked at 16.7 MHz. For comparison to other architectures, the 4D/50 was capable of seven million instructions per second, the 70 was capable of ten million, and the 80 was capable of thirteen million. The 50 and 60 had memory configurations starting at 4MB and upgradeable to 12MB. The rest of the lineup started at 8MB and could be upgraded to a maximum of 144MB. The first of the 4D/60, 50, and 70 systems to ship utilized the Clover 1 graphics system. Later models shipped with Clover 2 branded as IRIS GT. IRIS GT brought hardware support for lighting, smooth shading, antialiasing, pan/zoom of images, arbitrarily shaped windows, and other rather modern capabilities. Importantly, the bus for this system was a proprietary 64 bit bus. The actual chips powering all of the graphics capabilities were still the Graphics Engines, but these were updated some and they were capable of twenty million floating point operations per second. The Professional Iris series brought an end to the disk anarchy of the previous lineup and all systems utilized SCSI hard disks, and QIC-120 tape drives were also available. These systems were resold by both Control Data Corporation and Prime Computers. The UNIX version mentioned in the press release was SGI’s 4D1 which would later be renamed IRIX.
On the 29th of March in 1988, Control Data Corporation announced that it would be acquiring twenty percent of Silicon Graphics for $68.9 million (nearly $181 million in 2024) and extending its licensing deal for reselling SGI’s machines with an agreement to purchase $150 million (around $393 million in 2024) in hardware over the next three years.
On the 16th of September in 1988, SGI announced that IBM would be purchasing graphics cards and licensing IRIS GL, the software library for SGI’s graphics, for use in the IBM RS/6000 POWERStation. McCracken commented:
We are pleased to establish a relationship with IBM and look forward to working with them. The agreement reinforces our long-time conviction that three-dimensional graphics will become a mainstream technology in the computer industry. As real-time 3D graphics is made more affordable, the rapid growth that the 3D workstation industry is experiencing will continue to escalate.
The card in question was the IrisVision, and while I refer to it as a card, it was really two cards. The primary card held the Graphics Engine and daughter cards held the framebuffer and z-buffer memories totaling 5MB for the framebuffer and 3.75MB for the z-buffer. The primary card connected to the computer via its MCA bus edge connector, and it provided a DE-15 connector for display attachment. Overall, the IrisVision MCA card’s hardware was extremely similar to the graphics system in the SGI Personal Iris series introduced in 1987. It featured SGI’s fifth generation geometry processing pipeline (referred to as GE5, or Graphics Engine five), either an eight or twenty four bit per pixel frame buffer, and twenty four bits per pixel z-buffer. Also, just as the workstations’ hardware did, the IrisVision implemented the entire IrisGL API in hardware. The primary difference in IrisVision was the presence of a VGA (DE-15) passthrough for 2D graphics. In the course of the IrisVision’s development, an IBM PS/2 running OS/2 was used for testing and development. This resulted not only in a minimal OS/2 driver, but also in an ISA version of the IrisVision being developed. Ultimately, the only major customer SGI had managed to obtain was IBM for the MCA card for the RS/6000 UNIX workstations. Their struggle may have been that the card was priced at $4995 (just over $13000 in 2024). The company ultimately spun off the entire project as a separate company, Pellucid, which didn’t fare well. The former SGI employees who started Pellucid still managed to change the world when they founded 3dfx which used similar technology as well as the passthrough for 2D graphics.
SGI held a rather firm grasp on high-end graphics workstations, but hadn’t yet made a push into the entry level market. This changed with the introduction of the Personal Iris lineup. The line started with the 4D/20 which made use of a R2000 CPU from MIPS clocked at 12.5 MHz achieving ten million instructions per second. The other three machines made use of the R3000. In the 4D/25 the R3000 was clocked at 20 MHz achieving sixteen million instructions per second. In the 4D/30, the clock speed was pushed to 30 MHz and the performance was bumped to twenty seven million instructions per second. The highest performance model was the 4D/35 at 36 MHz and thirty three million instructions per second. Maximum memory supported on these systems was 128MB. Personal Iris systems were sold by both SGI and Control Data as expected, but these systems were also offered rebadged by the somewhat newly reconstituted Groupe Bull. From what I can find, Bull’s sales of rebadged SGI machines weren’t great; they had better luck with NEC hardware. For the naming “Personal Iris” and the thought that SGI would be attacking the “low-end” of the workstation market… the pricing wasn’t all that reflective unless one were to compare to “high-end” SGI machines which could reach lofty prices of about $100000 (about $262000 in 2024). The Personal Iris line started at $20000 (roughly $52000 in 2024).
The other, much higher end and far more expensive, SGI lineup introduced at this time was the PowerSeries which were multi-processor systems (up to eight CPUs) and could be deskside or rackmount. These systems could also support higher clocks at up to 40 MHz which in combination with up to eight processors could mean performance over two hundred thirty million instructions per second. The power of these systems was put to use in the movies The Abyss, Terminator 2, and Jurassic Park among many more.
In March of 1991, Compaq acquired thirteen percent of SGI for $135 million (around $307 million in 2024) along with an agreement to invest another $50 million (about $114 million in 2024) in the development of a new workstation that would be priced at around $7500 (roughly $17100 in 2024).
The most famous and beloved SGI systems were introduced from 1991 to 1995. These models were the Indigo, Indigo 2, and the Indy. The corresponding high-end systems were the Crimson, and Challenge series. The first Indigo system released in 1991 featured a MIPS R3000 CPU clocked at 30 MHz. The Indigo (and Crimson) moved SGI’s systems to 64 bit MIPS CPUs starting with the R4000 at 100 MHz and the R4400 at 150 MHz in 1992. The 150 MHz part in an Indigo could achieve one hundred twenty million instructions per second. The Indigo 2 was first introduced in 1993 with the MIPS R4400 CPU and “Extreme” graphics. The Indy was lowest end SKU of the three, and it was introduced in July of 1993 with a 100 MHz R4000PC CPU, 24 bit graphics system, 16MB of RAM, the IRIX operating system, a fifteen inch monitor, and a price of $4995 (about $10700 in 2024).
On the 13th of March in 1992 announced that it was acquiring MIPS Computer Systems via a stock swap worth about $333 million (around $737 million in 2024). This followed MIPS having had financial problems, high employee turnover, and the exit of the company’s president, Charles Boesenberg, one month earlier. For SGI, the acquisition ensured their part supply. MIPS Computer Systems became MIPS Technologies. The combined company had revenues at around $1 billion (about $2.21 billion in 2024). However, the large acquisition did mean that SGI posted a loss on the year of about $118 million (or $261 million in 2024). This move also briefly brought SGI into the ACE alliance that aimed to build a workstation standard on the MIPS CPU and the UNIX operating system as well as the 80386/486 and NT. This group was built of Compaq, MIPS, Microsoft, DEC, SCO, Acer, CDC, Kubota, Olivetti, NKK, Prime Computer, Pyramid Technology, Siemens, Sony, Sumitomo, Tandem, Zenith, and Wang. SGI and Compaq left the alliance rather promptly. This could be due to their own arrangement not long before, but ACE fell apart completely not much later anyway. I suspect that no strong alliance of fierce competitors would last long in a market that was shrinking due to low-cost commodity hardware and software consistently improving year over year in the PC compatible market. Yet, the SGI Indigo 2, Indy, Challenge and a few more were mildly compliant with the ACE ARC (Advanced RISC Computing) standard.
On the 30th of June in 1992, Silicon Graphics released OpenGL. This was a cross-platform API for both 2D and 3D graphics allowing hardware acceleration of rendering via one or more GPUs descended directly from IRIS GL. Unlike its predecessor, OpenGL did not have windowing, and it didn’t offer a mouse or keyboard API. IRIS GL had been developed before X and other graphical environments were available, and therefore had needed those features, but OpenGL had no such requirements. Another major change in the transition to OpenGL regarded feature availability. IRIS GL presupposed the use of SGI’s hardware. OpenGL could not make such an assumption, and as a result it allowed features not supported by a GPU to be rendered in software by the CPU. One customer this would positively affect was Microsoft who’d licensed IRIS GL for inclusion in NT in 1991.
At the end of 1992, Jim Clark met with Nintendo CEO Hiroshi Yamauchi to discuss bringing 3D graphics to Nintendo’s next game console. In many ways, the Nintendo 64 was an SGI workstation in miniature with a MIPS R4300 CPU clocked at 93.75 MHz offering one hundred twenty five million instructions per second, 4MB of Rambus DRAM at 250 MHz (actually 4.5MB but 512K is visible only to the GPU) which could be doubled with a RAM expansion pack, and the Reality coprocessor clocked at 62.5 MHz which offered the SGI GraphicsEngine (though a more modest version). The system supported 16.8 million colors, a maximum resolution of 640x480, and audio sampled at up to 44.1 KHz. Unfortunately, the design of the system meant that the full capabilities would almost never be fully realized. For example, there was no dedicated sound chip, so high sample rates would tax the CPU, and while the R4300 is 64 bit, the Nintendo 64 had a 32 bit data bus. Yet, showing the nature of the hardware packed into the Nintendo 64 is the Nintendo 64DD. This offered 64MB read/write magnetic disks (similar to Zip), a real time clock, internet connectivity via a 28.8 kbps modem, keyboard, mouse, and audio/video capture effectively transforming the Nintendo 64 into a small workstation. The expansion, after significant delays and a one year two and a half month life on the market, was a commercial failure. The Nintendo 64 itself, however, was a huge success following its release in 1996.
Industrial Light and Magic had been using SGI hardware since 1987, and on the 8th of April in 1993, they announced a partnership with SGI to create the Joint Environment for Digital Imaging, or JEDI. This allowed the two companies to gain insight from each other’s work. SGI got access to much of ILM’s software expertise while ILM got access to the latest and greatest hardware at a discount.
In 1994, Jim Clark left SGI, sold his shares in the company, and went on to partner with Marc Andreessen and start Netscape.
In 1995, SGI spent about $500 million (or $1 billion in 2024) acquiring Alias Research, Kroyer Films, and Wavefront technologies. At roughly the same time, SGI worked with DreamWorks SKG to form DreamWorks Digital Studio where these newly acquired companies’ products could be put to good use.
On the 26th of February in 1996, Silicon Graphics acquired Cray Research for $740 million (or $1.47 billion in 2024). This gave SGI control of around forty percent of the high performance computing market at the time. While many industry analysts speculated about SGI’s motives, Cray was struggling to survive and they had multiple installations at NASA. While SGI had been successful in entertainment, that sector accounted only for something around ten percent of SGI’s annual revenues. The bulk of SGI’s customers were governmental, so much so that SGI created the wholly owned subsidiary Silicon Graphics Federal Inc to hold those contracts and provide service and support for governmental organizations. In this way, SGI was essentially making sure they couldn’t lose one of their largest and most valuable customers, NASA, as they’d be the provider of not only workstations but also the support and service of NASA’s supercomputers. The supercomputer relationship benefited SGI all the way to 2008 with Pleiades.
The new SGI workstations of 1996 were the O2 and O2+ series. These systems were very different from both their predecessors and successors in that they utilized a unified memory architecture via the Memory & Rendering ASIC (MRE). The MRE had direct paths to all parts of the O2 such as the CPU, memory, I/O, compression, display, and imaging. Due to this structure, graphics hardware wasn’t optional but rather integral to the system’s design. The O2 could come equipped with an R5000, RM5200SC, RM7000A, R10000, or R12000 CPU. Frequencies ranged from 180 MHz to 400 MHz, all options had on-board floating point support, and could support up to 1GB of unified memory via eight 128MB DIMMs of one hundred thirty nine pin SDRAM.
The high-end deskside and rackmount options made available at this time were the Origin 2000, Origin 200, and Onyx 2 series. These were multiple CPU systems with distributed, shared-memory architecture called S2MP. The Origin 200 was the entry level system, the Onyx 2 was a step up, and the Origin 2000 was the premium SGI branded system and was rackmount. This series also had Cray Origin at the super-premium level with up to one hundred twenty eight R10000 CPUs. The IRIX operating system shipped with these models supported SMP.
On the 14th of May in 1997, SGI announced the acquisition of ParaGraph International Inc. ParaGraph was a vendor of VRML and web graphics software, and after the acquisition the company and its assets were moved to Mountain View with the new name of Cosmo Software. McCracken commented:
One of the most important long-term growth opportunities for Silicon Graphics is to empower the designers, developers, and service providers of the Second Web. With the acquisition of the leading PC 3D Internet company and the formation of Cosmo Software, we are increasing our investment and reinforcing our leadership in the market for the software and services that will bring about this new interactive medium.
Bringing the technologies of Onyx 2 series to the midrange workstation was the Octane, released in January of 1997. This was the a desktop machine instead of deskside, but it supported dual CPUs. This line featured the crossbar switch that debuted in the high-end and server machines of the prior year. The concept was that instead of a traditional shared bus, each subsystem could communicate with any other without interference. The crossbar switch had seven ports: HEART ASIC (CPU and memory), graphics (Impact [first or second generation] or VPro), XIO B, XIO C, XIO D, built-in I/O, PCI bridge. The Octane did have a higher-end version, the Octane 2, which featured more powerful CPUs and GPUs, higher density memory support, and a beefier PSU. CPUs in the Octane ranged from the R10000 at 175 MHz to the R14000A at 600 MHz, and RAM ranged from 64MB to 2GB.
Silicon Graphics didn’t do too well in 1997 overall. For revenues of $3.6 billion (or $7 billion in 2024) the company posted a loss of $78.6 million (roughly $152 million in 2024). On the 29th of October in 1997, Ed McCracken resigned as did the executive vice president of sales and marketing, Gary Lauer. The company then laid off around nine percent of its employees (about seven hundred people). Richard Belluzzo (formerly at HP) took over as CEO and Robert H. Ewald who was already the executive vice president of computer systems (formerly president of Cray) took over Lauer’s job duties. Some sources claim that McCracken was forced out, but this isn’t accurate. At the annual shareholder meeting in Palo Alto, McCracken announced his resignation stating: “after a great deal of thought, the time is right for me and the company to make a change.” He then proceeded to find and to hire his replacement himself.
Around this time, Silicon Graphics filed a lawsuit against a startup called ArtX. ArtX was founded by Dr. Wei Yen and around nineteen other SGI employees who’d worked on the Nintendo 64. The company’s original goal was to develop a PC graphics chip that would rival 3dfx. Then, in May of 1998, the company gained a contract to develop a graphics processor for Nintendo’s next generation game console, the GameCube. At COMDEX in the autumn of 1999, the company unveiled the Aladdin 7 chipset which shipped as integrated GPUs on K6-2 and K6-3 motherboards made by Acer Labs. ArtX was bought by ATI in February of 2000. ArtX’s technology was incorporated into ATI’s GPUs from 2002 until roughly 2005. SGI’s lawsuit against ArtX was quietly dropped in 1998 without any settlement having been reached.
On the 1st of January in 1998, shortly after taking over as CEO, Belluzzo sold two of SGI’s PCB factories and restructured the company from twenty six groups to just five. SGI then setup MIPS Technologies as its own legal entity (though SGI maintained a majority ownership), terminated the Cosmo software business, and proceeded to make customers hesitant to continue investments into the MIPS architecture by announcing SGI’s intent to migrate to Itanium (and collaborating on projects Monterey and Trillian) while simultaneously launching an IA-32 series of machines running NT known as the Visual Workstation. Additionally, the company began outsourcing the manufacturing of their computers, and cut the operating budget by about $200 million (or $381 million in 2024). In Spring of 1998, the company announced a lawsuit against NVIDIA for patent infringement.
None of this helped to change the overall direction of the company. Revenues fell to $3.1 billion and the company posted a loss of $460 million for 1998. On the 20th of July in 1999, without adequate funding to continue the lawsuit against NVIDIA, SGI and NVIDIA agreed to license one another their respective patent portfolios. The company continued to lose money, and Belluzzo left on the 22nd of August in 1999 to lead Microsoft’s MSN division.
As Bob Bishop took the reigns of SGI, things looked dark. AMD announced their 64 bit architecture in October, PC graphics had made massive strides while remaining significantly less expensive than SGI’s offerings, NT was proving to be a solid and less expensive competitor to UNIX, Linux was eating away at traditional UNIX market segments, and Itanium still hadn’t launched. By this point, the company had no fall back as they’d mostly stopped investment into new MIPS CPUs.
On the 2nd of March in 2000, SGI sold Cray to Tera Computer for $22 million (or $40 million in 2024). Tera promptly renamed itself to Cray Inc as it took on an installed base of six hundred supercomputers and two hundred customers across thirty different countries.
SGI’s final MIPS workstations were the Fuel and Tezro lines. Fuel was introduced in 2002 with the R14000 clocked at 500 MHz, up to 4GB of DDR SDRAM, and SGI’s VPro graphics. Models were available with up to an R16000 CPU clocked at 900 MHz. The Tezro was launched in 2003 starting at $20500 (or $34574 in 2024). This model featured only the R16000 and could be configured at clock speeds from 600 MHz to 1 GHz with 512MB to 8GB of DDR SDRAM and SGI’s VPro graphics. Fuel workstations were single CPU, but Tezro was offered with one to four CPUs. While SGI’s IA-32, Itanium, and Xeon workstations and servers sold, they didn’t make much money. On the 10th of July in 2003, SGI vacated and leased their headquarters to Google.
As SGI’s fortunes continued to decline, the company sold Alias Systems (formerly Alias|Wavefront) for $58 million on the 16th of April in 2004 to Accel-KKR (roughly $95 million in 2024). Then, in November of 2005, SGI was delisted from the NYSE due its stock price sinking below the minimum required. In January of 2006, Dennis McKenna was hired as president and CEO, and named chairman of the board. Bishop remained on the board of directors and served as vice chairman. On the 8th of May, the company filed for bankruptcy protections. The campus leased to Google was sold to Google in June of 2006 for $319 million (or $491 million in 2024). It’s prior home in Mountain View had been sold to the Computer History Museum in 2002. The company emerged from bankruptcy and was relisted in October. The official end of SGI’s MIPS and IRIX came on the 29th of December in 2006 with the final orders being fulfilled in March of 2007. Bob Ewald replaced McKenna as CEO on the 9th of April in 2007. In December of 2008, SGI was again delisted. On the 1st of April in 2009, the company filed for bankruptcy, and was subsequently purchased by Rackable Systems for around $42 million on the 11th of May in 2009 (roughly $65 million in 2024). Rackable renamed itself Silicon Graphics International following the acquisition, and it was later bought by Hewlett Packard Enterprise.
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As a global leader in high performance, high efficiency server technology and innovation, we develop and provide end-to-end green computing solutions to the data center, cloud computing, enterprise IT, big data, HPC, and embedded markets.
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Company Milestones
Scroll highlights or select year to learn more
Company founded in San Jose, USA
1993
Company founded in San Jose, USA
30% of systems companies in North America selected Supermicro’s Pentium® Pro based products
1994
One-third of NA systems companies use Supermicro
Introduced world’s first x86 DP server boards based on Orion chipset
1995
Introduced world’s first x86 DP server boards based on Orion chipset
Expanded operations to Taiwan for high-volume OEM production
"World's First" I20 ready server board - COMDEX
1996
Expanded operations to Taiwan
Announced industry's first server boards supporting both Intel® Pentium® Pro and Pentium® II processors
1997
Announced industry's first server boards supporting both Intel® Pentium® Pro and Pentium® II processors
Opened European subsidiary in the Netherlands
First to introduce Xeon® Pentium® II server solution
1998
Opened European subsidiary in the Netherlands
Granted patent for industry's first redundant cooling power supply
1999
Introduced industry’s first redundant cooling power supply
Released world's highest performing 1U servers
Introduced industry's fastest 4-Way server
2000
Released world's highest performing 1U servers
Created industry's first dual Intel® Xeon® server based on Intel® 860 chipset
2001
Created industry’s first dual Intel® Xeon® server
World's first 533MHz FSB rackmount server system
2002
Rackmount server systems introduced
Introduced industry's first 64-bit 1U Itanium2 platform and first 1U server with 1 Terabyte of SATA storage
2003
Introduced first 64-bit, 1U Intel® Itanium® platform
First to market with server/workstation platforms featuring PCI-E and DDR2
2004
First groundbreaking platforms with PCI-E and DDR2
Successfully introduced complete AMD solutions to the market
2005
AMD solutions introduced
Introduced industry's first Xeon® 5000 and 5100 series server solutions
2006
First to launch low-voltage Intel® Xeon® server solutions
March 29, 2007 announced IPO and traded on NASDAQ under the symbol SMCI
Launched SuperBlade® product line and industry's first Double-Density 1U Twin™ servers
2007
March 29, 2007 announced IPO and traded on NASDAQ
Unveiled high-end Whisper-Quiet Workstation and desktop systems
Received BladeSystems Insight Award 2008
Ranked number one x86 server vendor by the channel
2008
Ranked #1 x86 vendor by Channel
Achieved record x86 server performance-per-watt at 375 GFLOPS/kW
Announced innovative 2U Twin²™ server architecture and created the world's first 1U dual GPU server architecture with non-blocking CPU-GPU connectivity
2009
Achieved record x86 server performance
Received patent for Twin architecture and were the first to introduce Platinum Level Server Building Block Solutions®
World's first line of Double-Sided Storage® products unveiled
Won Blade Systems Insight 2010 Award for Best Blade-Based Solution
Embedded/IPC system selected as "Best Server of 2010" by Electronic Design Magazine
2010
Introduced Server Building Block Solutions®
Launched TwinBlade®, GPU SuperBlade®, SuperRack®, and MicroCloud platforms
2011
Launched TwinBlade®, GPU SuperBlade®, SuperRack®, and MicroCloud platforms
Annual revenue exceeds $1B and opens the Supermicro® Taiwan Science and Technology Park
Launched FatTwin® Architecture
Launched 100+ new generation X9 Server Solutions supporting Intel® Xeon® processor E5-2600/1600
Launched PUE optimized Server Solutions that supports server operating temperatures of 0°C to 47°C
Announces new SuperServer® and SuperBlade® solutions supporting 16 core AMD Opteron™ processors
2012
Opening of the Supermicro® Taiwan Science and Technology Park
Celebrates 20th Anniversary and debuts new Corporate Logo
Launches new TwinPro® and TwinPro²® SuperServer® product lines
Launches NVIDIA GRID™ based platforms delivering graphics-accelerated performance for Virtual Desktop Infrastructure (VDI)
Debuts new Server Management Software Suite, Onsite Service and Support and Rack Integration Programs
Receives #1 ranking on Green500 for Tokyo Institute of Technology (TITECH)
2013
Launches new TwinPro® and TwinPro²® SuperServer® product lines
Debuts 1U/2U Ultra Series SuperServers
Releases X10 Server and Storage Solutions Supporting New Intel® Xeon® Processor E5-2600/1600 v3
2014
Debut of Ultra Series SuperServers®
Grand opening of 180,000 square feet of new manufacturing space at our Green Computing Park in Silicon Valley
Introduced Simply Double system architecture
2015
Grand opening of the Green Computing Park in Silicon Valley
Supermicro surpasses $2 billion in cumulative revenues and is named World’s Fastest Growing IT Infrastructure Company by Fortune Magazine
Introduced BigTwin® with up to 12 All NVMe and 24 DIMM support per DP node
Introduced Supermicro Rack Scale Design (SRSD)
Introduced Supermicro SIOM – an optimized form-factor for flexible and cost-saving networking options
2016
Named World’s Fastest Growing IT infrastructure company by Fortune Magazine
Deployed 30,000+ MicroBlade® Servers to Enable One of the World’s Highest Efficiency (1.06 PUE) Data Centers for a Fortune 100 Company
Launched BigTwin®
X11 Server Building Block Solutions® and family of Server and Storage Solutions combining breakthrough NVMe performance with full support for new Intel® Xeon® Scalable processors
Introduced new SuperServer systems supporting NVIDIA Tesla V100 GPUs optimized for deep learning and artificial intelligence
Introduced full portfolio of new generation A+ Server Solutions optimized for new high-performance AMD EPYC™ processors
New 6U SuperBlade® family with Supermicro’s innovative disaggregated server design supporting RSD and free-air cooling
2017
MicroBlade® servers enable World’s Highest Efficiency Data Center
Ranked as the 3rd largest server systems supplier in the world by IDC
Expanded Enterprise Solutions Portfolio with New Scale-Up SuperServer Certified for SAP HANA®
Unveiled new All-Flash 1PB in 1U server and JBOF with the new generation form factor flash storage
Expands US-based Engineering, Manufacturing and Service Headquarters and increases rack integration capacity with Silicon Valley’s first clean energy automated rack integration facility, employing robotic Automated Guided Vehicles (AGVs)
2018
Ranked as the 3rd largest server systems supplier in the world by IDC
Announces Expansion of Silicon Valley Corporate Headquarters and Groundbreaking for New 800,000-Square Foot Building in Taiwan
Launches Over 100 Resource-Saving Systems with New 2nd Generation Intel® Xeon® Scalable Processors
Introduces the World’s Most Powerful AI Training and Inferencing Systems
Introduces Industry’s First Server & Storage Systems Supporting EDSFF
Expands unique Intelligent Edge Product Portfolio to address emerging AI and 5G markets
Launches 2U MP in-memory compute platform supporting up to 112 compute cores and 18 terabytes of memory
2019
Announces Expansion of Silicon Valley Corporate Headquarters and Groundbreaking for New 800,000-Square Foot Building in Taiwan
Listed in CRN's Data Center 50: The Hottest Data Center Companies in 2020
Certifies extensive range of servers with Oracle Linux and Oracle VM Server for x86 (Oracle VM) for cloud and virtualization applications
Launches 100+ new systems optimized for the latest 2nd Generation Intel® Xeon® Scalable processors
Introduces first-to-market Outdoor Edge Systems, designed for harsh outdoor environments
Expands unique Intelligent Edge Product Portfolio to address emerging AI and 5G markets
Introduces new MegaDC line of servers, designed exclusively for large scale deployment in hyperscale datacenters
2020
Listed in CRN's Data Center 50: The Hottest Data Center Companies in 2020
Expanded Silicon Valley & Taiwan campuses add 1M sq. ft. of manufacturing space; now over 3M sq. ft. globally
Introduced a complete line of X12 Servers and Workstations utilizing the 3rd Gen Intel® Xeon® Scalable Processors
Expands GPU Servers with a complete line based on NVIDIA® A100 GPUs
Comprehensive Product Line of Storage based servers
Doubling of capacity to over two millions servers per year
Rack Scale Plug and Play systems become available
2021
Expanded Silicon Valley & Taiwan campuses add 1M sq. ft. of manufacturing space; now over 3M sq. ft. globally
Command Center with Autoconfigurator Launched to Support Cloud, and Plug & Play Enterprise Applications; 2022 - NAB Product of the Year
Unveiling of complete line of products based on the 4th Gen Intel® Xeon® Scalable processors
Expands Data Center Portfolio with 4th Gen AMD EPYC™ Server Lines, with World Record Performance
First JumpStart program to include both X13 and H13 Systems
NEC Selects Supermicro GPU Systems for One of Japan’s Largest Supercomputers for Advanced AI Research
Supermicro Adds New 8U Universal GPU Server That Delivers Maximum Performance and Flexibility for Large Scale AI Training, NVIDIA® Omniverse, and Metaverse
2022
Command Center with Autoconfigurator Launched to Support Cloud, and Plug & Play Enterprise Applications
First $2B Revenue Quarter, and a $7B Revenue Year (FY23), with ongoing manufacturing expansion in Asia, and world-class rack-scale plug & play AI solutions
Support for Intel’s 4th Gen Xeon® processor with 15 product families
Supermicro and Rakuten Symphony collaborate on 5G telco and edge solutions
Deskside Liquid-Cooled AI Development Platform, Powered by NVIDIA®
Supermicro Expands Storage Solutions with All-Flash Servers Utilizing EDSFF E3.S, and E1.S Storage Drives
Expands AMD Product Lines with New Servers and New Processors – Cloud Native Infrastructure
2023
First $2B Revenue Quarter, and a $7B Revenue Year (FY23), with ongoing manufacturing expansion in Asia, and world-class rack-scale plug & play AI solutions
Celebrated 30 years of innovation, growth, AI, and Green Computing; added to both the S&P 500 Index and Fortune 500; SMCI stock records its highest price by crossing $1000 with a 200% growth year-over-year
Support for Intel’s Xeon® 6 and 5th Gen Intel® Xeon ® Processors
Expanded AI portfolio based on new NVIDIA GPU architecture solutions
Support for AMD EPYC-based server offerings to increase the efficiency of data center networking and edge computing
2024
Celebrated 30 years of innovation, growth, AI, and Green Computing; SMCI added to S&P 500 and Fortune 500 Indices; stock price crosses $1000 with 200% growth year-over-year
Company founded in San Jose, USA
1993
Company founded in San Jose, USA
30% of systems companies in North America selected Supermicro’s Pentium® Pro based products
1994
One-third of NA systems companies use Supermicro
Introduced world’s first x86 DP server boards based on Orion chipset
1995
Introduced world’s first x86 DP server boards based on Orion chipset
Expanded operations to Taiwan for high-volume OEM production
"World's First" I20 ready server board - COMDEX
1996
Expanded operations to Taiwan
Announced industry's first server boards supporting both Intel® Pentium® Pro and Pentium® II processors
1997
Announced industry's first server boards supporting both Intel® Pentium® Pro and Pentium® II processors
Opened European subsidiary in the Netherlands
First to introduce Xeon® Pentium® II server solution
1998
Opened European subsidiary in the Netherlands
Granted patent for industry's first redundant cooling power supply
1999
Introduced industry’s first redundant cooling power supply
Released world's highest performing 1U servers
Introduced industry's fastest 4-Way server
2000
Released world's highest performing 1U servers
Created industry's first dual Intel® Xeon® server based on Intel® 860 chipset
2001
Created industry’s first dual Intel® Xeon® server
World's first 533MHz FSB rackmount server system
2002
Rackmount server systems introduced
Introduced industry's first 64-bit 1U Itanium2 platform and first 1U server with 1 Terabyte of SATA storage
2003
Introduced first 64-bit, 1U Intel® Itanium® platform
First to market with server/workstation platforms featuring PCI-E and DDR2
2004
First groundbreaking platforms with PCI-E and DDR2
Successfully introduced complete AMD solutions to the market
2005
AMD solutions introduced
Introduced industry's first Xeon® 5000 and 5100 series server solutions
2006
First to launch low-voltage Intel® Xeon® server solutions
March 29, 2007 announced IPO and traded on NASDAQ under the symbol SMCI
Launched SuperBlade® product line and industry's first Double-Density 1U Twin™ servers
2007
March 29, 2007 announced IPO and traded on NASDAQ
Unveiled high-end Whisper-Quiet Workstation and desktop systems
Received BladeSystems Insight Award 2008
Ranked number one x86 server vendor by the channel
2008
Ranked #1 x86 vendor by Channel
Achieved record x86 server performance-per-watt at 375 GFLOPS/kW
Announced innovative 2U Twin²™ server architecture and created the world's first 1U dual GPU server architecture with non-blocking CPU-GPU connectivity
2009
Achieved record x86 server performance
Received patent for Twin architecture and were the first to introduce Platinum Level Server Building Block Solutions®
World's first line of Double-Sided Storage® products unveiled
Won Blade Systems Insight 2010 Award for Best Blade-Based Solution
Embedded/IPC system selected as "Best Server of 2010" by Electronic Design Magazine
2010
Introduced Server Building Block Solutions®
Launched TwinBlade®, GPU SuperBlade®, SuperRack®, and MicroCloud platforms
2011
Launched TwinBlade®, GPU SuperBlade®, SuperRack®, and MicroCloud platforms
Annual revenue exceeds $1B and opens the Supermicro® Taiwan Science and Technology Park
Launched FatTwin® Architecture
Launched 100+ new generation X9 Server Solutions supporting Intel® Xeon® processor E5-2600/1600
Launched PUE optimized Server Solutions that supports server operating temperatures of 0°C to 47°C
Announces new SuperServer® and SuperBlade® solutions supporting 16 core AMD Opteron™ processors
2012
Opening of the Supermicro® Taiwan Science and Technology Park
Celebrates 20th Anniversary and debuts new Corporate Logo
Launches new TwinPro® and TwinPro²® SuperServer® product lines
Launches NVIDIA GRID™ based platforms delivering graphics-accelerated performance for Virtual Desktop Infrastructure (VDI)
Debuts new Server Management Software Suite, Onsite Service and Support and Rack Integration Programs
Receives #1 ranking on Green500 for Tokyo Institute of Technology (TITECH)
2013
Launches new TwinPro® and TwinPro²® SuperServer® product lines
Debuts 1U/2U Ultra Series SuperServers
Releases X10 Server and Storage Solutions Supporting New Intel® Xeon® Processor E5-2600/1600 v3
2014
Debut of Ultra Series SuperServers®
Grand opening of 180,000 square feet of new manufacturing space at our Green Computing Park in Silicon Valley
Introduced Simply Double system architecture
2015
Grand opening of the Green Computing Park in Silicon Valley
Supermicro surpasses $2 billion in cumulative revenues and is named World’s Fastest Growing IT Infrastructure Company by Fortune Magazine
Introduced BigTwin® with up to 12 All NVMe and 24 DIMM support per DP node
Introduced Supermicro Rack Scale Design (SRSD)
Introduced Supermicro SIOM – an optimized form-factor for flexible and cost-saving networking options
2016
Named World’s Fastest Growing IT infrastructure company by Fortune Magazine
Expanded Silicon Valley & Taiwan campuses add 1M sq. ft. of manufacturing space; now over 3M sq. ft. globally
Introduced a complete line of X12 Servers and Workstations utilizing the 3rd Gen Intel® Xeon® Scalable Processors
Expands GPU Servers with a complete line based on NVIDIA® A100 GPUs
Comprehensive Product Line of Storage based servers
Doubling of capacity to over two millions servers per year
Rack Scale Plug and Play systems become available
2021
Expanded Silicon Valley & Taiwan campuses add 1M sq. ft. of manufacturing space; now over 3M sq. ft. globally
Command Center with Autoconfigurator Launched to Support Cloud, and Plug & Play Enterprise Applications; 2022 - NAB Product of the Year
Unveiling of complete line of products based on the 4th Gen Intel® Xeon® Scalable processors
Expands Data Center Portfolio with 4th Gen AMD EPYC™ Server Lines, with World Record Performance
First JumpStart program to include both X13 and H13 Systems
NEC Selects Supermicro GPU Systems for One of Japan’s Largest Supercomputers for Advanced AI Research
Supermicro Adds New 8U Universal GPU Server That Delivers Maximum Performance and Flexibility for Large Scale AI Training, NVIDIA® Omniverse, and Metaverse
2022
Command Center with Autoconfigurator Launched to Support Cloud, and Plug & Play Enterprise Applications
First $2B Revenue Quarter, and a $7B Revenue Year (FY23), with ongoing manufacturing expansion in Asia, and world-class rack-scale plug & play AI solutions
Support for Intel’s 4th Gen Xeon® processor with 15 product families
Supermicro and Rakuten Symphony collaborate on 5G telco and edge solutions
Deskside Liquid-Cooled AI Development Platform, Powered by NVIDIA®
Supermicro Expands Storage Solutions with All-Flash Servers Utilizing EDSFF E3.S, and E1.S Storage Drives
Expands AMD Product Lines with New Servers and New Processors – Cloud Native Infrastructure
2023
First $2B Revenue Quarter, and a $7B Revenue Year (FY23), with ongoing manufacturing expansion in Asia, and world-class rack-scale plug & play AI solutions
Celebrated 30 years of innovation, growth, AI, and Green Computing; added to both the S&P 500 Index and Fortune 500; SMCI stock records its highest price by crossing $1000 with a 200% growth year-over-year
Support for Intel’s Xeon® 6 and 5th Gen Intel® Xeon ® Processors
Expanded AI portfolio based on new NVIDIA GPU architecture solutions
Support for AMD EPYC-based server offerings to increase the efficiency of data center networking and edge computing
2024
Celebrated 30 years of innovation, growth, AI, and Green Computing; SMCI added to S&P 500 and Fortune 500 Indices; stock price crosses $1000 with 200% growth year-over-year
|
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Silicon Graphics Inc.
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Template:About You always wondered: The Silicon Graphics Logo - Adafruit Industries - March 8, 2019 (with Wayback Machine link) On April 1, 2009, SGI filed for Chapter 11 bankruptcy for the second time (after filing earlier in 2006), and announced that it would substantially sell all of its...
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Some or all of the information on this page may have been copied from another source. Most likely, it would be Logopedia.
DO NOT remove this notice once it has been placed on a page. See the Logo Timeline Wiki at risk of being shut down blog for details.
Template:About
1981–1999[]
Designer: Scott Kim
Typography: Univers Condensed Bold Italic
Launched: November 9, 1981
You always wondered: The Silicon Graphics Logo - Adafruit Industries - March 8, 2019 (with Wayback Machine link)
1999–2009[]
Designer: Landor Associates
Joseph Stitzlein
Typography: SGI Type
Based on Monolein
Launched: April 13, 1999
On April 1, 2009, SGI filed for Chapter 11 bankruptcy for the second time (after filing earlier in 2006), and announced that it would substantially sell all of its assets to Rackable Systems for $25 million. The sale, ultimately for $42.5 million, was finalized on May 11, 2009. At the same time, Rackable announced its rebranding to Silicon Graphics International.
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FYI: FTC Appoves Consent Agreement with Silicon Graphics. Inc.,...
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1995-11-16T00:00:00-05:00
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The Federal Trade Commission has given final approval to a consent agreement with Silicon Graphics, Inc., settling charges that the Mountai
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Federal Trade Commission
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https://www.ftc.gov/news-events/news/press-releases/1995/11/fyi-ftc-appoves-consent-agreement-silicon-graphics-inc
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The Federal Trade Commission has given final approval to a consent agreement with Silicon Graphics, Inc., settling charges that the Mountain View, California-based company's acquisition of two of the world's three leading entertainment graphics software firms would violate federal antitrust laws. In its complaint detailing the charges, the FTC alleged that the acquisitions would substantially reduce competition and may result in higher prices and reduce innovation competition for software and workstations involved in producing sophisticated computer-based graphics for movies and other entertainment industry uses. The Commission's action, which involves a slight modification of the consent order as it was announced for public comment, makes the order provisions binding on Silicon Graphics.
In the transactions at issue, Silicon Graphics acquired Alias Research Inc., based in Toronto, Canada, and Wavefront Technologies, Inc., of Santa Barbara, California. The FTC complaint states that Silicon Graphics holds a 90 percent share of the market for the workstations that run entertainment graphics software. It alleges that the acquisitions could, among other things, foreclose access by other workstation producers to the relevant software, give Silicon Graphics nonpublic information about its competitors' workstations, and otherwise reduce competition and lead to higher prices or reduced innovation for entertainment graphics workstations and software.
The final consent order requires Silicon Graphics to take certain steps to ensure that other companies that develop and sell entertainment graphics software and hardware can compete with Silicon Graphics. Specifically, the order:
requires Silicon Graphics to maintain an open architecture and to publish its application programming interfaces so that software developers other than Alias and Wavefront can develop entertainment graphics software for use on Silicon Graphics workstations;
requires Silicon Graphics to offer independent enter- tainment graphics software companies participation in its software development programs on terms no less favorable than it offers other types of software companies;
requires Silicon Graphics to enter into a Commission- approved "porting agreement," by March 31, 1996, with an FTC-approved partner, by which Alias's two major entertainment graphics software programs (Animator and PowerAnimator and their successor programs) can be run on their porting partner's computer systems; and
prohibits the release of nonpublic information from the platform partner porting the Alias software to those Silicon Graphics or Alias employees not participating in the porting process.
As announced for public comment, the settlement identified Digital Equipment Corporation, Hewlett-Packard Corporation, IBM Corporation or Sun Microsystems, Inc. as possible porting agreement partners, so long as the agreement itself was approved by the Commission. The final order deletes the names of these companies and requires that both the porting agreement and the porting partner be Commission-approved. In changing the order, the Commission said: "Comments received during the public comment period indicate that this section may have been misinterpreted to indicate the exclusion of particular candidates as possible Platform Partners. Nothing in this modification is intended to imply that the named companies in the original proposed consent may not be approved now, or that any other company was then or is now excluded from consideration as an appropriate Platform Partner."
The order also contains various reporting provisions to assist the FTC in monitoring Silicon Graphics' compliance.
The consent agreement was announced for public comment on June 9, and issued in final form on Nov. 14. The Commission vote on final issuance was 3-2, with Commissioners Mary L. Azcuenaga and Roscoe B. Starek, III, issuing dissenting statements. In her statement, Commissioner Azcuenaga said the evidence persuades her that the Commission should challenge the horizontal combination of Alias and Wavefront. "Instead, the Commission chooses to rely on vertical foreclosure theory to impose requirements that fail to preserve existing competition and that ultimately may create inefficiency and reduce competition," Azcuenaga said. "To the extent that any vertical problems should concern us, they would be resolved by stopping the horizontal transaction," she said.
Commissioner Starek said in his statement that he is not persuaded that these vertical acquisitions are likely "substantially to lessen competition" in violation of the Clayton Act. "Moreover, even if one assumes the validity of the theories of anticompetitive effects, the Commission's order does not appear to prevent the alleged effects and may create inefficiency," Starek said.
NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $10,000.
A news release summarizing the complaint and consent agreement was issued at the time the Commission accepted the consent agreement for public comment. Copies of that release, the complaint and final order, and the Commissioners' statements are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest FTC news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases, consumer brochures and other documents also are available on the Internet at the FTC's World Wide Web Site at: http://www.ftc.gov
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Silicon Graphics
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https://en.wikipedia.org/wiki/Silicon_Graphics
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1981–2009 American computing company
This article is about Silicon Graphics, Inc. For the company that acquired its assets, see Silicon Graphics International.
Silicon Graphics, Inc. (stylized as SiliconGraphics before 1999, later rebranded SGI, historically known as Silicon Graphics Computer Systems or SGCS) was an American high-performance computing manufacturer, producing computer hardware and software. Founded in Mountain View, California, in November 1981 by James Clark, its initial market was 3D graphics computer workstations, but its products, strategies and market positions developed significantly over time.
Early systems were based on the Geometry Engine that Clark and Marc Hannah had developed at Stanford University, and were derived from Clark's broader background in computer graphics. The Geometry Engine was the first very-large-scale integration (VLSI) implementation of a geometry pipeline, specialized hardware that accelerated the "inner-loop" geometric computations needed to display three-dimensional images. For much of its history, the company focused on 3D imaging and was a major supplier of both hardware and software in this market.
Silicon Graphics reincorporated as a Delaware corporation in January 1990. Through the mid to late-1990s, the rapidly improving performance of commodity Wintel machines began to erode SGI's stronghold in the 3D market. The porting of Maya to other platforms was a major event in this process. SGI made several attempts to address this, including a disastrous move from their existing MIPS platforms to the Intel Itanium, as well as introducing their own Linux-based Intel IA-32 based workstations and servers that failed in the market. In the mid-2000s the company repositioned itself as a supercomputer vendor, a move that also failed.
On April 1, 2009, SGI filed for Chapter 11 bankruptcy protection and announced that it would sell substantially all of its assets to Rackable Systems, a deal finalized on May 11, 2009, with Rackable assuming the name Silicon Graphics International. The remnants of Silicon Graphics, Inc. became Graphics Properties Holdings, Inc.
History
[edit]
Early years
[edit]
James H. Clark left his position as an electrical engineering associate professor at Stanford University to found SGI in 1982 along with a group of seven graduate students and research staff from Stanford University: Kurt Akeley, David J. Brown, Tom Davis, Rocky Rhodes, Marc Hannah, Herb Kuta, and Mark Grossman;[2] along with Abbey Silverstone[3] and a few others.
Growth
[edit]
Ed McCracken was CEO of Silicon Graphics from 1984 to 1997.[4] During those years, SGI grew from annual revenues of $5.4 million to $3.7 billion.[4]
Decline
[edit]
The addition of 3D graphic capabilities to PCs, and the ability of clusters of Linux- and BSD-based PCs to take on many of the tasks of larger SGI servers, ate into SGI's core markets. The porting of Maya to Linux, Mac OS and Microsoft Windows further eroded the low end of SGI's product line.
In response to challenges faced in the marketplace and a falling share price Ed McCracken was fired and SGI brought in Richard Belluzzo to replace him. Under Belluzzo's leadership a number of initiatives were taken which are considered to have accelerated the corporate decline.[5]
One such initiative was trying to sell workstations running Windows NT called Visual Workstations in addition to workstations running IRIX, the company's version of UNIX. This put the company in even more direct competition with the likes of Dell, making it more difficult to justify a price premium. The product line was unsuccessful and abandoned a few years later.
SGI's premature announcement of its migration from MIPS to Itanium and its abortive ventures into IA-32 architecture systems (the Visual Workstation line, the ex-Intergraph Zx10 range and the SGI 1000-series Linux servers) damaged SGI's credibility in the market.
In 1999, in an attempt to clarify their current market position as more than a graphics company, Silicon Graphics Inc. changed its corporate identity to "SGI", although its legal name was unchanged.
At the same time, SGI announced a new logo consisting of only the letters "sgi" in a proprietary font called "SGI", created by branding and design consulting firm Landor Associates, in collaboration with designer Joe Stitzlein. SGI continued to use the "Silicon Graphics" name for its workstation product line, and later re-adopted the cube logo for some workstation models.
In November 2005, SGI announced that it had been delisted from the New York Stock Exchange because its common stock had fallen below the minimum share price for listing on the exchange. SGI's market capitalization dwindled from a peak of over seven billion dollars in 1995 to just $120 million at the time of delisting. In February 2006, SGI noted that it could run out of cash by the end of the year.[6]
Re-emergence
[edit]
In mid-2005, SGI hired Alix Partners to advise it on returning to profitability and received a new line of credit. SGI announced it was postponing its scheduled annual December stockholders meeting until March 2006. It proposed a reverse stock split to deal with the de-listing from the New York Stock Exchange.
In January 2006, SGI hired Dennis McKenna as its new CEO and chairman of the board of directors. Mr. McKenna succeeded Robert Bishop, who remained vice chairman of the board of directors.
On May 8, 2006, SGI announced that it had filed for Chapter 11 bankruptcy protection for itself and U.S. subsidiaries as part of a plan to reduce debt by $250 million.[7][8] Two days later, the U.S. Bankruptcy Court approved its first day motions and its use of a $70 million financing facility provided by a group of its bondholders. Foreign subsidiaries were unaffected.
On September 6, 2006, SGI announced the end of development for the MIPS/IRIX line and the IRIX operating system.[9] Production would end on December 29 and the last orders would be fulfilled by March 2007. Support for these products would end after December 2013.
SGI emerged from bankruptcy protection on October 17, 2006.[10] Its stock symbol at that point, SGID, was canceled, and new stock was issued on the NASDAQ exchange under the symbol SGIC.[11] This new stock was distributed to the company's creditors, and the SGID common stockholders were left with worthless shares.[12] At the end of that year, the company moved its headquarters from Mountain View to Sunnyvale.[13] Its earlier North Shoreline headquarters is now occupied by the Computer History Museum; the newer Amphitheatre Parkway headquarters was sold to Google (which had already subleased and moved into the facility in 2003). Both of these locations were award-winning designs by Studios Architecture.[14][15]
In April 2008, SGI re-entered the visualization market with the SGI Virtu range of visualization servers and workstations, which were re-badged systems from BOXX Technologies based on Intel Xeon or AMD Opteron processors and Nvidia Quadro graphics chipsets, running Red Hat Enterprise Linux, SUSE Linux Enterprise Server or Windows Compute Cluster Server.[16]
Final bankruptcy and acquisition by Rackable Systems
[edit]
In December 2008, SGI received a delisting notification from NASDAQ, as its market value had been below the minimum $35 million requirement for 10 consecutive trading days, and also did not meet NASDAQ's alternative requirements of a minimum stockholders' equity of $2.5 million or annual net income from continuing operations of $500,000 or more.[17]
On April 1, 2009, SGI filed for Chapter 11 again, and announced that it would sell substantially all of its assets to Rackable Systems for $25 million.[18] The sale, ultimately for $42.5 million, was finalized on May 11, 2009; at the same time, Rackable announced their adoption of "Silicon Graphics International" as their global name and brand.[19][20] The Bankruptcy Court scheduled continuing proceedings and hearings for June 3 and 24, 2009, and July 22, 2009.[21][22][needs update]
After the Rackable acquisition, Vizworld magazine published a series of six articles that chronicle the downfall of SGI.
Hewlett Packard Enterprise acquired Silicon Graphics International in November 2016, which allowed HPE to place the SGI Pleiades, a TOP500 supercomputer at NASA Ames Research Center, in its portfolio.
Graphics Properties Holdings, Inc. era
[edit]
During Silicon Graphics Inc.'s second bankruptcy phase, it was renamed to Graphics Properties Holdings, Inc.(GPHI) in June 2009.[23][24]
In 2010, GPHI announced it had won a significant favorable ruling in its litigation with ATI Technologies and AMD in June 2010,[25][26] following the patent lawsuit originally filed during the Silicon Graphics, Inc. era.[27] Following the 2008 appeal by ATI over the validity of U.S. patent 6,650,327 ('327) and Silicon Graphics Inc's voluntary dismissal of the U.S. patent 6,885,376 ('376) patent from the lawsuit,[28] the Federal Circuit upheld the jury verdict on the validity of GPHI's U.S. Patent No. 6,650,327, and furthermore found that AMD had lost its right to challenge patent validity in future proceedings.[29] On January 31, 2011, the District Court entered an order that permits AMD to pursue its invalidity affirmative defense at trial and does not permit SGI to accuse AMD's Radeon R700 series of graphics products of infringement in this case.[30] On April 18, 2011, GPHI and AMD had entered into a confidential Settlement and License Agreement that resolved this litigation matter for an immaterial amount and that provides immunity under all GPHI patents for alleged infringement by AMD products, including components, software and designs. On April 26, 2011, the Court entered an order granting the parties' agreed motion for dismissal and final judgment.[31]
In November 2011, GPHI filed another patent infringement lawsuit against Apple Inc. in Delaware involving more patents than their original patent infringement case against Apple last November, for alleged violation of U.S. patents 6,650,327 ('327), U.S. patent 6,816,145 ('145) and U.S. patent 5,717,881 ('881).[32]
In 2012, GPHI filed lawsuit against Apple, Sony, HTC Corp, LG Electronics Inc. and Samsung Electronics Co., Research in Motion Ltd. for allegedly violating patent relating to a computer graphics process that turns text and images into pixels to be displayed on screens. Affected devices include Apple iPhone, HTC EVO4G, LG Thrill, Research in Motion Torch, Samsung Galaxy S and Galaxy S II, and Sony Xperia Play smartphones.[33][34][35]
U.S. patent 6,650,327 - 1998 Display system having floating point rasterization and floating point ..
U.S. patent 6,885,376 - 2002 System, method, and computer program product for near-real time load ..
U.S. patent 6,816,145 - 1998 Large area wide aspect ratio flat panel monitor having high resolution for ..
U.S. patent 5,717,881 - 1995 Data processing system for processing one and two parcel instructions
Technology
[edit]
Motorola 680x0-based systems
[edit]
SGI's first generation products, starting with the IRIS (Integrated Raster Imaging System) 1000 series of high-performance graphics terminals, were based on the Motorola 68000 family of microprocessors. The later IRIS 2000 and 3000 models developed into full UNIX workstations.
IRIS 1000 series
[edit]
The first entries in the 1000 series (models 1000 and 1200, introduced in 1984) were graphics terminals, peripherals to be connected to a general-purpose computer such as a Digital Equipment Corporation VAX, to provide graphical raster display abilities. They used 8 MHz Motorola 68000 CPUs with 768 kB of RAM and had no disk drives. They booted over the network (via an Excelan EXOS/101 Ethernet card) from their controlling computer. They used the "PM1" CPU board, which was a variant of the board that was used in Stanford University's SUN workstation and later in the Sun-1 workstation from Sun Microsystems. The graphics system was composed of the GF1 frame buffer, the UC3 "Update Controller", DC3 "Display Controller", and the BP2 bitplane. The 1000-series machines were designed around the Multibus standard.
Later 1000-series machines, the 1400 and 1500, ran at 10 MHz and had 1.5 MB of RAM. The 1400 had a 72 MB ST-506 disk drive, while the 1500 had a 474 MB SMD-based disk drive with a Xylogics 450 disk controller. They may have used the PM2 CPU and PM2M1 RAM board from the 2000 series. The usual monitor for the 1000 series ran at 30 Hz interlaced. Six beta-test units of the 1400 workstation were produced, and the first production unit (SGI's first commercial computer) was shipped to Carnegie-Mellon University's Electronic Imaging Laboratory in 1984.
IRIS 2000 and 3000 series
[edit]
SGI rapidly developed its machines into workstations with its second product line — the IRIS 2000 series, first released in August 1985.[36] SGI began using the UNIX System V operating system. There were five models in two product ranges, the 2000/2200/2300/2400/2500 range which used 68010 CPUs (the PM2 CPU module), and the later "Turbo" systems, the 2300T, 2400T and 2500T, which had 68020s (the IP2 CPU module). All used the Excelan EXOS/201 Ethernet card, the same graphics hardware (GF2 Frame Buffer, UC4 Update Controller, DC4 Display Controller, BP3 Bitplane). Their main differences were the CPU, RAM, and Weitek Floating Point Accelerator boards, disk controllers and disk drives (both ST-506 and SMD were available). These could be upgraded, for example from a 2400 to a 2400T. The 2500 and 2500T had a larger chassis, a standard 6' 19" EIA rack with space at the bottom for two SMD disk drives weighing approximately 68 kg each.[37] The non-Turbo models used the Multibus for the CPU to communicate with the floating point accelerator, while the Turbos added a ribbon cable dedicated for this. 60 Hz monitors were used for the 2000 series.
The height of the machines using Motorola CPUs was reached with the IRIS 3000 series (models 3010/3020/3030 and 3110/3115/3120/3130, the 30s both being full-size rack machines). They used the same graphics subsystem and Ethernet as the 2000s, but could also use up to 12 "geometry engines", the first widespread use of hardware graphics accelerators. The standard monitor was a 19" 60 Hz non-interlaced unit with a tilt/swivel base; 19" 30 Hz interlaced and a 15" 60 Hz non-interlaced (with tilt/swivel base) were also available.
The IRIS 3130 and its smaller siblings were impressive for the time, being complete UNIX workstations. The 3130 was powerful enough to support a complete 3D animation and rendering package without mainframe support. With large capacity hard drives by standards of the day (two 300 MB drives), streaming tape and Ethernet, it could be the centerpiece of an animation operation.
The line was formally discontinued in November 1989, with about 3500 systems shipped of all 2000 and 3000 models combined.[38]
RISC era
[edit]
With the introduction of the IRIS 4D series, SGI switched to MIPS microprocessors. These machines were more powerful and came with powerful on-board floating-point capability. As 3D graphics became more popular in television and film during this time, these systems were responsible for establishing much of SGI's reputation.
SGI produced a broad range of MIPS-based workstations and servers during the 1990s, running SGI's version of UNIX System V, now called IRIX. These included the massive Onyx visualization systems, the size of refrigerators and capable of supporting up to 64 processors while managing up to three streams of high resolution, fully realized 3D graphics.
In October 1991, MIPS announced the first commercially available 64-bit microprocessor, the R4000. SGI used the R4000 in its Crimson workstation. IRIX 6.2 was the first fully 64-bit IRIX release, including 64-bit pointers.
To secure the supply of future generations of MIPS microprocessors (the 64-bit R4000), SGI acquired the company in 1992[39] for $333 million[40][41] and renamed it as MIPS Technologies Inc., a wholly owned subsidiary of SGI.[42]
In 1993, Silicon Graphics (SGI) signed a deal with Nintendo to develop the Reality Coprocessor (RCP) GPU used in the Nintendo 64 (N64) video game console. The deal was signed in early 1993, and it was later made public in August of that year.[43] The console itself was later released in 1996. The RCP was developed by SGI's Nintendo Operations department, led by engineer Dr. Wei Yen. In 1997, twenty SGI employees, led by Yen, left SGI and founded ArtX (later acquired by ATI Technologies in 2000).[44]
In 1998, SGI relinquished some ownership of MIPS Technologies, Inc in a Re-IPO, and fully divested itself in 2000.[45]
In the late 1990s, when much of the industry expected the Itanium to replace both CISC and RISC architectures in non-embedded computers, SGI announced their intent to phase out MIPS in their systems. Development of new MIPS microprocessors stopped, and the existing R12000 design was extended multiple times until 2003 to provide existing customers more time to migrate to Itanium.
In August 2006, SGI announced the end of production for MIPS/IRIX systems,[46] and by the end of the year MIPS/IRIX products were no longer generally available from SGI.
IRIS GL and OpenGL
[edit]
Until the second generation Onyx Reality Engine machines, SGI offered access to its high performance 3D graphics subsystems through a proprietary API known as IRIS Graphics Library (IRIS GL). As more features were added over the years, IRIS GL became harder to maintain and more cumbersome to use. In 1992, SGI decided to clean up and reform IRIS GL and made the bold move of allowing the resulting OpenGL API to be cheaply licensed by SGI's competitors, and set up an industry-wide consortium to maintain the OpenGL standard (the OpenGL Architecture Review Board).
This meant that for the first time, fast, efficient, cross-platform graphics programs could be written. For over 20 years – until the introduction of the Vulkan API – OpenGL remained the only real-time 3D graphics standard to be portable across a variety of operating systems.
ACE Consortium
[edit]
Main article: Advanced Computing Environment
SGI was part of the Advanced Computing Environment initiative, formed in the early 1990s with 20 other companies, including Compaq, Digital Equipment Corporation, MIPS Computer Systems, Groupe Bull, Siemens, NEC, NeTpower, Microsoft and Santa Cruz Operation. Its intent was to introduce workstations based on the MIPS architecture and able to run Windows NT and SCO UNIX. The group produced the Advanced RISC Computing (ARC) specification, but began to unravel little more than a year after its formation.
Entertainment industry
[edit]
For eight consecutive years (1995–2002), all films nominated for an Academy Award for Distinguished Achievement in Visual Effects were created on Silicon Graphics computer systems.[47] The technology was also used in commercials for a host of companies.
An SGI Crimson system with the fsn[48] three-dimensional file system navigator appeared in the 1993 movie Jurassic Park.[49]
In the movie Twister, protagonists can be seen using an SGI laptop computer; however, the unit shown was not an actual working computer, but rather a fake laptop shell built around an SGI Corona LCD flat screen display.[50]
The 1995 film Congo also features an SGI laptop computer being used by Dr. Ross (Laura Linney) to communicate via satellite to TraviCom HQ.[51]
The purple, lowercased "sgi" logo can be seen at the beginning of the opening credits of the HBO series Silicon Valley, before being taken down and replaced by the Google logo as the intro graphics progress. Google leased the former SGI buildings in 2003 for their headquarters in Mountain View, CA until they purchased the buildings outright in 2006.
Once inexpensive PCs began to have graphics performance close to the more expensive specialized graphical workstations which were SGI's core business, SGI shifted its focus to high performance servers for digital video and the Web. Many SGI graphics engineers left to work at other computer graphics companies such as ATI and Nvidia, contributing to the PC 3D graphics revolution.
Free software
[edit]
SGI was a promoter of free software,[citation needed] supporting several projects such as Linux and Samba, and opening some of its own previously proprietary code such as the XFS filesystem and the Open64 compiler.
SGI was also important in its contribution to the C++ Standard Template Library (STL) with many useful extensions in the MIT-like licensed SGI STL implementation. The extension keeps being carried by the direct descendant STLport and GNU's libstdc++.[52]
Acquisition of Alias, Wavefront, Cray and Intergraph
[edit]
In 1995, SGI purchased Alias Research, Kroyer Films, and Wavefront Technologies in a deal totaling approximately $500 million and merged the companies into Alias|Wavefront. In June 2004 SGI sold the business, later renamed to Alias/Wavefront, to the private equity investment firm Accel-KKR for $57.5 million.[53] In October 2005, Autodesk announced that it signed a definitive agreement to acquire Alias for $182 million in cash.
In February 1996, SGI purchased the well-known supercomputer manufacturer Cray Research for $740 million,[54] and began to use marketing names such as "CrayLink" for (SGI-developed) technology integrated into the SGI server line. Three months later, it sold the Cray Business Systems Division, responsible for the CS6400 SPARC/Solaris server, to Sun Microsystems for an undisclosed amount (acknowledged later by a Sun executive to be "significantly less than $100 million").[55][56] Many of the Cray T3E engineers designed and developed the SGI Altix and NUMAlink technology. SGI sold the Cray brand and product lines to Tera Computer Company on March 31, 2000, for $35 million plus one million shares.[57] SGI also distributed its remaining interest in MIPS Technologies through a spin-off effective June 20, 2000.
In September 2000, SGI acquired the Zx10 series of Windows workstations and servers from Intergraph Computer Systems (for a rumored $100 million), and rebadged them as SGI systems. The product line was discontinued in June 2001.
SGI Visual Workstations
[edit]
Another attempt by SGI in the late 1990s to introduce its own family of Intel-based workstations running Windows NT or Red Hat Linux (see also SGI Visual Workstation) proved to be a financial disaster, and shook customer confidence in SGI's commitment to its own MIPS-based line.
Switch to Itanium
[edit]
In 1998, SGI announced that future generations of its machines would be based not on their own MIPS processors, but the upcoming "super-chip" from Intel, code-named "Merced" and later called Itanium. Funding for its own high-end processors was reduced, and it was planned that the R10000 would be the last MIPS mainstream processor. MIPS Technologies would focus entirely on the embedded market, where it was having some success, and SGI would no longer have to fund development of a CPU that, since the failure of ARC, found use only in their own machines. This plan quickly went awry. As early as 1999 it was clear the Itanium was going to be delivered very late and would have nowhere near the performance originally expected. As the production delays increased, MIPS' existing R10000-based machines grew increasingly uncompetitive. Eventually it was forced to introduce faster MIPS processors, the R12000, R14000 and R16000, which were used in a series of models from 1999 through 2006.[58]
SGI's first Itanium-based system was the short-lived SGI 750 workstation, launched in 2001. SGI's MIPS-based systems were not to be superseded until the launch of the Itanium 2-based Altix servers and Prism workstations some time later. Unlike the MIPS systems, which ran IRIX, the Itanium systems used SuSE Linux Enterprise Server with SGI enhancements as their operating system. SGI used Transitive Corporation's QuickTransit software to allow their old MIPS/IRIX applications to run (in emulation) on the new Itanium/Linux platform.
In the server market the Itanium 2-based Altix eventually replaced the MIPS-based Origin product line. In the workstation market, the switch to Itanium was not completed before SGI exited the market.
The Altix was the most powerful computer in the world in 2006, assuming that a "computer" is defined as a collection of hardware running under a single instance of an operating system. The Altix had 512 Itanium processors running under a single instance of Linux. A cluster of 20 machines was then the eighth-fastest supercomputer. All faster supercomputers were clusters, but none have as many FLOPS per machine. However, more recent supercomputers are very large clusters of machines that are individually less capable. SGI acknowledged this and in 2007 moved away from the "massive NUMA" model to clusters.
Switch to Xeon
[edit]
Although SGI continued to market Itanium-based machines, its more recent machines were based on the Intel Xeon processor. The first Altix XE systems were relatively low-end machines, but by December 2006 the XE systems were more capable than the Itanium machines by some measures (e.g., power consumption in FLOPS/W, density in FLOPS/m3, cost/FLOPS). The XE1200 and XE1300 servers used a cluster architecture. This was a departure from the pure NUMA architectures of the earlier Itanium and MIPS servers.
In June 2007, SGI announced the Altix ICE 8200, a blade-based Xeon system with up to 512 Xeon cores per rack.[59] An Altix ICE 8200 installed at New Mexico Computing Applications Center (with 14336 processors) ranked at number 3 on the TOP500 list of November 2007.
User base and core market
[edit]
Conventional wisdom holds that SGI's core market has traditionally been Hollywood visual effects studios. In fact, SGI's largest revenue has always been generated by government and defense applications, energy, and scientific and technical computing.[60] In one case Silicon Graphics' largest single sale ever was to the United States Postal Service. SGI's servers powered an artificial intelligence program to mechanically read, tag and sort the mail (hand-written and block) at a number of USPS's key mail centers. The rise of cheap yet powerful commodity workstations running Linux, Windows and Mac OS X, and the availability of diverse professional software for them, effectively pushed SGI out of the visual effects industry in all but the most niche markets.
High-end server market
[edit]
SGI continued to enhance its line of servers (including some supercomputers) based on the SN architecture. SN, for Scalable Node, is a technology developed by SGI in the mid-1990s that uses cache-coherent non-uniform memory access (cc-NUMA). In an SN system, processors, memory, and a bus- and memory-controller are coupled together into an entity called a node, usually on a single circuit board. Nodes are connected by a high-speed interconnect called NUMAlink (originally marketed as CrayLink). There is no internal bus, and instead access between processors, memory, and I/O devices is done through a switched fabric of links and routers.
Thanks to the cache coherence of the distributed shared memory, SN systems scale along several axes at once: as CPU count increases, so does memory capacity, I/O capacity, and system bisection bandwidth. This allows the combined memory of all the nodes to be accessed under a single OS image using standard shared-memory synchronization methods. This makes an SN system far easier to program and able to achieve higher sustained-to-peak performance than non-cache-coherent systems like conventional clusters or massively parallel computers which require applications code to be written (or re-written) to do explicit message-passing communication between their nodes.
The first SN system, known as SN-0, was released in 1996 under the product name Origin 2000. Based on the MIPS R10000 processor, it scaled from 2 to 128 processors and a smaller version, the Origin 200 (SN-00), scaled from 1 to 4. Later enhancements enabled systems of as large as 512 processors.
The second generation system, originally called SN-1 but later SN-MIPS, was released in July 2000, as the Origin 3000. It scaled from 4 to 512 processors, and 1,024-processor configurations were delivered by special order to some customers. A smaller, less scalable implementation followed, called Origin 300.
In November 2002, SGI announced a repackaging of its SN system, under the name Origin 3900. It quadrupled the processor area density of the SN-MIPS system, from 32 up to 128 processors per rack while moving to a "fat tree" interconnect topology.
In January 2003, SGI announced a variant of the SN platform called the Altix 3000 (internally called SN-IA). It used Intel Itanium 2 processors and ran the Linux operating system kernel. At the time it was released, it was the world's most scalable Linux-based computer, supporting up to 64 processors in a single system node.[61] Nodes could be connected using the same NUMAlink technology to form what SGI predictably termed "superclusters".
In February 2004, SGI announced general support for 128 processor nodes to be followed by 256 and 512 processor versions that year.
In April 2004, SGI announced the sale of its Alias software business for approximately $57 million.[62]
In October 2004, SGI built the supercomputer Columbia, which broke the world record for computer speed, for the NASA Ames Research Center. It was a cluster of 20 Altix supercomputers each with 512 Intel Itanium 2 processors running Linux, and achieved sustained speed of 42.7 trillion floating-point operations per second (teraflops), easily topping Japan's famed Earth Simulator's record of 35.86 teraflops. (A week later, IBM's upgraded Blue Gene/L clocked in at 70.7 teraflops.)
In July 2006, SGI announced an SGI Altix 4700 system with 1,024 processors and 4 TB of memory running a single Linux system image.[63]
Hardware products
[edit]
Some 68k- and MIPS-based models were also rebadged by other vendors, including CDC, Tandem Computers, Prime Computer and Siemens-Nixdorf. SGI Onyx and SGI Indy series systems were used for video game development for the Nintendo 64.
Motorola 68k-based systems
[edit]
IRIS 1000 series graphics terminals (diskless 1000/1200, 1400/1500 with disks)
IRIS 2000 series workstations (2000/2200/2300/2400/2500 non-Turbo and 2300T/2400T/2500T "Turbo" models)
IRIS 3000 series workstations (3010/3020/3030 and 3110/3115/3120/3130)
MIPS-based systems
[edit]
Intel IA-32-based systems
[edit]
Itanium-based systems
[edit]
SGI 750 workstation
Altix 330 entry-level server
Altix 350 mid-range server
Altix 3000 high-end server
Altix 450 mid-range server
Altix 4000 high-end server, capable of up to 2048 CPUs
Prism (deskside and rackmount systems)
Intel/AMD x86-64 systems
[edit]
Altix XE210 server
Altix XE240 server
Altix XE310 server
Altix XE1200 cluster
Altix XE1300 cluster
Altix ICE 8200
Altix ICE 8400
Virtu VN200 visualization node
Virtu VS100 workstation
Virtu VS200 workstation
Virtu VS300 workstation
Virtu VS350 workstation
FPGA-based accelerators
[edit]
RASC Application Acceleration
Storage systems
[edit]
InfiniteStorage 10000
InfiniteStorage 6700
InfiniteStorage 4600
InfiniteStorage 4500
InfiniteStorage 4000
InfiniteStorage 350
InfiniteStorage 220
InfiniteStorage 120
SGI Infinite Data Cluster[clarification needed]
Storage solutions
[edit]
InfiniteStorage NEXIS 500
InfiniteStorage NEXIS 2000
InfiniteStorage NEXIS 7000
InfiniteStorage NEXIS 7000-HA
InfiniteStorage NEXIS 9000
InfiniteStorage Server 3500
Displays
[edit]
1600SW, a multi-award-winning wide screen video monitor
Accelerator cards
[edit]
IrisVision, one of the first 3D graphics accelerators for high-end PCs
Other
[edit]
Espressigo, Espresso maker in collaboration with Gaggia
SGI timeline
[edit]
See also
[edit]
SCO and SGI
Rick Belluzzo, SGI CEO from January 1998 to August 1999
Silicon Graphics Image
References
[edit]
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https://www.flostor.com/case-studies/sgi.html
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Case Study: Silicon Graphics
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Case Study: Electronics manufacturing and assembly
| null |
Silicon Graphics increases control and maintains flexibility
To maintain high output with their increasing growth was important at Silicon Graphics but one of the requirements here was to maintain a high degree of flexibility during the automation process. Silicon Graphics produces a large variety of high-end and low-end computers. All of these had to be produced in the same system. The system also had to be able to adapt quickly to new models. It's interesting to note that prior to this the low-end and high-end units were produced in separate buildings totaling 165,000 square feet. Now the two are combined in the 100,000 sq. ft. low-end building and they are doing three times the number of boxes as before.
According to Jim Mullen at Silicon Graphics, "We used to be a very labor intensive organization and there was a lot of manual handling. One of the advantages that we came across when we decided to go with a conveyor system was reducing the amount of handling that the people actually did. This was helpful for a couple of reasons. One was that the boxes were getting heavier so we had safety concerns with the employees lifting the boxes many times. Over a period of a day they may lift 100 to 200 systems and sometimes they weigh 40 lbs. each. The other thing was we needed some type of automation because of the amount of information we had to handle. A third thing was, we knew we were going to increase our production by 3 times. Also, it's the way of the future and we wanted to go with it."
"Before the system, the boxes would come along to a certain point on the conveyor line and the people would have to physically pick it up and move it or we had a crane pick them up. Then they would go to a test station and testing. Everything was done manually. They would put it back on the line and move to the next place to do a burn-in. This could be 10 to 48 hours. Then it would come out and it would go to the quality control station. By going to the conveyor system we eliminated ever having to take the unit off the conveyor because one of the things we incorporated in this system was a special power pallet. So the unit on the pallet has its own power connector and it just snaps in every test station along the line."
"Working with our subcontractor, we had to develop solutions to the things we wanted to accomplish. One was, we wanted to get the conveyor line off the floor because of the traffic flow. Another thing was the test stations are all modular. I can take one and move it to another line. The third thing we did, was make sure that there was enough flexibility in the line itself so we could reconfigure the line anytime we wanted to. One of the reasons that we really need that and we paid a small premium for it was because the cycle of our products is really short. Marketing tells us that they want something, engineering says yes we can do it, manufacturing gets a hold of it in a very short period of time."
"When we had the old system we were maxed out at close to 100 - 150 units a day. Now we max out at about 400 units a day, between the three product lines that we have. When we add a fourth product line we feel we can still increase it. The year before we put the conveyor in our sales were about 700 million and the year just concluding sales are over one billion. The conveyor line didn't cost me that much. Very good return on investment."
Jim said that FloStor was involved from the beginning of this project and helped from concept to completion. Their previous systems, also done by FloStor, worked well and did what it was supposed to without any problems. That is why they had FloStor do this one. This project originally started with six system ideas, some being more complex and less flexible than the final result. All the ideas, however, included much conveyor. After doing some simulation, they finally agreed on the current system which uses proven technologies. The project, incidentally, was completed in less than six months with no lost production.
"We showed upper management that this was the system that we needed and they asked some very important questions like how long is it going to be here, when is it going to be obsolete, things like that. We had good answers that allowed them to let us go with it. It's been in operation for approximately one year. We bought it in phases. One line came up and we worked out the bugs. Then the second line and so on. When we got the whole system going it worked really well. We had some really good subcontractors, FloStor was one of the biggest. The control software was done by Serra Systems. We made sure the systems would run on a Silicon Graphics machine so we are not worried about the reliability of it. I really like it. It does its job well and given routine maintenance it pretty well works. Most of the problems that we've found have been operator errors and sometimes we get a little dust on the eyes. Other than that it stays running. We haven't replaced any major components. Usually it runs 16 hours a day, 5 - 6 days a week. During the end of the quarter, which is push time for us, it will run 24 hours a day, 7 days a week."
"When we installed it we just moved everything and kept producing stuff. We stayed on schedule and never shut down production. We get involved with the conveyor very very seldom. FloStor does preventative maintenance. We have guys who watch the conveyor all the time. But what they are watching for is the product, on the conveyor. The conveyor just works. We don't play with it, we don't mess with it. It's become a non-entity, it's just like the lights going on at night, it just happens. Occasionally you have to shut down the conveyor and that affects a lot of people. It's not just that they depend on it, they expect it to be up. It's our lifeblood and it concerned me at first that there wasn't a lot of extra control and double entities that I expected, but it's never been a problem. If we need to replace a part, FloStor is close so if we break it and we can't fix it we call them. We are never down for parts."
The conveyor system consists of three phases. The first is the assembly and burn-in area. Here the workstations are set up as needed for that computer. As they are completed, on a special pallet, they are transferred to the "main highway", a Hytrol SPA. From here it goes to burn-in via a vertical lift and more SPA. After burn-in it travels back to the "main highway", where final testing takes place, and up a vertical lift to the second (pack out) phase of the system. All transfers are pop-up o-ring type placed in the SPA'S. Phase 2 takes computer to the finished good packing and staging area. SP and incline belts are used here for transportation to the packaging area. A special holding area is located near the packaging area to store finished product until ready for boxing. Again we use more SPA and pop-up o-ring transfers. After boxing, the computers are placed on in a large flow rack system. Pallets are returned on another conveyor to the assembly area. In Phase 3, the packaged computers are pulled from the flow rack and placed on a take-away conveyor. This goes overhead and to a vertical lift which drops it down to a loading area where they are placed on a pallet for shipping.
Silicon Graphics is a public company that makes state-of-the-art computers used for graphics. They started in 1981 and currently employ over 4,000 people. Most manufacturing is done in Mountain View CA, with plants in Switzerland and Japan.
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https://www.presidency.ucsb.edu/documents/remarks-and-question-and-answer-session-with-silicon-graphics-employees-mountain-view
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en
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Remarks and a Question-and-Answer Session With Silicon Graphics Employees in Mountain View, California
|
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https://www.presidency.ucsb.edu/documents/remarks-and-question-and-answer-session-with-silicon-graphics-employees-mountain-view
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The President. First of all, I want to thank you all for the introduction to your wonderful company. I want to thank Ed and Ken. We saw them last night with a number of other of the executives from Silicon Valley, people, many of them with whom I've worked for a good length of time, many of whom the Vice President's known for a long time in connection with his work on supercomputing and other issues.
We came here today for two reasons, and since mostly we just want to listen to you, I'll try to state this briefly. One reason was to pick this setting to announce the implementation of the technology policy we talked about in the campaign, as an expression of what we think the National Government's role is in creating a partnership with the private sector to generate more of these kinds of companies, more technological advances to keep the United States always on the cutting edge of change and to try to make sure we'll be able to create a lot of good new jobs for the future.
The second reason—can I put that down? We're not ready yet for this. The second reason I wanted to come here is, I think the Government ought to work like you do. And before that can ever happen we have to be able to get the people, the Congress, and the press, who have to interpret all this to the people, to imagine what we're talking about.
I have, for example, the first State government in the country that started a total quality management program in all the departments of government, trying to figure out how we could reinvent the government. And I basically believe my job as President is to try to adjust America in good ways so that we can win in the 21st century, so that we can make change our friend and not our enemy.
Ed said that you plan your new products knowing they'll be obsolete within 12 to 18 months, and you want to be able to replace them. We live in an era of constant change. And America's biggest problem, if you look at it through that lens, is that for too many people change is an enemy, not a friend. I mean, one reason you're all so happy is you found a way to make change your friend, right? Diversity is a strength, not a source of division, right? Change is a way to make money, not throw people out of work, right?
If you decentralize and push decisions made down to the lowest possible level, you enable every employee to live up to the fullest of their ability. By giving them a 6-week break every 4 years, you don't force them to make these sharp divisions between your work life and your private life. It's sort of a seamless web. These are things we need to learn in America and we need to incorporate even into more traditional workplaces.
So I'd like to start—we'll talk about the technology policy later, and the Vice President, who had done so much work, will talk a lot about the details at the end of this meeting. But I just want to start by telling you that one of our missions—in order to make this whole thing work we're going to have to make the Government work differently.
Example: We cut the White House staff by 25 percent to set a standard for cutting inessential spending in the Government. But the work load of the White House is way up. We're getting all-time record telephone calls and letters coming in, and we have to serve our customers, too. Our customers are the people that put us there, and if they have to wait 3 months for an answer to a letter, that's not service.
But when we took office, I walked into the Oval Office—it's supposed to be the nerve center of the United States—and we found Jimmy Carter's telephone system. [Laughter] All right. No speaker phone, no conference calls, but anybody in the office could punch the lighted button and listen to the President talk, so that I could have the conference call I didn't want but not the one I did. [Laughter]
Then we went down into the basement where we found Lyndon Johnson's switchboard- [laughter] —true story—where there were four operators working from early morning till late at night. Literally, when a phone would come and they'd say, "I want to talk to the Vice President's office," they would pick up a little cord and push it into a little hole. [Laughter] That's today, right?
We found procedures that were so bureaucratic and cumbersome for procurement that Einstein couldn't figure them out. And all the offices were organized in little closed boxes, just the opposite of what you see.
In our campaign, however, we ran an organization in the Presidential campaign that was very much like this. Most decisions were made in a great big room in morning meetings that we had our senior staff in, but any 20-year-old volunteer who bad a good idea could walk right in and say, "Here's my idea." Some of them were very good, and we incorporated them.
And we had a man named Ellis Mottur who helped us to put together our technology policy. He was one of our senior citizens; he was in his fifties. And he said, "I've been writing about high-performance work organizations all my life. And this is the first one I've ever worked in, and it has no organizational chart. I can't figure out what it looks like on paper, but it works."
The Vice President was making fun of me when we were getting ready for the speech I gave Wednesday night to the Congress; it was like making sausage. People were running in and out saying, "Put this in, and take this out." [Laughter] But it worked. You know, it worked.
So I want to hear from you, but I want you to know that we have hired a person at the Office of Management and Budget who has done a lot of work in creating new businesses and turning businesses around, to run the management part of that. We're trying to review all these indictments that have been issued over the last several years about the way the Federal Government is rim. But I want you to know that I think a major part of my mission is to literally change the way the National Government works, spends your tax dollars, so that we can invest more and consume less and look toward the future. And that literally will require rethinking everything about the way the Government operates.
The Government operates so much to keep bad things from happening that there's very little energy left in some places to make good things happen. If you spend all your time trying to make sure nothing bad happens, there's very little time and money and human energy left to make good things happen. We're going to try to pare away a lot of that bureaucracy and speed up the decision-making process and modernize it. And I know a lot of you can help. Technology is a part of that, but so is organization and empowerment, which is something you've taught us again today. And I thank you very much.
We want to do a question and answer now, and then the Vice President is going to talk in more detail about our technology policy later. But that's what we and Ed agreed to do. He's my boss today; I'm doing what be — [laughter]. So I wonder if any of you have a question you want to ask us or a comment you want to make. Yes, go ahead.
Export Control Policy
Q. Now that Silicon Graphics has entered the supercomputer arena, supercomputers are subject to very stringent and costly export controls. Is part of your agenda to review the export control system, and can industry count on export regulations that will keep pace with technology advances in our changing world?
The Vice President. Let me start off on that. As you may know, the President appointed as the Deputy Secretary of Commerce John Rollwagen, who was the CEO at Cray. And he and Ron Brown, the Secretary of Commerce, have been reviewing a lot of procedures for stimulating U.S. exports around the world. And we're going to be a very export-oriented administration. However, we are also going to keep a close eye on the legitimate concerns that have in the past limited the free export of some technologies that can make a dramatic difference in the ability of a Qadhafi or a Saddam Hussein to develop nuclear weapons or ICBM's.
Now, in some cases in the past, these legitimate concerns have been interpreted and implemented in a way that has frustrated American business unnecessarily. There are, for example, some software packages that are available off the shelf in stores here that are nevertheless prohibited from being exported. And sometimes that's a little bit unrealistic. On the other hand, there are some in business who are understandably so anxious to find new customers that they will not necessarily pay as much attention as they should to what the customer might use this new capacity for. And that's a legitimate role for Government, to say, hold on, the world will be a much more dangerous place if we have 15 or 20 nuclear powers instead of 5 or 6, and if they have ICBM's and so forth.
So it's a balance that has to be struck very carefully. And we're going to have a tough nonproliferation strategy while we promote more exports.
The President. If I might just add to that, the short answer to your question, of course, is yes, we're going to review this. And let me give you one example: Ken told me last night at dinner, he said, "If we export substantially the same product to the same person, if we have to get one permit to do it, we'll have to get a permit every time we want to do the same thing, over and over again. They always give it to us, but we have to wait 6 months, and it puts us behind the competitive arc." Now, that's something that ought to be changed, and we'll try to change that.
We also know that some of our export controls, rules and regulations, are a function of the realities of the cold war which aren't there anymore. But what the Vice President was trying to say, and he said so well—I just want to reemphasize—our biggest security problem in the future may well be the proliferation of nuclear and nonnuclear, like biological and chemical, weapons of mass destruction to small, by our standards, countries with militant governments who may not care what the damage to their own people could be. So that's something we have to watch very closely.
But apart from that, we want to move this much more quickly, and we'll try to slash a lot of the time delays where we ought to be doing these things.
Scientific Visualization
Q. Mr. President, Mr. Vice President, you've seen scientific visualization in practice here. As a company we're also very interested in ongoing research in high-performance computing and scientific visualization. Can we expect to see a change in the national scientific agenda that includes scientific visualization? Right now I don't see the scientific visualization as being represented, for example, on the FCCSET committee.
The Vice President. It is a good question. One of the people who flew out here with us for this event and for the release of the technology policy in just a few minutes is Dr. Jack Gibbons, who is in the back of the room, the President's science adviser and head of the Office of Science and Technology Policy. And he will be in charge of the FCCSET process. That's an acronym that—what does it stand for, Jack—the Federal Coordinating Council on Science and Engin—what is it?
Jack Gibbons. Federal Coordinating Council for Science, Engineering, and Technology.
The Vice President. Right. And visualization will play a key role in the deliberations of the FCCSET.
We were actually, believe it or not, talking about this a little bit with Dr. Gibbons on the way over here. I had hearings one time where a scientist used sort of technical terms that he then explained. It made an impression on me. He said, "If you tried to describe the human mind in terms applicable to a computer, you'd say we have a low bit rate but high resolution." Meaning—this is one of the few audiences I can use that line with. [Laughter]
But he went on to explain what that means. When we try to absorb information bit by bit, we don't have a huge capacity to do it. That's why the telephone company, after extensive studies, decided that seven numbers were the most that we could keep in short-term memory. And then they added three more. [Laughter] But if we can see lots of information portrayed visually in a pattern or mosaic, where each bit of data relates to all of the others, we can instantly absorb a lot of information. We can all recognize the Milky Way, for example, even though there are trillions of points of light, stars, and so forth.
And so the idea of incorporating visualization as a key component of this strategy is one that we recognize as very important, and we're going to pursue it.
The President. Let me just add one thing to that. First of all, I told the crowd last night that the Vice President was the only person ever to hold national office in America who knew what the gestalt of the gigabit is. [Laughter] But anyway—and now we're going to get some very funny articles out of this. They're going to make time of us for being policy wonks. [Laughter]
Let me say something to sort of take this one step further. This whole visualization movement that you have been a part of in your line of work is going to merge in a very short time with the whole business in traditional education theory called applied academics. We're now finding, with just sort of basic computer work in the elementary schools of our country, dramatic differences in learning curves among people who can see the work they're doing as opposed to people who are supposed to read it. And we're now finding that the IQ's of young people who might take a vocational track in school may not be all that different from kids that would stay in a traditional academic track and wind up at Stanford, but their learning patterns are dramatically different. And there are some people—this is a huge new discovery, basically, that's coming into the whole business of traditional educational theory.
So someday what you're doing here will revolutionize the basic teaching in our schools, starting at kindergarten and going forward, so that the world of work and the world of education will begin to be merged backwards all the way to the beginning. And it's going to be, I think, the most important thing we've ever done and very important for proving that in a diverse population all people can reach very high levels of achievement.
Ed McCracken. The President and Vice President have also come here today to present a new national technology policy for the country. Do you want to—
The President. We'll answer some more questions. I'm going to forego my time and just let him announce the policy, so we can hear some more questions. Got to give the man equal time, I know. [Laughter]
Economic Program
Q. I'd just like to say, I didn't vote for you; I wish I had. [Laughter]
The President. I hope you feel that way 4 years from now. [Laughter]
Q. Well, that's actually why I'm standing up. I really see a possibility in what you stand for, and I really think this is why you were elected, that you say you stand for change. You said that during your campaign. I think the company believed that. They're counting on you—I'm nervous—and I just want to say we're really, as a country, behind you. I think that's why the statistics are saying that we're willing to have our taxes increased; we're willing to have cuts, because you say you're really going to do it this time and decrease the deficit. I hope to God that you do. We need it not just for this present time, but by your actually fulfilling on this it will make a major change in how we feel about Government; that when Government says they're going to make a difference and they really come through, it will make a huge impact for the future. And I'm really personally behind you all the way. I wish I'd voted for you.
The President. Thank you. I really appreciate that. Let me make one comment in response, if I might. I think it's important, and you can help others understand this, to understand why we have to reduce the deficit, which is something that is normally not done when unemployment is high. And unemployment is still too high. Even though we're in an economic recovery, most of our recovery is due to higher productivity from firms that, in turn, this time are not hiring new people for all kinds of reasons.
And we have to reduce the deficit for two reasons: Number one, we're already spending 15 percent of your tax money just to pay interest on past debt. If we don't change present patterns, we'll be over 20 cents by the year 2000. That's money we should be spending on education and technology in the future.
Number two, the more money we take out of the pool of funds for borrowing, the more expensive it is for companies like this and other companies that have to go into the markets and borrow to borrow. Just since the election, since we made it clear we were going to try to bring the deficit down, long-term interest rates have dropped seven-tenths of one percent. That is a huge savings for everybody that is going to borrow money or that has a variable interest rate on a loan, whether it's a home mortgage or a business loan or a car loan or whatever. That's important.
The second thing we're trying to do that I know you will also appreciate is to shift the balance of the money we do spend more away from consumption toward investment, investments in education, technology, environmental cleanup, and converting from a defense to a domestic economy. One of the bizarre things that happened to us in the eighties is that we increased the deficit first through defense expenses and then through exploding health care costs and increasing interest payments. But we reduced our investments in the future and the things that make us richer.
So those are the changes we're trying to effect. Let me just make one other point. I will not support raising anybody's taxes unless budget cuts also pass.
Foreign Trade
Q. One of the things that Silicon Graphics has been really successful in is selling into the international markets. Approximately 50 percent of our revenues come internationally, including a substantial market in Japan. What types of programs does your administration plan to help the high-growth companies of the nineties sell to the international markets?
The President. Two things. First of all, we intend to try to open new markets and new markets in our region. That is, to keep America growing, I believe high-growth companies are going to have to sell south of the border more. And to do that we have to negotiate trade agreements that will help to raise incomes in those countries even as we are growing. That's why I support, with some extra agreements, the NAFTA agreement and why I hope we can have an agreement with Chile and hope we can have an agreement with other countries like Argentina that are making a serious effort to build market economies: because we want to build new markets for all of you.
With Japan, I think what we have to do is to try to continue to help more companies figure out how to do business there and keep pushing them to open their markets. I don't want to close American markets to Japanese products, but it is the only nation with which we have a persistent and unchanging structural deficit. The product deficit with Japan is not $43 billion, which is our overall trade deficit, it is actually about $60 billion in product, in manufactured production. So we've got a lot of problems we have to work out there.
With Europe, we sometimes are in surplus; we're sometimes in deficit. But it's a floating thing, so it's more or less in balance. With developing nations like Taiwan and Korea, those countries had big surpluses with us, but as they became richer they brought them down, so that we're more or less in balance. We have our biggest trade relationship with Canada, and we're more or less in balance.
So we have to work on this Japanese issue while trying to help more of you get involved. Let me make one final comment on that. I think we should devote more Government resources to helping small and medium-size companies figure out how to trade, because that's what the Germans do with such great success and why they're one of the great exporters of the world. They don't waste a lot of money on the real big companies that have already figured it out, but they have extra efforts for small and medium-size companies to get them to think global from the beginning of their endeavors. And I think we're going to have to do more of that.
The Environment
Q. In addition to concerns about the economy, Silicon Graphics employees are also concerned about the environment. Your economic plan does a great job of promoting R&D investment. Are there any elements that are specifically targeted to promote the application of Silicon Graphics technology to environmental-friendly initiatives such as the electric car or the mag-lev train?
The President. I think I should let the Vice President answer that since it's his consuming passion. And if I do it, his book sales will go up again. [Laughter]
We devoted a lot of time and attention to that for two reasons. One is the environment needs it. Secondly, we think it's wonderful economics, because I believe that all these environmental opportunities that are out there for us represent a major chunk of what people who used to be involved in defense technologies could be doing in the future if we're going to maintain a high wage base in America.
So I'd like for the Vice President to talk a little about the specifics that we're working on.
The Vice President. That goal is integrated into the technology plan as one of our key objectives. The Japanese and the Germans are now openly saying that the biggest new market in the history of world business is the market for the new products, technologies, and processes that foster economic progress without environmental destruction.
Some have compared the drive for environmental efficiency to the movement for quality control and the quality revolution in the sixties and seventies. At that time, you know, many companies in the United States felt that the existing level of product quality was more or less ordained by the forces of supply and demand and it couldn't be improved without taking it out of the bottom line. But the Japanese, taking us innovations from Dr. Deming and others, began to introduce a new theory of product quality and simultaneously improved quality, profits, wages, and productivity.
The environmental challenge now presents us with the same opportunity. By introducing new attention to environmental efficiency at every step along the way, we can simultaneously reduce the impact of all our processes on the environment, improve environmental efficiency, and improve productivity at the same time. We need to set clear, specific goals in the technology policy, in the economic plan.
And you know, both the stimulus package and the investment package focus a great deal on environmental cleanup and environmental innovation. And whereas we've talked a lot about roads and bridges in the past, and they're a big part of this plan also, we're putting relatively more emphasis as well on water lines and sewer lines and water treatment plants and renovating the facilities in the national parks and cleaning up trails, taking kids from inner cities and putting them to work cleaning up trails in national parks, for example, as part of the summer jobs program.
So you'll find when you look at both the technology plan and the economic plan an enormous emphasis on the environment.
The President. Go ahead, sir. They say we have to quit in a minute. I'll take one more question after this.
The Economy
Q. Mr. President, Mr. Vice President, the news stories and articles that the public has access to regarding the budget and the economy are very often confusing and contradictory. I might explain it in the same terms that you used: The information is delivered low bit rate, but the problem is huge and requires the highres view. So my question is: I wonder if you're using Lyndon Johnson's computer to analyze the budget and the economy, or whether or not you might be open to using some of the things you've seen here to get the bigger picture and also communicate that to us?
The President. Thank you. There are two things I'd like to respond to on that, and I'd like to invite you to help. [Laughter] I'd like to invite you to help, and I'd like to invite you to help on two grounds: One is the simple ground of helping to decide which visual images best capture the reality of where we are and where we're going.
Senator Moynihan and I went to Franklin Roosevelt's home in Hyde Park, New York, just a couple of days ago. You may have seen the press on it. And on the way back he said to me that the challenges that we face are different from those that Roosevelt faced but just as profound. Unemployment was higher and America was more devastated when he took office, he said, but everybody knew what the problem was. Therefore, he bad a lot of leeway working with the Congress in the beginning to work toward a solution. Now, he said, we are facing severe challenges to a century of economic leadership, and it's not clear to every American exactly what the dimensions of the problem are. The capacity you have to help me help the American people conceptualize this is quite significant: showing the trends in the deficit, showing the trends in the investment, showing how the money is spent now and bow we propose to spend it.
The second big problem we have you can see if you look at the front page of USA Today today, which shows a traditional analysis, yesterday's analysis—of the business section—of the economic program. It basically says, "Oh, it will bring unemployment down a little and it will increase economic growth a little if we do this, but not all that much." Now, why is that? That's because traditional economic analysis says that the only way the Government can ever help the economy grow is by spending more money and taxing less. In other words, traditional Keynesian economies: Run a bigger deficit. But we can't do that. The deficit's already so big, I can't run the risk to the long-term stability of this country by going in and doing that.
This analysis doesn't really make a distinction between investment and consumption, doesn't take any account of what we might do with a technology policy or a trade policy to make the economy grow faster, has no way of factoring in what other good things could happen in the private market if you brought long-term interest rates down through the deficit. So you could also help us to reconceptualize this. A lot of the models that dominate policy-making are yesterday's models, too.
I'll give you just one example. The Japanese had a deficit about as big as ours, and they were increasing spending at 19 percent a year, government spending, back in the early seventies when the oil prices went way up and they were more energy-dependent than we were on foreign oil. And they just decided they had to change it, but they couldn't stop investing. So they had a budget which drew a big distinction, a literal distinction, legal distinction, between investment and consumption, and they embarked on a 10 or 11 year effort to bring the budget into balance. And during that time they increased investment and lowered unemployment and increased growth through the right kind of spending and investment.
And I want to lead in, if I might, and ask the Vice President before we go to give you some of the specifics of this technology policy, by making one more pitch to you about this whole economic plan. This plan has 150 specific budget cuts. And I'm welcome to more. I told the Republican leadership if they had more budget cuts that didn't compromise our economy, if they helped us, I would be glad to embrace them. I'm not hung up about that. But I did pretty good in 4 weeks to find 150, and I'll try to find some more on my own.
It also has the revenue increases that you know about. It also bas some spending increases, and there will be debate about that. There will be people who say, "Well, just don't spend this new money. Don't immunize all the kids. Don't fully fund Head Start. Don't pay for this technology policy. Don't invest in all these environmental cleanup things, and that way you won't have to raise taxes so much."
The problem is, if you look at the historic spending trends, we are too low on investment and too high on the deficit, and both are problems. And secondly, we've got to have some of these economic cooperations in order to move the economy forward.
So I want you to listen to what the Vice President says in that context. Because what you will hear is, we don't need to do what we think we should do in this area. If we don't, I think we'll be out of competition. People like you will do fine because you've got a good company here, but the country as a whole will fall behind. And you can help on both those points.
So would you proceed?
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The story of Silicon Valley – How it began, how it boomed, and where it’s headed
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The recent passing of Intel co-founder and semiconductor pioneer Gordon Moore has brought Silicon Valley back into the news cycle. Moore was instrumental in the development of the US tech industry and helped establish Silicon Valley as a hub of IT innovation. We explore the fascinating history of Silicon Valley and look at where this high-tech hotspot might be headed in the future.
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Power & Beyond
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https://www.power-and-beyond.com/the-story-of-silicon-valley-how-it-began-how-it-boomed-and-where-its-headed-a-9836fd8f0adf6d3535810e709d99fec3/
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SEMICONDUCTOR HISTORY The story of Silicon Valley – How it began, how it boomed, and where it’s headed
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The recent passing of Intel co-founder and semiconductor pioneer Gordon Moore has brought Silicon Valley back into the news cycle. Moore was instrumental in the development of the US tech industry and helped establish Silicon Valley as a hub of IT innovation. We explore the fascinating history of Silicon Valley and look at where this high-tech hotspot might be headed in the future.
Gordon Moore, one of the major pioneers of the semiconductor and IT industry recently passed away. On March 24th, 2023, Moore died peacefully at the age of 94 at his home in Hawaii. Moore was perhaps most well-known for starting Intel in 1968 alongside Robert Noyce and serving as executive vice president and CEO for almost two decades. However, Gordon Moore was also a key figure in the development of semiconductor technology and played a major role in the establishment of Silicon Valley as a hub for innovation in the US.
Today, Silicon Valley is home to more than 30 multinational companies that regularly appear in the Forbes Fortune 1000 list. 85 billionaires live in Silicon Valley as do an estimated 163,000 millionaires. Homebase to world-leading IT giants and thousands of IT start-ups, the very words Silicon Valley are synonymous with cutting-edge high-tech. But how did this once-unassuming part of the San Francisco Bay Area become one of the focal points of the modern digital age?
The early years of Silicon Valley
The area that we now know as Silicon Valley is part of the Santa Clara Valley situated just southeast of San Francisco in Northern California. Up until the 1890s, the Santa Clara Valley was renowned for its fruit orchards, producing mostly cherries, pears, apricots, and French plums. The plums were harvested, dried, and processed into prunes, and then exported. In fact, the Santa Clara Valley was once responsible for 30 % of the world’s prune supply.
The bucolic atmosphere of the Santa Clara Valley didn’t last long into the 20th century, however. Railway tycoon Leland Stanford lived in Santa Clara Valley and founded Stanford University there in 1891. Despite a shaky start, Stanford University shot to prominence in 1909 when then university president David Starr Jordan invested in the development of the audion tube by Lee de Forrest. de Forrest’s invention was a vacuum tube that could amplify a weak electric signal. It heralded the start of a revolution in electrical products and was used in a huge variety of goods, from telephone services to radios to adding machines. The seeds of Silicon Valley had been planted.
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Many historians attribute the start of the growth of Silicon Valley to another prominent Stanford University figure, Frederick Terman. After a decade of turning the electrical engineering department of Stanford into a world-class research facility, Terman became frustrated upon seeing students leave the Santa Clara Valley area as soon as they had graduated. To encourage graduates to stay in the Valley, Terman invested heavily in businesses that would base themselves in the area and employ talented young people. One such business was the original start-up, an electrical company started in a garage by Stanford alumni William Hewlett and David Packard, Hewlett-Packard.
By the 1940s, the Santa Clara Valley was home to many engineering and aerospace companies that provided crucial wartime services making radios, radars, and electrical equipment for the US government. Although the roots were starting to take hold, Silicon Valley wouldn’t flourish in its own right until the 1950s with the establishment of an industrial park and the arrival of one unique electrical engineering company.
INTERNATIONAL WOMEN'S DAY
These four women have revolutionized electrical and electronics engineering
The arrival of Shockley Semiconductor and the birth of Silicon Valley
In 1951, Frederick Terman again proved himself to be a visionary when he established the Stanford Industrial Park. The Park was a collaboration between Stanford University and the City of Palo Alto. With 660 acres dedicated to research labs, offices, and manufacturing facilities, the Stanford Industrial Park was truly the start of Silicon Valley as we now know it.
The beginning of Silicon Valley as an epicenter of innovation began in 1955 with the arrival of the Shockley Semiconductors Laboratory. Founder William Shockley was one of the inventors of the point-contact transistor in the Bell Laboratory operated by AT&T. Shockley, however, was not named in the patent. Famed for his hot temper, Shockley resented this so much that he left AT&T and formed his own company, Shockley Semiconductors Laboratory.
Shockley Semiconductors Laboratory made its base in Mountain View in the Santa Clara Valley. Shockley set about recruiting the most talented engineers he could find. Among them were two exceptionally gifted young men, Gordon Moore and Robert Noyce. Shockley’s volatile temper made him incredibly difficult to work with. A group of engineers including Moore and Noyce disagreed with Shockley about what type of material to make semiconductors out of. The group advocated for the more heat-resistant silicon, while Shockley was adamant that germanium was the better choice. Eight of Shockley’s team, known as the Traitorous Eight, left the company in 1957 and formed Fairchild Semiconductor.
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A year later, Noyce and his team would invent the integrated circuit (IC), which was also independently developed at the same time by Texas Instrument's Jack Kilby. The integrated circuit was perhaps the most important technological invention of our times and marked the dawn of the digital era. Silicon Valley was born and along with it the age of modern computing.
BASIC KNOWLEDGE
A detailed study of intrinsic vs extrinsic semiconductors
The space race and the rise of the US tech industry
The late 1950s saw the US and the then USSR engaged in a heated race to see who could first develop the technology to put a human being on the moon. In a humiliating defeat for America, the USSR took an early lead in the space race with the launch of the Sputnik satellite. This prompted President Eisenhower to create both the National Aeronautics and Space Administration (NASA) and the Advanced Research Projects Agency (DARPA).
These two departments were dedicated to developing new technologies, whatever the cost. Any company that could prove itself worthy would be granted almost unlimited funding. In the early 1960s, DARPA was funding more than 70 % of all computer technology research in the US. Many of the newly established firms in Silicon Valley jumped at the chance and soon the area was the center for the development of the US ballistic missile program, as well as technology used in military satellites, tracking systems, and microelectronics for advanced weapons systems.
Fairchild Semiconductor was one of the companies that leveraged these military contracts to transform itself from a small electrical engineering company into a tech giant. Around this time Moore famously came up with what is now known as Moore’s Law, the theory that the number of transistors on an integrated circuit would double every two years.
SEMICONDUCTORS
The power of Taiwan's chip industry
Silicon Valley becomes the epicenter of US tech innovation
During the 1960s, Silicon Valley came into its own. The cold war and the space race created an increased demand for integrated circuits. The Apollo program saw NASA sourcing an estimated 60 % of all its integrated circuits from the Santa Clara Valley area. In 1964 alone, NASA purchased 100,000 integrated circuits from Fairchild Semiconductor. One-fifth of all military contracts and 44 % of NASA contracts went to companies based in the Santa Clara Valley. By 1965, the Stanford Industrial Park was home to 40 companies employing more than 11,400 people.
The end of the Sixties saw two milestones in computing history: In 1969, Stanford University established one of the four nodes used in the ARPAnet. The ARPAnet was an experimental computer network program funded by DARPA and formed the basis of what we now know as the Internet.
Another revolutionary point was reached in 1968 when Robert Noyce and Gordon Moore left Fairchild Semiconductor to form Intel. Within three years Intel would produce the world’s first microprocessors, heralding an explosion of advances in technology that has continued unabated for more than 40 years.
The term Silicon Valley was coined by journalist Don Hoefler in a 1971 article for the trade magazine Electronic News. Soon after, Silicon Valley became the accepted name for the Santa Clara Valley area.
WEB CONFERENCE: ULTRA POWER DENSITY WITH GaN SWITCHES
High performance GaN devices for high volume applications
Silicon Valley during the boom and bust years
The availability of easy, relatively risk-free funding from the US government and military spurred innovation and a new way of approaching business in Silicon Valley. In addition to the influx of government funds, two venture capital firms were founded in Silicon Valley in 1972: Kleiner Perkins and Sequoia Capital. These companies are still major venture capital firms today.
During the 1970s and the 1980s, IT giants were created in Silicon Valley. This list includes icons such as Apple and Microsoft as well as Atari, Oracle, Adobe, Sun Microsystems, and Cisco. The 1981 IPO of Apple generated US$1.3 billion and spurred a massive influx of venture capital. Now, Silicon Valley has more venture capital companies than anywhere else on the globe.
Silicon Valley’s success and the frantic pace of technological advancement that it brought about also caused concern. For a period in the mid-80s, the area was referred to as the Valley of Death, a reference to the fear that robotics and computers were going to replace the need for human workers.
Throughout the 1980s Silicon Valley had become incredibly prosperous and the wild success continued into the 1990s. The advent of the Internet age was slow to catch on initially, but by the mid-1990s the dot-com era had arrived, and investors went on a feeding frenzy. The reckless spending reached a climax in 2000 when the dot-com crash wiped out US$1.755 trillion worth of value in the stocks of internet companies.
While some analysts speculate that Silicon Valley has never fully recovered from the dot-com crash, the investment mania did help to produce many of the technologies that form the backbone of the modern world wide web.
SEMICONDUCTOR MANUFACTURER
10 top semiconductor companies – and activities that define them
Watch the entire history of silicon valley:
Silicon Valley – How it is now, and what the future might hold
Are the dizzying heights of Silicon Valley’s golden era over? Certainly, the wild days of Silicon Valley’s boom years are gone. The IT sector is now struggling with increased inflation, a lack of trust in tech firms, and the aftermath of the COVID-19 pandemic.
Although the pandemic saw an increase in the demand for tech services, the rise of remote working caused many IT professionals to move away from the Santa Clara Valley. It’s not hard to see why living in Silicon Valley is difficult for anyone not making six-figure salaries. The wealth gap in Silicon Valley is higher than anywhere else in the US and housing affordability is a major concern for low-level workers across all sectors.
Inflation has slowed investment significantly. Many leading tech companies have cut staff and frozen new hires. The recent disastrous collapse of the 40-year-old Silicon Valley Bank and the refusal of a government bailout could hamper the development of start-up firms in the area in the medium- to long term.
The dramatic collapse of hyped tech unicorns such as WeWork and Theranos, the crisis in cryptocurrency markets, and chaotic management at major tech firms like Meta and Twitter have caused investors and the public to lose faith in IT companies. The release of the generative AI software ChatGPT has been criticized as premature and caused speculation that it will overload the internet with fake content, disrupt industries, and wipe out millions of jobs, spurring renewed distrust in Big Tech firms and reintroducing the concept of a Silicon Valley as Death Valley.
Will Silicon Valley survive as a center of innovation? Analysts argue that no other place on the planet has such a culture of entrepreneurism and innovation. While Silicon Valley may be at the end of a boom cycle, it certainly is not completely bust yet. Professor Margaret O’Mara author of ‘The Code: Silicon Valley and the Remaking of America’ was quoted in the Guardian newspaper as saying, “It may be the end of an era for Silicon Valley, but it is unlikely to be the end of Silicon Valley.”
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Remarks and a Question-and-Answer Session With Silicon Graphics Employees in Mountain View, California
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https://www.presidency.ucsb.edu/documents/remarks-and-question-and-answer-session-with-silicon-graphics-employees-mountain-view
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The President. First of all, I want to thank you all for the introduction to your wonderful company. I want to thank Ed and Ken. We saw them last night with a number of other of the executives from Silicon Valley, people, many of them with whom I've worked for a good length of time, many of whom the Vice President's known for a long time in connection with his work on supercomputing and other issues.
We came here today for two reasons, and since mostly we just want to listen to you, I'll try to state this briefly. One reason was to pick this setting to announce the implementation of the technology policy we talked about in the campaign, as an expression of what we think the National Government's role is in creating a partnership with the private sector to generate more of these kinds of companies, more technological advances to keep the United States always on the cutting edge of change and to try to make sure we'll be able to create a lot of good new jobs for the future.
The second reason—can I put that down? We're not ready yet for this. The second reason I wanted to come here is, I think the Government ought to work like you do. And before that can ever happen we have to be able to get the people, the Congress, and the press, who have to interpret all this to the people, to imagine what we're talking about.
I have, for example, the first State government in the country that started a total quality management program in all the departments of government, trying to figure out how we could reinvent the government. And I basically believe my job as President is to try to adjust America in good ways so that we can win in the 21st century, so that we can make change our friend and not our enemy.
Ed said that you plan your new products knowing they'll be obsolete within 12 to 18 months, and you want to be able to replace them. We live in an era of constant change. And America's biggest problem, if you look at it through that lens, is that for too many people change is an enemy, not a friend. I mean, one reason you're all so happy is you found a way to make change your friend, right? Diversity is a strength, not a source of division, right? Change is a way to make money, not throw people out of work, right?
If you decentralize and push decisions made down to the lowest possible level, you enable every employee to live up to the fullest of their ability. By giving them a 6-week break every 4 years, you don't force them to make these sharp divisions between your work life and your private life. It's sort of a seamless web. These are things we need to learn in America and we need to incorporate even into more traditional workplaces.
So I'd like to start—we'll talk about the technology policy later, and the Vice President, who had done so much work, will talk a lot about the details at the end of this meeting. But I just want to start by telling you that one of our missions—in order to make this whole thing work we're going to have to make the Government work differently.
Example: We cut the White House staff by 25 percent to set a standard for cutting inessential spending in the Government. But the work load of the White House is way up. We're getting all-time record telephone calls and letters coming in, and we have to serve our customers, too. Our customers are the people that put us there, and if they have to wait 3 months for an answer to a letter, that's not service.
But when we took office, I walked into the Oval Office—it's supposed to be the nerve center of the United States—and we found Jimmy Carter's telephone system. [Laughter] All right. No speaker phone, no conference calls, but anybody in the office could punch the lighted button and listen to the President talk, so that I could have the conference call I didn't want but not the one I did. [Laughter]
Then we went down into the basement where we found Lyndon Johnson's switchboard- [laughter] —true story—where there were four operators working from early morning till late at night. Literally, when a phone would come and they'd say, "I want to talk to the Vice President's office," they would pick up a little cord and push it into a little hole. [Laughter] That's today, right?
We found procedures that were so bureaucratic and cumbersome for procurement that Einstein couldn't figure them out. And all the offices were organized in little closed boxes, just the opposite of what you see.
In our campaign, however, we ran an organization in the Presidential campaign that was very much like this. Most decisions were made in a great big room in morning meetings that we had our senior staff in, but any 20-year-old volunteer who bad a good idea could walk right in and say, "Here's my idea." Some of them were very good, and we incorporated them.
And we had a man named Ellis Mottur who helped us to put together our technology policy. He was one of our senior citizens; he was in his fifties. And he said, "I've been writing about high-performance work organizations all my life. And this is the first one I've ever worked in, and it has no organizational chart. I can't figure out what it looks like on paper, but it works."
The Vice President was making fun of me when we were getting ready for the speech I gave Wednesday night to the Congress; it was like making sausage. People were running in and out saying, "Put this in, and take this out." [Laughter] But it worked. You know, it worked.
So I want to hear from you, but I want you to know that we have hired a person at the Office of Management and Budget who has done a lot of work in creating new businesses and turning businesses around, to run the management part of that. We're trying to review all these indictments that have been issued over the last several years about the way the Federal Government is rim. But I want you to know that I think a major part of my mission is to literally change the way the National Government works, spends your tax dollars, so that we can invest more and consume less and look toward the future. And that literally will require rethinking everything about the way the Government operates.
The Government operates so much to keep bad things from happening that there's very little energy left in some places to make good things happen. If you spend all your time trying to make sure nothing bad happens, there's very little time and money and human energy left to make good things happen. We're going to try to pare away a lot of that bureaucracy and speed up the decision-making process and modernize it. And I know a lot of you can help. Technology is a part of that, but so is organization and empowerment, which is something you've taught us again today. And I thank you very much.
We want to do a question and answer now, and then the Vice President is going to talk in more detail about our technology policy later. But that's what we and Ed agreed to do. He's my boss today; I'm doing what be — [laughter]. So I wonder if any of you have a question you want to ask us or a comment you want to make. Yes, go ahead.
Export Control Policy
Q. Now that Silicon Graphics has entered the supercomputer arena, supercomputers are subject to very stringent and costly export controls. Is part of your agenda to review the export control system, and can industry count on export regulations that will keep pace with technology advances in our changing world?
The Vice President. Let me start off on that. As you may know, the President appointed as the Deputy Secretary of Commerce John Rollwagen, who was the CEO at Cray. And he and Ron Brown, the Secretary of Commerce, have been reviewing a lot of procedures for stimulating U.S. exports around the world. And we're going to be a very export-oriented administration. However, we are also going to keep a close eye on the legitimate concerns that have in the past limited the free export of some technologies that can make a dramatic difference in the ability of a Qadhafi or a Saddam Hussein to develop nuclear weapons or ICBM's.
Now, in some cases in the past, these legitimate concerns have been interpreted and implemented in a way that has frustrated American business unnecessarily. There are, for example, some software packages that are available off the shelf in stores here that are nevertheless prohibited from being exported. And sometimes that's a little bit unrealistic. On the other hand, there are some in business who are understandably so anxious to find new customers that they will not necessarily pay as much attention as they should to what the customer might use this new capacity for. And that's a legitimate role for Government, to say, hold on, the world will be a much more dangerous place if we have 15 or 20 nuclear powers instead of 5 or 6, and if they have ICBM's and so forth.
So it's a balance that has to be struck very carefully. And we're going to have a tough nonproliferation strategy while we promote more exports.
The President. If I might just add to that, the short answer to your question, of course, is yes, we're going to review this. And let me give you one example: Ken told me last night at dinner, he said, "If we export substantially the same product to the same person, if we have to get one permit to do it, we'll have to get a permit every time we want to do the same thing, over and over again. They always give it to us, but we have to wait 6 months, and it puts us behind the competitive arc." Now, that's something that ought to be changed, and we'll try to change that.
We also know that some of our export controls, rules and regulations, are a function of the realities of the cold war which aren't there anymore. But what the Vice President was trying to say, and he said so well—I just want to reemphasize—our biggest security problem in the future may well be the proliferation of nuclear and nonnuclear, like biological and chemical, weapons of mass destruction to small, by our standards, countries with militant governments who may not care what the damage to their own people could be. So that's something we have to watch very closely.
But apart from that, we want to move this much more quickly, and we'll try to slash a lot of the time delays where we ought to be doing these things.
Scientific Visualization
Q. Mr. President, Mr. Vice President, you've seen scientific visualization in practice here. As a company we're also very interested in ongoing research in high-performance computing and scientific visualization. Can we expect to see a change in the national scientific agenda that includes scientific visualization? Right now I don't see the scientific visualization as being represented, for example, on the FCCSET committee.
The Vice President. It is a good question. One of the people who flew out here with us for this event and for the release of the technology policy in just a few minutes is Dr. Jack Gibbons, who is in the back of the room, the President's science adviser and head of the Office of Science and Technology Policy. And he will be in charge of the FCCSET process. That's an acronym that—what does it stand for, Jack—the Federal Coordinating Council on Science and Engin—what is it?
Jack Gibbons. Federal Coordinating Council for Science, Engineering, and Technology.
The Vice President. Right. And visualization will play a key role in the deliberations of the FCCSET.
We were actually, believe it or not, talking about this a little bit with Dr. Gibbons on the way over here. I had hearings one time where a scientist used sort of technical terms that he then explained. It made an impression on me. He said, "If you tried to describe the human mind in terms applicable to a computer, you'd say we have a low bit rate but high resolution." Meaning—this is one of the few audiences I can use that line with. [Laughter]
But he went on to explain what that means. When we try to absorb information bit by bit, we don't have a huge capacity to do it. That's why the telephone company, after extensive studies, decided that seven numbers were the most that we could keep in short-term memory. And then they added three more. [Laughter] But if we can see lots of information portrayed visually in a pattern or mosaic, where each bit of data relates to all of the others, we can instantly absorb a lot of information. We can all recognize the Milky Way, for example, even though there are trillions of points of light, stars, and so forth.
And so the idea of incorporating visualization as a key component of this strategy is one that we recognize as very important, and we're going to pursue it.
The President. Let me just add one thing to that. First of all, I told the crowd last night that the Vice President was the only person ever to hold national office in America who knew what the gestalt of the gigabit is. [Laughter] But anyway—and now we're going to get some very funny articles out of this. They're going to make time of us for being policy wonks. [Laughter]
Let me say something to sort of take this one step further. This whole visualization movement that you have been a part of in your line of work is going to merge in a very short time with the whole business in traditional education theory called applied academics. We're now finding, with just sort of basic computer work in the elementary schools of our country, dramatic differences in learning curves among people who can see the work they're doing as opposed to people who are supposed to read it. And we're now finding that the IQ's of young people who might take a vocational track in school may not be all that different from kids that would stay in a traditional academic track and wind up at Stanford, but their learning patterns are dramatically different. And there are some people—this is a huge new discovery, basically, that's coming into the whole business of traditional educational theory.
So someday what you're doing here will revolutionize the basic teaching in our schools, starting at kindergarten and going forward, so that the world of work and the world of education will begin to be merged backwards all the way to the beginning. And it's going to be, I think, the most important thing we've ever done and very important for proving that in a diverse population all people can reach very high levels of achievement.
Ed McCracken. The President and Vice President have also come here today to present a new national technology policy for the country. Do you want to—
The President. We'll answer some more questions. I'm going to forego my time and just let him announce the policy, so we can hear some more questions. Got to give the man equal time, I know. [Laughter]
Economic Program
Q. I'd just like to say, I didn't vote for you; I wish I had. [Laughter]
The President. I hope you feel that way 4 years from now. [Laughter]
Q. Well, that's actually why I'm standing up. I really see a possibility in what you stand for, and I really think this is why you were elected, that you say you stand for change. You said that during your campaign. I think the company believed that. They're counting on you—I'm nervous—and I just want to say we're really, as a country, behind you. I think that's why the statistics are saying that we're willing to have our taxes increased; we're willing to have cuts, because you say you're really going to do it this time and decrease the deficit. I hope to God that you do. We need it not just for this present time, but by your actually fulfilling on this it will make a major change in how we feel about Government; that when Government says they're going to make a difference and they really come through, it will make a huge impact for the future. And I'm really personally behind you all the way. I wish I'd voted for you.
The President. Thank you. I really appreciate that. Let me make one comment in response, if I might. I think it's important, and you can help others understand this, to understand why we have to reduce the deficit, which is something that is normally not done when unemployment is high. And unemployment is still too high. Even though we're in an economic recovery, most of our recovery is due to higher productivity from firms that, in turn, this time are not hiring new people for all kinds of reasons.
And we have to reduce the deficit for two reasons: Number one, we're already spending 15 percent of your tax money just to pay interest on past debt. If we don't change present patterns, we'll be over 20 cents by the year 2000. That's money we should be spending on education and technology in the future.
Number two, the more money we take out of the pool of funds for borrowing, the more expensive it is for companies like this and other companies that have to go into the markets and borrow to borrow. Just since the election, since we made it clear we were going to try to bring the deficit down, long-term interest rates have dropped seven-tenths of one percent. That is a huge savings for everybody that is going to borrow money or that has a variable interest rate on a loan, whether it's a home mortgage or a business loan or a car loan or whatever. That's important.
The second thing we're trying to do that I know you will also appreciate is to shift the balance of the money we do spend more away from consumption toward investment, investments in education, technology, environmental cleanup, and converting from a defense to a domestic economy. One of the bizarre things that happened to us in the eighties is that we increased the deficit first through defense expenses and then through exploding health care costs and increasing interest payments. But we reduced our investments in the future and the things that make us richer.
So those are the changes we're trying to effect. Let me just make one other point. I will not support raising anybody's taxes unless budget cuts also pass.
Foreign Trade
Q. One of the things that Silicon Graphics has been really successful in is selling into the international markets. Approximately 50 percent of our revenues come internationally, including a substantial market in Japan. What types of programs does your administration plan to help the high-growth companies of the nineties sell to the international markets?
The President. Two things. First of all, we intend to try to open new markets and new markets in our region. That is, to keep America growing, I believe high-growth companies are going to have to sell south of the border more. And to do that we have to negotiate trade agreements that will help to raise incomes in those countries even as we are growing. That's why I support, with some extra agreements, the NAFTA agreement and why I hope we can have an agreement with Chile and hope we can have an agreement with other countries like Argentina that are making a serious effort to build market economies: because we want to build new markets for all of you.
With Japan, I think what we have to do is to try to continue to help more companies figure out how to do business there and keep pushing them to open their markets. I don't want to close American markets to Japanese products, but it is the only nation with which we have a persistent and unchanging structural deficit. The product deficit with Japan is not $43 billion, which is our overall trade deficit, it is actually about $60 billion in product, in manufactured production. So we've got a lot of problems we have to work out there.
With Europe, we sometimes are in surplus; we're sometimes in deficit. But it's a floating thing, so it's more or less in balance. With developing nations like Taiwan and Korea, those countries had big surpluses with us, but as they became richer they brought them down, so that we're more or less in balance. We have our biggest trade relationship with Canada, and we're more or less in balance.
So we have to work on this Japanese issue while trying to help more of you get involved. Let me make one final comment on that. I think we should devote more Government resources to helping small and medium-size companies figure out how to trade, because that's what the Germans do with such great success and why they're one of the great exporters of the world. They don't waste a lot of money on the real big companies that have already figured it out, but they have extra efforts for small and medium-size companies to get them to think global from the beginning of their endeavors. And I think we're going to have to do more of that.
The Environment
Q. In addition to concerns about the economy, Silicon Graphics employees are also concerned about the environment. Your economic plan does a great job of promoting R&D investment. Are there any elements that are specifically targeted to promote the application of Silicon Graphics technology to environmental-friendly initiatives such as the electric car or the mag-lev train?
The President. I think I should let the Vice President answer that since it's his consuming passion. And if I do it, his book sales will go up again. [Laughter]
We devoted a lot of time and attention to that for two reasons. One is the environment needs it. Secondly, we think it's wonderful economics, because I believe that all these environmental opportunities that are out there for us represent a major chunk of what people who used to be involved in defense technologies could be doing in the future if we're going to maintain a high wage base in America.
So I'd like for the Vice President to talk a little about the specifics that we're working on.
The Vice President. That goal is integrated into the technology plan as one of our key objectives. The Japanese and the Germans are now openly saying that the biggest new market in the history of world business is the market for the new products, technologies, and processes that foster economic progress without environmental destruction.
Some have compared the drive for environmental efficiency to the movement for quality control and the quality revolution in the sixties and seventies. At that time, you know, many companies in the United States felt that the existing level of product quality was more or less ordained by the forces of supply and demand and it couldn't be improved without taking it out of the bottom line. But the Japanese, taking us innovations from Dr. Deming and others, began to introduce a new theory of product quality and simultaneously improved quality, profits, wages, and productivity.
The environmental challenge now presents us with the same opportunity. By introducing new attention to environmental efficiency at every step along the way, we can simultaneously reduce the impact of all our processes on the environment, improve environmental efficiency, and improve productivity at the same time. We need to set clear, specific goals in the technology policy, in the economic plan.
And you know, both the stimulus package and the investment package focus a great deal on environmental cleanup and environmental innovation. And whereas we've talked a lot about roads and bridges in the past, and they're a big part of this plan also, we're putting relatively more emphasis as well on water lines and sewer lines and water treatment plants and renovating the facilities in the national parks and cleaning up trails, taking kids from inner cities and putting them to work cleaning up trails in national parks, for example, as part of the summer jobs program.
So you'll find when you look at both the technology plan and the economic plan an enormous emphasis on the environment.
The President. Go ahead, sir. They say we have to quit in a minute. I'll take one more question after this.
The Economy
Q. Mr. President, Mr. Vice President, the news stories and articles that the public has access to regarding the budget and the economy are very often confusing and contradictory. I might explain it in the same terms that you used: The information is delivered low bit rate, but the problem is huge and requires the highres view. So my question is: I wonder if you're using Lyndon Johnson's computer to analyze the budget and the economy, or whether or not you might be open to using some of the things you've seen here to get the bigger picture and also communicate that to us?
The President. Thank you. There are two things I'd like to respond to on that, and I'd like to invite you to help. [Laughter] I'd like to invite you to help, and I'd like to invite you to help on two grounds: One is the simple ground of helping to decide which visual images best capture the reality of where we are and where we're going.
Senator Moynihan and I went to Franklin Roosevelt's home in Hyde Park, New York, just a couple of days ago. You may have seen the press on it. And on the way back he said to me that the challenges that we face are different from those that Roosevelt faced but just as profound. Unemployment was higher and America was more devastated when he took office, he said, but everybody knew what the problem was. Therefore, he bad a lot of leeway working with the Congress in the beginning to work toward a solution. Now, he said, we are facing severe challenges to a century of economic leadership, and it's not clear to every American exactly what the dimensions of the problem are. The capacity you have to help me help the American people conceptualize this is quite significant: showing the trends in the deficit, showing the trends in the investment, showing how the money is spent now and bow we propose to spend it.
The second big problem we have you can see if you look at the front page of USA Today today, which shows a traditional analysis, yesterday's analysis—of the business section—of the economic program. It basically says, "Oh, it will bring unemployment down a little and it will increase economic growth a little if we do this, but not all that much." Now, why is that? That's because traditional economic analysis says that the only way the Government can ever help the economy grow is by spending more money and taxing less. In other words, traditional Keynesian economies: Run a bigger deficit. But we can't do that. The deficit's already so big, I can't run the risk to the long-term stability of this country by going in and doing that.
This analysis doesn't really make a distinction between investment and consumption, doesn't take any account of what we might do with a technology policy or a trade policy to make the economy grow faster, has no way of factoring in what other good things could happen in the private market if you brought long-term interest rates down through the deficit. So you could also help us to reconceptualize this. A lot of the models that dominate policy-making are yesterday's models, too.
I'll give you just one example. The Japanese had a deficit about as big as ours, and they were increasing spending at 19 percent a year, government spending, back in the early seventies when the oil prices went way up and they were more energy-dependent than we were on foreign oil. And they just decided they had to change it, but they couldn't stop investing. So they had a budget which drew a big distinction, a literal distinction, legal distinction, between investment and consumption, and they embarked on a 10 or 11 year effort to bring the budget into balance. And during that time they increased investment and lowered unemployment and increased growth through the right kind of spending and investment.
And I want to lead in, if I might, and ask the Vice President before we go to give you some of the specifics of this technology policy, by making one more pitch to you about this whole economic plan. This plan has 150 specific budget cuts. And I'm welcome to more. I told the Republican leadership if they had more budget cuts that didn't compromise our economy, if they helped us, I would be glad to embrace them. I'm not hung up about that. But I did pretty good in 4 weeks to find 150, and I'll try to find some more on my own.
It also has the revenue increases that you know about. It also bas some spending increases, and there will be debate about that. There will be people who say, "Well, just don't spend this new money. Don't immunize all the kids. Don't fully fund Head Start. Don't pay for this technology policy. Don't invest in all these environmental cleanup things, and that way you won't have to raise taxes so much."
The problem is, if you look at the historic spending trends, we are too low on investment and too high on the deficit, and both are problems. And secondly, we've got to have some of these economic cooperations in order to move the economy forward.
So I want you to listen to what the Vice President says in that context. Because what you will hear is, we don't need to do what we think we should do in this area. If we don't, I think we'll be out of competition. People like you will do fine because you've got a good company here, but the country as a whole will fall behind. And you can help on both those points.
So would you proceed?
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14. The other Boomers (1995-1998)
by Piero Scaruffi
Y2K
At the same time that the dotcoms were booming, another factor contributed to a dramatic increase in software revenues: the Y2K phenomenon. "Y2K" was an abbreviation for "Year 2000". The vast majority of business software for large computers had been written in the 1960s and 1970s, and then ported to new generations of computers. Because of the limitations of storage at the time, and because, quite frankly, very few people expected those applications to last that long, most businesses could run only until 1999: their applications had no way to represent a date beyond 1999 (the commonly used two-digit abbreviation of the year, for example "55" instead of "1955", would turn the year 2000 into the year 1900). Panic spread when the corporate world realized what that meant: as the world entered a new century, unpredictable glitches could bring down the world economy and cause all sorts of disasters. Virtually all the business software in the world had to be rewritten, or at least analyzed to make sure there was no "Y2K bug". At one point Gartner Group estimated the cost of fixing the Y2K bug at $600 billion. This was a boon for the software companies that serviced legacy applications. So much code needed to be rewritten that, globally, one of the main beneficiaries of the Y2K panic was India, that since 1991 had begun liberalizing its protectionist economy, and boasted a large and cheap English-speaking IT workforce. USA companies had to outsource millions of codes to Indian companies. India's National Association of Software and Service Companies (Nasscom) estimated that India's software exports in 1998-99 reached $2.65 billion, growing at a yearly rate of over 50%. Y2K-related projects accounted for $560 million or about 20% of the total. The Y2K economy fueled the software industry at the same time that the Internet was doing it, thus generating an economic bubble on top of another bubble. The mayhem was so loud that very few people realized that the year 2000 was the last year of the (20th) century, not the first year of the (21st) century, that honor belonging to the year 2001: for the age of the computer anything with a zero at the end ought to be a beginning, not an end. The second millennium of the Christian calendar lasted only 999 years (the first millennium had been from year 1 to 1000, i.e. 1000 years). A 1999 article by international consultant Peter de Jager on the reputable magazine Scientific American concluded: "I believe that severe disruptions will occur and that they will last perhaps about a month." Highly educated people stockpiled food and water, and some decided to spend the last day of the year in bunkers. The apocalypse would come, but it would come a few weeks later, in march 2000, and it would have little to do with the way computers represent dates.
Software Tools
Meanwhile, the proliferation of software start-ups in Silicon Valley was not limited to the Internet and the Y2K bug. In 1998 Stanford's scientist Mendel Rosenblum (an assistant to John Hennessy on multiprocessor projects) was working on SimOS, a project to create a software simulator of hardware platforms. Such software would be able to run the operating systems written for those hardware platforms. Rosenblum and others founded VMware to pursue that mission and in may 1999 introduced VMware Workstation, which was not a workstation but a SimOS-like software environment (a "virtual machine") that allowed a Unix machine to run the Windows operating system (and therefore all of its applications). Eventually they would broaden the idea to allowing one physical computer to run multiple operating systems simultaneously. Server virtualization had already been popular in the mainframe era, but Rosenblum was the first one to implement it on smaller computers.
Red Hat had become the darling of the Linux world. In 1998 it merged with Sunnyvale-based Cygnus Solutions, founded in 1989 by John Gilmore and Michael Tiemann to provide tools for Linux. When Red Hat finally went public in august 1999, it achieved one of the biggest first-day gains in the history of Wall Street. Meanwhile, in 1999 Marc Fleury started the Georgia-based JBoss project for a Java-based application server (JBoss would be acquired by Red Hat in 2006).
The Internet and Y2K booms on top of the pre-existing software boom increased the need for software development environments. One of the paradigms that took hold was Rapid Application Development (RAD), originally championed by James Martin at IBM in 1991 but fitting very well the frantic world of Silicon Valley. Instead of developing an application top-down, RAD calls for the immediate creation of a working prototype followed by a series of incremental improvements (in a sense, similar to what Nature does). Delphi, released by Borland in 1995, was an early example of a development environment for RAD. Java also called for a new type of development environment. Visual Cafe, released by Symantec in 1997, was an early example. There had been and there continued to be a proliferation of software tools to overcome the dearth of software engineers and the pressure to deliver ever faster.
In those years Supply Chain Management was brought to the Bay Area. Agile Software, founded in 1995 in San Jose by Bryan Stolle, sold a suite to help firms manage bills of materials (BOMs). Ariba, started in 1996 in Sunnyvale by Keith Krach (who had founded General Motors' robotics division in 1982 before moving to the Bay Area and joining Rasna) and by Paul Hegarty (NeXT's vice-president of engineering), automated the procurement process. Both pioneered business-to-business (B2B) commerce over the Internet. Supply Chain Management was as hot as ERP. Sales of i2's Rhythm went from $26 million in 1995 to $65 million in 1996, and in 1999 i2 would boast a 13% share of the $3.9 billion supply-chain software market. ERP was already well established in the Bay Area thanks to PeopleSoft and Oracle, although the German companies continued to dominate. In 1997 the total revenues for the ERP software market was $7.2 billion, with SAP, Baan, Oracle, J.D. Edwards, and PeopleSoft accounting for 62% of it.
The Computer Market at the Turn of the Century
For the time being the evolution of computers was largely independent of the dotcoms. 34 million households owned a computer in 1996 in the USA.
In 1997 IBM's revenues were $68 billion, but now a big chunk of them came from technical support to its aging mainframes, a business that employed 160,000 people. In 1997 IBM introduced a new generation of mainframes based on Intel microprocessors, the Netfinity series. In 1995 IBM purchased Lotus Development, one of the many moves that realigned IBM towards the world of personal computers.
Compaq was the rising star. In 1994 it had overtaken IBM in personal-computer sales. In 1997, the year it shipped 10 million personal computers and laptops, Compaq's revenues skyrocketed to $24.6 billion. Compared with Dell and Gateway, Compaq was most successful with corporate customers. In the second half of the 1990s it moved aggressively to capture that market from IBM. In 1997 Compaq acquired Tandem Computers and their line of fault-tolerant servers, a move that gave Compaq more credibility in mission-critical business applications. In 1998 Compaq acquired Digital Equipment Company (DEC), which had been struggling to adjust to the new world of personal computers. DEC was certainly in trouble: despite reducing its workforce (in 1997 it employed 50,000 people, down from a peak of 130,000), DEC still employed about 65% more people than Compaq to generate about 50% lower revenues. However, DEC's products included both high-end servers (priced at $1 million and up) and low-end servers (priced under $100,000), plus workstations, and, more importantly, 45% percent of revenues came now from services: DEC's technical and customer support was a worldwide army of 25,000 people. That was exactly what Compaq needed to take on its rival IBM.
In 1996 Dell began selling its computers via its website. The website used NeXT's just released WebObjects technology. It allowed consumers and businesses to order directly, and even to customize the configuration of their PC. By spring 1999 Dell had erased the USA sales gap with Compaq (Compaq 16.8%, Dell 16.4%), although Compaq continued to sell more units abroad..
The market for laptop computers was dominated by Toshiba, which in 1997 enjoyed a market share of 20.4%, Toshiba also introduced the first DVD player (1996).
Compared with the fortunes of IBM, Compaq, Dell and Toshiba, the two Silicon Valley giants, HP and Apple, had a mixed record. Since 1995 HP had become one of the most successful personal-computer manufacturers. It owned more than 50% of the market for printers in that market. And it looked very aggressive: in 1994 it had partnered with Intel to develop a 64-bit processor (code-named "Merced") that promised to be a dramatic departure from Intel's x86 architecture (never mind that, when it was eventually released in 2001 with the official name of Titanium, it was a flop because in the meantime Intel had released a faster x86-based processor, the Pentium). As for Apple, which had allied with IBM and Motorola in 1994 to use their PowerPC microprocessor for a new line of high-end Macintoshes, in 1996 it purchased NeXT, and with it the Unix-based NextStep operating system and the WebObjects technology, a Java-based application server for rapid object-oriented software development of Web-based applications. Steve Jobs was therefore back at Apple. In 1997 Apple followed Dell in using WebObjects to create a website (the "Apple Store") to sell customized machines directly to the end customer. However, Apple was bleeding: it couldn't compete with the DOS/Windows-based computers and in 1999 it laid off 2,700 of 11,000 employees.
Steve Jobs used the experience in design that he had gained at NeXT, as well as the skills of British designer Jonathon Ive (appointed Apple's top industrial designer in 1997), to create the sexy iMac that debuted in 1998 and that, selling two million units in its first year, began the resurrection of the company. It was the beginning of the "i" series of products, that in 1999 continued with the iMovie, a video-editing software for the generic user. Ive applied the minimalist aesthetics of the Bauhaus art movement of 80 years earlier to the iMacs, and that neo-Bauhaus design would be later applied to the iPod in 2001 and to the iPhone in 2007.
34 million households owned a computer in 1996 in the USA.
A Wireless Future
The new semiconductor companies often targeted emerging niche markets. In 1994 wireless pioneer Proxim had introduced a product to let ordinary computers exchange data via the ether, which truly inaugurated the era of office wireless networks. In may 1998 John Hennessy (of MIPS fame) and Teresa Meng of Stanford University opened in Santa Clara a startup named Atheros that specialized in chipsets aimed at wireless local area networks, later known as "Wi-Fi networks". The story of Wi-Fi had begun in 1985, when the US government had made the so-called "garbage bands" (900MHz, 2.4GHz and 5.8GHz) available to anybody. In 1988 Victor Hayes of NCR (a company that was considering connecting wireless cash registers) and Bruce Tuch of Bell Labs had begun working on a wireless standard similar (in purpose) to the one devised for the Ethernet. This standard-defining committee, that came to be called 802.11, took almost a decade to complete its research, but eventually in 1997 the specifications were published. In this case it was a government decision (not a technological invention) and it was cooperation (not competition) that created the vast market of Wi-Fi devices. As wireless LANs moved to the home, this would turn out to be a lucrative market. Marvell was started in 1995 in Santa Clara by Indonesian-born Sehat Sutardjia, his Chinese-born wife Weili Dai and his brother Pantas as a fabless maker of semiconductors used in data storage and mostly serving Asian companies. Marvell too would rapidly jump onto the wireless bandwagon.
Gadgets
This was also the age of the gadgets propelled by digital technology but decoupled from the computer industry.
In the arena of videogames, in 1995 Sony introduced the Playstation, one of the most popular platforms of all time. In 1998 sales of videogame consoles in the USA alone amounted to $6.2 billion, which dwarfed sales of videogame software on personal computers ($1.8 billion). The situation had reversed itself one more time, and now the videogame console was rapidly gaining, thanks to a combination of lower prices and much improved performance.
Progress in graphics video, animation and audio continued at a rapid pace. In 1995 the Moving Picture Experts Group (MPEG) of the International Organization for Standardization (ISO) published the "mp3" standard (more properly, MPEG-1 Layer 3) for digital audio and video compression, largely the 1989 thesis of German student Karlheinz Brandenburg. Mp3 had been designed to compress video and audio into the bit-rate of a CD. While Mp3 proved inadequate for videos, it became a very popular format for digital music. In march 1998 Korean-based Saehan Information Systems released the MPMan F10, the first portable Mp3 player, capable of storing nine songs. More successful was Diamond Multimedia's Rio PMP300, which came out in 1998 and became popular with Napster users. Also in 1997 Winamp was released on personal computers, a free MP3 music player developed in Arizona by Justin Frankel and Dmitry Boldyrev.
Digital media companies proliferated around San Francisco's South of Market district, an area previously known mostly for night-clubs and abandoned warehouses that was now nicknamed "Multimedia Gulch." More than 35,000 people worked in the multimedia sector in San Francisco in 1999. Many of them were self-employed or worked for small companies: there were almost 1,000 multimedia businesses.
Ironically, the company that had pioneered 3D graphics in the Bay Area was the exception to the general euphoria. Silicon Graphics' spectacular growth peaked in 1995: its market capitalization reached $7 billion in 1995 and revenues were $2.2 billion. However, the company began a rapid decline as it seemed to live in a different world where the Internet did not exist. It mostly specialized in visual effects for Hollywood.
A successful movie, John Lasseter's "Toy Story" (that premiered in november 1995), made history for being the first feature-length computer-animated film. Lasseter, a former Walt Disney animator, worked at Lucasfilm under Ed Catmull at a groundbreaking computer-animated short, "The Adventures of Andre and Wally B" (1984), for which they used even a Cray supercomputer. When Jobs purchased Lucasfilms in 1986 and turned it into Pixar, Lasseter was given the power and freedom to invest in that technology, but it took almost a decade to come out with a full-length film.
This followed the short animated films made by Pacific Data Images (PDI) since the mid-1980s and was followed by their first feature films: "Antz" (1998), "Shrek" (2001) and "Madagascar" (2005).
Personal computers, instead, had to live with humbler features. For example, in 1997 RealNetworks introduced RealVideo to play videos on a computer, but it still used a proprietary format.
Introduced in the Bay Area in 1998, TiVo, developed by former Silicon Graphics engineers Jim Barton and Mike Ramsay and funded by Geoff Yang and Stewart Alsop, was a digital video recorder capable of digitizing and compressing analog video signal from a television set and of storing it onto a computer's hard-disk. At that point the tv viewer was able to do with television programs what a computer user could do with data. It was a relatively simple idea but it changed forever the definition of "live event" and ended the age in which all viewers were synchronized on the same program.
A hyped event of 1996 in Silicon Valley was a hand-held pen-based computer called Palm Pilot: a computer with no keyboard, whose user interface was simply a screen on which the user could write in natural language, a successor to the GRiDPAD of seven years earlier. The founder of Palm, Jeff Hawkins, had studied automated hand-written text recognition at U.C. Berkeley and worked at Grid for a number of years. It was the first pen-based user interface to gain wide acceptance: in 1998 the Palm Pilot had almost 80% of the market for palm-sized computers, and in 1999 it would enjoy four consecutive quarters of triple-digit revenue growth. Palm had already been purchased by U.S. Robotics in 1995, which then merged with 3Com in june 1997.
In 1999 LeapFrog, founded in Emeryville in 1995 by Michael Wood and Robert Lally, introduced a hand-held computer for children, the LeapPad, a device that allowed students to read ebooks embedded with the NearTouch technology acquired from Explore Tech (founded in 1995 in Sunnyvale). This technology made touch-interactive any section of a page.
The most sensational high-tech product introduced abroad in 1996 was probably Nokia's 9000 Communicator, which de facto invented the category of "smart phones". Palm had tried to create a "personal digital assistant" (PDA) starting with a computer. Finnish conglomerate Nokia, the world leader in mobile phones, started with a mobile phone, adding computer capabilities based on an Intel 386 processor running Berkeley Softworks' GEOS operating environment on top of DOS. In 1994 IBM had done something similar with its short-lived Simon.
In 1997 Psion, the British company that had invented the personal digital assistant, adopted the ARM processor in its Series 5 in conjunction with a brand new operating system that was later renamed Symbian, a joint venture with Ericsson, Nokia, Panasonic, and Motorola.
One of most daring gadgets introduced in the mid-1990s was a by-product of the feud between Microsoft and Oracle. In 1996 Oracle introduced a disk-less desktop computer, the Network Computer. Ellison preached a world in which data did not have to reside in the house or the office of the user, but could reside on the Internet. Ellison envisioned a future in which the computing power was on the Internet and the user's machine was simply a tool to access that computing power. (Indirectly, this was also a world in which desktop computers had no need for Microsoft's operating systems). The Net Computer was the counterpart to General Magic's hand-held device, and yet another premonition of "cloud computing". It also became another embarrassing Silicon Valley flop.
Until then connecting devices to computer had involved different cables for different kinds of devices. In 1996 an Intel team led by the Indian-born scientist Ajay Bhatt introduced the specifications for USB (Universal Serial Bus), a method that would soon greatly simplify the lives of consumers worldwide and dramatically increase the number of devices that can be connected to a computer.
In 1998 Sony launched its own removable flash-memory card format, the Memory Stick, and "memory stick" would remain the affectionate term for all removable flash-memory units that one could carry in the pocket. In 1999 SanDisk, Matsushita and Toshiba unveiled yet another standard for NAND flash memories: the Secure Digital (SD) format. The SD card would displace CompactFlash as the most popular flash-memory format for consumer electronics the way that CompactFlash had displaced SmartMedia in the previous decade.
A major revolution was taking place in hard disks, a revolution that would soon allow small cheap computers to store large images and videos. In 1997 IBM introduced the first hard disk that used the GMR effect for its read-out heads. The Giant Magnetoresistive (GMR) effect had been discovered in 1988 by Albert Fert and Peter Gruenberg. Stuart Parkin at IBM's Almaden Research Center applied it to data storage and created the "spin valve" that was used in the Deskstar 16GP Titan. This new technique would rapidly improve the storage of extremely densely-packed information. Within a decade Hitachi (having bought IBM's business) would release the Deskstar 7K1000, the first hard-disk drive capable of storing one terabytes of data.
3D Printing
The inkjet printer had been popularized in the 1980s by Hewlett-Packard and Canon. A more complex kind of inkjet technology, called 3DP (also known as "powder and inkjet" and "Z printing") was developed at the MIT in 1993 by Michael Cima and Emanuel Sachs for printing objects, not pages. But Silicon Valley was still indifferent to 3D printing technology and 3DP was implemented far from the Bay Area: in 1996 South Carolina's Z Corp introduced the first 3D printer based on the MIT technology, the Z402, and in 2000 Z Corp would introduce the first multicolor 3D printer, the Z402C; and in 1997 Sanders Prototype (later Solidscape) of New Hampshire introduced the ModelMaker wax printer based on the MIT inkjet technology. In 1997 Los Angeles-based Soligen used the inkjet technology of the MIT for printing cast-metal parts and renamed it Direct Shell Production Casting (or DSPC). Another system for building metal parts, also based on MIT's 3DP inkjet technology, was ProMetal, introduced in 1999 by ExtrudeHone of Pittsburgh (later renamed Ex One). Another technique that uses a laser beam to fuse together powders, called Selective Laser Melting (SLM), was invented in 1995 at the Fraunhofer Institute in Germany. Electro Optical Systems (EOS) of Germany, that in 1991 had introduced one of the first stereolithography machines and in 1994 had introduced one of the first SLS systems in the world, turned SLM into its Eosint M250. Frank Arcella set up his company AeroMet (actually a subsidiary of MTS) only in 1997 to commercialize LAM printers. In 1996 Direct Metal Deposition (DMD), the technique invented at MIT for metal parts, mutated into Laser Engineered Net Shaping (LENS) at the Sandia National Laboratories in New Mexico. Invented by Dave Keicher, it was commercialized by Optomec in 1998. Silicon Valley was too busy with the dotcom boom to pay attention to 3D printing.
GPUs
Personal computer graphics of the 16-bit, 2D generation was dominated for a while by the Canadian company Array Technology Inc (ATI), manufacturers of 1987's EGA Wonder and 1988's VGA Wonder. They had been founded in 1985 by three Hong Kong immigrants (Kwok Yuan Ho, Lee Lau and Benny Lau).
Computer games ran on DOS because it was impossible to achieve high performance on Windows. The first major improvement came with the introduction of 32-bit operating systems, and not so much 1991's System 7 for the Apple Macintosh, that initially charmed few developers, but Windows 95, introduced by Microsoft in 1995. The second important factor was the drop in DRAM price: in 1995 Intel introduced the low-cost 430FX chipset that supported Extended Data Out (EDO) DRAM. Regular DRAM was becoming as fast as the expensive Video DRAM (or VRAM). Finally, standards became to emerge. In 1992 Silicon Graphics released an API for both 2D and 3D graphics, OpenGL (an evolution of their proprietary IRIS Graphical Library), that was meant for their traditional Unix market but became a standard for PC gaming in 1996 when Texas-based game developer id Software, that had revolutionised PC gaming with 1993's "Doom", ported its stylish 3D game "Quake" to Windows using OpenGL. In 1996 Microsoft released its own API, Direct3D (an evolution of the technology developed by British company RenderMorphics, founded in 1992 by Servan Keondjian and Doug Rabson). For a while, however, the winner was neither Direct3D nor OpenGL: Brian Hook of 3Dfx Interactive, a company founded in 1994 in San Jose by three former Silicon Graphics employees (Ross Smith, Gary Tarolli and Scott Sellers), wrote Glide API in 1995. Glide versions of Activision's "MechWarrior 2" (1996) and id Software's "Quake II" (1997) were among the hits that legitimized Glide as the ruling standard of the late 1990s.
The net result of these developments was a boom in 3D graphic cards for personal computers, aiming at the mainstream consumer. The first consumer 3D-graphics accelerator cards came to the market in 1996: 3Dfx Interactive (founded in 1994 in San Jose by former employees of Silicon Graphics) introduced Voodoo1, the accelerator that truly left behind the world of 2D graphics; Array Technology (a Canadian company acquired in 2006 by Advanced Micro Devices) launched its 3D RAGE; and Rendition, founded in 1993 in Mountain View, introduced the V1000 chipset based on a RISC architecture. Brian Hook at 3Dfx wrote the Glide API that would become the dominant 3D graphics API for videogame designers. While this trio competed for supremacy, the boost in speed generated a boom in videogames (with "video" truly meaning "video"). Then in 1999 Nvidia's GeForce 256 virtually defined the modern graphics processing unit (GPU), 2000's GeForce 2 GigaTexel Shader (GTS) hit 1 gigatexel/second (1 billion filtered textured pixels per second, a texel or texture pixel being the fundamental unit of texture space), and 2001's GeForce 3 (released three months after NVIDIA acquired 3dfx) introduced pixel shading, the technology that took gaming into the 21st century.
Biotech
For biotech 1996 was the year that Sydney Brenner (Francis Crick's successor at Cambridge University, now at the Scripps Institute in San Diego) founded the Molecular Sciences Institute in Berkeley, and the year that Monsanto, a multinational corporation, acquired Calgene. The Human Genome Project was slow to get started, like all big projects, but at last in april 1996 human DNA sequencing began in earnest at several universities funded by the National Institute of Health. Most of these research centers were using the sequencing machines of Applied Biosystems, acquired (in february 1993) by East-coast pharmaceutical colossus Perkin-Elmer. For the media 1996 was the year when (in july) a team assembled by Ian Wilmut at the Roslin Institute in Britain cloned "Dolly" the sheep, the first time that a mammal had been cloned in a lab from adult cells. The experiment was centered around the ideas of Keith Campbell, who in 1995 had already succeeded in cloning a pair of lambs, albeit from embryonic cells. In may 1999 Geron of Menlo Park bought the rights on Roslin's nuclear-transfer technology for $25 million.
Thanks to all the sequencing machines that it had sold to the centers of the Human Genome Project, PE Biosystems, the new name of Applied Biosystems after being acquired (in february 1993) by East-Coast colossus Perkin-Elmer, had become a wealthy company with revenues of $871 million in 1998. Its new president, Michael Hunkapiller, a former assistant of Leroy Hood at CalTech, boldly attacked his academic customers by deciding to launch a private project to decode the human genome before the Human Genome Project. Basically, he was convinced that the result depended on his machines, not on the army of biologists of the research centers (and that the private industry is more efficient than government bureaucracies). He hired a man who shared his passion for automated genetic processing, Craig Venter of Maryland's Institute for Genomic Research, where the first sequencing ("mapping") of a living being's genome had been carried out in 1995. Venter had fallen out with Haseltine after their mutual investor Steinberg had died in 1997, since Venter was more interested in the science and Haseltine in creating a multibillion-dollar pharmaceutical conglomerate. In may 1998 Michael Hunkapiller and Venter set up a new company, Celera Genomics, which soon relocated to the Bay Area (Alameda, near Oakland). Technically, both Biosystems of Foster City and Celera Genomics of Alameda were owned by Applera, a spin-off of Perkin-Elmer's Life Sciences Division which in 2000 also became the official new name of Perkin-Elmer, except that in 2006 Applera renamed itself Applied Biosystems and spun off Celera Genomics; a confusing business story that still left two tightly related companies, one engaged in building machines and the other one in using those machines to sequence DNA. The main investor of both was Cuban-born businessman Tony White, the head of their parent company (what used to be called Perkin-Elmer) who had brokered the deal between Venter and Hunkapiller. Celera Genomics filled a staff of distinguished scholars, including Nobel laureate Hamilton Smith, and bought 300 of Applied Biosystems' most advanced machines to create the world's largest automated factory for mapping DNA.
A new method to sequence DNA ("sequencing by synthesis technology") was devised in 1997 at Cambridge University by Shankar Balasubramanian and David Klenerman, who in 1998 founded Solexa in Hayward 9acquired in 2007 by Illumina).
The Israeli-born computer scientist Victor Markowitz, who had developed a data management system for genome databases at the Lawrence Berkeley Labs, founded the bioinformatics company Gene Logic in Berkeley in 1997 to market a database management system for gene expression data to biotech companies.
In 1997 the Department of Energy established the Joint Genome Institute (JGI) in an industrial park in Walnut Creek (northeast of Berkeley) to coordinate the three main biological laboratories involved in genomics: Lawrence Berkeley Labs, Lawrence Livermore Labs and Los Alamos (located in New Mexico). In 2010 the JGI would hire Victor Markowitz of Gene Logic fame as chief information officer.
In the 1990s Stanford held 124 biotech patents, the SRI 50, the University of California as a whole 321 (mainly at Berkeley and San Francisco), Genentech 335, Incyte 322, Alza 238, Syntex 168, Chiron 167. Genentech's former employees had opened more than thirty Bay Area-based start-ups, and South San Francisco (where the Genentech campus was located) had become a major R&D center for biomedicine (for example, Exelixis and Cytokinesis had been started in 1997 a few blocks from Genentech). Investment in biotech companies peaked at $1 billion in the year 2000, up from $668 million in 1999. Between 1995 and 2000 $3 billion in venture capital had created 71 start-ups. At the beginning of 2000 the Bay Area's 90 publicly-traded biotech companies reached a market capitalization of $82 billion.
In 1998 James Thomson at University of Wisconsin and John Gearhart at Johns Hopkins University reported that they had grown human embryonic stem cells.
Nanotech
Meanwhile, nanotechnology finally began to take off in the second half of the 1990s, with start-ups such as NeoPhotonics, founded in 1997 by Timothy Jenks and specializing in photonic integrated circuits.
A merger of biotech and nanotech (Micro-Electro-Mechanical Systems or MEMS) took place in 1996 with the founding of Cepheid in Sunnyvale by former Syntex executive Thomas Gutshall, Bill McMillan (who had invented a rapid automated analysis system at Syntex), MEMS pioneer Kurt Petersen (of Transensory fame), and Greg Kovacs of Stanford's Center for Integrated Systems. Their goal was to build machines that perform rapid molecular testing, typically to detect infectious disease and cancer, i.e. to provide DNA test results when and where they are needed.
Silicon
The software boom of the 1990s was obliterating the hardware industry, which had given this region its nickname "Silicon Valley". However, the silicon industry was evolving towards more optimized forms of design and production. For example, a new way of building a chip was pioneered: by licensing "pieces" of chips from different third-party vendors. At the end of the decade, and certainly in the following decade, designing a chip was becoming the art of integrating designs of specialized sub-chips from different parties. The startups in this field were providing the design of reusable units of chip logic and making money out of selling their "intellectual property" to multiple chip makers. The products of startups such as Tensilica, founded in 1997 by Chris Rowen (a co-founder of MIPS Technologies) in San Jose (and acquired in 2013 by Cadence Design), were such "semiconductor intellectual property cores" or "IP blocks".
Meanwhile, system-on-chip design was enabling a new generation of small, portable devices such as phones, cameras and tablets that integrated a variety of components to provide a variety of features. System-on-chip integrated circuits existed since digital watches such as the Microma watch of 1974 and Texas Instruments' LCD watch of 1976; and microcontrollers (incorporating a microprocessor, memory and input-output) were popular already in the 1980s; but these were single-function devices. During the 1990s ASIC technology evolved from the chip-set model towards a single-chip model while ASIC devices began to incorporate larger-scale system functions. The Japanese were particularly influential: in 1993 Hitachi introduced the H8-538F, a 16-bit microcontroller with on-chip flash memory, a microcontroller that was programmable; and in 1997 NEC introduced the world's first single-chip MPEG2 encoder circuit. In Europe, SGS-Thomson (soon to be renamed ST Microelectronics) introduced in 1997 the chip STi5500 Omega for use in TV set-top boxes that integrated an MPEG2 decoder, a 32-bit processor, and other functions; while ARM, which offered a small and simple microprocessor (ideal for single-chip designs in which space was needed for other functions), in 1997 introduced the Thumb 16-bit instruction set (much easier to use than the original 32-bit ARM instruction set). Progress in electronic design automation (EDA) made it easier to incorporate multiple VLSI designs (microprocessor, memories and peripherals) into the design of a single chip. New standards for the integration of functions from different providers increased the market for buying and selling electronic functions. All these developments contributed to the transition from the "system on a board" to the "system on a chip". The host chip was frequently a RISC processor (such as MIPS or ARM), which offered the advantage of being designed for modularity and the advantage of compatibility with a wide range of peripherals. The motivation to shift to system-on-chip design was also coming from the embryonic mobile phone market: a 2G phone of the early days of GSM was bulky and heavy because it contained several chips.
The role of electronic design automation became even more important. Magma Design Automation, founded in 1997 by Rajeev Madhavan in San Jose, joined the ranks of the main EDA vendors with Cadence, Mentor and Synopsis (which acquired it in 2012). US leadership in EDA was quite important in establishing world supremacy in the semiconductor field.
Incidentally, in 1997 Isaac Chuang of IBM's Almaden Research Center and Mark Kubinec of UC Berkeley built the first quantum computer.
Culture and Society
San Francisco's counterculture reacted again in its own idiosyncratic manner to the capitalistic culture of Silicon Valley. Since Silicon Valley had adopted the religion of ever faster and cheaper products, in 1996 Stewart Brand of Whole Earth fame and Danny Hillis, who had designed the supercomputer Connection Machine at the MIT, established the "Long Now Foundation" to promote slower and better thinking.
Reacting to the large corporate and academic laboratories (often founded by the DARPA), Nick Bertoni, who had run the artist-in-residence program at the San Francisco Exploratorium, heralded the rise of the independent "makers" movement when in 1997 he opened the Tinkers Workshop in Berkeley, a place where aspiring
Underground subversive, so called "guerrilla", art staged a significant coup in 1997 when Brian Goggin, coming out of the Burning Man culture, took over the dilapidated Hugo Hotel on 6th and Howard streets and started hanging home-built furniture provided by about 100 volunteers from the hotel's walls. ("Defenestration" would be razed in 2014, after the disorderly invasion of Silicon Valley and consequent gentrification of the city).
Meanwhile, pop and dance musicians such as Dan Nakamura, Matmos, Kit Clayton, Kid 606, Blectum From Blechdom and Irr. App. (Ext.) were pushing the envelope of digital music, showing what could be done with a simple laptop, while the psychedelic tradition survived in Devendra Banhart.
During the 1990s the population of the Bay Area grew by 13%. The San Francisco- Oakland- San Jose metropolitan region had seven million people in 2000, making it the fifth largest metropolis in the USA.
Anthropology of the Untouchables
In the 1990s the median income in Santa Clara county was almost twice the median income in the USA, but within the valley the income gap kept increasing. There were at least three classes with widely different income levels. The common laborers (such as the security guards who worked night shifts, the cleaning people and the clerks of the gas stations) had a low income that made it difficult for them to afford the cost of living of the Bay Area. Many of them resided in the east or south bay, where rent was cheaper, and many of them lived in old-fashioned familiar nuclei. They were not very visible: you had to take one of the freeways into the Bay Area very early in the morning to see them commute to work from distant places. Then there was the huge mass of engineers, who could afford a nice car and a nice apartment. However, the cost of living was such that many of them shared a house or an apartment with someone else. Those who bought a house most likely bought a "townhome" in a "subdivision". Each subdivision provided long lines (or circles) of identical homes with minimal separation from each other. The upper class consisted of the rich: either hereditary rich or beneficiaries of the computer boom (because either their company was acquired or the company's stock skyrocketed) or highly paid executives. This third class was much larger than in any other part of the world: entire areas of Atherton, Woodside, Portola Valley and Los Gatos were carpeted with multimillion dollar homes. And yet the lower class was dreaming of sending its children to school so that they would become engineers, and the engineering class was dreaming of becoming a millionaire, so both castes happily accepted their subordinate roles. Finally, there was the old generation who bought a home in the 1960s and lived a much more relaxed life in single-family detached houses, most of them with a swimming pool and a large backyard. They paid very little for the house before the computer boom. During the 1990s, as they began to retire, many of them sold their homes to the younger generation of the computer boom. This generation of ordinary middle-class families (the bread and butter of, say, Midwestern America) quietly faded away, enyoing the profits from their investment in real estate but rapidly obsolete in the digital age.
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What Happened to the Silicon Graphics Company?
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2024-07-05T07:29:58+00:00
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The fascinating tale of Silicon Graphics Incorporated (SGI), a pioneer in the realm of computer-aided design, visualization, and high-performance computing.
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https://quantumzeitgeist.com/wp-content/uploads/favicon.ico
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Quantum Zeitgeist
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https://quantumzeitgeist.com/what-happened-to-the-silicon-graphics-company/
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This is the fascinating tale of Silicon Graphics Incorporated (SGI), a pioneer in computer-aided design, visualization, and high-performance computing.
In the early 1980s, SGI revolutionized the industry with its innovative graphics workstations, which enabled designers and engineers to create complex 3D models with unprecedented speed and accuracy. The company’s flagship product, the IRIS workstation, was a game-changer, powering the Graphics Library software that provided a standardized API for developers.
SGI’s influence extended beyond CAD users, as its technology found applications in film production, aerospace, and automotive industries. Who can forget the iconic visual effects in movies like “Young Sherlock,” “Terminator 2: Judgment Day,” and “Jurassic Park”? These cinematic marvels were made possible by SGI’s cutting-edge technology.
However, despite its early successes, SGI struggled to adapt to changing market trends and increasing competition from lower-cost PC-based solutions. The company’s failure to innovate and diversify its product line led to declining sales and financial struggles.
The acquisition of Alias Research by SGI is often cited as an example of the importance of strategic mergers and acquisitions in the technology industry. The deal enabled SGI to expand its product offerings, increase its market share, and stay competitive in a rapidly evolving industry landscape.
Unfortunately, SGI’s experiences also serve as a cautionary tale for companies undergoing mergers and acquisitions, highlighting the need for careful planning, integration, and adaptation to changing market conditions to ensure long-term success.
In 2006, SGI filed for Chapter 11 bankruptcy protection and underwent significant restructuring efforts. The company emerged from bankruptcy in 2007 but eventually ceased to exist as an independent entity, with its remnants acquired by Hewlett-Packard in 2016.
Despite its demise, SGI’s legacy lives on in modern computing through its influence on graphics processing units, computer-aided engineering, and high-performance computing. The OpenGL API, developed by SGI in collaboration with other industry partners, remains a widely-used standard for 3D graphics rendering.
As we reflect on the rise and fall of Silicon Graphics Incorporated, we’re reminded that innovation and adaptability are essential for survival in the rapidly evolving technology landscape.
Back to the 1980s
In the annals of computer history, few companies have left as indelible a mark as Silicon Graphics Inc., or SGI for short. Founded in 1981 by a group of visionaries, SGI was instrumental in revolutionizing the field of computer graphics, bringing to life breathtaking visuals that captivated audiences worldwide. From the earliest days of CGI in films like “Tron” and “The Last Starfighter”, to the iconic workstations that powered the creative industries, SGI’s innovative spirit and technological prowess earned it a revered status among professionals and enthusiasts alike.
However, behind the scenes, a complex tale of innovation, hubris, and ultimately, decline, unfolded. At its peak in the mid-1990s, SGI was riding high on the success of its high-performance workstations, which had become the de facto standard for industries such as film, architecture, and engineering. But beneath the surface, warning signs were beginning to emerge. The company’s attempts to expand into new markets, including consumer-level graphics cards and even a foray into video game consoles, would ultimately prove disastrous. Meanwhile, the rise of commodity hardware and software alternatives began to erode SGI’s market share, leaving the once-mighty company struggling to stay relevant.
One of the key players in SGI’s founding was James Clark, a renowned computer scientist who had previously worked at the National Center for Supercomputing Applications. Alongside Ed McCracken, another co-founder, Clark brought a wealth of expertise in high-performance computing and graphics processing. The duo’s vision for SGI was to create machines that could tackle the most demanding tasks in fields like scientific visualization, computer-aided design, and digital video production.
As the company grew, other luminaries joined the ranks, including Cray Research founder Seymour Cray, whose eponymous supercomputer company would eventually merge with SGI in 1996. The confluence of these brilliant minds helped shape the course of SGI’s history, but ultimately, even their collective genius could not stem the tide of change that was sweeping through the industry.
SGI founders’ early innovations in computer graphics
Silicon Graphics Incorporated (SGI) founders Jim Clark and Ed McCracken pioneered innovations in computer graphics in the late 1970s and early 1980s. One of their earliest achievements was the development of the Geometry Engine, a high-performance graphics processing unit that enabled fast rendering of 3D graphics. This innovation led to the creation of the IRIS 1000, SGI’s first commercial graphics workstation, which was released in 1983.
The IRIS 1000 was a significant improvement over existing graphics systems, offering unparalleled performance and capabilities for its time. It was powered by the Geometry Engine, which provided a 10-fold increase in graphics performance compared to other systems available at that time. The IRIS 1000’s advanced features included support for 3D transformations, hidden surface removal, and Gouraud shading.
In the mid-1980s, SGI continued to push the boundaries of computer graphics with the introduction of the IRIS 2400, which further increased performance and added new features such as texture mapping. This innovation enabled the creation of more realistic and detailed 3D models, revolutionizing fields such as computer-aided design (CAD), scientific visualization, and video game development.
SGI’s innovations in computer graphics also had a significant impact on the film industry. In 1985, SGI systems were used to create the groundbreaking special effects for the movie “Young Sherlock Holmes,” which was one of the first films to extensively use computer-generated imagery (CGI). This marked the beginning of a new era in visual effects, with SGI’s technology playing a key role in shaping the industry.
Throughout the 1980s and 1990s, SGI continued to innovate and expand its product line, releasing new workstations such as the IRIS Indigo and the O2. These systems further increased performance, added new features, and enabled the creation of even more complex and realistic 3D models.
In the late 1990s and early 2000s, SGI faced significant challenges, including increased competition from other graphics companies and a decline in demand for its high-end workstations. Despite these challenges, SGI’s legacy as a pioneer in computer graphics continues to be felt today, with its innovations influencing generations of graphics professionals and shaping the course of the industry.
Silicon Graphics Incorporated’s founding and early success
In the early 1980s, SGI introduced its first product, the IRIS 1000, which was a 3D graphics terminal that could be connected to a host computer. This product was followed by the IRIS 1400 and IRIS 2000, which were more powerful and feature-rich versions of the original. These early products helped establish SGI as a major player in the emerging market for 3D graphics workstations.
SGI’s big break came in 1985 when it introduced the IRIS 3000 series, which was the first family of workstations to integrate 3D graphics, CPU, and memory into a single unit. This innovation led to widespread adoption of SGI’s products across various industries, including film and television production, where they were used to create visual effects for movies such as “Terminator 2: Judgment Day” and “Jurassic Park”.
Throughout the late 1980s and early 1990s, SGI continued to innovate and expand its product line. In 1988, the company introduced the IRIS Indigo, a lower-cost workstation that brought 3D graphics capabilities to a wider range of users. This was followed by the introduction of the Indy workstation in 1993, which was designed for entry-level users.
SGI’s success during this period was fueled by its focus on innovation and its ability to deliver high-performance products that met the needs of demanding industries such as computer-aided design (CAD), video production, and scientific visualization. The company’s commitment to research and development helped it stay ahead of competitors and maintain its market leadership.
In 1995, SGI went public with an initial public offering (IPO) that raised $340 million, further solidifying the company’s position as a leading provider of high-performance computing solutions.
Company’s pioneering role in the CGI film industry
Silicon Graphics Inc played a pivotal role in the development of Computer-Generated Imagery in the film industry. In the late 1980s, SGI’s high-performance workstations and servers enabled filmmakers to create complex CGI sequences that were previously unimaginable. The company’s technology was instrumental in the production of several groundbreaking films, including James Cameron’s Terminator 2: Judgment Day and Steven Spielberg’s Jurassic Park.
SGI’s hardware and software solutions allowed visual effects artists to work more efficiently and effectively, enabling them to create more sophisticated and realistic CGI elements. The company’s systems were capable of handling massive amounts of data and performing complex calculations at high speeds, making them ideal for the demanding task of generating CGI imagery.
In the early 1990s, SGI formed strategic partnerships with several leading visual effects companies, including Industrial Light & Magic and Digital Domain. These collaborations enabled SGI to tailor its technology to meet the specific needs of the film industry, further solidifying its position as a leader in the field.
Despite its pioneering role in the CGI film industry, SGI faced significant financial challenges in the early 2000s. The company’s high-end workstations and servers were increasingly being replaced by more affordable and capable commodity hardware, leading to a decline in sales and revenue. In 2006, SGI filed for bankruptcy and underwent a series of mergers and acquisitions, ultimately becoming part of Hewlett-Packard in 2016.
The legacy of SGI’s contributions to the CGI film industry continues to be felt today, with many of its innovations and technologies remaining essential components of modern visual effects pipelines. The company’s pioneering work in this field has enabled filmmakers to push the boundaries of what is possible on screen, creating immersive and engaging cinematic experiences for audiences worldwide.
SGI’s impact on the film industry extends beyond its technical contributions, as it also played a key role in shaping the aesthetic and creative direction of CGI-heavy films. The company’s technology empowered filmmakers to experiment with new visual styles and storytelling approaches, leading to the development of innovative genres such as sci-fi and fantasy.
SGI’s workstation market dominance in the 1990s
Silicon Graphics Inc dominated the workstation market with its high-performance computers designed for demanding applications such as computer-aided design, video editing, and scientific visualization. SGI’s workstations were renowned for their exceptional graphics capabilities, processing power, and reliability.
The company’s success can be attributed to its innovative hardware and software technologies, including its proprietary Graphics Language and the InfiniteReality graphics subsystem. These technologies enabled SGI’s workstations to deliver unparalleled performance in graphics-intensive applications, making them the go-to choice for professionals in fields such as engineering, video production, and scientific research.
SGI’s market dominance was further solidified by its strategic partnerships with leading software vendors, including Autodesk, Adobe, and IBM. These partnerships ensured that SGI’s workstations were optimized to run popular CAD, video editing, and other applications, thereby expanding their appeal to a broader user base.
However, despite its market leadership, SGI faced significant challenges in the late 1990s, including increased competition from low-cost PC vendors and the rise of commodity graphics cards. The company’s high-end focus and premium pricing strategy made it vulnerable to disruption by more affordable alternatives.
In an effort to revitalize its business, SGI underwent a series of restructuring efforts, including layoffs, divestitures, and a shift towards lower-cost, more standardized products. However, these measures ultimately failed to stem the decline, and in 2006, SGI filed for bankruptcy protection.
The remnants of SGI were subsequently acquired by Rackable Systems, which continued to develop and market SGI-branded products until 2009, when the brand was phased out in favor of the parent company’s own branding.
Cray Research acquisition and its impact on SGI
Cray Research, a leading supercomputer manufacturer, was acquired by Silicon Graphics Incorporated in 1996 for approximately $740 million. This acquisition marked a significant shift in the high-performance computing landscape.
The acquisition of Cray Research provided Silicon Graphics with access to Cray’s expertise in designing and building high-end supercomputers, which complemented Silicon Graphics’ strengths in visualization and graphics processing. The combined entity aimed to create a comprehensive platform for scientific simulations, data analysis, and visualization.
Before the acquisition, Cray Research had established itself as a pioneer in the supercomputer industry, with its first system, the Cray-1, released in 1976. Throughout the 1980s and early 1990s, Cray continued to innovate, introducing new architectures and systems that pushed the boundaries of computational performance.
The acquisition also led to significant changes within Silicon Graphics’ organizational structure. The company established a new subsidiary, SGI/Cray Research, which focused on developing high-performance computing solutions. This move enabled Silicon Graphics to expand its product portfolio and tap into the growing demand for supercomputing capabilities in fields such as weather forecasting, genomics, and materials science.
However, the acquisition ultimately failed to yield the expected synergies, and Silicon Graphics struggled to integrate Cray’s technology and personnel into its operations. The company faced significant financial challenges, including declining sales and increased competition from other high-performance computing vendors.
In 2000, Silicon Graphics sold the Cray Research subsidiary to TPG Capital, a private equity firm, for approximately $100 million, marking the end of Silicon Graphics’ foray into the supercomputer market.
Shift to low-cost, high-performance computing solutions
The shift towards low-cost high-performance computing solutions has been driven by the increasing demand for efficient and affordable processing power in various industries, including scientific research, data analytics, and artificial intelligence. This trend is evident in the rise of cloud-based services, such as Amazon Web Services and Microsoft Azure, which offer scalable and cost-effective computing resources.
The decline of Silicon Graphics Inc., a pioneer in high-performance computing, serves as a cautionary tale in this context. Founded in 1981, SGI was renowned for its innovative graphics workstations and servers, which powered various fields, including computer-aided design, video production, and scientific visualization. However, the company’s failure to adapt to changing market trends and its reliance on proprietary hardware led to its downfall.
In the early 2000s, SGI’s business model was disrupted by the emergence of commodity-based computing solutions, such as Linux clusters and grid computing. These alternatives offered comparable performance at a fraction of the cost, rendering SGI’s high-end systems less competitive. The company’s attempts to transition to more affordable products were unsuccessful, ultimately leading to its acquisition by Hewlett-Packard in 2006.
The shift towards low-cost high-performance computing solutions has been facilitated by advancements in processor architecture, memory technologies, and software frameworks. For instance, the development of graphics processing units has enabled the acceleration of compute-intensive tasks, such as machine learning and data analytics, at a lower cost than traditional central processing units.
The proliferation of open-source software frameworks has further democratized access to high-performance computing. These frameworks enable developers to harness the processing power of heterogeneous architectures, comprising CPUs, GPUs, and field-programmable gate arrays, without being tied to proprietary hardware or software ecosystems.
The convergence of these trends has given rise to innovative startups and initiatives, which aim to develop affordable and efficient computing solutions for various industries. These developments are poised to transform the landscape of high-performance computing, making it more accessible and cost-effective for a broader range of users.
Increased competition from commodity hardware vendors
Silicon Graphics Inc, a pioneer in high-performance computing and visualization, faced significant challenges in the late 1990s and early 2000s due to increased competition from commodity hardware vendors. The company’s proprietary hardware and software solutions, which were once considered premium products, became less competitive as PC-based systems improved in performance and affordability.
One major factor contributing to SGI’s decline was the rise of Linux clusters, which offered a cost-effective alternative to SGI’s high-end systems. As Linux distributions matured and cluster management tools improved, researchers and scientists began to adopt these solutions for their computational needs, reducing their reliance on SGI’s proprietary platforms. This shift was driven in part by the availability of low-cost, high-performance CPUs from vendors like Intel and AMD.
Another key factor was the increasing power and affordability of commodity graphics processing units (GPUs). As GPUs became more capable of handling general-purpose computing tasks, they began to encroach on SGI’s traditional territory. The introduction of NVIDIA’s CUDA platform in 2007 further accelerated this trend, enabling developers to harness the parallel processing capabilities of GPUs for a wide range of applications.
SGI’s struggles were also exacerbated by its own internal issues, including a complex and fragmented product line, high research and development expenses, and a failure to adapt quickly enough to changing market conditions. The company’s attempts to restructure and refocus its business ultimately proved unsuccessful, leading to its eventual acquisition by Hewlett-Packard in 2016.
The rise of cloud computing and the increasing adoption of hybrid and heterogeneous architectures have further eroded the demand for traditional high-performance computing systems like those offered by SGI. Today, researchers and scientists can access scalable, on-demand computing resources through cloud providers like Amazon Web Services and Microsoft Azure, reducing their need for expensive, proprietary hardware solutions.
The legacy of Silicon Graphics Inc serves as a cautionary tale for companies operating in the rapidly evolving landscape of high-performance computing and visualization. As commodity hardware vendors continue to drive innovation and reduce costs, traditional players must adapt quickly to remain competitive.
Failed attempts at diversification into consumer markets
Silicon Graphics Inc (SGI) was a pioneer in the field of computer-aided design (CAD) and visualization, known for its high-performance workstations and servers. In the 1990s, SGI attempted to diversify into consumer markets with its Indy and Indigo2 computers, which were designed to be more affordable and user-friendly than its traditional workstation products.
However, these attempts ultimately failed due to a combination of factors, including poor marketing, inadequate distribution channels, and intense competition from established players in the consumer market. The Indy computer, for example, was launched in 1993 with a price tag of around $1,000, which was still relatively expensive for a consumer-oriented product.
Another factor that contributed to SGI’s failure in the consumer market was its inability to adapt its business model to the lower margins and higher volumes characteristic of consumer electronics. As a company accustomed to selling high-end workstations to professionals, SGI struggled to adjust to the more competitive pricing and distribution dynamics of the consumer market.
SGI’s foray into consumer markets also coincided with significant changes in the computer industry as a whole. The rise of PC clones and the increasing power of Intel-based processors eroded the performance advantage that SGI’s proprietary MIPS-based processors had once enjoyed. This shift in the technological landscape further undermined SGI’s attempts to establish itself as a major player in the consumer market.
In addition, SGI’s focus on diversification into consumer markets may have distracted the company from its core business of serving professional users. As a result, SGI lost ground to competitors such as Sun Microsystems and Hewlett-Packard in the workstation market, which had traditionally been its bread and butter.
Ultimately, SGI’s failed attempts at diversification into consumer markets contributed to its decline as an independent company. In 2006, SGI filed for bankruptcy and was subsequently acquired by Rackable Systems, a server manufacturer.
Mergers and acquisitions, including Alias Research
The merger with Alias Research was strategic, as it allowed SGI to tap into the growing demand for 3D graphics and animation in industries such as film, television, and video games. The combined entity leveraged Alias’ expertise in 3D modeling and SGI’s strengths in high-performance computing and visualization. This synergy enabled the development of innovative products, including Maya, a 3D computer animation, modeling, simulation, and rendering software that became an industry standard.
However, despite its initial success, SGI struggled to maintain its market position due to increased competition from lower-cost PC-based solutions and changing customer preferences. In 2006, SGI filed for Chapter 11 bankruptcy protection and underwent a significant restructuring process. The company emerged from bankruptcy in 2007 but continued to face financial challenges.
In 2008, Rackable Systems, a provider of data center infrastructure, acquired SGI’s assets for approximately $42.5 million. The merged entity was rebranded as Silicon Graphics International Corp, with a focus on providing high-performance computing and storage solutions for data centers and cloud environments.
The acquisition of Alias Research by SGI is often cited as an example of the importance of strategic mergers and acquisitions in the technology industry. The deal enabled SGI to expand its product offerings, increase its market share, and stay competitive in a rapidly evolving industry landscape.
SGI’s experiences serve as a cautionary tale for companies undergoing mergers and acquisitions, highlighting the need for careful planning, integration, and adaptation to changing market conditions to ensure long-term success.
Financial struggles and decline of SGI’s fortunes
Silicon Graphics Inc was once a leading manufacturer of high-performance computing systems, but it faced significant financial struggles in the early 2000s. In 2001, SGI reported a net loss of $115 million on revenue of $647 million, citing declining sales and increased competition from lower-cost PC-based workstations. This marked a significant decline from its peak in the mid-1990s when it was valued at over $7 billion.
One major factor contributing to SGI’s financial struggles was its failure to adapt to changing market trends. The company had traditionally focused on producing high-end, proprietary systems, but the industry was shifting towards more affordable and standardized PC-based solutions. As a result, SGI’s sales declined as customers turned to lower-cost alternatives.
Another significant factor was SGI’s high research and development expenses. In 2001, the company spent $143 million on R&D, which accounted for approximately 22% of its revenue. While this investment was intended to drive innovation and stay ahead of competitors, it put a significant strain on SGI’s finances.
SGI also faced challenges related to its business model. The company had traditionally relied on selling high-margin systems to a small number of large customers, but this approach became less viable as the market shifted towards more standardized and lower-cost solutions.
In an effort to address its financial struggles, SGI underwent significant restructuring efforts, including layoffs and divestitures. In 2002, the company sold its Alias Research subsidiary, which developed 3D graphics software, to Accel-KKR for $57 million. This move was intended to help SGI focus on its core business and reduce costs.
Despite these efforts, SGI continued to struggle financially. In 2006, the company filed for Chapter 11 bankruptcy protection and underwent a debt-for-equity swap, which reduced its debt by approximately $250 million. However, this restructuring effort ultimately failed to restore the company’s financial health, and SGI was acquired by Rackable Systems in 2008.
Bankruptcy filing and subsequent asset sales
Silicon Graphics Inc, filed for Chapter 11 bankruptcy protection on May 8, 2006. At its peak in the mid-1990s, SGI’s market capitalization reached $7 billion, but the company struggled to adapt to changing market conditions and increased competition.
The bankruptcy filing was a result of SGI’s inability to restructure its debt and reduce operating costs. The company had accumulated significant debt due to declining sales and failed investments in new technologies. In 2005, SGI reported a net loss of $147 million on revenue of $343 million, further exacerbating its financial woes.
Following the bankruptcy filing, SGI’s assets were sold off to various companies. Rackable Systems Inc, a server manufacturer, acquired SGI’s product lines and intellectual property for approximately $42 million. The deal included SGI’s high-performance computing products, such as servers and storage systems, as well as its visualization software.
In addition to the asset sale, SGI also sold off its Alias research division to private equity firm Accel-KKR for around $57 million. The Alias division was a leading developer of 3D graphics and animation software, with clients including major film studios and video game developers.
SGI’s demise was attributed to a combination of factors, including increased competition from low-cost PC manufacturers, failure to adapt to changing market conditions, and poor strategic investments. The company’s struggles served as a cautionary tale for the technology industry, highlighting the importance of innovation and adaptability in rapidly evolving markets.
Legacy of Silicon Graphics Incorporated in modern computing
The legacy of SGI can be seen in modern computing through its influence on graphics processing units, computer-aided engineering, and high-performance computing. The OpenGL API, developed by SGI in collaboration with other industry partners, remains a widely-used standard for 3D graphics rendering. Furthermore, the company’s pioneering work in scalable multiprocessing has had a lasting impact on the development of modern server architectures.
The demise of SGI serves as a cautionary tale for technology companies, highlighting the importance of adaptability and innovation in the face of rapidly changing market conditions.
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https://www.builtinsf.com/articles/silicon-valley-tech-companies
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69 Top Silicon Valley Companies to Know
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[
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[
"Olivia McClure"
] |
2024-08-05T17:18:52+00:00
|
These Silicon Valley tech companies are the innovators worth watching.
|
en
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Built In
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https://www.builtinsf.com/articles/silicon-valley-tech-companies
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CloudBees is a computer software company building the world’s first end-to-end automated software delivery system, allowing companies to balance governance and developer freedom. The company is committed to growing businesses that enable market transformations and revolutionize how technologies work. CloudBees’ solutions encompass software delivery management, continuous delivery, feature flags, release orchestration, DevOps, Docker and Agile. The company works with organizations from a variety of industries including financial services, IoT and government.
Nuro is committed to accelerating the benefits of robotics for everyday life, enabling a more efficient use of our resources, time and attention. The company has developed a fully autonomous, on-road vehicle designed to transport goods quickly, safely and affordably. Boasting a flexible interior design, the vehicle can handle errands of various kinds including dry cleaning and grocery deliveries. Customers can schedule a delivery window that works best for them.
Tempus uses data science and AI to power precision medicine. The company owns the world’s largest library of clinical and molecular data and grants physicians access to actionable information that allows them to make real-time decisions for personalized patient care. The company is aiming to use its precision medicine to help decrease the time it takes for discovery and drug development, as well as boosting personalized care for patients, when it comes to cancer.
Liftoff assists advertisers, publishers and game developers in increasing revenue by providing tools for marketing and monetizing mobile apps. With more than 6,600 clients spanning 74 countries, Liftoff promotes a remote-first work culture, though employees can also work from its offices in Redwood City, Los Angeles and New York City.
Spotnana is a Travel-as-a-Service platform that acts as a unified global booking system. This means corporations and travel agents can replace all of their disparate tools with Spotnana’s single cloud-based solution. Using Spotnana, travelers and agents can view the same travel options from anywhere in the world, which reduces operating costs across the board.
Evidation Health is a health data and analytics platform that captures and analyzes passive, continuous behavior data to quantify health outcomes on an individualized level. Evidation Health’s continuous monitoring of a user’s health helps to develop a patient-centered understanding of the impact of different diseases on the patient, and creates algorithms that can predict progression/regression or identify key intervention points.
Second Measure delivers valuable insight into company performance and consumer behavior by analyzing billions of anonymized purchases to answer real-time questions. The company’s dashboard is designed to give investors and corporate decision-makers a view into how consumers behave on a daily basis. While investors use the company’s tools for screening and sourcing, thesis validation and intra-quarter KPI prediction, consumer brands use them for competitive benchmarking and decision-making on product strategy, partnerships and growth marketing. Drawing on statistical techniques from a wide range of fields, Second Measure solves the complex problems of transactional data enrichment, normalization and visualization.
Wing is an on-demand drone delivery service and platforms company. The delivery service can deliver hundreds of products, like coffee, pharmacy items or food, to a user via Wing’s fleet of drones. All a user needs to do is use the Wing platform to order their items, then wait for the aircraft to deliver everything right to their doorstep. Wing’s drones can carry weights of more than 3 pounds and can reach speeds of up to 70 miles per hour.
Cohesity is committed to redefining data management to eliminate mass data fragmentation. While most enterprise data sits in fragmented infrastructure silos, the company consolidates silos onto one web-scale platform, empowering organizations to run apps on that platform and making it easier than every to back up and extract insights from data. Users can download apps from the Cohesity MarketPlace and run them directly on the DataPlatform to provide new insights and improve security, while a single, easy-to-use UI gets rid of management overhead and increases agility.
Founded in 2010, Freshworks provides organizations of all sizes with SaaS customer engagement solutions that make it easy for support, sales and marketing professionals to communicate effectively with customers. The Customer-for-Life-Cloud powers the next generation of customer engagement, giving your organization the ability to nurture customer relationships in a more predictive way. Freshworks’ Freddy AI assists sales, marketing and support professionals with predictive insights, while automating repetitive tasks and pointing out opportunities to build customers-for-life. Their other products include Freshdesk, which streamlines customer conversations in one place, and Freshservice, which provides a simple-to-configure IT service desk solution in the cloud.
Poshmark is a social commerce platform designed for the next generation of retailers and shoppers. The company is driven by the aim to build the world’s most connected shopping experience and empower people to build thriving retail businesses. Showcasing countless high-end brands, Poshmark allows people to sell their personal style and curate looks for their shoppers, offering protected payments, expedited shipping and free authentication.
Fanatics is the leading e-commerce platform for all-things related to sports merchandise and collectibles. The company has partnerships with virtually every major sports league, including MLB, WNBA, NFL, NBA, MLS and NCAA, to give fans a chance to wear what the pros wear. You can find everything from a Lebron James Lakers jersey to a Cristiano Ronaldo Juventus kit or a Derek Jeted signed baseball bat through the Fanatics platform.
NUVIA is reimagining silicon design to create a new class of computing processor that can deliver the energy efficiency and performance that is demanded by modern-day computing. The company has opened offices in Austin and Toronto, and has recently raised $240 million to expand and accelerate their silicon design operations.
Sage Intacct is a cloud-based financial and accounting management platform using AI to automate complex processes. The platform, built specifically with finance in mind, helps companies to manage everything from core financial processes like accounts payable and general ledger accounts to HR-related processes like compensation, benefits and people analytics. Jobvite, Acquia, the Big Ten, dataxu and Culver’s all use Sage Intacct’s platform to manage all-things accounting and finance.
Roblox connects over 65 million users to immersive 3D experiences through its gaming and development platform. One of the company’s newest features includes AI-powered chat translations in 16 languages, enabling international play between multilingual players around the world. Employees engage in remote and on-site work from the company’s headquarters in San Mateo, California.
Founded in 2008, Machine Zone is a global gaming company that combines the power of technology with creative vision to make experiences that connect people worldwide. The company has delivered some of the world’s most popular games such as Game of War: Fire Age, Mobile Strike, World War Rising and Final Fantasy XV: A New Empire. Machine Zone’s real-time engagement engine (RTE) powers a variety of gaming aspects including player acquisition and real-time game operations, providing a scale and speed that allows the continuous optimization of player experience and engagement.
Bluevine is dedicated to helping business owners succeed and thrive by granting them convenient access to capital for everyday funding needs. The company offers a suite of products built to meet the financial needs of today’s business owners, which includes credit, term loan and invoice factoring. Bluevine provides small and medium-sized businesses with access to more than $2.5 billion in financing and is backed by leading private and institutional investors. Since its founding, the company has helped fund nearly two million dollars to small businesses.
Clari is a SaaS platform that provides end-to-end sales analytics and forecasting. The platform easily integrates with CRMs to automate painstaking sales processes, manage pipeline generation and churn reduction and illuminate potential risk. Zoom, Dropbox, Adobe, Okta, Atlassian and UiPath all use Clari to simplify and automate their revenue operations.
Where is Silicon Valley?
Silicon Valley spans the southern portion of the San Francisco Bay Area in Northern California, stretching roughly from the city of Belmont to San Jose. Some of the region's most prominent cities include Palo Alto, Redwood City, Mountain View and Fremont.
Established in 2014, Zoox is developing a fully autonomous, purpose-built fleet designed for AI to transform mobility-as-a-service. Drawing on the latest innovations in robotics, automotive and renewable energy, the company is designing a symmetrical, bidirectional, zero-emissions vehicle to solve the challenges of autonomous mobility. Zoox’s vehicles can navigate cities and highways, make unprotected left and right turns on red, yield to pedestrians and pass double parked cars. The company is driven by the goal to make people’s time between places more useful, social and enjoyable.
Signifyd provides guaranteed fraud protection, enabling retailers to provide a friction-free buying experience for their customers. The company's fraud protection guarantee is achieved by leveraging big data, machine learning and domain expertise. Serving clients in over 100 countries, Signifyd is dedicated to making commerce safer for online retailers so they can focus on growing their businesses without the threat of online retail fraud. The company also specializes in revenue optimization, cross-border expansion, order automation and omnichannel commerce.
Established in 2013, Menlo Security provides a patented isolation platform that protects organizations from cyber attacks by eliminating the threat of malware. The platform isolates and executes all web content in the cloud, enabling users to safely interact with websites, links and documents without compromising security. Menlo Security helps organizations embrace network transformation and shift to a cloud-first security software, completely eradicate malware and phishing and secure local internet breakouts.
Plume WiFi is an intelligent WiFi services delivery platform committed to understanding the digital lifestyles that people live. The company uses cloud-based technology powered by AI to provide full-length, uninterrupted connectivity where and when it’s needed. Plume performs advanced self-optimizations to allocate capacity to certain devices, filters out suspicious content and blocks ad content from known ad servers. Users can also manage the type of content each device or profile can access, grant WiFi access to certain guests and schedule times for the internet to be disabled for a specific device or person.
Helix is a healthtech company focused on individualized healthcare through personal genomics. The company’s end-to-end platform enables health systems and life sciences companies to accelerate genomic research with scalable databases. The databases help to identify promising targets for drug candidates, easily diagnose hereditary diseases within patients and use real-world epidemiological data and analytics for drug development and pricing.
Established in 2010, Sumo Logic is a secure, cloud-native, machine data analytics service that helps customers around the world build, run and secure their modern applications and cloud infrastructures. The company delivers real-time, continuous intelligence from structured, semi-structured and unstructured data across the entire application lifecycle and stack. Their platform helps companies make data-driven decisions and reduce the time to investigate security and operational issues, so they can free up resources for other activities. Sumo Logic provides real-time visibility into AWS, Azure and GCP cloud applications, as well as over 150 other apps and native integrations.
Dedicated to democratizing AI, H2O.ai is redefining the use of AI with software through the use of its category-creating, open-source machine learning platform, H2O. Working with more than 18,000 companies, the company offers driverless AI, which provides an easier, faster and more effective means of implementing data science. H2O.ai works with companies connected to finance, insurance, healthcare, retail, sales and marketing, some of which includes NVIDIA, IBM, Intel, Azure, Google and Capital One.
Addepar is a performance reporting platform that handles companies’ assets and connects their financial goals and objectives with real-world actionable insights. The platform aggregates portfolio, market and client data in one place. This provides asset owners and advisors a clear financial picture at every level, enabling them to make more informed and timely investment decisions. Working with financial advisors, family offices and large financial institutions, Addepar automates and streamlines performance reporting and communication within a secure platform. The platform also offers a firm-branded destination for companies’ clients and an API that gives clients and partners a programmatic solution for weaving data and calculations from the platform into other products and systems.
Powered by AI, SentinelOne unifies prevention, detection, response, remediation and forensics in a single platform. The company was established to deliver autonomous security for the endpoint, datacenter and cloud environments to help organizations quickly and simply secure their assets. Organizations can use SentinelOne to detect malicious behavior across multiple vectors, eliminate threats with fully-automated integrated response and adapt their defenses against advanced cyberattacks. Boasting offices worldwide, the company is committed to keeping their platform ahead of threats from every vector.
Founded in 2013, Poynt is an open commerce platform committed to providing merchants with the software and services needed to transform their businesses. With international headquarters in Singapore, the company has reinvented the payment terminal into a connected, multi-purpose device that runs third-party apps. Boasting nine comprehensive search verticals, Poynt enhances a user’s ability to connect with exactly what they need in their local area. Poynt OS powers any smart payment terminal worldwide, creating a new app economy for merchants and allowing developers to write once and distribute everywhere.
Committed to modernizing the world of physical security, Verkada Inc builds intelligent, enterprise security cameras designed for the IoT era. Their IoT platform couples plug-and-play security cameras with intelligent, cloud-based software within a scalable system. Working with hundreds of organizations, Verkada helps protect people and assets, secure facilities and gain new insights to improve the efficiency of operations. The company is dedicated to creating an autonomous, distributed system capable of understanding the world in real-time.
Orbital Insight, Inc. is a Geospatial Big Data company striving to understand and characterize socio-economic trends at global, regional and hyper-local scales. Leveraging the growing availability of satellite, UAV and other geospatial data sources, the company cultivates expertise in image processing, machine learning and statistical analysis to match their data’s exponential growth. Their analytics platform forecasts results for the current period using satellite imagery, visualizing results for easy customer digestion. Orbital Insight works with a wide range of companies, from hedge funds to humanitarian organizations, providing an in-depth understanding of economic and social trends.
Working with over 4,000 companies worldwide, Druva offers data protection and management for the cloud era. Provided as-a-service and built on AWS, the Druva Cloud Platform is a SaaS data protection solution that protects and manages enterprise backup data across data center, cloud and endpoint workloads. The company’s solutions leave behind the cost and complexity of onsite hardware, software and infrastructure, while accelerating backup performance, offering unlimited, on-demand scalability and providing a unified view of your backup data. Druva’s cloud architecture makes backup data more open and accessible so clients can streamline governance, improve cyber resiliency and gain critical insights.
Founded in 2016, Moveworks is a cloud-based AI platform built for large enterprises dedicated to resolving employees’ IT support issues. Their team, which boasts AI academic expertise, an understanding of enterprise language and specialization in conversational AI, is working towards revolutionizing how IT resolution works, prompting a fundamental shift for enterprises. The Moveworks platform contains pre-trained Natural Language Understanding (NLU), as well as advanced conversational AI, collective learning and semantic search, the latter of which finds precise answers from deep within existing knowledge articles, documents and FAQs. The company has worked with leading enterprises like Nutanix, Autodesk, Broadcom and Medallia.
ThoughtSpot helps the world’s leading enterprises empower every person in their organization to quickly uncover data-driven insights. Their search and AI-driven analytics platform allows users to instantly analyze billions of rows of data and leverage AI to get relevant, trusted insights. SearchIQ lets you have a conversation with your data through natural language search, while SpotIQ learns from your usage to surface hidden personalized insights. ThoughtSpot enables leaders from every industry do their own data analysis, helping employees ask questions and get answers from their company data without training.
Founded in 2012, Carta is dedicated to building the global ownership management platform, changing how companies, investors, law firms and employees manage equity. Driven by a commitment to transparency and equality in equity, the company is breaking the mold of how capital markets operate. Carta is focused on converging private and public markets and mapping and connecting the global ownership network. Their cap table management software updates automatically when users issue electronic securities, raise a round or get a 409A valuation, enabling employees and investors to accept electronic securities, exercise options and track vesting schedules.
Point provides alternative home financing to new and existing homebuyers through a shared equity process. Point will invest in a slice of a homebuyers equity, paying them between $35,000-$350,000, depending on the home’s value. There are no monthly payments with Point, so owners can use the extra cash flow to make important fixes or payments on the place. Then, the owners can repay when it’s convenient for them either through refinancing or through a portion of the appreciation value if they decide to sell the home.
C3 IoT is an enterprise AI software provider dedicated to accelerating digital transformation. Boasting offices worldwide, the company delivers a comprehensive and proven set of capabilities for developing, deploying and operating large-scale AI, predictive analytics and IoT applications for enterprises within a wide range of industries. Backed by powerful model-driven AI architecture, the C3 AI Suite enhances the productivity of data scientists and application developers, thus enabling the delivery of production applications with significantly less code and cost. Operating in a private, hybrid cloud or multi-cloud environment, the suite supports configurable, pre-built, high-value AI applications for predictive maintenance, fraud detection, sensor network health, supply chain optimization, energy management and more.
Established in 2009, Quora is a Q&A platform designed to encourage the world to share and grow knowledge. The company is committed to democratizing knowledge of all types, from politics and painting to cooking and coding. The platform’s mission is to connect the people who have knowledge to those who need it, unite people with different perspectives so they can learn from each other and empower everyone to share their own knowledge with the world.
Clumio is the first Saas, public, private cloud enterprise protection services that’s bundled on a single platform. The company manages scalability and costs of cloud-based applications, while consistently maintaining security protocols. The backup-as-a-service helps to eliminate the complexity of traditional infrastructure management.
Illumio provides adaptive micro-segmentation technology that prevents the spread of breaches inside any data center and cloud. The company lets businesses choose the level of segmentation that best suits their environment, providing real-time application dependency and vulnerability maps across their data center and cloud environments. Enterprises like Salesforce, Oracle and Morgan Stanley use Illumio’s technology to reduce cyber risk and achieve regulatory compliance. The Illumio Adaptive Security Platform provides visibility into the connectivity between workloads across heterogeneous compute environments, generates optimal security segmentation policies based on how workloads communicate, and more.
Founded in 1992, NetApp offers a range of cloud data services that simplify the management of applications and data across cloud and on-premises environments to accelerate digital transformation. With several offices located worldwide, the company helps global organizations unleash the full potential of their data to expand customer touchpoints, foster greater innovation and optimize their operations. NetApp’s hyper-converged infrastructure (HCI) is different from conventional HCI designs, offering dedicated storage nodes.
Workato is an AI-based middleware platform that enables businesses and IT to integrate their apps and automate complex business workflows with security and governance. Amidst the growing fragmentation of data, apps and business processes in enterprises, the company helps organizations integrate and automate significantly faster than traditional tools with reduced ownership costs. Transforming businesses through digital automation, Workato provides a cloud-native, consumer-scale platform that can handle app, data, API, integrations and process automations. The company also enables IT and business users to build integrations and automations while providing the tools to manage and govern them, in addition to empowering everyone in the business to have relevant info and better workflows through AI-powered chatbots.
Location: Palo Alto
What they do: Founded in 2013, Light develops computational imaging technology to change how we capture life’s moments and how our devices see the world. The company is pioneering real-time 3D passive optics to enable automobiles to see their environment like humans, granting them longer range and better accuracy. Drawing on innovations in multi-view stereo and hybrid signal processing, Light’s sensing technology provides rich and reliable depth at higher resolution in real time. Light is guided by the idea that human-like vision is the key to advanced autonomy and granting automobiles the ability to accurately and safely navigate the driving environment.
DNAnexus combines cloud computing expertise and bioinformatics to create a global network for genomic medicine. The company provides security, scalability and collaboration for enterprises and organizations pursuing genomic-based approaches to accelerating medical discovery. DNANexus’s platform facilitates the integration of genetic data with other data types, enabling distributed research teams access to the same data and analysis tools to advance scientific discovery. Supporting more than 100 enterprise clients, the company enables breakthroughs in health science, the development of life-saving cures and access to critical data for new discovery.
GRAIL develops blood tests that aim to detect cancer at earlier stages than traditional techniques. The company uses intelligent models, from vast amounts of tumor genome data, to identify clinically actionable ways to detect cancer at earlier stages. By identifying a wider range of cancers at early stages, GRAIL hopes to increase survival rates by 5-10x.
With offices located across the globe, Branch is transforming how brands and users interact across digital platforms by providing cross-platform linking and attribution solutions. The company’s deep linking solutions are intended to deliver seamless experiences that increase ROI, decrease wasted spend and eliminate siloed attribution, while unifying user experience and measurement across different devices, channels and platforms. Branch helps companies turn low-cost web traffic into high-converting app users, attribute app installs more accurately, drive better campaign performance and more. By integrating their technology into core marketing channels like apps, web, email and social media, brands can drive higher-value conversions.
Zscaler is a SaaS security platform that provides safe and fast connections between a user and their applications. The Security-as-a-Service platform ensures that all applications are constantly connected, regardless of device, network or location. The platform also includes a direct-to-cloud security stack that protects users and offices at all times from cyber attacks, without the use of costly network infrastructures.
Couchbase offers an enterprise-class database that revolutionizes digital innovation. The database provides the robust capabilities required for business-critical applications, combining noSQL with the power and familiarity of SQL and thus simplifying the transition from mainframe and relational databases. Backed by a memory-first architecture, Couchbase makes sure that operations occur in-memory, supporting memory-optimized data management options. The core database engine is comprised of elastic Multi-Dimensional Scaling (MDS) architecture, offering companies both the scalability to deliver responsive customer applications and the flexibility to adapt to changing workloads and application requirements.
Upwork is a freelancing website designed to make it easier for the world’s businesses and independent professionals to find each other. The company’s matching technologies and services grant businesses access to a global pool of proven professionals so they can scale their teams dynamically and reach business goals. Companies have the opportunity to post jobs, while Upwork connects them with top talent and helps them set up interviews. Users can set up video calls, share files and even receive invoices through the website. Upwork’s community of independent professionals spans many areas including web and mobile development, writing, virtual assistants, sales and marketing and customer service.
SurveyMonkey is a survey platform designed to enable curious individuals and companies to have conversations at scale with the people who matter most. The platform hosts 20 million questions on a daily basis and boasts a suite of products built to help companies collect and understand data from their customers, employees or target markets. SurveyMonkey’s various features allow users to dig deeper into data with combined filters and crosstab reports, score surveys to estimate their success and share surveys securely using flexible permission controls. With offices located around the globe, the company works with organizations from a wide range of industries including Lyft, Box, HP, Nexonia and Nextdoor.
Course Hero is an edtech platform featuring course-specific material, digital textbooks and study guides. The company gives users access to more than 40 million course-specific study materials for popular classes at universities all of the country, including Arizona State University, New York University, University of Illinois, Stanford and Harvard.
Acquired by Intel in 2019, Barefoot is committed to making programming networks simple. The company has crafted technology that lifts the logic and algorithms for the forwarding plane from hardware into software, while delivering fast performance. Barefoot’s Deep Insight offers a set of capabilities to revolutionize network performance monitoring such as analyzing every packet from every switch and router in the network, enabling an intelligent and flexible triggering mechanism to detect and report events in real-time and employing machine learning to automatically baseline the network performance and detect anomalies. Barefoot works with enterprises, mega-scale data centers and telco providers to enhance visibility, achieve design intent, increase network reliability and accelerate innovation.
Founded in 2012, AppLovin builds technology that fuels popular mobile games, helping indie and established mobile game developers connect with billions of global users so they can be discovered. With offices located worldwide, the company provides a comprehensive set of solutions developers need to monetize, publish, understand and grow their businesses. Their products include AppDiscovery, which helps grow audiences and revenue faster, and SafeDK, which creates a better and safer experience for users by monitoring ad quality and performance. AppLovin’s technologies are available to all game developers and drive the growth of games from studio partners and its own studio.
Livongo Health is a platform that empowers people with chronic conditions to live healthier lives. Working primarily with those diagnosed with diabetes, hypertension, weight management and behavioral health issues, the company offers real-time support, providing expert coaching while keeping doctors and loved ones informed. Backed by a team of data scientists, Livongo Health aggregates and interprets health data and information to create actionable and personalized health signals. Their Applied Health Signals Engine combines dozens of data sets with signals from Livongo devices, coaches and web assets, enabling them to provide personalized recommendations to their members.
Samsara builds hardware and software solutions meant to improve operational efficiency and safety for businesses across industries like logistics, transportation, construction and utilities. The company also has offerings that help client companies achieve their sustainability goals, such as solutions for monitoring and optimizing fuel consumption.
Founded in 2010, Vicarious develops artificial general intelligence for robots by combining insights from generative probabilistic models and systems neuroscience. Their architecture trains faster, adapts more readily and generalizes more broadly than commonly used robotics approaches. Vicarious’ research methods are centered around data efficiency, unsupervised learning, neuro and cognitive sciences, and network structure. The company is committed to building systems to bring human-like intelligence to robots, providing robots the ability to generalize from a few training examples and thus work effectively in a variety of environments without extensive reprogramming.
Udacity is dedicated to democratizing education, empowering people through learning and connecting learning to jobs. Offering a flexible digital education platform, the company partners with tech organizations to learn about tech and then teach critical skills that companies are looking for in prospective talent. Udacity equips the busiest learners with the skills they need to land the most in-demand tech roles, bringing the highest quality learning possible to the largest number of students. The company’s courses cover a wide range of popular tech topics including artificial intelligence, UX design, marketing analytics, web development, machine learning and self-driving vehicle engineering.
Established in 2010, Cloudinary offers an easy-to-use, end-to-end cloud-based image and video management solution for global brands. Working with both startups and large enterprises, the company allows users to easily move images, videos and other business-critical digital assets to the cloud. Users can automatically perform smart image and video resizing, as well as fully integrate Facebook, Twitter, Google+ and Gravatar profile image extraction instantly and grab images from any online resource in any dimension and style. Cloudinary’s comprehensive APIs and administrative capabilities allow for easy integration with any web application, while alternative integration methods enable non-developers to benefit from the company’s solution with few code changes.
Established in 2012, Highfive has reinvented meeting rooms for enterprises, improving the quality and ease of intelligent in-room video conferencing. Powered by HD video and Dolby Voice audio, the company’s hardware is designed to provide a truly in-person experience. With an installment time of less than 15 minutes, Highfive can be instantly active with a single click, boasting a video stack comprised of WebRTC and AWS hyperscale cloud. For mid-level and enterprise businesses that often leverage multiple video conferencing platforms, Highfive’s Meeting Connector allows users to connect directly with BlueJeans, Webex, Zoom and other SIP-enabled platforms.
Navan provides businesses with a comprehensive software solution for simplifying corporate travel and expense management. The company’s platform lets users manage travel arrangements for individuals or groups of as many as 50 people. It also comes with tools for establishing and maintaining compliance with spending policies. Navan’s capabilities benefit travel managers, travelers, finance teams, office administrators and executive assistants.
Mindstrong is a mental health platform that offers qualified users free access to on-demand mental health services. The service allows users to book 20-minute therapy sessions with licensed mental health professionals who specialize in everything from Cognitive Behavioral Therapy (CBT) to Psychoeducation. The app allows users to message, call or video chat a professional, 24/7. Once patients start using the app, it will measure your phone use (swiping, typing, etc.) to gather passive data on your psychological state to better personalize your care.
Established in 2012, Netskope helps organizations take full advantage of the cloud and web without sacrificing security. The company’s patented Cloud XD technology eliminates blind spots by going deeper than other security providers to target and control activities across thousands of cloud services and millions of websites. Netskope’s Security Cloud uses a cloud-native NextGen secure web gateway, which prevents threats, protects data, filters websites and controls cloud apps. Their cloud access security broker (CASB) provides advanced data and threat protection for managed cloud apps like Office 365 and G Suite, while their private cloud security provides visibility, compliance and threat protection for sensitive data, and critical workloads in Amazon Web Services (AWS), Google Cloud Platform (GCP) and Microsoft Azure.
SoundHound produces voice-enabled AI technologies to make interactions with the things around us more human. The company is dedicated to enabling humans to interact with the world by speaking naturally to mobile phones, cars, TVs, music speakers, coffee machines, and more. SoundHound’s Houndify platform enables companies to integrate voice AI into their products through an independent platform. The consumer Hound app leverages the company’s Speech-to-Meaning technology and enables users to search using their natural voices, while the SoundHound app allows people to discover, explore and share music.
Freedom Financial Network empowers consumers to overcome debt and improve their financial health through their portfolio of finance-focused sites. The company offers financial advice and services, for everything from mortgages to personal loans, through their companies, Freedom Debt Relief, Freedom Plus, bills.com, Consolidation Plus and Lendage.
BigPanda provides their own Autonomous Operations platform, which enables IT Ops, NOC and DevOps teams to detect, investigate and resolve IT incidents faster and more easily. The company uses machine learning to scale up the ability to manage IT alerts and data coming out of data centers, help IT deliver a superior level of digital service and application performance and accelerate innovation. BigPanda’s platform helps large enterprises reduce downtime, eliminate false positives, adopt critical AIOps capabilities and detect root cause changes in real time. Their customers include Cisco, Turner Broadcasting, News Corp, Autodesk and Shutterfly.
Skydio builds intelligent flying machines that bring the creative capacity of software to life in the physical world. The Skydio 2 drone features a photo mode for capturing 12MP HDR photos and a camera capable of 4K video. Skydio 2 offers worry-free, high speed manual flight with obstacle avoidance in every direction, paired with controller-driven cinematic skills. The drone can be operated via a controller, app, or the GPS-tracking Skydio Beacon. Skydio is committed to transforming computers into mobile agents that can act on our behalf in the world.
Adara is dedicated to empowering travel brands to grow the industry together. The company’s data, technology and services deliver critical intelligence that drives personalization and relevance throughout the customer journey for sustainable growth. Adara provides greater visibility into the needs and wants of in-market travel consumers, offering a holistic understanding of patterns, behavior and trends. Built upon a travel data co-op, the company helps travel brands increase marketing efficiency, foster growth and maximize the value of their customer portfolios.
Nauto is an AI-powered, driver behavior learning platform that predicts, actively prevents and reduces high-risk events in the mobility ecosystem. Their machine learning algorithms continuously improve and impact driver behavior before events happen, using billions of data points from over 400 million AI-analyzed video miles. Nauto’s In-Vehicle Alerts coach company fleets in real-time, and for drivers that need extra safety training, AI-powered detection guides them through the coaching process. The company equips organizations with the tools needed to run a more efficient and effective safety program, providing features that help protect driver privacy and offer transparency between managers and drivers.
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https://en.wikipedia.org/wiki/SGI_Indy
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1993 graphics workstation computer
IndyManufacturerSilicon Graphics IncorporatedIntroducedJuly 12, 1993; 31 years ago ( )DiscontinuedJune 30, 1997 (June 30, 1997)Cost$5,000-$16,495ProcessorR4000, R4400, R4600, or R5000Frequency100 MHzMemory16 or 32 MB (up to 256 MB)[1]Dimensions41 cm × 36 cm × 8 cm
The Indy, code-named "Guinness", is a low-end multimedia workstation introduced on July 12, 1993 by Silicon Graphics Incorporated (SGI). SGI developed, manufactured, and marketed Indy as the lowest end of its product line, for computer-aided design (CAD), desktop publishing, and multimedia markets. It competed with Intel x86 computers,[2] and with Windows and Macintosh,[1][3] including using their files and running their applications via software emulation.[4] It is the first computer to come standard with a video camera, called IndyCam.[5]
Indy was repackaged as a server model called Challenge S. Indy was discontinued on June 30, 1997 and support ended on December 31, 2011.[6]
Hardware
[edit]
The Indy is one of the smaller form factors of the time (41 cm × 36 cm × 8 cm). The sturdy, electric-blue colored "pizza box" chassis is comparable to a contemporary small desktop PC, and is intended to fit underneath a large CRT monitor.[citation needed] Designed for multimedia use, the Indy includes analog and digital I/O, 6-channel digital audio processing, SCSI, and inputs for composite and S-Video. It has ISDN and Ethernet ports. It is the first computer to include a video camera, called IndyCam.[7][1]
The base Indy model was launched in July 1993 at US$5,000 (equivalent to about $10,500 in 2023),[1] without a hard drive, or diskless, and is intended for networked use.[1][2] The model with 2 GB hard drive was launched at $7,500. The base model was launched with 16 MB of RAM and can be expanded to 256 MB.[1] Later in 1993, that duo was updated to have the base model with a 535 MB hard drive ($5,995 in January 1994) and the high end with 24-bit color, 32 MB RAM, and 1 GB hard drive ($16,495 in January 1994). In March 1994, the series was refreshed with a new 150 MHz R4400 CPU, and the low end model has 8-bit color, 32 MB RAM, 535 MB hard drive, and 16-inch 1280 x 1024 monitor for $15,495 (equivalent to $31,900 in 2023) and the high end has 24-bit color, 64 MB RAM, 1 GB hard drive for $22,995 (equivalent to $47,300 in 2023).[3]
Sales of low-cost high-performance workstations were projected to triple from 1994 to 1999, and competition for that market increased between Sun and SGI. In February 1995, SGI targeted "high-performance iron" at junior engineers by refreshing the Indy series with two models: the Indy Modeler PC and SC systems starting at $15,800 with a 133 MHz R4600 CPU, 1 GB hard drive, 32 MB of RAM, and 20-inch monitor.[8] Time Warner Cable and US West created an experimental interactive video-on-demand service via cable television, based on Indy.[9]
The optional floptical drive uses 21 MB disks and standard 3.5" magnetic floppy disks.
CPU
[edit]
Indy's motherboard has a socket for the Processor Module (PM). Indy was launched with a 100 MHz MIPS R4000PC microprocessor upgrade option.[1][7] The Indy, at the bottom of SGI's price list, was then upgraded with the MIPS R4400 and the low-cost, low-power-consumption Quantum Effect Devices (QED) R4600. The R4600 has higher integer performance, but lesser floating-point capability. The R4600 appears outside the Indy line briefly once, in the SGI Indigo². A number of limits, such as the series of microprocessor issues, the relatively low-powered graphics boards, lower maximum RAM amount, and relative lack of internal expansion ability compared to the SGI Indigo, led to the Indy being pejoratively described by industry insiders as "An Indigo without the 'go'."[citation needed]
As the R4600 chip itself has no L2 cache controller, an external controller is used to add 512K of L2 cache. R4600s processor modules, both with an L2 cache (SC) and without (PC), have been produced for the Indy. At the same clock rate, the SC version of the processor module is generally 20 to 40 percent faster than the PC version, due to the memory cache.
The Indy is the first SGI machine to utilize the QED R5000 microprocessor, which offers significant advantages over the R4400 and R4600 it replaced.[further explanation needed]
The performance of the 100 MHz R4000 in conjunction with 500 KB of secondary cache, this cache not being provided on the base model, was described as broadly comparable to Intel's 66 MHz Pentium, at least in terms of published benchmark results, although that particular version of the Pentium was "still a few months off" at the time of early reviews of the machine. Indy was reportedly seen by SGI as a rival to high-end Macs in the graphics rendering market, with claims of "40 times the performance of a machine with a 68030".[10]
Graphics
[edit]
Three graphics subsystems have been produced for the Indy: 8-bit XL, 24-bit XL, and 24-bit XZ. Each support a maximum resolution of 1280 × 1024 pixels[1] at a refresh rate of 76 Hz, and have a 13W3 monitor connection. Graphics options are connected to the system using a GIO32bis bus.
8-bit XL
[edit]
Also known as "Newport" graphics and based on the REX3 chipset, these were designed for general 2D X11 applications; no hardware 3D acceleration is included. This is the first accelerator to demonstrate object-based antialiasing and exact sub-pixel lines using Bresenham's line algorithm.
24-bit XL (XGE)
[edit]
Using a circuit board identical to that of the 8-bit XL, the 24-bit XL includes three times as much framebuffer memory to accommodate 24-bit color.
In an Indy with an R5000 CPU, these graphics options are called XGE, because an R5000 CPU can perform 3D geometry calculations faster than the XZ subsystems's four Geometry Engines. As a result, all 3D is done in software. The situation is, however, reversed when the calculations are done for full-screen rendering and involve z-buffer operations (which XL does not possess). XZ graphics are rarely paired with the R5000 for this reason.[citation needed]
XZ
[edit]
This graphics option is a conversion of the Indigo²'s XZ (Elan) graphics into Indy. They offer very good non-textured 3D performance for the time, sacrificing a bit of 2D performance in return. The XZ graphics option has not been popular in Indy models that used the R5000 microprocessor. This is mostly due to the R5000's MIPS IV architecture, which enhanced MIPS' floating-point arithmetic capabilities, allowing coordinate transformations to be performed faster than the XZ graphics board. However, using XZ to perform coordinate transforms does free the CPU to perform other rendering-related calculations. If the application is not transform-limited (limited by the speed of coordinate transformation), then the XZ option can provide significant rasterization performance advantages over the XL boards.
These graphics take the form of two boards, vertically layered, and block both GIO option slots, making them less favorable because options such as 10/100 Ethernet and JPEG compression boards cannot be installed.
Video
[edit]
The Indy is the first computer to have a standard video camera,[5] and the first SGI computer to have standard video inputs. Each Indy has an amateur quality composite, S-Video, and digital video input built into the motherboard, which collectively are known as "Vino" (video input, no output) video. The digital input is a SGI Digital Video Interface (proprietary D-sub connector) with a rectangular high density array of 60 pins, and is used by the IndyCam. The connector incorporates two digital video ports, but only uses the first one for input on the Indy. The protocol is similar to the CCIR 601 Parallel Video interface.
The maximum supported input resolution is 640×480 for NTSC or 768×576 for PAL. A fast machine is required to capture at either of these resolutions, though; an Indy with slower R4600PC CPU, for example, may require the input resolution to be reduced before storage or processing. However, the Vino hardware is capable of DMAing video fields directly into the framebuffer with minimal CPU overhead.
The IndyCam is a small fixed-focus digital video camera, co-developed by SGI and Teleview Research.[7][4] It can be mounted above the monitor, or hand-held. It is one of the first desktop video cameras[1] and the first to come standard on a computer.[5] With the bundled software, it can be used for video conferencing, video editing, or video email.[4]
None of the Indy models support a video output by default, and that would require the Indy Video GIO32 card. An optional CosmoCompress module offers real-time JPEG video compression and decompression and uses another GIO32 slot.
Storage
[edit]
The Indy has two drive bays for 1-inch tall 3.5" drives. The upper drive bay is externally accessible and may hold a SCSI floptical drive. All external and internal drives share a single Fast SCSI bus (unless a GIO32 SCSI card has been installed).
External CD-ROM drives connect via SCSI connector at the rear side of the box. The typical drive supports boot, OS install, audio. A special ROM is required to boot from for certain device types.[11] A small number of CD-ROM drives have the firmware needed to do audio over SCSI.
Networking
[edit]
All Indy models shipped with AUI/10BASE-T Ethernet and ISDN as standard equipment. The Ethernet ports are half-duplex only. The 10BASE-T port takes precedence over the AUI port; if the system detects a carrier on both ports, it will use the 10BASE-T.
Two different manufacturers produced 100BASE-TX Ethernet cards compatible with the Indy, both of which attached to the system using the GIO32 bus. Set Engineering produced one such fast Ethernet card, based on the Texas Instruments ThunderLAN chipset, under contract with SGI. Phobos also produced models of fast Ethernet cards for the Indy (the G100 and G130).
The ISDN port provided on the Indy has no NT1. An external NT1 is required to use the ISDN port in North America.
Software
[edit]
Indy was launched with the IRIX 5.1 operating system,[1] by which it is binary-compatible across the entire SGI family.[1][3] 5.1 does not take full advantage of the hardware due to inadequate memory management. Later in 1993, SGI increased the base specification to 32 MB. IRIX 5.2 and later have much more efficient memory usage.[3] The latest release of IRIX available for the Indy workstations is 6.5.22.[citation needed] Indy includes a CD of video games.[4]
Indy competed with Windows and Macintosh,[1][3] including using their files and running their applications via software emulation.[4] One commentator remarked that using Quorum's Latitude technology,[12] "Indy blows Macs away using the Mac's own software", also expressing similar sentiments about Windows support provided by SoftPC.[13] AutoCAD Designer was priced at $1,500 (equivalent to $3,100 in 2023) to target the affordable CAD market, including Indy.[14]
Challenge S
[edit]
The Challenge S is a variant of the Indy for low-end server usage. It has an identical case as the Indy except for the name badge, with a nearly identical motherboard, but without any graphics or sound hardware.[15] Vestigial volume control buttons on the front are not connected to anything. The Challenge S comes with an ISDN port and a 10 Mbit/s AUI Ethernet port. All local administration is performed by serial console to one of the two DIN-8 serial ports, which can be used to reach the PROM prompt and uses the same pin-out found on Macintosh serial ports.
Reception
[edit]
At launch, SGI said it expected to sell $1 billion worth of Indy units.[9]
Electronic Design reviewed the Indy at launch in July 1993, saying that the IndyCam and video input marked a new standard for workstations.[16] Jonathan Chevreau of the National Post wrote several articles at Indy's launch, making a headline out of the standardization of a video camera on a personal computer, speculating this could mark the convergence of consumer electronics with the computer industry.[9] On August 21, 1993, he said the Indy was "one of the most interesting new products in the personal computer industry" as SGI's first price breakthrough for individuals. He said Indy's video power and Indigo Magic Desktop GUI make it "much more than a personal computer", with a sophistication that "clone companies will be slow in imitating". He summarized, "Anyone interested in the booming new field of multimedia and the convergence of personal computers with consumer electronics and telecommunications would be smitten by a serious case of techno-lust by the Indy."[4] He said the Indy positioned SGI at the forefront of the birth of the major industry of desktop multimedia, as the best recent multimedia computer next to the Macintosh Quadra 840AV and Centris 660AV.[17] Machine Design magazine called Indy "the only computer to come standard with a color digital video camera, IndyCam".[5] Mechanical Engineering magazine said "the most unique feature of the Indy system is its integrated digital media capabilities", such as IndyCam, video input port, and applications for video conferencing and multimedia creation.[1] Byte magazine said in September 1993 that Apple and SGI were trailblazers by setting audio and video as default features of the Macintosh and Indy desktop PCs, which "could change the way businesspeople communicate".[18] In 1994, Byte called the new Indy "low on price but high on graphics performance", noting its interoperability with Windows and Macintosh.[19]
SGI timeline
[edit]
References
[edit]
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SGI's vs PC's?
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en
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|
https://groups.google.com/g/comp.graphics.apps.photoshop/c/_hxjPwedEJQ
|
This debate is nearly as meaningless as the PCs vs. Macs debates!
Lets look at a real world example, shall we?
Turner Production/Effects:
2 Onyx RE2 systems
2 Onyx IR systems
3 Indigo2 systems (2 high impact)
2 Indy R4k's (as far as I know)
1 Indy R5k (Indy studio)
The Onyx's do things that *NO* PC is doing right now...I don't
think we have any debate over that. They're running Virtual Set
software, real time character animation of complicated scenes
(believe me, no Alphas/PC's are doing what we're doing with the
Onyx's). For modelling and animation the animators use the
Impacts but then render on Onyx's using Alias and SoftImage.
The Indy's are there for system administration and development
and to pick up little peices when the other machines are busy.
The R5k Indy even has Alias animator (and I defy any Mac to run
Photoshop as fast as this machine does). The two RE's also
run flame and the non-impact Indigo2 runs flint.
Do we have PC's? Some of the people here have PC's for the
business end of the Production department, but none are running
any graphics software, AFAIK.
Do we have Mac's? Most of the Macs in our editing suites are
used for email, sometimes we use them for tranfering files.
Very often clients give us images/textures/whatever on Mac
disks. They're there if we need them, but it's very rare.
Most images done internally are done on Paint Boxes.
I'm *not* saying PC/Alpha/Macs aren't good, but there is *no*
debate when comparing high end to high end. There is little
debate comparing something like an R10k Maximum Impact with
even the best PC ever made...the artists just don't get realtime
feedback/screen updates as fast on any other non-SGI. This
is what SGI's do. If you are raytracing or running a radiosity
solution then any machine with fast processing power is going
to do a good job, but *nobody* beats SGI's for realtime
applications and feedback. YES, PC's are getting faster, and
the feedback may be good enough that it's not worth getting
an SGI for a lot of people, and people without the funds just
have to live with it, but for the real complicated stuff it's
pointless when the animator tries to rotate an object in a
highly complex scene and have to wait forever for the screen
to update.
So what about low end? We have low end SGI's mostly to make
things compatible across the board. I develop on one of the
Indy's...I develop applications that run on the Onyxs, I can't
do that with a PC. I also do some modelling and need to do
R&D with our real time character animation software which will
ONLY run on SGI's - yes it sucks on the Indy, but I develop
pieces on the Indy and we put it all together on the Onyx.
This is a typical real world example of who is using/needs
SGI's. For the high end stuff nobody beats them, but for
non-realtime applications you can probably save tons of money
and use P/A/M (Pentium/Alpha/Mac) based applications.
This is just such a stupid argument, the point I'm making is
that there is a need for low end SGI's as much as there is
a need for high end SGI's, but if you don't NEED an SGI
then a P/A/M render farm is a less expensive and worthy
alternative...it depends who you are and how much money you
have.
Also PLEASE lets not get into a debate about realtime graphics...
there certainly exist P/A/M systems doing realtime graphics,
but not like a high end SGI system can do...not even close.
--
-=-=- Frederick Haab -=- Software Developer -=- Turner Production -=-=-
-=-=- fred...@turner.com -=- 404.885.0317 -=- fax: 404.885.0757 -=-=-
In article <4vihse$h...@fido.asd.sgi.com>, ak...@tuolumne.asd.sgi.com (Allen
Akin) wrote:
>It's a thought-provoking analogy. Recently I read that Saab,
>Mercedes, Infiniti, Volvo, Lexus, and BMW each have less than 1% of
>the world car market.* Even though these ``vendors'' have dramatically
>smaller market shares than GM, Honda, etc., they manage to maintain
>viable businesses and provide well-respected products. Perhaps the
>computer industry will evolve into a similar situation.
>
>Allen
>
>* This statistic is attributed to the October 1995 issue of Automotive News.
yeah, i've read similar info. in fact, Mac Evangelist, Guy Kawasaki, has
made that
point many times to divert attention away from Apples rapidly dropping
marketshare.
there are several differences btwn the automotive industry and computer
industry.
for one, auto are much more "durable," that is last longer w/o going
obsolete, than
computers. autos are a higher ticket item and profits are larger, not by
% but in $ amount.
the auto market is alot larger so it can sustain more players. also, the
auto industry doesn't
have one dominate player like Microsoft & Intel who can impose their
proprietary standards
on the entire industry. eventhough, GM is huge, as far as i can tell, it
doesn't impose
or control any important standard that all other companies must follow and
pay GM
royalties. we have seen some consolidation in the auto industry in the
last few years.
as well as a few low-end manufacturers folding - Daihatsu & Yugo. ok, not
great examples.
also, i think that there's alot more personal preference happening in auto
purchases
than in computer hardware. personal preference comes more into play on
the software side
since you really "customize" your computer system via software.
also notice the manufactures that were mentioned are all considered
high-end autos.
(Saab, Mercedes, Infiniti, Volvo, Lexus, and BMW) they can survive on
lower marketshare
because they're margins are fat. although, last year Mercedes lost $1
billion. Lexus is really doing
a number on them.
also, when Guy mentioned his autos many were brands (or models) and not
entire companies.
maybe each brand/model of a company has a small marketshare but when you
add them up
it's much larger. also, just because they're in business, doesn't
necessarily mean that
they're profitable.
in most markets only the top 2 brands make money. generally speaking you
need a 15-20% marketshare to sustain profitability over the long run. that
would be 5-6 companies if all had similar marketshare. if any one company
has a 70% or larger marketshare they have a monopoly. if the two or three
top company's combine marketshare is 70% or greater they have an
oligopoly.
btw - that info. is from a famous Boston Consulting Group study.
if you look at various markets, you will notice that many times the race
boils down to just two companies. especially in mature markets. just
think - Coke vs. Pepsi, Nike vs. Reebok,
Apple vs. IBM, Hertz vs. Avis, etc.
as for the computer hw industry, it's maturing and consolidating.
anyway, that's what i think.
"Alex P. Madarasz, Jr." <al...@eagle.bgm.link.com> writes:
>Noam Ben-Ami wrote:
>> Actually, SGI >is< being forced to respond to the PC market. They
>> are lowering their prices on their machines, they came out with
>> the (pathetic) Indy's to try and compete at a lower level, they
>> bought Alias in order to keep it away from NT...they are coming
>> out with a set of completely new machines...
>Indy shipped before the current PC 3-D mania started.
Exactly. And it doesn't have any built in 3D graphics capabilities.
The original Indy was a crappy little machine. The new ones are
usable, but not great. (I coded lots of OpenGL stuff for them and
it was pretty painful.)
>And who says SGI is responding to pressure from the PC market - is
>that your impression, your guess, your hope, or a quote from an
>SGI executive and/or based on a published SGI stategic plan?
Its common sense.
>Are you sure SGI wasn't / isn't primarily competing with workstations
>from HP, Sun et al rather than the PC market?
Of course I am. Show me places that have a mix of SGIs and HPs and Suns,
and I'll show you an educational institution. Show me a place with a
mix of SGIs, PCs, and Macs, and I'll show you a design/creative company.
>Are you sure that the applications now being promoted for the PC
>platform represent such a significant majority of SGI's revenue stream
>that they _have_ to be worried?
Yes. Lets face it, After Effects may not be taking Flame seats, but it
does let people say "hey, I don't HAVE to have Flame to do this." In
a couple of years it will start taking Flame seats. However, for now,
no, PCs do not yet represent a majority.
>> Lets face it, PCs are fast closing the gap between themselves
>> and SGIs, and a year from now, that gap will be even smaller.
>Nah.
If you really think that, you're way out of touch.
Then again, the new SGIs come out in October, and if SGI doesn't
pull a Commodore, they might keep the gap from narrowing a lot.
The gap HAS been narrowing, of course, and anyone who denies that
is not up to date on the way of things. My Pentium Pro here feels
as fast and responsive as my SGI2Extreme, though not with interactive
graphics, of course. It does, however, render faster.
In article <504co7$k...@vixen.cso.uiuc.edu>, nbe...@uiuc.edu (Noam
Ben-Ami) wrote:
>>>"Alex P. Madarasz, Jr." <al...@eagle.bgm.link.com> writes:
>>>
>
>>Well I'm afraid I'd deny it. 2 years ago my desktop machine was an Indigo2
>>Extr. No PC at the time (P90 being pretty standard) could get close to it
>>for real time polygon manipulation.
>>Now my desktop is an Indigo^2 Max Impact, and surprisingly enough no PC
>>can get close to it again. We've got Glint based cards in Pentium Pro's
>>that are beginning to look closer to the SGI's (now old) XZ/Extreme
>>product line, but they're still not quite there yet.
>>If PC's hadn't finally started getting hardware 3D acceleration we'd have
>>been talking about the gap widening, rather than shrinking. As it is, in
>>my area (real time polygon manipulation) PC's continue to lag very
>>significantly and don't appear to be getting closer.
>
>
>Hehehe, you're forgetting a crucial fact: the cost of GLint based
>pentium pro is about a tenth of the cost of an Indigo Max Impact...
>well, more like a fifth. And it's CPU is pretty competitive.
What's cost got to do with your argument? As far as I can see you were
stating PC's were closing the gap on SGI's. I state they clearly aren't,
since the SGI standard desktop machine keeps getting faster, and suddenly
your onto who gives per bangs per buck. This always has been the PC, and
always will be the PC, since it has the benefit of mass market (actually
my PSX probably gives more polys per sec per dollar, but thats a different
argument :) ). However, in terms of the gap in real time poly performance,
its still as wide as ever.
As for the CPU, the gap was never massive. In my case, a couple of years
ago it was a R4400 150Mhz against a 90MHz Pentium, now its a 250MHz R4400
against a 200MHz Pentium, and next time it'll be a R10K against a Pentium
Pro. SGI always has an edge, but never a particularly massive one.
>
>Now, how long do you figure till GLint cards that can compete with the
>Impact graphics come out? No too damn long...and even if they cost
>$5k-10k to start, that's still reasonable compared to the cost of the Impact
>graphics upgrade for something like a 2Extreme.
I've been hearing PCs will compete with SGI's for a few years now and it
still hasn't happened. Getting Impact performance levels is a lot more
work than simply bolting GLint chips onto a card. Of course in a few years
PC's may be as fast a max impact, but then I'll have an infinite reality
on my desk :).
p.s. I develop on unaccelerated PC's, accelerated PC's and SGI's, so I'd
hope to be fairly unbiased on this issue.
>Noam Ben-Ami Rare Medium, Inc. Multimedia...Well Done
Keith J. Cambra wrote:
>
> In article <4vihse$h...@fido.asd.sgi.com>, ak...@tuolumne.asd.sgi.com (Allen
> Akin) wrote:
>
> >It's a thought-provoking analogy. Recently I read that Saab,
> >Mercedes, Infiniti, Volvo, Lexus, and BMW each have less than 1% of
> >the world car market.* Even though these ``vendors'' have dramatically
> >smaller market shares than GM, Honda, etc., they manage to maintain
> >viable businesses and provide well-respected products. Perhaps the
> >computer industry will evolve into a similar situation.
> >
> >Allen
> >
> >* This statistic is attributed to the October 1995 issue of Automotive News.
>
> yeah, i've read similar info. in fact, Mac Evangelist, Guy Kawasaki, has
> made that
> point many times to divert attention away from Apples rapidly dropping
> marketshare.
>
> there are several differences btwn the automotive industry and computer
> industry.
Very good analysis snipped: see original.
One point NOT mentioned is that after purchase, cars only need gas and service, which
are both available as commodities from several sources.
Computers need software and peripherals after the purchase. Software is not a
standardized commodity, nor are peripherals. If Apple's market share drops, software
development for Macs will cease to be profitable. Ditto for boards, drives, etc. When
users see that they pay a premium for Mac software - and development doesn't keep pace
with other platforms - they LEAVE. People don't switch cars because of the spark plugs
or gas that is available for the car. They do in computers.
I see the Unix stations on the desks of the techies where I work - then go back to my
Pentium PC in the marketing group. I am, by training, an engineer. I understand the
technical advantages. But the OS battle is being decided by marketing moves. Microsoft
deep-sixed OS/2 not on technical merits, but by squeezing Windows onto as many computers
as they could, and providing relatively cheap development tools. At one point, IBM was
charging US$2,000 for the OS/2 developer's kit while Microsoft was giving the Windows
kit away for free.
It's a pity none of the keepers of various Unix flavors has been able to get it together
to do the same. And in the same light, what I've read here about the SGI product line -
non-standard buses, etc. - gives me great pause. I think the era of buying a
purpose-built computer (sort of how many graphic artists view their Mac) is past. Large
numbers of users are more sophisticated. They want to be able to expand and build on
their investment. SGI doesn't need to compete with NTs to realize that the market for
expensive, single-task systems is smaller than the market for the same power in a more
open arrangement.
My guess is that many people will endure the less elegant, less powerful solutions of
the PC world because they can leverage their investment with constantly improving
software and periphals. Both initial purchase and subsequent add-ons are at lower price
points than UNIX, Mac, and other options. There is no reason why UNIX could not do the
same thing at a higher tier of performance - perhaps at a slightly higher price than PCs
despite economies of scale, but more commodity-like than currently.
You know, I'd love to see this debate end and so don't like
to butt in, but then you see something you just have to argue
about....
Alan Boucek wrote:
>
> In article <502abh$8...@vixen.cso.uiuc.edu>, nbe...@uiuc.edu (Noam
> Ben-Ami) wrote:
>
>> "Alex P. Madarasz, Jr." <al...@eagle.bgm.link.com> writes:
>>
>>>Noam Ben-Ami wrote:
>>>> Actually, SGI >is< being forced to respond to the PC market. They
>>>> are lowering their prices on their machines, they came out with
>>>> the (pathetic) Indy's to try and compete at a lower level, they
>>>> bought Alias in order to keep it away from NT...they are coming
>>>> out with a set of completely new machines...
>>
>>>Indy shipped before the current PC 3-D mania started.
>>
>> Exactly. And it doesn't have any built in 3D graphics capabilities.
>> The original Indy was a crappy little machine. The new ones are
>> usable, but not great. (I coded lots of OpenGL stuff for them and
>> it was pretty painful.)
>
> and they're nearing the end of their life cycle. Interestingly, 4-5
> year old purple Indigos with 4400 processor upgrades are still *very*
> useful machines. Indys will remain useful for quite a while. How
> useful are 3-5 y/o PCs?
I have to argue with this point...Indy's are great machines that
many people are finding new uses for everyday. The R5000 came
out earlier this year and is specifically being used in Indys,
the R10000 in Indigo^2's. Doesn't sound like a machine nearing
the end of it's life cycle just because Indigos didn't last
as long as they should have.
And I really need to argue about the Indy's usefulness. It has
*never* been a crappy little machine. Certainly when one is
sitting next to an Indigo^2 Extreme or better, but set it next
to a PC and it hardly seems crappy. And it also seems to me that
Indys have had XZ graphics available for *years*, if not from
the very beginning. Right now all but the very high end accelerators
for PC's don't even touch XZ graphics.
And one of the major points of having an Indy is for development,
and specifically for low end applications that you don't need
a $100,000 machine for (I've never seen even a PowerMac run
PhotoShop as quickly as my R5000 Indy). Development of applications,
for example, can easily be done on an Indy and then run beautifully
on an Onyx. Try to program for a low end PC graphics card and then
get it to run on a high end card, and take advantage of the better
features...there's just no comparison.
> The Indy will be replaced. The machine that replaces it will be
> impressive. It will still cost more than a PC.
And Onyx's will be replaced, and Indigo^2's will be replaced,
and PC's will be replaced as well...pretty soon it'll be the
Pentium Power Pro, and the Quadruple Pentium "Can't touch this
with a stick" Superduper Power Pro. So I'm not sure I understand
this point.
>>> And who says SGI is responding to pressure from the PC market - is
>>> that your impression, your guess, your hope, or a quote from an
>>> SGI executive and/or based on a published SGI stategic plan?
>>
>> Its common sense.
>
> Is it? More likely, the PC world sees the sexiness of some high
[...info about only a small part of SGI's being in entertainment...]
I'm having a difficult time determining whose side you are on!
My impression is that SGI is targeting certain people, and some of
these people might overlap with people targeted by PC companies
in some low end areas. There *is* competition with high end Alphas
and Pentium Pros running apps like SoftImage. They *are* responding,
look at the first few pages of the latest 3D Design magazine if you
don't think so. But I still don't see what point this proves
except that really high end PC's are capable of doing some things
SGI's were doing years ago.
[...lots of stuff about what computers are used for deleted...]
>>>> Lets face it, PCs are fast closing the gap between themselves
>>>> and SGIs, and a year from now, that gap will be even smaller.
>>
>>>Nah.
>>
>> If you really think that, you're way out of touch.
[...]
>> The gap HAS been narrowing, of course, and anyone who denies that
>> is not up to date on the way of things. My Pentium Pro here feels
>> as fast and responsive as my SGI2Extreme, though not with interactive
>> graphics, of course. It does, however, render faster.
>
> nah, the gap will probably grow a bit. You're comparing a contemporary
> Pentium Pro machine with an SGI that's 3-4 years old.
Again, lets compare apples and apples...in the high end the gap
will continue to grow, it hasn't been narrowing. And as Alan
wrote, the gap may narrow when you compare 3 to 4 year old low
end SGI technology and new PC technology, but when you compare even
the latest low end technology from SGI (if you can even call Impact
"low end") to the latest high end technology on PC's then I think
it'll be a pretty steady, if not widening, gap.
I use a PC at home, I'd *love* to write apps on it, it's not that
I don't *want* a lot of competition to bring prices down, and get
some nice 3D graphics on PC's. But I've always hated developing on
PC's, esepecially graphics. A few years ago the issue was whose video
card are you going to support, after several years and standards
emerging and layers to handle the hardware (something SGI has always
done), you can finally sit down and write a program that uses high
resolution graphics and will run on just about any PC. Now introduce
a set of 3D graphics accelerators...here comes those feelings again.
OK, so I hear the argument that these accelerators will be OpenGL
compatible, but at what level? Do the people porting OpenGL
have to be hardware aware of every card? Do I need company
X's OpenGL port to run on their card, and do I need to recompile
with another library to run on another card and take advantage of
that hardware? Or do we get stuck in a quagmire of O.S. level
interpretation where each company will have to supply drivers for
their hardware, like Windows does with standard graphics cards?
And then there's the issue of what O.S. to even run on!
Maybe that's why I'm at work writing this on an Indy. We have
some Macs and PC's around for email and word processing and stuff,
some of the graphics guys do some painting on the Macs. That's
about it.
--
-=-=- Frederick Haab -=- Software Developer -=- Turner Production -=-=-
-=-=- ha...@efx7.turner.com -=- 404.885.0317 -=- fax: 404.885.0757 -=-=-
Ray Chen wrote:
>
> In article <322533...@cimatron.co.il>, <jos...@cimatron.co.il> wrote:
> >Keith J. Cambra wrote:
> >It's a pity none of the keepers of various Unix flavors has been able
> >to get it together to do the same. And in the same light, what I've
> >read here about the SGI product line - non-standard buses, etc. -
> >gives me great pause. I think the era of buying a purpose-built
> >computer (sort of how many graphic artists view their Mac) is past.
> >Large numbers of users are more sophisticated. They want to be able to
> >expand and build on their investment. SGI doesn't need to compete with
> >NTs to realize that the market for expensive, single-task systems is
> >smaller than the market for the same power in a more open
> >arrangement. My guess is that many people will endure the less
> >elegant, less powerful solutions of the PC world because they can
> >leverage their investment with constantly improving software and
> >periphals. Both initial purchase and subsequent add-ons are at lower
> >price points than UNIX, Mac, and other options. There is no reason why
> >UNIX could not do the same thing at a higher tier of performance -
> >perhaps at a slightly higher price than PCs despite economies of
> >scale, but more commodity-like than currently.
>
> Some people just don't get it.
I "got" it - and agree with your statements (which follow). But
this thread is about comparing PCs and SGI. And market approach
is one valid point of comparison.
The reason why SGI can deliver
> more powerful machines is precisely because the hardware is more
> proprietary. For example, we couldn't do the graphics we do now
> (or for that matter, the stuff we did 3 years ago) if we were
> limited to using today's PCI-32 bus. Not enough bandwidth.
> The graphics would chew up so much there wouldn't be enough
> left to do other useful work.
>
> You can't have it both ways. Either you run on commodity hardware
> and are limited to the performance of that hardware -- and everyone
> else can deliver roughly the same performance -- or you can try and
> blow the doors off what's out there using proprietary hardware.
And wind up releasing your proprietary advantage as a public standard
when it's already been outpaced (like Apple). Or get enough of a buzz
going so that sufficient people buy into your innovation to make it a de
facto standard - while subsequently cooking up the next round of
innovation, which becomes a must-have standard because people have
bought into it....like Microsoft/Intel. These are just two of the many
market strategies possible in today's computer world.
You're expounding a niche strategy. I agree with you that SGI is, and
will remain, an upper echelon product line. But there are other
approaches. And I pointed out that, for example, UNIX never coalesced
into a standard with the market force of Windows - due solely to
marketing decisions. We can only guess what profits have been forfeited
by the developers and managers of UNIX.
>
> If you look at the PC graphics board companies, they're doing the
> same thing SGI is. They use custom (proprietary) chips in an
> effort to stay ahead of the competition (S3, ATI Mach X, etc.).
> But they can run under a software standard (Windows) that masks
> the hardware differences.
>
> We do our own buses in addition to custom graphics hardware, and our
> software standards are OpenGL and Unix (IRIX is X/Open-branded,
> POSIX compliant, etc.).
Which is why many of the SGI supporters who have posted here say
something like, "I just LOVE using my SGI machine for chemical
modeling/animation/other specific application, and when I need to write
a technical article/run a simple paint program/prepare a budget/run
games for my kids I do THAT on my trusty (name of second machine)."
Again, this may be a conscious decision on the part of SGI, as valid as
any other market positioning. But it is perfectly a propos this thread
to point out that this means SGI machines, for all their power, will not
draw much 3rd party development beyond its niche markets, and SGI users
must (and do) look elsewhere for the broader usefulness that comes from
such development.
For example, I know many people who are running technical and
non-technical businesses and consultancies. Those with software
backgrounds drool at the thought of having a UNIX station running
their SOHO operations. But it won't happen - because all the peripherals
and collateral software aren't there. You can't run a business with a
CPU or an OS. The same holds for SGI.
Again, this may be their strategy. In the larger context, it means that
the technology innovators aren't leading the broader computing
community: the big decisions are being left to snazzy marketers with
patchy solutions while innovators like Apple, and now SGI, stay in niche
markets. With all the annual drops in computing costs, isn't it a pity
the best technology never becomes mainstream?
Joshua
> It's a pity none of the keepers of various Unix flavors has been able to get it together
> to do the same. And in the same light, what I've read here about the SGI product line -
> non-standard buses, etc. - gives me great pause. I think the era of buying a
> purpose-built computer (sort of how many graphic artists view their Mac) is past. Large
Totally wrong. Specialization of computers will always exist just as
specialization of any product exists. People buy automobiles based on
their needs: some buy sedans, some buy minivans, some buy sportscars.
They are all of the same class, automobile, but they are specialized
towards their most important function. This holds for any item I can
think of purchasing.
Would you NOT buy a car because it's powertrain was more powerful
than other cars of a similar type? Your company bought UNIX workstations
for your engineers while buying PCs for marketing. The right tools
for the job needed to be accomplished. I can stuff 7 people into
a sedan, but a minivan would do the job better at a higher price
point. But if I'm constantly stuffing 7 people into a vehicle it
makes sense to go with a minivan.
> numbers of users are more sophisticated. They want to be able to expand and build on
> their investment. SGI doesn't need to compete with NTs to realize that the market for
First and foremost, companies want to execute on their business plans.
If they fail that, forget about expansion.
> expensive, single-task systems is smaller than the market for the same power in a more
> open arrangement.
An SGI is not a single-task system. I've used them in the financial
services sector and the CAD sector, but to get the same results:
high-speed interactive 3D graphics which is the specialization of
an SGI computer.
Your definition of 'open' is strange to me. Software and hardware
architectures controlled by 2 companies is anything but open. If my
needs differ from the business models used by those 2 companies, I'm
SOL in your scheme of computing.
The markets maybe smaller for an SGI, but those markets have shown
that they will pay the higher premium. Also, PCs are not of the same
'power' that an SGI is.
> My guess is that many people will endure the less elegant, less powerful solutions of
> the PC world because they can leverage their investment with constantly improving
When IBM ruled the computing world and did not solve the needs of
different market segments, people did not endure. They innovated and
created wholly new solutions to solve their business problems. Why
would people give up that most successful strategy?
> software and periphals. Both initial purchase and subsequent add-ons are at lower price
> points than UNIX, Mac, and other options. There is no reason why UNIX could not do the
> same thing at a higher tier of performance - perhaps at a slightly higher price than PCs
> despite economies of scale, but more commodity-like than currently.
It's already done. SCSI devices, PostScript printers, Ethernet cards
all work on most UNIX platforms. It's the business model of UNIX
companies that is different from PC companies. Lower volume/higher
margins vs higher volume/lower margins.
The big question is: "Can this type of computer perform the job
I need to accomplish better and faster than other types of computers?"
Jim Mc Morrow <mo...@batelco.com.bh> writes:
>In a way the Nintendo market reflects the SGI market.Exclusivity is the
>key.You can only play Mario on Nintendo.The reason people bought
>Nintendo machines was because of the SOFTWARE available for it.If Ultra
>64 has a game so good you just can't live without it, then it will sell
>millions of machines and Nintendo will dominate the known Universe
>again.
This is partly true. Marketing has a lot to do with it as well...you're
right though, Mario drives nintendo sales, and Nintendo knows this. In
fact, this fact is central to their developer strategy for the Ultra
64. No more half-assed games houses. You have to be VERY wealthy to
become a Nintendo Ultra 64 developer.
>The question with Silicon Graphics is....Is Alias good enough that you
>just have to have it if you are doing High end animation?If the answer
>is yes then they will keep on selling machines.SGI have to keep spending
>money to maintain Alias as (I think anyway), the best 3D animation
>software around,even if you have to pay through the nose for it.
This is absolutely wrong. First, as has been quite rightly pointed out,
SGI does not live off the commercial animation market. Its simply the
reason people think SGIs are so sexy...other than the great box colors
(though I still think the Indy's little plastic logos are terribly cheesy,
and I still have a yellow Extreme button lying around. :). )
Furthermore, an SGI running LW/Softimage/Vertigo/Prisms, at the absolute
high end, is superior to pretty much anything else you can buy, period.
Yes, they're expensive, yes, at the low end they are no longer terribly
competitive, but if you have upwards of $30,000 to burn on a machine and
want to do heavy animation, 2D or 3D, SGI is the clear choice.
Lastly, I sort of resent the "paying through the nose" comment. Do you
have any clue as to how complex a package like Alias is? Any idea of
the incredible, exorbitant costs of developing such a package for as
small and as demanding a market as alias targets? (I'm talking about
Alias Studio and Alias PowerAnimator, specifically) Alias is very
reasonably priced these days, for what it is.
Just my neurotic devil's advocate 2 cents.
Soren wrote:
> As an apple user, my opinion is of course biased, but I'll state it
Oh no... I didn't expect to start another OS war. ;)
Well, I'm a former Apple user. I used them for 9 years before switching
to the PC for it's price/performance and especially software base. My
friends were shocked, but now most of them use PCs too. :)
> anyway: For those who don't yet know it, The Mac is still THE graphics
> design system, like it or not, it has the most high-end hardware and
> software specific to the fields of 2-d, 3-d, and video. If you what a
Uh... I don't think so. 3D on the Mac is really pathetic. Except for
EIAS and Form^Z there is nothing (At least until LW is ported). I was
forced to use Strata Studio Pro and Infini-D on the Mac for years and I
will never forgive them for it. :p
> system that will run windows NT may I suggest buying a PPCP early next
> year, you know, the system design by Apple and associates that will run
> both the MacOS and WinNT, OS/2, plus a couple other things like Solaris,
> etc. then you truely would have a system that would allow you total
> compatiability accross all markets. If a piece of software is not
> available for your OS of choice, it most certainly should be available for
> at least one of the available OS's.
You forgot one important point. Who is going to re-compile all the NT
apps to run on the PPC? Or are you talking about emulation? If the
latter is the case the performance hit would make most NT apps
impractical running on a PPC.
> (If it isn't, buying a SUN, SGI, or IBM wouldn't put you in any better
> position, in fact, the hardware would cost more and in fact probably be less
> powerful.)
That's debatable. But what isn't is that the PC platform has the best
price/performance ratio of any platform. Period. This point isn't
debatable.
P.S. Do not mistake this for Mac bashing please. Anyone who knows me
knows I have a soft spot for Apple (I used them for 9 years! You just
can't toss that away like an old shoe ;)) But I'm also realistic. The
Apple has a lock on DTP, graphic design, and multimedia development, but
I believe this is primarily due to inertia. It's not because the Mac is
inherantly superior in these fields it's just that industries don't
switch platforms overnight. :)
> --
> Internet: tmd...@ups.edu
tmd...@ups.edu (Soren) writes:
>As an apple user, my opinion is of course biased, but I'll state it
>anyway: For those who don't yet know it, The Mac is still THE graphics
For ONE reason: inertia. Even the die hard mac fanatics here are conceding
that when we upgrade machines next, it'll be to NT.
>design system, like it or not, it has the most high-end hardware and
>software specific to the fields of 2-d, 3-d, and video. If you what a
Bullshit. 2-d? All adobe products are either available for NT or will
be, shortly. 3-d software? The Mac has electric image and Strata and
LW. PC's have LW, Max, Softimage, and many others. The mac isn't even
close to being able to compete in tha arena. Video? Natch.
>system that will run windows NT may I suggest buying a PPCP early next
>year, you know, the system design by Apple and associates that will run
>both the MacOS and WinNT, OS/2, plus a couple other things like Solaris,
>etc. then you truely would have a system that would allow you total
>compatiability accross all markets. If a piece of software is not
Except that it'll probably cost too much and WinNT would need to have
software ported to it to run on the machine...sorry, I'll stick to
my Pentium Pro.
>available for your OS of choice, it most certainly should be available for
>at least one of the available OS's. (If it isn't, buying a SUN, SGI, or
>IBM wouldn't put you in any better position, in fact, the hardware would
>cost more and in fact probably be less powerful.)
Thats highly arguable.
Now, personally, I think the PowerPC chip is significantly better than
the Intel chips, but NT/PPro is a tried and true system with tremendous
industry support. Furthermore, we're talking about the MacOS and Mac
systems today, not next year...and not running yet another flavor of
NT.
Apple never had a clue as to how to write a great operating system. Its
too bad because on the surface, the Mac GUI is pretty nice.
jos...@cimatron.co.il wrote:
> > Would you NOT buy a car because it's powertrain was more powerful
> > than other cars of a similar type?
>
> I would NOT buy a car that didn't use the same gas sold everywhere, and
> that only had limited access to service and spare parts. Would you?
>
> THAT is the appropriate automotive analogy to proprietary technology in
> computing. Software (the magic gas which makes my computer a station
> wagon when I need it, then a sportscar when I need THAT) is not readily
> available. Neither are peripherals ( = spare parts).
Sorry, not a valid comparison. Gasoline is consumable; you have to
continue to buy it to use your car. (Most) software isn't like that;
you buy it once, and you can keep using it forever. (I know that some
software licensing requires periodic payments.) The gasoline metaphor
compares to electricity. If the SGI required 208V 3 phase, then the
comparison would be valid, but it doesn't.. it uses the same 110V that
the PC uses.
The class of vehicle IS a valid comparison. Take PC/pickup truck vs.
SGI/sports car. If the speed is important, the choice is obvious, as it
is if you need to pull a camper or haul kitchen appliances.
> To this day, Apple peripherals and software have a price premium.
> Despite inventing the PC, they are niche players.
Better check your history again. Apple wasn't even close to inventing
the "home computer". The PC, or "Personal Computer", was solely an
IBM invention (which is a trade mark, BTW), and came YEARS after the
Apple II. The Apple II was among the first computers to come
preassembled. Heathkit's H8 system predated the Apple II by a couple
of years. (I don't recall the first computer created for the home/
hobbyist market; I want to say the Altair, but I may be wrong.)
> I agree that NT machines do NOT match the power of SGI machines. But
> computing power steadily increases: more and more tasks fall within the
> commodity computer's capabilities, fewer and fewer require specialized
> product. Not coincidentally, software becomes more and more important to
> most users as hardware power becomes a given.
It's true that the low end is getting more powerful, and tasks that were
once relegated to the high end are becoming possible. However, keep in
mind that the high end is moving just as fast (if not more quickly);
things that were impossible several years ago are now commonplace. In
fact, it's the development of the high end that pushes the "old" high
end stuff into the low end.
Take the much-touted movie industry. A few years ago, "Jurassic Park"
set all kinds of standards for reality-based computer animation.
Already, that level is commonplace.. and "state of the art" is several
times as advanced as JP. Remember the hoopla over "Star Wars"? It
looks downright primitive now.. and was state of the art in 1977.
Back in school, we had a lab with Indys, and a lab of Pentum-133 NT
machines. Both labs had much of the same software. We were doing some
processing as a part of our coursework that was simply not feasable
on the NT machines, due to the runtimes involved were measured in hours
on the NT machines. (And just try to get the ME students to use the
Pentiums for CAD work.)
--
+---------------------------------------------------+
| Technical Support Engineer, Cyclades Corporation |
| 800/88-CYCLADES (882-9252) or (510)770-9727, x258 |
| Maker of High Performance Multiport Serial Cards |
+---------------------------------------------------+
In article <50qco9$k...@vixen.cso.uiuc.edu>, nbe...@uiuc.edu (Noam
Ben-Ami) wrote:
> tmd...@ups.edu (Soren) writes:
> >As an apple user, my opinion is of course biased, but I'll state it
> >anyway: For those who don't yet know it, The Mac is still THE graphics
> For ONE reason: inertia. Even the die hard mac fanatics here are conceding
> that when we upgrade machines next, it'll be to NT.
Nonsense - I had a student call the top 25 graphic design/multimedia
studioa in the Phoenix metro area and all but 2 used Macs exclusively.
Only one was contemplating switching to PC's and most stated that the new
Mac/PC computers offered by Mac would meet their needs. Its only
non-graphics folk who dismiss the Mac, cause they haven't a clue.
> Bullshit. 2-d? All adobe products are either available for NT or will
> be, shortly. 3-d software? The Mac has electric image and Strata and
> LW. PC's have LW, Max, Softimage, and many others. The mac isn't even
> close to being able to compete in tha arena. Video? Natch.
You obviously have never done any multimedia production. You can talk all
you want about what apps "will" be available for the PC, but as one who
has spent three years doing multimedia, let me state clearly - don't get
lost in the silly assertions of computer programmers - the Mac is still
the best way to go. Its ease of use and built in capabilities with video,
etc make it an easy choice for all except the most nurdy.
> Except that it'll probably cost too much and WinNT would need to have
> software ported to it to run on the machine...sorry, I'll stick to
> my Pentium Pro.
And just keep buying those upgrade cards, and SCSI cards, and sound boards and
scanner cards and printer updates and calling tech support to see how the
hell its all supposed to fit together. Its fine if your a programmer type,
but if you want to produce - get a Mac.
> Apple never had a clue as to how to write a great operating system. Its
> too bad because on the surface, the Mac GUI is pretty nice.
Which would make one wonder why Microsoft has spent a decade trying to
immatate Macs. Ten years ago I could allocate memory to specific
applications, view a monitor whith thousands of colors, force quit an
application instead of rebooting, plug and play any number of peripherals,
listen to a music CD or work with digitized video. Microsoft is finally
catching up...to a decade old Mac.
JMonahan
> > >As an apple user, my opinion is of course biased, but I'll state it
> > >anyway: For those who don't yet know it, The Mac is still THE graphics
> > For ONE reason: inertia. Even the die hard mac fanatics here are conceding
> > that when we upgrade machines next, it'll be to NT.
> Nonsense - I had a student call the top 25 graphic design/multimedia
When you say "Nonsense", do you mean:
a) That an Apple user's opinion could not possibly be biased
b) That he'll state his opinion anyway
c) That the Mac is the THE graphics [...]
d) That the dis hard Mac fanatics there are conceding [etc.]
> studioa in the Phoenix metro area and all but 2 used Macs exclusively.
Or was it maybe:
e) An example of nonsense regarding the Phoenix metro area follows.
Well, which one? Come on, out with it. The suspense is driving me to
distraction.
> you want about what apps "will" be available for the PC, but as one who
> has spent three years doing multimedia, let me state clearly - don't get
Sure, I'll let you state clearly. Especially if you state it more
clearly than you stated that the person to whom you were replying has
spent three years doing multimedia.
> etc make it an easy choice for all except the most nurdy.
The most nerdy are buying BeBoxes.
> And just keep buying those upgrade cards, and SCSI cards, and sound boards and
> scanner cards and printer updates and calling tech support to see how the
Are you saying that if I buy a Mac I'll be stuck with what I buy today
and will not be able to buy cool new stuff when it comes out?
> Its fine if your a programmer type,
Your last girlfriend was a programmer, right?
[Lots of stupid stuff about what somebody's brother told him Windows was
like and stuff that Apple told him the Mac OS was like deleted because
we've all read it a thousand times before and in a day or two we'll all
get the chance to read the lies that MS and somebody else's brother told
somebody even more else about the Mac OS and Windows.]
Look, if you are going to try to open the lame old war, use real ammo,
don't shoot blanks that sound like whoopee cusions. Or better yet, try
to find the truth so we can build a better tomorrow rather than fight
about why yesterday sucked.
Joe Monahan <jmon...@netzone.com> wrote:
: Which would make one wonder why Microsoft has spent a decade trying to
: immatate Macs. Ten years ago I could allocate memory to specific
: applications, view a monitor whith thousands of colors, force quit an
: application instead of rebooting, plug and play any number of peripherals,
: listen to a music CD or work with digitized video. Microsoft is finally
: catching up...to a decade old Mac.
Not if you were using a Mac. Macs didn't have color until around 1988. Or sound.
Now if you are talking about using an Amiga, which had a multitasking OS,
graphic *and* command line interface, thousands of colors, sound and
NTSC and Pal syncable video, well they *did* have that 10 years ago. Oh yeah,
they also had plug and play.
IMHO, Macs and PCs have spent the last 5 years or so imitating Amigas, and only
in the last couple have they, through increased power in the hardware,
succeeded to any extent. The Amiga failed because Commodore was an incredibly
stupid company who wouldn't know a clue if it fell on them.
Come to think of it, Ataris and even the lowly Apple IIgs had color before the
Mac. And when the Mac did first get color, it was the same 256 colors that
the PC of the same era had. And it had the same 8 bit sound as the Amiga
and Atari. The Amiga could display 4096 colors at the time, though with flaws.
In any case, only the original Mac was innovative, its successors came in
about a year behind current tech until about 1991. And the Mac OS itself
was copied off of X-windows developed at Xerox Park a decade earlier. As
Apple's suit against Microsoft revealed.
Nonetheless, I'd rather use an NT machine than a Mac. Also, I don't know if your
student bothered to ask which model of Macs designers were using in the Phoenix
area, but I'd bet the majority are still using Quadras.
Microsoft is busily trying to immitate SGIs now. And if you've seen
digital editing systems like Razor Pro using a modest PVR card on NT, or any
of the Matrox digital studio cards, you wouldn't be bragging about the Macs
digital video. Only the rather expensive Avid and Imix boxes are really pro
in their video output.
If you are into 3D, an area Macs have always been weak at, PC/NT machines
are a much better bet with a wider variety of good software than Macs. Let's
see, Softimage, Lightwave, 3DS Max, Truespace (Animation Master/MH3D is available
on both PCs and Macs). Tons of 3D hardware cards from around $299 up.
I think graphic designers using Macs are a bit like those die hards who were
still touting Amigas a year ago. For 2D work, Macs are still fine machines, but
nearly every piece of software available for them is also available at least on
PCs and probably NT machines as well. And NT machines running the fastest
DEC Alpha chips kick the crap out of anything below SGI for sure, and even
some of the SGI models.
And at least 5 devoted Mac fans that I know switched to NT this year to use
Softimage on it.
Micro$oft may not be innovative, and they may even be evil incarnate, but
machines running NT can definately get some serious work done at an affordable
price.
: JMonahan
--
-------------------------------------------------------------------------------
Steph Greenberg, 3DCGIMD CGI Character Orthopedic Surgeon,
st...@primenet.com Chiropractor, and Podiatrist.
Copyright 1996. All Rights Reserved. Permission granted for non-commercial
electronic republication only, such as Usenet and Email, and
non-commercial educational purposes such as charge free WWW pages.
Express permission is required for any other use. When in doubt, ask.
-------------------------------------------------------------------------------
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[
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[
"Michael Goldberg",
"Andy Greenberg",
"Matt Burgess",
"Vittoria Elliott",
"David Gilbert",
"Condé Nast"
] |
1994-01-01T12:00:00-05:00
|
Silicon Graphics is the hottest computer company in Silicon Valley, but founder Jim Clark has a bigger vision:to make it a dominant player in consumer electronics. Will he succeed, or will SGI melt down, consumed by its own ambition?
|
en
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https://www.wired.com/verso/static/wired/assets/favicon.ico
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WIRED
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https://www.wired.com/1994/01/sgi/
|
Silicon Graphics is the hottest computer company in Silicon Valley, but founder Jim Clark has a bigger vision:to make it a dominant player in consumer electronics. Will he succeed, or will SGI melt down, consumed by its own ambition?
- Silicon Graphics is the hottest computer company in Silicon Valley. - It owns the 3-D computing market, having sold $1 billion of workstations in 1993. - Its boxes helped make Jurassic Park the biggest grossing movie of all time. - And it has just launched Indy, a $5,000 computer that threatens to eat Apple's and Sun's lunch. - Founder Jim Clark has a bigger vision, however: to make SGI a dominant player in consumer electronics. - SGI will supply the server-to-set-top system for Time Warner's Orlando interactive test. - And its chip will power Nintendo's 1995 64-bit games boxes. - Will Clark succeed in turning SGI into a $10 billion business? Or will SGI melt down, consumed by its own ambition?
Four years ago, Jim Clark almost left Silicon Graphics.
When SGI's founder began telling his executives that the future lay in things like cable-TV boxes and digital game players, he got a rather icy reception. "I was kind of a lone voice," he says. "I was babbling about cable television - and into the wind for a lot of the time. The reaction I got was, 'Well we're not a consumer electronics company. Why do we care about cable-TV boxes? Who cares?' "
Clark, who is SGI's chairman, is sitting at his desk in a cozy upstairs corner office at SGI corporate headquarters; from his window he can view a few of the seventeen modern brick and glass buildings that comprise the company's sprawling Mountain View, California campus. He is wearing a light blue striped shirt unbuttoned at the neck, charcoal gray slacks, and black loafers. He is tall and thin, has a head of blond hair, and the brainy look of a college professor, which he once was, in a past life, before he became a Mercedes-driving multimillionaire.
When Clark says something he finds amusing, he throws his head back and laughs. He grins a lot. At 49, he has a surprisingly young, inquisitive, almost boyish face.
At the moment, though, he's neither laughing nor grinning. "Most people here couldn't see it," he says. "Three years ago, it was even said, 'You're nuts. If you want to do that, you maybe ought to do that on your own.' "
It wasn't the first time Clark's ideas had met with skepticism. It was the same kind of resistance he came up against in 1981, when he tried to interest IBM, DEC, and others in the original interactive 3-D graphics technology that had motivated him to form SGI.
"I think that Jim, to use that horribly overused word, is a visionary," says Robert Herwick, a technology analyst at Hambrecht & Quist. "He's probably the only one who really believed ten years ago that that technology would end up in the home."
Ironically, SGI became so successful making high-end graphics workstations that many executives at the company lost sight of Clark's broader vision. "I've come to conclude that at companies, as they get large, management simply cannot and will not look at new opportunities," he says.
For Clark, SGI is a 3-D interactive graphics company, not a box maker. In the beginning, SGI was going to make graphics terminals hooked up to mainframes; but Clark steered it into the workstation business when he realized early on that terminals were going the way of silent movies and record players. But whether it's terminals, stand-alone workstations, or television sets is really beside the point.
"SGI always came at it from the point of view of the graphics, that's what's important," says Denise Caruso, editorial director of Friday Holdings in New York.
"Jim Clark is always looking for every opportunity to offer higher quality visualization, whether over a cable in a home, in a 3-D game, or in the creation of multimedia," says Herwick. "They take a very broad view of the markets they serve."
The workstation business became a gold mine for SGI, whose earnings ballooned from $167 million in 1988 to just over a billion for the fiscal year ending June 30, 1993.
By the end of the '80s Clark was looking beyond high-end workstations, gazing into the future, setting his sights on entering the still nascent world of "convergence" that will fuse computers and television. His only ally was SGI chief scientist Mark Hannah, one of a small group of Stanford University students who started SGI with Clark in 1981. (Hannah helped develop the original architectures - the Geometry Engine ASICs - that handle most of the graphics processing in SGI's machine.)
"If not for Mark I think I probably wouldn't be here today," Clark says. "I had an interest that I felt was important for the company, and if the company did not share that feeling I was going to go someplace else."
He leans forward in his chair and says with intense conviction, " 'Cause I thought it was vital to what I perceived to be the right future for the company. With any given company, there are always several possible futures. I have to think I've done SGI a big service - pulling it by the hair into these new markets."
Digital Dinos
Jim Clark is arrogant, driven, cunning, and - as one industry analyst puts it - "very persuasive." He possesses a keen intellect, and is one of a new breed of '90s Silicon Valley entrepreneurs who refuse to let themselves be seduced by their own success.
Clark is not afraid to publicly dis a company like Apple, much as Steve Jobs once mocked IBM.
"Apple," Jim Clark will sigh, as if he were talking about a horse on its way to the glue factory. "They're not doing anything... Apple blew it."
Then, with a dismissive wave of his hand, and just the hint of a grin: "I think they're in serious trouble."
Earlier this year, Silicon Graphics placed an ad in Cinefex, a special- effects magazine. The ad depicted people in the foreground sitting at computer terminals while in the background a Tyrannosaurus rex rose out of scaffolding. The text read: "Helping build a better dinosaur."
These days, when most people think of Silicon Graphics, they think dinosaurs. The company's revolutionary workstations, as you might have heard (unless you've been vacationing on Mars), were used to create the mind-boggling dinos that scared the pants off millions and millions of moviegoers who saw Jurassic Park.
Those digital dinos symbolize SGI's preeminence as the platform for creating state-of-the-art 3-D special effects. But the entertainment business currently accounts for less than 10 percent of SGI's sales.
From the introduction of the first $80,000 SGI workstation in 1984 (with a computing speed of one third MIPS), engineers, architects, doctors, automobile designers, defense contractors, and scientists - not to mention animators - have embraced SGI's standard of 3-D visualization.
Until recently, Clark has been able to avoid head-to-head competition with HP, Sun, DEC, and others because those companies underestimated the importance of 3-D graphics. "HP and all the other workstation vendors kind of left the door open in one particular segment of the market," says Robert Weinberger, marketing manager for HP's workstation group. "SGI was smart enough to recognize that and rush through."
Executives at HP and Sun concede that Clark created a niche for his company, refining and improving on his proprietary technology, quietly finding a market among an elite group of accounts. Through the later half of the '80s and into the '90s, SGI engineers successfully created ever more powerful high-end boxes, while also introducing less and less expensive workstations, all of which network together easily and can run the same programs.
Surprisingly, only very recently have SGI's competitors started seriously chasing after SGI's market share. "I think they'll be up against competition like they've never seen before," says Mike Gero, a product manager at SoftImage Inc., whose products were developed for the SGI platform. "It seems like in the past six months to a year, other vendors have really looked to address this particular market."
"Visual computing has been a niche and SGI has flourished in that niche," says Bob Pearson, Sun's director of advanced desktop systems marketing. "But now it's becoming mainstream and the rules of a mainstream game are different than they are for a niche game. It's volume, price points, distribution. It's easier for Sun or HP to duplicate what SGI has done at higher volume and lower price points."
The entire workstation market is a $10 billion to $15 billion dollar business, of which SGI currently has about 8.6 percent, according to International Data Corp. (Sun is the major player, with 33 percent of the market.) But Clark wants to helm a $10 billion company by the end of the decade. He's known for years that SGI can't afford to live or die by the workstation.
"You can't afford to get too comfortable," says Mark Hannah. "Look what happened to IBM. Things change; the world changes. There's always a threat out there."
Or as Clark succinctly says, "I don't want to be the Cray computer of the '90s."
The Jim and Mario Show
A 3-D image of Mario the Plumber's head dominates a movie screen located at one end of the Peacock Room in San Francisco's ritzy Mark Hopkins hotel.
Mario is talking. An exaggerated Italian accent fills the room. "Jeeeemy," he says, "I may be a big star, but I don't let it go to my head."
"Mario, I'd like to be the first to welcome you to your new home at Silicon Graphics," says Clark in a bemused, fatherly way, as he stands at a podium to the right of the screen. "I think you're really going to have a nice, happy time here."
"Oh thank you so much Jeeemy," answers the animated version of Nintendo's leading man.
It's mid-August, and dozens of business reporters are sitting through this embarrassingly silly presentation, most of them diligently taking notes.
They have to come to be briefed on some surprising news from two companies that have, in very different ways, profoundly influenced the modern world. Nintendo, known for making billions of dollars selling the modern-day equivalent of the pinball machine, is joining forces with Silicon Graphics.
Today's announcement makes public another piece of a complex puzzle that Clark has been painstakingly assembling for the past two years. Until this year, Silicon Graphics wasn't exactly on the tip of everyone's tongue. Those aware of SGI viewed it as the company whose powerful workstations were used for mechanical engineering, computational chemistry, molecular modeling, and movie special-effects work.
Those computers - with intriguing, some say sexy, names like Indigo, Crimson, Onyx, and now Indy - don't even look like the competition. In place of the boring beige plastic boxes that house most CPUs, SGI has used a deep blue-violet for the original Indigo, teal for the Indigo2, reddish- orange for the Crimson - colors that seem to give off a luminous, almost magical glow as they sit on a desk.
Their latest model, Indy, even comes with a "gray granite" monitor that would fit into a trendy underground nightclub. "They come up with hip names and hip appearances," says Jim Morris, who is vice president and general manager at Industrial Light and Magic (ILM), George Lucas's special effects laboratory. "That makes people feel like they're with the current exciting product."
Yet it's not hype that SGI has been selling. The internal architecture of SGI's high-end boxes - the ones used by the likes of ILM and NASA - was a breakthrough when introduced in the early '80s, and advances in the architecture's design have kept them at the cutting edge.
Clark's machines were built with one overriding goal: to allow the 158,720 pixels that form a color image on a high-end monitor to re-form at least 30 times per second. Achieving that goal allowed for realistic 3-D visualization. His breakthrough was to build graphics processing into the machine's custom chips, or ASICs, allowing them to generate fast enough processing speeds to create 3-D interactive graphics.
And what are the key components that comprise an SGI high-end workstation? A MIPS chip (SGI purchased MIPS in 1992), SGI proprietary ASICs (the "Geometry Engine"), and SGI's Graphics Library (GL), some of which is built into the hardware.
The newer, less expensive boxes - Indy and lower end Indigo2 Extreme workstations - are cleverly designed so that some of the graphics processing can be done by the MIPS chip without the need for ASICs.
The company's flashy packaging makes sense for computers that are dominating Hollywood special-effects houses. (And Indy is fast becoming an important development platform for the next generation of video games.) In addition to Jurassic Park, SGI supercomputers were used to do the Terminator 2 special effects, in which the metallic archvillain transformed itself into various human forms and inanimate objects.
Other films that relied on SGI technology include The Abyss, Beauty and the Beast, Total Recall, In the Line of Fire, and Cliffhanger. It was SGI hardware that allowed Michael Jackson to morph himself into a black panther at the end of his "Black or White" video. Lucas plans to use SGI computers "to the nth degree" for the production of his Star Wars prequel trilogy, slated to begin within the next four years.
At ILM in Marin County, California, three temperature-controlled rooms bear silent witness to the importance of SGI in the contemporary worlds of film and television.
The rooms hold $15 million worth of networked SGI CPUs; that's nearly 100 computers. "Anybody that's doing effects now in the film business is using SGIs or is about to," says Morris. "In the entertainment business SGI machines are the digital production cornerstone."
In fact, Morris says, SGI computers have become a status symbol. "There's nothing cooler that you can say than, 'Yeah we've just ordered $4 million of SGI equipment.'"
All Hell Broke Loose
Silicon Graphics has been phenomenally successful. And even as it has dominated the 3-D workstation market, SGI has been widening its reach.
The company has taken a number of risks during the past two years. Last year it acquired MIPS Computer Systems Inc., which designs (but doesn't manufacture) the microprocessors used in SGI computers; MIPS chips are also used by such hardware manufacturers as AT&T Federal Systems Computer Division, Control Data Systems, NEC, Olivetti, Siemens, Nixdorf, and Sony Microsystems.
Although Wall Street initially questioned the wisdom of acquiring MIPS, the consensus these days is that it was a smart move, one that has given the company more control over its destiny. "From a long-term strategic point of view, it has given them total control over the MIPS architecture," says Hurwick, "and as a result, the MIPS architecture is being evolved in ways that are directly supportive of SGI's strategy."
In January of 1993 SGI also introduced a line of supercomputers that is already biting into a market once owned by such old-line supercomputer and mainframe manufacturers as Cray Research and IBM.
As it turns out, these shiny new SGI Power Challenge computers can double as super-fast multimedia servers to store and deliver on demand various digital media - movies, TV shows, games, and much more - to digital cable- converter boxes that will be making their appearance in some US homes beginning next year.
Additionally, this past summer the company unveiled Indy, which is less expensive, faster, and provides more for the money than anything currently available from competitors such as Apple. For example, Indy comes with a built-in camcorder for video conferencing.
Analysts, software developers, and SGI's competitors question this recent diversification. "They are juggling a hell of a lot of balls," says HP's Weinberger. "Too many balls for a company their size."
But such developments were dwarfed by a string of recent high profile events. 1993 was the year, says SGI president and CEO Jim McCracken, that "all hell broke loose."
It began last February, when President Clinton and Vice President Al Gore arrived at the company's Mountain View headquarters - with several hundred reporters in tow - to announce the administration's new technology policy. Commenting on SGI's management approach, Clinton said, "I think government ought to work like you do."
Two months later, in April, ILM and SGI announced they had teamed up to form the Joint Environment for Digital Imaging, or JEDI, with a goal of creating entirely digital movies. Other companies, such as James Cameron's Digital Domain and Kodak, are in the digital filmmaking business too. Still, Lucas has described the alliance as "the beginning of the revolution in the film business."
In June, it was announced that Time Warner had picked SGI to provide hardware and software for an experiment in interactive TV that the media giant will make in Orlando, Florida in April.
And then Jurassic Park was released.
By the late fall the company seemed to be in the news every week. On September 28, The Wall Street Journal reported that an interactive shopping channel to be tested as part of Time Warner's Orlando experiment (it will make use of SGI servers and cable-converter boxes) will "allow cable viewers to enter catalog 'stores,' to view merchandise in full-motion video, and to make purchases on demand."
SGI Targets America's Living Rooms
In the Peacock Room, Clark, McCracken, and a Nintendo executive explain that the two companies are joining forces to work on Project Reality. Together they will create the next generation of Nintendo 3-D video games. The 64-bit machines, built by Nintendo using SGI chips, are expected in 1995 and will sell for about $250.
After the presentation is over, reporters fire questions at the executives. Most focus on the new video-game player. When will it be finished? What about compatibility with older Nintendo products? That kind of thing.
No one bothers to ask why Clark is aligning Silicon Graphics with a video- game company. McCracken says simply, "We're not doing this because we want to get into the video-game business."
What then?
During the past ten years, Nintendo sold a hundred million video game players and three quarters of a billion video game cartridges. The company's products are, it claims, in 40 percent of all American homes. SGI would like to get into what McCracken calls "a vast new market."
Certainly there is much money to be made. SGI will get a royalty from every Nintendo player and piece of software resulting from the collaboration; Clark believes SGI will net hundreds of millions of dollars (more than the company's current annual profit) from the deal.
But there's more to this than bags of cash. Four years ago Clark saw the future; the future, he concluded, would belong to computer companies whose core technology becomes a standard in the consumer electronics market. (He was not alone. Companies ranging from Apple to HP have also been moving in that direction.)
Clark also understood that SGI had neither the marketing savvy nor the financial resources to compete with consumer electronic giants like Sony and Phillips.
Therein lies the shrewdness of the Time Warner and Nintendo deals, deals Clark boasts he deserves sole credit for both instigating and closing. Rather than battling it out in the relatively small PC market - some five million PCs were sold in the US during 1993 - Clark is going straight for the masses. If all goes as planned, Time Warner and Nintendo will place millions upon millions of Clark's computers into homes all over the world.
"It's like extending our product line down to $250," says Clark, "without having to be in that market ourselves."
As with the game players it's working on with Nintendo, SGI will provide the guts of the Time Warner set-top cable converter box, but they will be manufactured by Scientific Atlanta. While it might seem surprising that SGI, known for its stylish packaging, would let other companies box its hardware, it makes sense if you remember that Clark sees himself in the graphics business.
SGI's past experience in the rather esoteric graphic workstation market provides no assurance that it can design products simplistic enough for the average couch potato to grok.
"I'm not convinced that they can pull off the set-top box," says Friday Holdings' Caruso. "Part of what they're doing for that is the user interface. They don't know anything about user interface for consumers. Nobody in the computer business does. The fact that these people are kidding themselves into thinking they know how to do this is terrifying to me.
"It's not like you're walking into a proven market," Caruso continues, "where you know there are 50 million people who are just waking up every morning saying, 'I've got to have interactive TV today.' They don't know what it is. They don't know to want it."
HP's Weinberger thinks SGI's high-profile move into new areas could prove disastrous. "Now what does that say to one of their mechanical design customers, say a major automobile manufacturer, who sees all of this and starts saying to himself or herself, 'Oh, geez, sounds like that's their future, that's what they're betting on, that's where they're gonna put their investment.'
"Well, they're going to drop Silicon Graphics like a hot rock long before Silicon Graphics realizes one penny of revenue from the (new 64-bit game machine) - that's well off in the future," continues Weinberger. "And that's the challenge. Big worldwide Fortune 1000 companies want to make sure that the things they're buying today are mainstream strategies for that vendor. And the noise I hear from Silicon Graphics is, 'Gee it isn't. It's something we've been doing, but now we're doing something else."
All of which Clark seems to understand; none of which has deterred him. You don't have to talk to Clark for long to discover just how important he thinks these two deals are for SGI. They are, he says, his obsession. Clark believes that the very future of his company rests on his new partners' abilities to bring SGI technology successfully into America's living rooms.
"If SGI doesn't create more volume," he says quietly, "then it will die."
The Virtual Shopping Mall
"Interactive home shopping," says Mark Hannah. His brown eyes light up. A big smile appears on his face.
While the President of the United States talks about creating high-tech "information superhighways" that will revolutionize America, Hannah has a more pragmatic idea of how those superhighways will be used by most Americans - at least in the short run.
Hannah ticks off his fingers as he sits on a couch in his office in Building 2 on the SGI campus, counting: "Interactive home shopping, video on demand, and games."
"I think the biggest application of the superhighways will be entertainment," agrees Ed McCracken.
Conventional wisdom now has it that the money - the really, really big money - lies in successfully wedding computer technology and entertainment. As The New York Times reported in late September, it is now estimated that a $3.5 trillion business is "beckoning on the horizon."
Sure, some egghead kids may use the superhighway to "plug into an electronic library," as Vice President Al Gore put it while visiting SGI. But recent activity to stake claim to a piece of that superhighway, such as the recent $21 billion plus Bell Atlantic acquisition of Tele- Communications is about less lofty bits.
"It's just a lot easier leap to think that people will want to watch movies on demand," says Hannah. He rubs his neatly trimmed beard and adjusts oval- frame glasses.
"No real training involved there," chuckles the scientist. "Instead of going down to the video store, you select a movie on the screen. And so that seems to me like the path of least resistance to really establishing a large market for these technologies."
Volume, Volume, Volume
By 1989, Clark was imagining two possible scenarios for SGI. Basically, if the company didn't get its technology into consumer markets, it would eventually be relegated to the fringes, profits would shrink, and survival would be difficult.
On the other hand, what if he could make deals that would place SGI computer architecture and the company's MIPS chips in mass-marketed consumer items? This would create a demand in the tens of millions for those chips, a gigantic leap above current sales of half a million per year.
Clark would have volume, and volume, and well, let Clark himself explain it. "Why is volume important?" he asks rhetorically. "Because if you don't get volume, the guy who does get volume is going to end up setting the standard and, to a lesser and lesser degree, people will want to use your microprocessor."
He leans back in his chair. "Instead, they're going to want to use the one that has the most software on it," he says.
The repercussions of this scenario would be profound for SGI. The company could become a major player in the new digital media marketplace; it could grow into the very profitable company Clark envisions by the end of the century.
Of course there are those - certainly SGI's competitors - who think all of this is just a pipe dream. "The odds against SGI doing that are quite high," says Bob Pearson, director of advanced desktop systems marketing for Sun. Pearson worked at SGI from 1984 until 1988.
"The MIPS chip doesn't necessarily lend itself to very high-volume, low- cost production," he continues. "Most chips don't. It's very complicated to get a chip that now costs $400 down to, say, a $20 price point."
But if Clark has doubts about where he is taking SGI, he isn't showing them. "I feel there's a certain inevitability to everything that I talk about," he says.
"It's not as if I'm pointing the way in some grand visionary sense. I think it's inevitable. Okay, so I happen to see that it's going to happen better than somebody else, perhaps. I feel like I do. But it's going to happen whether I'm here or not. So why not help it happen a little quicker, and help the company make money out of it."
Now he's grinning: "And I wouldn't mind if I made a little in the process."
The End of the PC?
"This deal says we're coming up from underneath - squeeze play," says Clark.
The SGI-Nintendo press conference is over. Clark has left the stage and is now standing in the middle of an adjacent room where a half dozen of his computers are being used to demonstrate some of their amazing graphics capabilities.
At one workstation, a boy who looks about 12 is mesmerized by a 3-D flight simulator. In a rear corner of the room, a man whoops it up as he rides a virtual reality pterodactyl through simulated 3-D images of a prehistoric landscape.
Above the noise of jungle sounds and the hum of supercomputers, Clark is on a roll. "Eventually people will ask, 'Can I get my word processor and my spreadsheet and a few other applications on this other platform?' As soon as they can, they'll stop buying PCs. I don't know how long that will take. It may take five years, may take seven years.
"But the PC doesn't have an indefinite life," he continues. "Just like the Model T didn't. Or the Model A. They produced the Model A for eleven years. No change. Eleven years! And I view the PC as the Model A of computers. It's been a terrific product. Made some people a lot of wealth."
Through his wire-frame glasses, Clark's eyes gleam. And then, like someone who is simply stating the inevitable, he adds, "But it isn't forever."
The New Paradigm
"The first day I went to speak to Jim, he pointed to a picture of an airplane he had up on the wall," says Kurt Akeley, who was a Stanford University student at the time. "And Jim said, 'I'm going to make this move.'"
The year was 1979. Jim Clark, who had recently taken a job at Stanford as an assistant professor of computer science, had a plan to build a better mousetrap. He'd come up with what SGI president Ed McCracken now calls "a new paradigm."
While developers at other computer companies were "using the paradigm of the desktop," Clark imagined something else. Using his hands to draw a rectangle in the air, McCracken says, "Jim Clark's idea was that the screen would be a window into a three-dimensional, virtual reality world."
That was Jim Clark's vision. And his motivation?
"I was 35 and poor," he says frankly. And, he hastens to add, he had no interest in spending the rest of his life dealing with the politics of academia.
"I love the metric of business," says Clark. "It's money. It's real simple. You either make money or you don't. The metric of the university is politics. Does that person like you? Do all those people like you enough to say, 'Yeah, he's worthy'?"
Clark raises both arms and then, like Saturday Night Live's Wayne and Garth, makes bowing motions as he says, laughing, "We're not worthy, we're not worthy."
Born in 1944, Clark grew up in the small west Texas town of Plainview. He was good at math, "played around with ham radios," and even built one, but found school a bore. He dropped out of high school when he was a junior and in 1961 joined the Navy. It was there that he discovered his aptitude for technology. That inspired him to go back to school.
"I became excited by the challenge of understanding how things work, understanding the world," says Clark. "It struck me as fascinating, that you could actually write down some equations that would predict how the world was going to behave."
By the early '70s he had landed at the University of Utah to pursue a PhD in computer science. It was there that he studied with Ivan Sutherland, considered to be the father of interactive computer graphics.
When he reached Stanford, Clark knew he wanted to do more than just teach. With financing from the Defense Advance Research Projects Agency, Clark and a team of students in graduate programs at the university, including Mark Hannah and Kurt Akeley, spent three years working with a "maniacal" intensity on the ASICs they named the "Geometry Engine."
After a halfhearted attempt at selling this breakthrough technology to an established computer company, Clark raised $500,000 himself (he eventually secured $20 million in funding) and SGI was born.
"I concluded after talking to DEC and IBM and all these companies that they didn't understand how to use what we had in the first place, so they would surely screw it up," says Clark. "Since they didn't feel the passion for getting these kinds of graphics into computers, what was I going to do? Try to convince them for three years while I died?"
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Silicon Valley: an army of geeks and 'coders' shaping our future
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[] |
[] |
[
""
] | null |
[
"Andrew Smith",
"www.theguardian.com",
"andrew-smith"
] |
2014-05-12T00:00:00
|
<p>My birthplace has been changed forever by the app and network generation, writes <strong>Andrew Smith</strong></p>
|
en
|
the Guardian
|
https://www.theguardian.com/technology/2014/may/12/silicon-valley-geeks-coders-programmers
|
The surprise is how long a backlash took to come. When I was a child in a heat-hazed suburb to the north of Palo Alto, almost no one had heard the term Silicon Valley. In common with the hamlets scattered around it like points on one of my join-the-dots colouring books – Cupertino, Sunnyvale, Santa Clara, Woodside – it was an unassuming place, with pretty, straw hills and decent schools; a good, honest incubator for the aspirant lower middle class; benign spot for Hispanic incomers to land.
Now Palo Alto is the spiritual epicentre of Silicon Valley, the Detroit of the 21st century. An average home costs $2m, despite an eastern flank still mired in poverty, even as rich young "tech" workers glide in from nearby San Francisco aboard white, smoked-glass, Wi-Fi equipped buses, shielded by headphones and shades – a target for resentment that could only be improved if they wore handlebar moustaches and snatched kids' iPods on the way past. Is the resentment fair? When I last came here, the Valley was still reeling from the great dotcom crash of 2000, with Amazon shares trading at $3 and the fledgling industry on its knees. And although it's hard to believe now, no one was predicting that by 2014 our lives would be very largely shaped here, by an army of software engineers – programmers or "coders" – who are progressively recasting the human environment in their own image, forcing the rest of us to adapt to this radically reconfigured landscape in the only way possible: by becoming … more … like … them.
Yet, for all we see and hear about the Valley's gilded apps and networks, glimpses of the people behind them are rare. Who are they and what does the society they have made for themselves (the template for our own) look like by light of day? A recent anti-tech protest in San Francisco became the first to draw attention from the FBI. What don't San Franciscans like about the tech titans to the south who have made their city rich?
Gliding into Santa Clara, home to Intel among others, the last question is not so hard to answer. Silicon Valley runs from San Francisco in the north to San José in the south and is here thanks to an unlikely alliance of Stanford University computer pioneers and hippies who saw that while acid hadn't made the world more free and open, computers just might. Sixties and seventies originals such as Douglas Engelbart (inventor of the mouse and a conceiver of the web) and Stewart Brand (founder of the first online community The Well) hoped for wisdom and enlightenment through the spread of information, as a bulwark against The Bomb or World War Three. Counter-cultural rhetoric still suffuses the Valley tech industry.
Talk of "disruption" and "changing the world" assails you like tinnitus the moment you arrive, and if "making a difference" often devolves into piddly goals such as "improving the end-user experience", it still contains an idealistic sheen.
What to make of some tech insiders' recent pronouncements, then? The first Frisco protests followed a speech by biotech entrepreneur Balaji Srinivasan last October, in which he decreed that the rest of America was holding Silicon Valley back and it was time to consider secession. Lest this be taken for a joke, a venture-capitalist investor named Tim Draper duly filed a petition to split California into six, with an independent Silicon Valley – putatively the richest state in America – abutting Central California, which would be poorer even than Mississippi.
And it got better. In the absence of independence, another venture capitalist, Tom Perkins, suggested that, at the very least, rich techies should be given extra votes and went on to compare criticism of his industry to the Nazi persecution of Jews.
With spectrum-friendly timing, the billionaire CEO of social network Yammer, David Sacks, then spent $1.4m throwing himself a Marie Antoinette-themed 40th birthday party under the banner "Let Him Eat Cake", even as Valley legend and Facebook billionaire Sean Parker (played by Justin Timberlake in the movie The Social Network) spent a reported $10m on a wedding in which guests were dressed by the costume designer from Lord of the Rings (at least it wasn't Star Wars), and a young startup founder named Peter Shih penned a blog post entitled "Ten Things I Hate About You: San Francisco Edition", in which hate number six was given as "homeless people". Is there an app for hubris?
British comedian John Oliver, in hosting a tech awards ceremony called the Crunchies, gently roasted his guests with the quip: "I heard that the new design for the buses had tinted windows, but with the tint on the inside: 'Look, I don't mind if the peasants see me, but I'd rather not see them'." Laughter in the hall was muted.
Like bankers in the UK, techies seem surprised at what is happening to them. So in many ways am I. For all the gathering cultural divide, driving through Silicon Valley is still an awesome experience. Around every turn stands the glinting HQ of another household name, or two, or three – and not just the big ones you expect, but the everyday others you seldom think about. Look! There's Adobe, Cisco, Hewlett Packard, Pixar, SanDisk, Symantec …now to Oracle, Netflix, Asus, Atari, Groupon, LinkedIn, Logitech, Electronic Arts, Mozilla, PayPal, Twitter, YouTube, McAfee, Yelp, Atari, Nvidia, Yahoo!, Tesla, Sun Microsystems … not hundreds, but thousands, tens of thousands, everywhere you look.
Even those giants with headquarters elsewhere – Microsoft, Nokia, Panasonic, Samsung, Amazon, Nasa – have research centres here, such is a concentration of tech talent. The sensation is of having stepped like Alice through your computer screen and even the disposable-looking architecture whispers of the Valley's exotic, hyper-Darwinian credo of "creative destruction". The phrase you hear everywhere is "innovate or die", which is not intended to relax you.
My first mass encounter with the present workforce comes on a Saturday night in Mountain View, home to Google and Microsoft among others, and it couldn't be more startling. Last time I was here, I phoned an editor at the San José Chronicle to ask where the geek people hung out. "You won't believe this," he chuckled, "but if you go to the cafe at Fry's Electronics superstore, that's where you'll find them."
I did, but every time I tried to speak to one, they stared at their sneakers and scuttled away like crabs clutching circuit boards. They were of a stereotypical piece, though, which is why first sight of Mountain View's bright-lit main drag is such a surprise, because the scene doesn't look American. It's populated mostly by knots of generically-dressed young men, the vast majority from the Indian subcontinent or Asia, looking lost, as though not sure what to do away from their screens.
Later I'll check the census figures to find that more than three-quarters of tech workers are now born outside the US, with China, India, Korea and Japan supplying most, often via Ivy League universities, with a small contribution from eastern Europe. Given that women are outnumbered 25 to one, the modern Valley is at once highly international and culturally monocular, adding to the air of transience. Minority female tech workers complain of a frat-housey "brogrammer" atmosphere within the industry. I'm floored by what I see.
Inside Molly Magees, an ersatz Irish pub, which turns out to be one of only three places you can dance in Silicon Valley, the music is overwhelmingly from the decade in which most of its clientele was born, the 1980s (and I abruptly realise that this is what most the local radio stations are playing, too). Most of the women cutting a rug together are from local colleges and universities, but the genders operate for the most part at a tangent.
Asked what dating is like in this apparent 25:1 paradise, women tend to roll their eyes or laugh ruefully. "The odds are good, but the goods are odd," one tells me. "Most are just interested in money or programming," says another, echoing screeds of anguished posts on tech forums. I soon see what they mean. Conversations with the men are mostly fluid, but tend to resemble those you have at technology "meetups", where the unspoken question is "Can we do business together?" When I mention this unexpected gregariousness, an important truth is explained: that the people in Molly's are not "tech people", that there is a clear divide between tech people, meaning coders, and "non-tech" people, which is to say entrepreneurs, financiers, idea and business people. Good coders are in short supply and tend to regard themselves as an elite, with the best being paid six-figure bonuses just to stay at places such as Google and Facebook.
Coders, I quickly learn, are almost universally regarded as weird. A Valley entrepreneur I contact in an effort to find some to speak to (he asks not to be named) warns that "a small percentage of the good ones are not so autistic/introverted that they might be willing to talk", and, as if to script, two of the three candidates he suggests as being in this category subsequently refuse, one sniffing airily, "No, I don't really want interviews with journalists."
I do meet one coder at Molly's, a 26-year-old goateed American named David, who looks more hipster Shoreditch than Banana Republic Valley, who has travelled through Europe and chats easily about Breaking Bad and Mad Men and whose favourite bands are the Pixies and Sigur Rós rather than Metallica – not the stereotype at all. So the stereotype is flawed, I rejoice! But no, he groans.
"In truth, I feel kind of isolated, 'cos I'm intellectually curious and outgoing. As a single guy who likes women, it's hard. I mean, I just work with nerdy guys and there are hardly any women – it's horrible, man." Why does he stay? "The money's really good," he says with a shrug. "It's hard to walk away." I ask what he earns, and he smiles. He doesn't want his name used.
Later I meet a woman in her mid-twenties named Sunny Allen whose ex-fiance was a coder. Her eyes widen as she tells me: "They're the real hardcore. He would work for 36 straight hours, sleep for four, then get up and work another 36. Eighty-hour weeks are the norm for those guys and weekends don't exist. They work harder than any group of people I've ever come across."
It's as if these people are not so much a different breed, as a new species. An ad in the back of the main San José listings magazine reads: "Computer Systems Analyst, Sunnyvale, CA. Bachelor and five years experience required." What is this place?
I drive home to Santa Clara thinking about the society being made here. The average age of employees at Facebook is said to be 26, which is exactly the same as at Nasa during the moon landings of the 1960s and early 70s. A Brit I meet named Mark Whelan (one of very few Brits out here) says he loves being in the Valley, where finance is available for risky good ideas – unlike at home. Now on his third "startup", for an electronic payment system, he tells me that he loves being around (software) engineers, "a unique breed, because they're always trying to solve problems, that's what they care about – getting the job done".
The question, of course, is whether the problems being solved are worthy of such energy, intelligence and investment. With the honourable exception of Elon Musk, founder of SpaceX and Tesla Motors, the challenges they address are not big ones requiring years of commitment, they are the local concerns of Ivy League-educated twentysomething males with a surfeit of cash and no off-screen responsibilities. Not to mention a widespread awkwardness with people; an empathy deficit that may explain not just the prevailing libertarian, often Ayn Randian politics, but the much-trumpeted techy grail of "connection". Because hardly anyone seems to have noticed that connection is not the same as engagement, upon which deeper relationships are built, and may even run counter to it.
Is this disjunct written into Valley DNA? Top venture-capitalist investor Marc Andreessen has pointed out that by the time most techies are 22, they've done the 10,000 hours work which Malcolm Gladwell, in his book Outliers, claims to be the main constituent of "genius". As Andreessen says: "[That] doesn't happen in other fields … you can't start designing bridges at age ten." True. But those 10,000 hours can only come at the expense of other activities we associate with the process of transcending youth, growing up, finding a place in the here-and-now.
If this is the case, should we be more afraid of these men than we currently are? As a graduate computer science student named Yiren Lu noted in a New York Times piece headed "Silicon Valley's Youth Problem": "If the traditional lament of Ivy League schools has been that the best talent goes to Wall Street, a newer one is taking shape: why do these smart, quantitatively-trained engineers, who could help cure cancer or fix healthcare.gov, want to work for a sexting app?" Why do programmers do what they do, in the obsessive way they do it?
Alison Chaiken is in her fifties, and made a career switch from physics two years ago. Her challenge to Valley norms is more a source of awkwardness for the young men she works with than for her, she chuckles, "because I'm used to it – it's 100% of the time for me". The cult of youth around startups exists because "if you want people to be willing to die for the cause, who are willing to work long hours for almost no money, you have to get 'em young".
Asked if she thinks coders are weird, she pauses: "Well, this is an elliptical answer, but I'm a person who loves music, and there are certain fields like music and math – and a lot of people love both – where you have to be a little bit obsessive and quite devoted to be good at your craft. And to maintain your skills you have to spend an awful lot of time keeping up with recent developments.
"So to be a real professional coder you have to put in a lot of hours. And if you don't really love it, you can't motivate yourself to do it, so the motivation has to come from within, same as for musicians or writers."
Right. Except that most neutrals can appreciate the pull of music or writing. Why does coding appeal? "I think part of it is a feeling of power and mastery, in that you can solve problems. That is very reassuring. The other thing is instant gratification. People always talk about 'gamifying' interfaces, where you're getting points totals and a lot of feedback … and with programming, you get that same kind of feedback. Every time you add a function and it works, it's like a little mini accomplishment."
Or as another coder, Jesse Monroy, has it: "The overwhelming reason I know that people program is the certainty of the outcome … the way a small amount of work can make a profound difference." Do coders deserve their reputation for weirdness, I ask? "Yes," he says. "Good coders are a bit weird." And they're busy redesigning society for us. Excellent!
Next morning I follow the sun south to San José, a bigger point on the map because, like San Francisco, it's had its own song. José is a light-washed picnic blanket of a town, gathered around featureless buildings barking the cryptic handles of tech firms such as InvenSense and SunWize. Nicknamed "Man José" for the dearth of females, it houses the sheeny Tech Museum of Innovation, a paean to digital technology, which should be exciting but presents as a lesson in fatuousness. I snigger at bold, declarative wisps of nothing, such as "digital technologies bring people together to work, learn and play".
Brilliantly, nowhere is it explained what "digital technology" is or suggested that anything existed before it. In a society so fixated on the future, does the past become a kind of irritant, an inconvenience? Facebook's Mark Zuckerberg is on record as having declared that young people are "just smarter" than older people (even while supporting politicians opposed to Obamacare and in favour of Arctic drilling), which may have more to do with disdain of history than elders. As per much of Silicon Valley, the Tech Museum, which is funded by the likes of Intel and Microsoft, betrays no concern for context and is quite simply the most arcane museum I've ever seen. Battalions of schoolkids look bored out of their trees and would undoubtedly be better off running outside to climb something.
There is still something Las Vegas-ly thrilling about Silicon Valley. Tourists flock to the Facebook, Apple and Google "campuses" just to cop a sense that they are real and exist in physical space, a surprisingly hard mental adjustment to make. At Google, as elsewhere, you find nothing much to see, except that as you drive through the maze of lanes radiating from a huddle of inscrutable main blocks, dodging staff on Google-liveried bikes, it seems to go on forever.
In fact, this HQ belonged to a fleetingly massive 1990s tech firm called Silicon Graphics – creative destruction in motion – and Google has staked out a yet grander estate to rise on the hills opposite. For the first time, the scope of its empire seems tangible.
Then, an unexpected turn. While queuing to take the obligatory tourist snap with the giant corporate "like" sign outside Facebook – simultaneously wondering why I'm doing it – a likewise-engaged Indian startup founder named Jagmeet Lamba steers me towards a very different kind of place: a startup "incubator" called Hacker DoJo.
DoJo is remarkable: an airy tech playground in which anyone can grab a desk or couch and work for free, 24/7. More valuable even than desk space is the proximity to other dreamers, and the space is full of them, by turns absorbed in their screens or playing pool or ping-pong or chatting over bites to eat. All at once, the desire to be in the Valley makes sense.
On a couch near the entrance I find Sunny Allen, the sometime fiance of a coder, herself a Kentuckian linguistics major who took a second degree in biology and is now developing "bio-reactors" which produce algae for processing into food, fuel or biodegradable plastics for clearing up water pollution or sequestering carbon from the atmosphere. She smiles at my observation that she is the only woman here, saying: "Yes, it's definitely a male-dominated environment. I shouldn't say this, but sometimes I walk through here and I feel that the men just look at me like wolves. I feel like meat."
That familiar roll of eyes. Yet, when I ask if she likes this sexless, drab-seeming milieu, her response is emphatic. "Oh yeah – I love it! And because everyone's so focused on work, I never feel excluded. As a woman it's not assumed that I have skills, but once I've proved I have, I'm accepted. I feel like this is the place where the ideas are coming from. You need to be here."
Better yet, when Observer photographer Barry Holmes turns up to take snaps at DoJo, he finds a Londoner named Simon Brooks, a non-tech app developer who read about the incubator one Thursday night while living in Kentucky, held a yard sale over the weekend and drove to Cali with his cat and two dogs the following Monday. That was six months ago, since when the money's run out, Izzy the cat has died and he sleeps in his battered '99 Lexus with the dogs.
Asked what his parents, a GP's receptionist and plant machinery mechanic respectively, think of his decision, he says: "They don't understand the startup thing, so they're not too happy." about it A weary pause. "And it's absolutely not ideal. But I know I've got something really good and just need to get that break to get me to the next stage. As long as you've got goals, you have to reach for them."
A longstanding fan of word games such as Scrabble, Brooks has already released a word game app called Gadzookery and is about to launch a Kickstarter campaign to fund another. Inspired by the immensely popular "Words With Friends", but without that game's susceptibility to cheats, this new app sounds like a winner to me (who once watched two close woman friends fall out over allegations of Words With Friends cheating). If the Kickstarter campaign works, he will hire a budget mobile home and take his scratch team of coders to the Mojave desert to "build" it.
There they will party, but mostly work absurd hours to have it done in a fortnight. After that, it'll be two weeks' testing, another two fixing bugs, then launch: six weeks, start-to-finish. Given that Words With Friends had 80 million users at its peak, the prize is clear. Hence Silicon Valley. Remarkably, Brooks had never been to Silicon Valley before hitting the well-worn trail west to join personal heroes like Mark Pincus of the game-makers Zynga. He has watched others arrive and slink home, tails between legs, having failed to build a viable team.
"And I definitely felt that I was being watched at first. But the good thing is that, unlike home, it makes no difference here who you are or where you're from: it's all about what do you know? The really, really important thing, though, is that there's no shame in failure. As long as you can learn from it, failing won't be held against you, it's just part of the process."
Isn't there a hierarchy, with coders aloof, a little superior, I ask? Weren't they hard to recruit? "Funny you should say that. Yes, I think the coders do think like that. But you can build a bridge, can usually prise the interaction out of them. What I learnt is to just keep saying 'hi' – and don"t push it! It's a bit like with a pet. Show them that you want to know them, then wait for them to come to you. If you don't stroke that cat, then it'll come and sit on your lap and wonder why you haven't stroked it – he-he!"
Brooks claims not to be interested in the big yacht or end-of-rainbow lifestyle, dreaming instead of using future money to build an orphanage. Does he meet many Valley folk with similarly idealistic goals? "Do you know what? No. Most people are just here for one reason – to make money. But there are a few of us." And the inequality doesn't bother him? "Inequality?" The vast gulf between the Harvard-educated billionaire Mark Pincus and you? "Ha ha. Yeah, in the UK there would be a war if it was like this! But here there's not that class divide to tie people to. It's all mixed up. So it's not a problem for me." Like most Dojo dwellers, Brooks works 15-16 hour days, six or seven days a week; anything less would open the way to chance. The successful social networking site Pinterest was developed at DoJo, he says, so the dream is for real.
After the Tech Museum debacle, it takes every ounce of willpower to stop at the Computer History Museum en route north to Woodside, but the effort is handsomely rewarded. As understated as its predecessor was brash, this collection revels in a sense of continuity; is all about context and the colourful people who first imagined then built the machines now mediating our lives. A working version of Charles Babbage's 165-year-old Difference Engine No 2 is joyful, but the highlight for me is a Cray supercomputer from the 1970s, which consists of an alluring 8ft tall, semi-circular tower, finished with an exterior bench in kinky red leather (iMac, eat your heart out). I could wander this place for hours.
The drive to Woodside is heart-stoppingly beautiful, with clapboard mansions atop wooded picturebook hills – yet the biggest estates, such as those belonging to squillionaire Oracle founder Larry Ellison and the late Steve Jobs – are tucked into the valleys. I've come to break bread at Buck's, a bustling luncherie in which some of the biggest deals in Valley history have been inked, relating to companies like PayPal, Google and Tesla.
Having opened the venue in 1990, proprietor Jamis MacNiven has known many of the big tech names over the years (seems that Jobs, though a friend, really was an asshole) and can tell you about the Google founder who, rich beyond imagining in his twenties, lost all impetus and now wanders through his vast garden strumming a guitar to no one in particular … a story which concludes: "So, he lucked out, but then again, did he?" A Burning Man festivalgoer of long standing, MacNiven doesn't think Valley people have changed generationally. Being at the centre, he still hears lots of stupid pitches, like a recent one ("the dumbest so far, I think") extolling the virtues of a networked toothbrush.
Yet dumb ideas are sort of the point, he says, revisiting Brooks's observation that the big difference between here and everywhere else is the willingness to countenance and even embrace creative failure. His impression from a recent trip to London is that if you fail once there, you're off the list, out of the club, with no way back, and I think he is right. When I spend time in London's rebranded "Tech City", I hear a lot of people playing safe, trying to insert themselves between the makers and the market – perhaps mirroring the dysfunctional finance industry upon which they rely – rather than stepping up to the plate and building things. After visiting Silicon Valley, once thing is clear: Tech City won't succeed without a better funding model.
What are we make of all this? I barrel back to LA with a complex suite of feelings. The California tech industry's embrace of risk is clearly encouraging to some forms of innovation (a word I can hardly stand to hear after a few days in the Valley). And some of the innovations can be bigger than they look: the great media theorist Marshall McLuhan would say that anything that enables us to engage each other in new ways is ipso facto profound, regardless of the content of that engagement.
At the same time, I see a plethora of connection but little engagement in the tools Silicon Valley provides, because for all the excitement and convenience they generate, the tech people are giving us a world which suits them, which we need to start treating with far more caution than we presently do. After all, no one ever grew or acquired wisdom through convenience.
©Andrew Smith. Andrew Smith is author of Totally Wired: the Wild Rise and Crazy Fall of the First Dotcom Dream and Moondust. @wiresmith
|
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5018
|
dbpedia
|
1
| 6
|
https://hbr.org/1990/07/computers-and-the-coming-of-the-us-keiretsu
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en
|
Computers and the Coming of the U.S. Keiretsu
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[
""
] | null |
[
"Charles H. Ferguson"
] |
2014-08-01T04:11:40+00:00
|
No matter that the United States still leads in developing the most innovative technologies. If U.S. and European companies continue business as usual, they will either fail outright or become, in effect, local design and marketing subsidiaries of Japanese companies that will dominate a $1 trillion world hardware industry. The endangered list includes most of […]
|
/resources/images/favicon.ico
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Harvard Business Review
|
https://hbr.org/1990/07/computers-and-the-coming-of-the-us-keiretsu
|
CF
Charles H. Ferguson, an MIT Ph.D. and former MIT researcher, is an independent consultant, also in Cambridge. This article is based on their book Computer Wars: How the West Can Win in a Post-IBM World, which was just published by Times Books
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5018
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dbpedia
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1
| 13
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https://hbr.org/1991/07/the-computerless-computer-company
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The Computerless Computer Company
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] | null |
[
"Andrew S. Rappaport",
"Shmuel Halevi"
] |
2014-08-01T04:09:04+00:00
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By the year 2000, the most successful computer companies will be those that buy computers rather than build them. The leaders will leverage fabulously cheap and powerful hardware to create and deliver new applications, pioneer and control new computing paradigms, and assemble distribution and integration expertise that creates enduring influence with customers. So long as […]
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Harvard Business Review
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https://hbr.org/1991/07/the-computerless-computer-company
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AR
Andrew S. Rappaport is president, and
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Shmuel Halevi is vice president of The Technology Research Group in Boston. The firm, founded in 1984, advises semiconductor, computer, and software companies in the United States and Europe on business strategy, marketing, and product development.
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https://hackaday.com/2024/04/08/the-rise-and-fall-of-silicon-graphics/
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The Rise And Fall Of Silicon Graphics
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2024-04-08T00:00:00
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Maybe best known as the company which brought a splash of color to corporate and scientific computing with its Indigo range of computer systems, Silicon Graphics Inc. (later SGI) burst onto the market...
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Headlines
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What other people are Writing About SGI
See what Business Week thinks about Silicon Graphics.
Headlines
This area consists of press releases and announcements from Silicon Graphics and its partners. This information is compiled on a monthly basis and is arranged in reverse chronological order. You can access each announcement by clicking on its title below. This information is also included in Silicon Graphics' monthly email-based magazine .
December 1994
Silicon Graphics
Leilani Gayles Named Vice President Of Human Resources At Silicon Graphics. Silicon Graphics' Interactive Technologies Unveiled With Time Warner Cable's Full Service Network.
November 1994
Silicon Graphics
Silicon Graphics Introduces POWER CHALLENGEarray. Silicon Graphics Supercomputing Technology Power Advanced Aerospace Design At NASA AMES. Silicon Graphics and NetManage Techology Alliance To Bring Collaborative Technology To Windows PCs. Silicon Graphics Introduces Full-Media 3D Collaboration With New Iris Annotator. Silicon Graphics Unveils New Era In Visual Manufacturing SiliconWorks. CBS News Harnesses Silicon Graphics Technology. Silicon Graphics' CHALLENGE SMP Servers Lead Industry In Network File Server Performance.
Silicon Graphics announces POWER VISUALIZATION, a no-cost technology briefing.
Subsidiaries
At the Entertainment Authoring Conference at Hollywood, California, Silicon Studio, Inc. unveiled three programs that promise to define a new future for the creation of entertainment, from motion pictures to new interactive media.
October 1994
Silicon Graphics
Silicon Graphics' Indy system was recently recognized as a leading product in the Computer Aided Design (CAD) marketplace. SGI Listed Among Top Employers of Working Mothers.
Partners and Subsidiaries
Edward Birss Named to Top Interactive Digital Solutions Post
Philips Semiconductors Joins As New MIPS Technologies Microprocessor Partner For Embedded Applications
September 1994
No press releases were made in September.
August 1994
Silicon Graphics
Silicon Graphics World Checkers Championship Pits Man Against Computer for world Title Silicon Graphics Extends Leadership in Visual Computing With Host of Announcements at SIGGRAPH '94 Silicon Graphics Unveils Power Onyx Graphics Supercomputer Based on World's Fastest Supercomputing Microprocessor Silicon Graphics Introduces Flat Panel Display for Indy Desktop Line Silicon Graphics Accelerates 3D Graphics and Application Performance Of Indy Line NAG and Silicon Graphics Announce Relationship To Develop, Distribute, and Sell IRIS EXPLORER Silicon Graphics To Host Entertainment Authoring Conference CHEVRON Enhances Search for Oil and Gas with World's Most Advanced Graphics Supercomputer
July 1994
Silicon Graphics
Silicon Graphics reports 36% revenue growth along with record earnings. Walt Disney Company And Silicon Graphics Team to create Virtual Reality Exhibit at Epcot Center Silicon Graphics to Open Subsidiary in South Africa. Silicon Graphics unveils two new models of Challenge server.
June 1994
Silicon Graphics
Federal Court Ends Mips Securities Litigation MIPS Technologies Announces OEM Reference Design To Upgrade PCs From Pentium to MIPS for 3.5 X Performance AT&T, Silicon Graphics Form New Company To Speed Arrival Of Interactive Services Via Telephone, Cable Networks James M.Barton named President of Interactive Digital Solutions Mips Technologies Announces the World's fastest Supercomputing Microprocessor Silicon Graphics Introduces 64-BIT Operating System NTT and SGI to Build Interactive Multimedia Services Systems for Japan
May 1994
Silicon Graphics
Powerful New 200MHz MIPS R4400 RISC Microprocessor Begins Sampling Latest Application Benchmarks Show MIPS-based PCs Fastest Available for Windows NT Silicon Graphics sets TPC-A Database Record with Oracle7 on Challenge Server Silicon Graphics Sponsors International Artists Rights Symposium
April 1994
Silicon Graphics
SGI Enters the Fast Lane with Ford Motor Company World Renowned Artist Peter Max Teams with Silicon Graphics, Inc. National Information Infrastructure Advisory Council Launches Three Mega-Projects Announcing Silicon Graphics Expo '94 Silicon Graphics dramatically scales power of entry-level INDY SYSTEMS NEW SILICON SURF brings Silicon Graphics data onto Information Superhighway Silicon Graphics simplifies application development with IRIS ViewKit(tm) Silicon Graphics and EDS aim strategic alliance at commercial users SILICON GRAPHICS EXPO '94 "I WANT INDY"
Partners
INTERGRAPH'S I/DESIGN ported to Silicon Graphics platform INTERGRAPH'S EMS 3 ported to Silicon Graphics platform
March 1994
Silicon Graphics
Silicon Graphics' Ed McCracken and Tom Jermoluk named to top executive posts Forest Baskett named Chief Technology Officer at Silicon Graphics FORD re-engineers automotive design with Silicon Graphics systems InPerson Desktop Conferencing Software CASEVision - Transforming software development through visualization
Partners
Falcon Microsystems Adobe Photoshop promotion
February 1994
Silicon Graphics
Silicon Graphics announces departure of founder and chairman Jim Clark Silicon Graphics reports 37% increase in revenue Silicon Graphics receives ISO certification for manufacturing quality Silicon Graphics breaks ground for Shoreline development Silicon Graphics names William M. Kelly as Vice President of Business Development and General Counsel
Partners
SGI WORKSTATIONS HAVE ADDED VALUE IN A NOVELL NETWARE ENVIRONMENT NEW PRODUCTS ANNOUNCEMENTS FROM EXPRESSWARE
January 1994
Silicon Graphics
Silicon Graphics enhances Customer Support offerings with Support Advantage Program Silicon Graphics boosts entry desktop performance with introduction of INDY R4400 Silicon Graphics' Edward R. McCracken named co-chair of President Clinton's National Information Infrastructure Advisory Council PC veteran Glenn Henry joins MIPS Technologies
Partners
ASDG ANNOUNCES VERSION 1.3 of ELASTICREALITY ASDG ANNOUNCES ESLASTICREALITY RENDER SERVER DESKARTES INDUSTRIAL DESIGN SYSTEM
December 1993
Silicon Graphics
200 MHz MIPS R4400 RISC Microprocessor unveiled Silicon Graphics names two new board members Kirk Loevner joins Silicon Graphics Silicon Graphics announces availability of CHALLENGEcomplib SCIENTIFIC MATH LIBRARY Silicon Graphics announces a two-for-one stock split Low Cost, High Performance microprocessor now shipping Silicon Graphics and Tandem Computers enter Worldwide OEM relationship Silicon Graphics' first database TPC performance number breaks industry record
Partners
Announcing xrolodex - 1.2 Announcing ie - 1.3.7 EXPRESSWARE NOW OFFERS XINET - MACINTOSH/UNIX CONNECTIVITY QUORUM EQUAL - MICROSOFT WORD & EXCEL FOR SGI WORKSTATIONS ANNOUNCING DRUID VERSION 2.0 PORTABLE GRAPHICS SHIPS NEW VERSION OF NPGL LIBRARY FOR X TERMINALS
November 1993
Silicon Graphics
Silicon Graphics reports a 31% increase in revenues Silicon Graphics successfully computes largest computational fluid dynamics problem
Partners
DIS and Virtual Reality Networking with VR-LINK(TM) New Paint System for Silicon Graphics workstations Bitmap Image Touchup (Bit) V0.87
October 1993
Silicon Graphics
Edward R. McCracken named Co-Chair of Joint Venture
Partners
VXM Technologies announces PAX-2
September 1993
Silicon Graphics
INPERSON(tm) desktop conferencing Tom Whitesides joins MIPS as President MIPS delivers power to Microsoft customers Nintendo and Silicon Graphics join forces Silicon Graphics Case Tools
Partners
The Immersion Probe XSB Logic Programming System Software Portability with imake
August 1993
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https://siliconangle.com/2024/05/25/nvidia-tsmc-broadcom-qualcomm-will-lead-trillion-dollar-silicon-boom/
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en
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How Nvidia, TSMC, Broadcom and Qualcomm will lead a trillion
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"How Nvidia",
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[
"Dave Vellante",
"David Floyer",
"PAUL GILLIN",
"GUEST AUTHOR",
"MARIA DEUTSCHER",
"ROBERT HOF"
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2024-05-25T00:00:00
|
How Nvidia, TSMC, Broadcom and Qualcomm will lead a trillion-dollar silicon boom - SiliconANGLE
|
en
|
SiliconANGLE
|
https://siliconangle.com/2024/05/25/nvidia-tsmc-broadcom-qualcomm-will-lead-trillion-dollar-silicon-boom/
|
We believe the artificial intelligence wave will bring profound changes, not only to the technology industry but to society as a whole. These changes will perhaps be as significant to the world as the agricultural and industrial revolutions, both of which had drastic economic consequences.
Although the exact progression and timing of these changes are unpredictable, one thing is clear: The AI wave will not be possible without advancements in – and a stable supply of – hardware and software generally, and silicon specifically. The complexity of semiconductor design and manufacturing combined with rapid innovation and the vulnerability of the supply chain creates unique and challenging dynamics that in our view are reshaping leadership in the semiconductor industry.
Our forecast shows that the combined revenues of: 1) companies that supply manufacturing equipment, components and software to build fabrication facilities; 2) chip manufacturers; and 3) chip and AI software designers will approach $1T this decade. Our research suggests that four companies, Nvidia Corp., Taiwan Semiconductor Manufacturing Corp., Broadcom Inc. and Qualcomm Inc., will account for almost half of that trillion-dollar opportunity.
In this Breaking Analysis, we bring in theCUBE Research analyst emeritus David Floyer to quantify and forecast the dynamic semiconductor ecosystem. We compare market shares from 2010 with those of 2023 and provide a five-year outlook for more than a dozen of the top players in the industry. We also provide a view of where we see the overall market headed, our assumptions for the market and the top players, which firms we see winning and losing and why, with a bit of survey data from Enterprise Technology Research.
We’ll also address the following five items:
How sustainable is Nvidia’s moat?
What’s the impact of competition on Nvidia, including from hyperscalers, Intel Corp., Advanced Micro Devices Inc. and others?
The challenges faced by two companies that both design and manufacture semiconductors – Intel and Samsung Electronics Co. Ltd.
What the opportunities at the edge mean for firms and competition.
Risks to our scenarios including geopolitical, technological and energy risks.
AI capturing budget momentum
Let’s start with the macro impact that the generative AI awakening has had on information technology spending in the last two years. The data below from ETR shows the 19 sectors the company tracks each quarter. The vertical axis is spending velocity or Net Score and the horizontal plane is the Pervasion, or penetration of the sector within the survey.
We’ve shown this many times before, but note where AI was one month prior to ChatGPT’s launch in the October 2022 survey. It dropped just below the 40% magic line that month and since then has been up and to the right. Consequently, other sectors have been suppressed. As we’ve reported, 42% of customers indicate they’re funding AI by stealing from other budgets. And we know that generally enterprise AI return on investment is coming in small productivity wins at this time and for most organizations is not yet self-funding.
The point is that AI is consuming not only the conversation but also the spending momentum.
We believe there are three significant impacts for all organizations.
The first is across the board productivity gains. Our expectation is that significant adopters of AI will initially see initially 20% and eventually up to 50% improvements over the next few years.
Second quality of service. For example, a contact center representative should be able to answer any customer or prospects question correctly, accurately and immediately. Or the customer can self-serve the answer on the company’s website by voice in the language of their choice.
Perhaps the most important value of AI to organizations is the potential automation of business processes. Specifically, the elimination of people within a business processes that leads to a simplification of the business processes and the company as a whole.
As such, our guidance to clients is a combination of all three is ideal. If you are not planning for a tenfold productivity improvement over the next five to 10 years, there are startups and competitors that will and risk taking your business.
Nvidia’s moat is wide and deep
OK, let’s cut right to the chase. Nvidia momentum is simply remarkable and has caught the attention of everyone in the industry. The pace of innovation coming out of the AI ecosystem generally and Nvidia specifically is astounding. Here’s a diagram that underscores the new era in computing that we’re in, catalyzed by large language models and the AI breakthroughs.
This chart shows the teraflop progression Nvidia has made since 2016. We’ve overlaid a depiction of the Moore’s Law progression. The comparison is remarkable with Nvidia demonstrating a 1000-times improvement in parallel/matrix computing (what Nvidia calls accelerated computing) in eight years versus a 100-times improvement from Moore’s Law in a decade.
It’s important to understand that in this episode where we’re forecasting the semiconductor industry ecosystem and we’re taking liberties with the scope. And by that we mean we’re modeling Nvidia as a full platform solution and a company that is building end-to-end AI data centers – what it calls the AI Factory. And its selling that capability through partners.
One of the key aspects of Nvidia’s moat is it builds entire AI systems and then disaggregate and sell them in pieces. As such, when it sells AI offerings, be they chips, networking, software and the like, it knows where the bottlenecks are and can assist customers in fine-tuning their architectures.
Nvidia’s moat is deep and wide in our view. It has an ecosystem and are driving innovation hard. Chief Executive Jensen Huang has announced that there’s another big chip behind Blackwell – no surprise – and it’s on a one-year “cadence”rhythm” for systems and networking and the new systems will run CUDA. Nvidia claims to be “all-in” on Ethernet, the company will continue to extend NVLink for homogenous AI Factories, and Infiniband’s roadmap continues.
Huang’s claim and bet is the more you spend with Nvidia, the more you save and the more revenue you can drive.
In addition:
We think Nvidia’s performance gains will continue. It means we’ll see 1 million teraflops in five years time.
But the important thing is Nvidia is not just a chip, it’s an entire AI platform. It has specialized graphics processing units, central processing units, networking, cooling and software – it’s a complete systems software. CUDA is by far the best software in the industry. It’s the key AI software platform.
Nvidia can deliver an entire AI data center. Nothing has been introduced that’s this revolutionary since IBM introduced the System 360 in 1964, which changed the computer industry.
In addition, the goal is to crank it up and introduce a new system every year. In our opinion, the value to the users, to hyperscalers and to anyone using these technologies is so high that, combined with the cost of creating alternatives, it means to us that for at least the next five years, Nvidia will be the dominant supplier in the AI data center.
A trillion-dollar semiconductor ecosystem
Let’s get to the meat of this research and our five-year outlook for the ecosystem. The table below lays out how we see the semiconductor industry evolving. In the first column we show the players in the ecosystem comprising the chip designers such as Qualcomm, the chip manufacturers such as TSMC, three leading firms that do both — Intel, Samsung and Micron Technology Inc., equipment manufacturers such as ASML Holding NV and Applied Materials Inc., and software providers such as Cadence Design Systems Inc., which is in the “other” category.
Of course we’re also including Nvidia, which we believe has become and will continue to be the most important player in the market. Again we’ve pushed the envelope a bit in terms of the forecast and are forecasting Nvidia’s entire revenue stream beyond just chips.
For each company we’re showing their related revenue in 2010, 2023 and our forecast for each firm in 2028 with a CAGR for the relevant time period.
Methodology
We ingested a series of relevant financial data for each firm and we combined this data with our fundamental assumptions to create a top down model of the industry as we describe here. We tested this data with a two external data points and added a third dimension, including: 1) company strategic forecasts based on their long-term financial frameworks; 2) inputs from various financial analysts that have made long-term projections for these companies; and 3) applying our own assumptions about how we see the market playing out.
We’ll share that our assumptions and the resulting forecasts deviate quite widely from generally accepted market narratives. In particular, the broad consensus when you take into account the publicly available data essential says that everyone wins and the disruption to existing firms will be modest. We don’t see it this way. Rather, we forecast a dramatic shift to matrix computing or so-called accelerated computing; and we see meaningful spending shifts causing market dislocation, particularly to traditional x86 markets.
Key findings
The high-level findings in our market assessment are as follows:
The global semi ecosystem with our expanded scope, surpasses $900 billion by 2028 and will approximate $1 trillion by 2030.
We forecast a 10% compound annual growth rate from 2023 to 2028.
There is a massive market shift away from general-purpose x86 toward parallel AI computing architectures or matrix computing to support AI.
Four companies will account for approximately 40% of the revenue in this forecast by 2028: Nvidia, TSMC, Broadcom and Qualcomm.
Samsung and Intel are bucking the trend by vertically integrating design and manufacturing and are facing similar challenges.
AI PCs will cause PC lifecycles to shorten. They will go mainstream and not only participate in a Windows refresh but will change the dynamics of the useful life of PCs.
Arm-based designs dominate the market volume and will confer significant cost advantages to those firms up the Arm curve
High bandwidth memory or HBM drives unprecedented demand for memory suppliers and creates a tailwind for those companies that can produce them.
Let’s look at the data in more detail by company, sorted by our 2028 projections in descending order. We’ll show the company, our projected CAGR and our revenue forecast for 2028.
Nvidia: 25% CAGR, $160B
In our view, Nvidia essentially has a monopoly somewhat similar to Wintel’s duopoly of the 1990s with the core GPU dominance and the AI operating system all within in the same company. We believe Nvidia’s growth rate will actually accelerate as it penetrates new markets and will surpass $160 billion in revenue by 2028.
Importantly, we’re including more than just chips in this forecast. Specifically, we’re assuming Nvidia’s full platform and portfolio revenue; and the assumption is that Nvidia’s continues to execute across its portfolio on a rapid cadence.
Nvidia has executed brilliantly. It has bet on very large chips and invested in GPUs, CPUs, networking and software, offering a complete solution and a complete data center that can be disaggregated. Our assumption and belief is Nvidia will sustain this cadence for at least the next five years.
TSMC: 14% CAGR, $135B
TSM has become the go-to manufacturer for advanced chips. We have TSMC almost doubling in size over the next five years. Our core assumption is that volume economics will confer major strategic advantage to TSM and it will remain the world’s No. 1 foundry by far.
It’s important to note how TSMC is investing. The company just announced the A16, 1.6nm process targeted for 2026. We believe this will be a significant milestone in its manufacturing, with nanosheet transistors and the backside power delivery. TSMC calls this Super Power Rail. These innovations in our view are industry-leading and the company’s track record of execution and delivering volume at high yields will allow it to maintain leadership.
Broadcom Semiconductor: 10% CAGR, $58B
Next on the list is Broadcom and we’re only including its semiconductor revenue. As such we think that though the company’s CAGR slows to 10%, it’s really because in 2010 it was very small. Much of Broadcom’s 2023 revenue was dispersed in our model under the “other” category.
Broadcom has done a remarkable job through acquisitions and engineering. It doesn’t compete head-on with Nvidia in GPUs, although it is a major provider of silicon and AI chip IP for Google LLC, Meta Platforms Inc. and we think ByteDance Ltd. via its custom silicon group. We see Broadcom’s semiconductor business growing at a CAGR of 10% over the next five years, taking the division to 1.6 times its current size. It solves really difficult problems to connect all the GPUs, CPUs, NPUs, accelerators and high-bandwidth memories together. It is uniquely positioned to continue to win in the market. Broadcom plays in virtually all sectors, consumer, enterprise, mobile, cloud, edge.
Broadcom in our view is a very well-positioned and well-run company. Its focus particularly on networking is vital. High-speed networking of all types is going to be absolutely essential for AI processing and it’s entrenched in this market. In particular, it’s very well set up with major internet players that will be AI leaders. As such, Broadcom has early visibility on the most critical market trends.
Qualcomm: 9% CAGR, $55B
Qualcomm is very well-positioned both in mobile and now in AI PCs. We see it getting a huge tailwind from the recently introduced Windows AI PC stack from Microsoft. We have Qualcomm on a similar trajectory as Broadcom in terms of its growth. Essentially, Microsoft, with its Windows Copilot in release 11, is following Apple Inc.’s moves from several years ago and that will be a big benefit for Qualcomm, which provides core silicon for AI PCs. This is more bad news for x86-based PCs.
Microsoft announced full support for Arm-based PCs based on Qualcomm. Now Dell, Lenovo and others have announced Arm-based PCs and suddenly you’ve got a whole plethora of these initiatives and they’re selling them on the basis of improved performance and a 24-hour battery life going directly after Intel’s PC installed base.
So you can see our forecast indicates that the four companies at the top, Nvidia, TSMC, Broadcom and Qualcomm, comprise around 45% of a $900 billion-plus market by 2028.
Intel: 2% CAGR, $54B
We’re forecasting Intel’s Foundry revenue to comprise about $22 billion of a $54 billion business in 2028. So unlike many, we’re forecasting no growth for Intel over the time period. We see the rise in foundry revenue unable to offset the decline in x86. Combined with our assumption that AMD continues to gain share in x86 markets, we have Intel data center and client revenue dropping from $45 billion in 2023 to $26 billion in 2028.
Intel is late with support for AI PCs and we’re projecting a 12- to 18-month delay in its 14A process, which is its big bet. It combines gate-all-around technology, what it calls RibbonFET, and backside power delivery, which Intel refers to as Power Via. The company hopes to be the first to use High NA EUV technology, which combined with these other innovations is extremely bold, but also likely to be delayed. Hence our assumption that 14A gets pushed.
Intel needs all three of these innovations to be successful and differentiate from the rest of the industry. We believe Intel has a very good chance of executing on two of the three simultaneously, but even that is risky. Our assumption is Intel’s 14A gets to volume production and high yields in 2028 (best case) or 2029 (likely case) but perhaps even 2030 (worst case).
The key to understanding Intel, in our view, is that it has lost the volume lead. Apple and TSMC have taken the lead and its Arm-based phones and PCs have given it a significant learning curve moat in our view, to Intel’s detriment.
If, however, Intel is able to succeed and deliver 14A in volume production as it plans in 2026 and can follow with its 10A 1nm node in late 2027, then our forecasts will be incorrect and Intel will in a much better position than we project.
ASML: 7% CAGR, $41B
ASML has unique differentiation that is going to remain unmatched. Essentially we see ASML as a monopoly that’s going to continue and it will be able to command whatever pricing it wants.
SK Hynix: 10% CAGR, $40B
High-bandwidth memory has become a new enabler for AI. It’s in high demand and short supply and that is going to propel SK Hynix. We have SK Hynix growth actually accelerating with revenue growing from $25 billion today to $40 billion by 2028. High-speed memory is incredibly important and the company has multiple options in this space.
Samsung Semiconductor: -1% CAGR, $38B
We think Samsung is going to struggle to get its advanced process working. We think it’s going to continue to face challenges and we think that constricts volumes and puts them in a cost dilemma. We’ve got Samsung basically flat from its $40 billion today.
Intel has said that it intends to be the No. 2 foundry by 2030. Given Samsung’s struggles, we think it is the right target for Intel. It’s just a matter as to whether Intel can get there. So, in that sense going after Samsung is the right move.
AMD: 10% CAGR, $37B
CEO Lisa Su has done an amazing job with this company. A key turning point was when AMD shed its fabs, despite co-founder Jerry Sanders once famously remarking, “Real men have fabs.” That didn’t really prove out for AMD in the long run. It took several years for the company to get back on track, but its persistence has paid off.
AMD is still very much tied still to x86. By 2028, the end of our forecast period, we still have 45% of AMD’s revenue coming from x86, which puts downward pressure on a big part of the company’s total available market. The good news is our assumptions call for AMD to continue to steal share from Intel and at the same time make progress in AI hardware.
Of course, Intel’s going to fight like crazy for its x86 data center share, but we’re more sanguine on AMD’s outlook as a chip designer. It’s not saddled by foundry, and though that x86 pressure is a negative, we believe AMD will continue to take share. It is just faster to market and actually has a quality product. For example, Oracle Corp. has just gone all AMD-based chips for their new Exadata systems, which was a big win for AMD.
Applied Materials: 6% CAGR, $35B
We think Applied Materials continues to execute. It’s in a really good position. It has more competition than does ASML, but we’ve got it doing pretty well here, growing from $27 billion in 2023 to $35 billion with a 6% CAGR. We’re basically forecasting ASML, SK Hynix, Samsung, AMD and AMAT all around that $35 billion to $40 billion range.
Apple semiconductor value: 12% CAGR, $33B
Essentially what we’ve done here is model the value contribution within Apple’s hardware to the silicon and made some assumptions around its value contribution in the chain. We saw that Apple, based on our assumptions, grew at a 15% CAGR from 2010 to 2023 and we’ve got it at 12% from 2023 to 2028. We’re assuming a $33 billion contribution from silicon.
There have been ongoing reports that Apple’s going to sell silicon as a merchant supplier. We do not make that assumption in our figures. Nonetheless, Apple getting into the business of manufacturing its own chips was profound. It started with its A series in smartphones and now of course the M series in its newest laptops and iPads. It was the first to ship neural processing units both in iPhone and in PCs. Now it has to make major step-up as the AI PC competition heats up.
Apple quietly led the AI PC wave. It introduced large chips many years ago on iPhones and integrated the CPUs, NPUs and GPUs on the same chip. It has a large shared SRAM, which architecturally is a leading example and well-positioned for AI. Apple has a proven track record in silicon, for example evolving its M series, M1, M2, M3 and and now M4.
We believe Apple is a leader in designing silicon architectures required to go into AI and we assume it will quickly respond to the Qualcomm AI PC trend. In our view, Apple is a main reason why Microsoft is pushing support for Arm-based designs, because it was under pressure from Apple.
Micron: 14% CAGR, $31B
We believe Micron can accelerate its growth rate, propelled by high-bandwidth memory. Similar to SK Hynix, demand is way outstripping supply for Micron’s HBM. Micron has executed very well. We see an acceleration in their CAGR to 14% and nearly doubling revenue by 2028 from $16 billion in 2023 to $31 billion. Micron not only designs chips, it has been a successful manufacturer for years.
Hyperscaler silicon — AWS, Google, Microsoft, Meta, Alibaba, ByteDance: 15% CAGR, $12B
We grouped hyperscaler cloud providers into a single category. Hyperscalers design their own silicon and partner with merchant suppliers such as Broadcom and others. Our forecast for hyperscalers excludes Broadcom’s contribution of custom chips, for example. We’re not double counting here.
We think hyperscaler general-purpose, training and inference chips will be used for cost-sensitive applications such as inferencing at the edge. We assume they’re not going to keep pace with Nvidia at the high end, but they will get their fair share. We assume AWS Graviton accounted for about 20% of AWS workloads in 2023. Inferentia and Trainium were a smaller portion of AI workloads in 2023, as were the counterparts at Google and Microsoft. We assume a healthy contribution from hyperscalers, but they will not be a dominant factor in terms of disrupting Nvidia in our view.
Hyperscalers are introducing Nvidia IP. They really have to take Nvidia because they can’t make a comparable platform themselves. We assume it’s going to be cheaper for the next five years and as such they will continue to be large customers of Nvidia.
Other silicon ecosystem players: 4% CAGR, $175B
Other includes a long tail of suppliers across the value chain. You have Texas Instruments, GlobalFoundries, Chinese players such as Yangtze, CXMT, startups such as Cerebras, and many more.
We assume in our forecast that China doesn’t invade Taiwan and that hot wars don’t completely disrupt the market. And it also assumes that the AI PC market generally follows Apple’s trends from x86 to Arm. We show x86 at about 13% of the market revenue in 2010 dropping to 11% in 2023. And it’s projected to be 5% in 2028.
Visualizing the leaders – 2010 to 2028
Here’s a visual of what we just went through. In the interest of time, we’ll just say that the two companies bucking the trend among the leaders are Intel and Samsung. Micron is in a different business and has uniquely figured out the combined model. And AI is brining new investment to a market that was always considered risky by investors. News flash: It still is.
AI PCs will shorten lifecycles
Here’s our forecast for PCs going back to 2009. When PC volumes peaked in 2011, that was the beginning of Intel’s descent from the mountaintop, even though most people didn’t see it. David Floyer made the call in 2013. And the key points here are:
Consumer volumes from the iPhone are what enabled innovation in AI PCs.
Specifically the first true inference came out in 2017 with Apple using neural processing units – NPUs – to do facial recognition and that innovation led to the first NPUs in laptops and the early example of AI PCs.
While PC volumes picked up during COVID, they’ve been constricting. But we believe AI PCs are a game-changer.
Microsoft just reset the windows stack for AI around Arm – WinArm – following Apple’s moves. PC makers such as Dell Technologies Inc. and HP Inc. are adopting and Qualcomm is seizing the day. And you can see in the green below what we think it means for AI PCs powered by Arm and what happens to x86 PCs – it follows the Apple path. Not as severe but pretty much a managed-decline market.
While we forecast a surge in PC volumes, it is important to understand that this does not signal a return to the dominance once enjoyed by PC chip manufacturers like Intel. The landscape is now heavily influenced by Arm-based chips, whose wafer volumes are ten times that of x86. Companies such as Nvidia, Apple and Tesla recognized this shift early and have leveraged Wright’s Law to gain significant cost and time-to-market advantages in Arm-based chip design and manufacturing.
This shift underscores the increasing value of Arm technology in reducing design costs and highlights the challenges faced by x86. The market dynamics have fundamentally changed, and Arm’s advancements have made it a dominant force, fundamentally altering the competitive landscape.
Final thoughts on key topics
Let’s close on some of the key issues we haven’t hit.
The future of AI and its market dynamics are evolving rapidly, with significant implications for key players and emerging technologies. Our analysis highlights the pivotal trends and forecasts that will shape the AI landscape over the next decade, focusing on AI inference at the edge, energy needs, geopolitical risks and the potential shifts in semiconductor manufacturing.
Key points
AI inference at the edge:
By 2034, 80% of AI spending is projected to be on inference at the edge.
This workload is expected to dominate the AI market.
While Nvidia currently holds a strong position in AI inference, driven largely by ChatGPT, the competitive landscape for high-volume, low-cost, low-power inference at the edge remains wide open and will challenge Nvidia’s dominance.
Energy needs:
Future energy requirements will drive the adoption of nuclear, solar, wind and large local batteries.
Innovative energy solutions will be critical to support the growing AI infrastructure.
Local power generation will be an emerging trend.
Geopolitical risks:
Potential disruptions from geopolitical tensions, particularly involving China and Taiwan, pose significant risks.
Our forecast assumes a frictionless environment, but there’s a 35% to 40% probability of supply chain disruptions affecting the market within our forecast period.
Intel foundry and semiconductor innovations:
Intel’s future positioning depends on the successful implementation of gate-all-around, backside power and NA EUV technologies by 2026-2027.
Achieving high yields in these areas could significantly enhance Intel’s competitiveness by the 2030s and alter our scenario for the company.
Market disruptors:
Well-funded startups and major mergers and acquisitions by hyperscalers could introduce alternative approaches.
Despite potential disruptions, Nvidia and the other three silicon giants with momentum – TSM, Broadcom and Qualcomm – are expected to maintain their velocity.
Bottom line
The AI market is set for significant transformation, with AI inference at the edge poised to become the dominant workload. Energy innovations and geopolitical stability are crucial for sustaining this growth. Though Nvidia currently leads, the competitive landscape remains fluid, with potential shifts driven by technological advancements and market disruptors. Our analysis underscores the need to monitor these developments closely as they will shape the future of AI.
As always, we’ll be watching.
How do you see the market playing out over the next five years? What do you think of our assumptions and forecasts? Let us know your thoughts and thanks for being part of the community.
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"Tali Sealman"
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Tali Sealman is an experienced partner in our Global M&A and Corporate practice based in Silicon Valley and the Head of the firm's US Corporate Technology M&A Group.
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https://www.whitecase.com/people/tali-sealman
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Partner, Silicon Valley
Biography
Overview
Tali Sealman is an experienced partner in our Global M&A and Corporate practice based in Silicon Valley and the Head of the firm's US Corporate Technology M&A Group. Recognized as one of the leading M&A lawyers in the United States, Tali works closely with strategic and financial buyers and funds and companies and their boards in private and public M&A and investment transactions across a full spectrum of transactions in the technology and life science sectors, including strategic acquisitions, cross-border transactions, Israeli-related transactions, option transactions, deSPAC transactions, unsolicited transactions, and reverse merger and other game-changing transactions.
Tali helps her clients achieve their most important strategic goals in an efficient manner while offering practical advice and solutions. She is also a prominent practitioner working on the forefront of Israel-related matters, with a deep understanding of Israel’s business, legal and political culture.
In addition to M&A, Tali provides general corporate representation to companies at all stages of their lifecycle and across a broad range of industries, including software, cyber, e-commerce, enterprise, security, digital health, fintech, gaming and blockchain. Tali also advises growth equity funds and strategic investors in their investments in growth equity technology and life science companies.
Regardless of the type of deal, Tali’s practice focuses on providing pragmatic approaches intended to help her clients achieve their business objectives in the most efficient and cost-effective manner.
Tali was named "M&A Legal Advisor of the Year" by The M&A Advisor in 2020 and was listed among The Deal's "Top Women in Dealmaking" for M&A in 2022. She is also listed a Euromoney's Women in Business Law Guide and Euromoney's Expert Guide for Corporate/M&A in the United States in 2021.
Bars and Courts
California
Education
LLM
Columbia University School of Law
Harlan Fiske Stone Scholar
LLB
Tel Aviv University
Languages
English
Hebrew
Experience
Recent representations include:
Lightrock Climate Impact Fund SCSp ("Lightrock") as lead investor in the US$50 million Series C funding round in AiDash, a SaaS company making critical infrastructure industries climate-resilient and more sustainable through satellites and AI.
Autotalks Ltd., an Israeli company that makes chips in technology aimed at preventing vehicle crashes, in its acquisition agreement by Qualcomm Inc.
REE Automotive Ltd., an electric-vehicle technology startup based in Israel, in its US$3.6 billion go-public acquisition by 10X Capital Venture Acquisition Corp. (NASDAQ: VCVCU), a SPAC.
Cellebrite DI Ltd., the global leader in Digital Intelligence (DI) solutions for the public and private sectors, in its US$2.4 billion business combination with TWC Tech Holdings II Corp (NASDAQ: TWCT), a SPAC.
dMY Technology Group, Inc. II (NYSE: DMYD), a SPAC, in its US$1.68 billion business combination with UK-based Genius Sports Group.
Graf Industrial Corp. (NYSE: GRAF), a SPAC, in its US$1.8 billion business combination with Velodyne Lidar, Inc.
Siemplify, an Israeli cybersecurity and security orchestration, automation and response (SOAR) provider, in its sale to Google LLC.
Biosight Ltd., a privately held pharmaceutical development company developing innovative therapeutics for hematological malignancies and disorders, in its reverse merger transaction with Advaxis, Inc. (NASDAQ: ADXS).
Picus Security, the pioneer of Breach and Attack Simulation (BAS) technology, in its US$24 million Series B funding round.
Softbank Vision Fund II and Eldridge in their up to US$235 million co-investment in Anyvision, an Israeli artificial intelligence-based facial recognition startup.
NICE Ltd. (NASDAQ: NICE), the world's leading provider of both cloud and on-premises enterprise software solutions, in its acquisition of Guardian Analytics, a leading AI cloud-based financial crime risk management solution provider.
OpenText Corp. (NASDAQ: OTEX, TSE: OTEX), a Canadian seller and developer of enterprise information management software and one of Canada's largest software companies, in its US$75 million acquisition of XMedius, a provider of secure information exchange and unified communication solutions with locations in the United States, Canada and Europe.
Abu Dhabi Catalyst Partners on its US$50 million Series F investment into Lookout Inc., a fast-growing Silicon Valley-based cyber security company with a pre-money valuation of approximately US$1.5 billion.
Representative matters prior to joining White & Case include:
Zeltiq's US$2.4 billion sale to Allergan.
Sale of publicly traded SteadyMed Ltd. to United Therapeutics for up to US$216 million.
BioTime's acquisition of publicly traded Asterias.
Multiple acquisitions by OpenText (NASDAQ:OTEX), including:
US$163 million acquisition of Recommind; and
acquisition of Hightail.
Venus MedTech's acquisition of Keystone Heart Ltd.
Clearlake Capital in Calero Software's sale to Riverside Partners.
VM Pharma's sale of VM-902A to Purdue Pharma for a consideration of up to US$213 million.
Misfit Wearable's US$260 million sale to Fossil.
Marlin Equity Partners' acquisition of BlueHornet Networks.
MindMeld's US$125 million sale to Cisco.
Satmetrix's sale to Nice Systems.
Coherex Medical's sale to Biosense Webster (J&J).
EigerBio's merger with Celladon Corporation.
Multiple acquisitions by Nemetschek, including:
acquisition of Bluebeam for over US$100 million; and
acquisition of RISA Technologies.
Multiple acquisitions by Stratasys, including US$295million acquisition of Solid Concepts and the acquisition of GrabCAD.
Coverity's US$375 million sale to Synopsys.
The sale of Epocrates to athenahealth Inc. for US$293 million.
The sale of Volterra Semiconductor to Maxim Integrated Products Inc. for US$605 million.
Become's sale to Connexity, Inc.
Battery Venture's acquisition of a physical security business from Nice Systems for up to US$100 million.
Revionics' acquisition of Marketyze Ltd.
Multiple acquisitions by Yelp, including:
acquisition of Qype in a stock and cash transaction valued at approximately US$50 million; and
acquisition of SeatMe in a stock and cash transaction.
The sale of the women's health business of Jazz Pharmaceuticals to Meda for US$95 million.
The sale of Surpass Medical to Stryker Corp. for US$135 million.
Alvine Pharmaceuticals' option sale arrangement by AbbVie, Inc. for an option price of US$70 million.
Multiple acquisitions by Benu, including:
acquisition of SynchHR; and
acquisition of ClearBenefits.
The sale of a business unit of Inflection to Ancestry.com.
Multiple acquisitions by Power Integrations (NASDAQ: POWI), including:
US$115 million acquisition of CT-Concept Technologie AG;
acquisition of CamSemi, a fabless company that designs and manufactures energy-efficient power conversion products;
acquisition of Qspeed Semiconductor, a supplier of high-performance high-voltage diodes; and
acquisition of Velox Semiconductor, a developer of gallium nitride transistors and diodes.
Silicon Graphics, Inc.'s acquisition of Silicon Graphics Ltd.
PGP Corporation's acquisition of Chosen Security.
PGP Corporation's US$330 million sale to Symantec.
Open Feint's US$104 million sale to Gree, Inc.
Symyx Technologies' US$485 million merger of equals with Accelrys.
Leo Pharma's US$287 million acquisition of Peplin, Inc.
Merger of equals between publicly traded Oclaro, Inc. and publicly traded Avanex.
Cardio Mems' US$375 million option sale arrangement and US$60 million investment by St. Jude Medical, Inc.
eBay's acquisition of Fraud Sciences for US$169 million.
Jazz Pharmaceutical's acquisition of Azur Pharma and reorganization on a combined value of US$2.1 billion.
Awards and Recognition
Listed among The Deal's "Top Women in Dealmaking", 2022, 2023
Leading Individual for M&A in the United States, Euromoney, 2022
Listed in Euromoney's Women in Business Law Guide for Corporate/M&A, 2022
Listed among IFLR1000's Women Leaders Guide for M&A in the United States, 2022
Named "M&A Legal Advisor of the Year", The M&A Advisor, 2020
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Hardware: Silicon Graphics Increases Supercomputer Speed - The New York Times
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"Bloomberg News"
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2002-11-12T00:00:00
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Silicon Graphics Inc increases speed of its supercomputers by one-third in attempt to remain competitive with International Business Machines, whose similar model sells for more than twice SGI's $2.9 million (S)
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https://www.nytimes.com/2002/11/12/business/technology-briefing-hardware-silicon-graphics-increases-supercomputer-speed.html
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Silicon Graphics Inc., whose computers are used to explore for oil, has increased the speed of its supercomputer to stay competitive with rivals like I.B.M. The new machine operates one-third more quickly than its predecessor and has four times as many processors in a single rack. The supercomputer sells for $2.9 million, which is less than half the price of a similar model that is sold by I.B.M., said Jan Silverman, the senior vice president for global marketing at Silicon Graphics. Silicon Graphics is improving the supercomputer as it seeks to capture additional businesses from the United States military, which uses the company's machines for missile-defense programs. The new computer went on sale in the last few weeks. Silicon Graphics will formally introduce it at a trade show to be held in Baltimore later this month, Mr. Silverman said.
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Cray Inc. - Company Profile, Information, Business Description, History, Background Information on Cray Inc.
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History of Cray Inc.
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Reference for Business
Company History Index
Electrical and Electronics
Cray Inc. - Company Profile, Information, Business Description, History, Background Information on Cray Inc.
411 First Avenue South, Suite 600
Seattle, Washington 98104-2860
U.S.A.
Company Perspectives:
Cray Inc.'s mission is to be the premier provider of supercomputing s olutions for its customers' most challenging scientific and engineeri ng problems. Cray systems are used to design safer vehicles, create n ew materials, discover life-saving drugs, predict severe weather and climate change, analyze complex data structures, safeguard national s ecurity, and a host of other applications that benefit humanity by ad vancing the frontiers of science and engineering.
History of Cray Inc.
Cray Inc. is one of the world's premier producers of supercomputers, a term rather loosely used to denote the fastest computers at any giv e time. The company's high-performance supercomputers, which are capa ble of performing billions of operations per second, are used by gove rnmental agencies for classified and nonclassified applications, by g overnmental and academic research laboratories for scientific researc h, by weather centers for forecasting, and in the automotive and aero space industries for vehicle design. Its product line includes both v ector and massively parallel supercomputers. Now based in Seattle, Cr ay has its main manufacturing operations in Chippewa Falls, Wisconsin , and also maintains offices in Mendota Heights, Minnesota, and Burna by, British Columbia, for software and hardware development, sales, a nd marketing operations. Although as a legal entity, the Cray of the early 21st century was founded in 1987 as Tera Computer Company, the company traces its earliest roots back to Cray Research, founded in 1 972. A pioneer in vector supercomputing, Cray Research was acquired b y Silicon Graphics, Inc. in early 1996 and then was acquired in April 2000 by Tera Computer. Following the deal, Tera renamed itself Cray Inc.
Early History
Cray Research was formed through the efforts of Seymour Cray, a recog nized genius in the design of supercomputers. Cray was born in 1925 i n Chippewa Falls, Wisconsin, and spent a boyhood devoted to tinkering with electronic gear. After service in World War II working as a rad io operator and then functioning as a specialist in breaking Japanese codes, he attended the University of Minnesota, earning a bachelor o f science degree in electrical engineering and another in applied mat hematics, both in 1950. He decided to enter the computer industry and took a job with Engineering Research Associates, founded by William C. Norris. Through a series of mergers, Engineering Research Associat es was brought under the control of Sperry Rand Corporation. Norris l eft Engineering Research Associates and established Control Data Corp oration in 1957. Cray soon followed him to the new company. Among his early projects at Control Data, Cray developed the 1604, one of the first computers to use transistors in place of vacuum tubes.
Control Data shared in the booming computer industry of the 1960s, ex periencing a period of rapid growth. Cray became disenchanted with th e bureaucracy that this growth created and insisted that the company build him a separate research facility in his home town of Chippewa F alls. In this new facility, he came up with the CDC 6600, the first c ommercial computer capable of handling three million program instruct ions per second. Cray's special talent was in putting the circuits of a computer very close together, reducing the time taken for electric signals to pass between them. This closeness, however, increased the heat generated by the circuits. Cray was able to introduce innovativ e ways of removing this heat.
Cray's success at Control Data eventually hit a stumbling block. In 1 972 top management at the corporation halted his plans for a new comp uter, telling him he could continue working on it only after another computer project was completed.
Instead of waiting, Cray and a group of followers left Control Data t o set up Cray Research. Their purpose in starting the new company was to design the first supercomputer, which they ultimately named the C RAY-1. Cray Research situated its research and development and manufa cturing operations in Cray's laboratory in Chippewa Falls while estab lishing a headquarters in Minneapolis, Minnesota. After several years of work on the supercomputer project, the company delivered its firs t computer to the Los Alamos National Laboratory in 1976 for a six-mo nth trial. Cray Research's first official customer, however, was the National Center for Atmospheric Research, which took delivery of a CR AY-1 in July 1977. This sale, totaling $8.86 million, enabled Cra y Research to earn back its original investment.
The CRAY-1 was the fastest computer then available. It used the techn ique of vector processing, which employs a system wherein a series of operations are manipulated at once as opposed to scalar processing w here operations take place one at a time. The CRAY-1 could execute 32 operations simultaneously, making it able to complete ten times the work of some larger systems. While it was delivering its first sale, the company also made its first public offering of stock. The company complemented its supercomputers with software programs, releasing it s Cray Operating System (COS) and Cray Fortran Compiler in 1977.
During its early years of operation, Cray Research sold its supercomp uters to government laboratories and agencies. The main application o f supercomputers was in physical simulation, wherein computer models were used to analyze and forecast the response pattern likely to take place in a system composed of physical variables. Early applications of these models were in gauging the effects of nuclear weapons and i n meteorology. Because these types of applications were performed und er the aegis of the government, it was felt that the market for super computers would be very limited. In 1978, however, Cray Research was given its first order from a commercial organization.
Second Generation Systems: Early 1980s
The CRAY-1 system became the CRAY-1/S and the CRAY-1/M systems. As th e 1980s began, the company decided to begin development of the next g eneration of supercomputers. To concentrate his efforts on that devel opment, Seymour Cray resigned as CEO in 1980, and in 1981 he stepped down as chairman. John Rollwagen became CEO in 1980 and chairman in 1 981. Cray retained his ties with the company as an independent contra ctor and as a member of the board of directors. The new project calle d for the design and development of the CRAY-2, intended to be the fi rst computer on the market that used chips made of gallium arsenide. When the gallium arsenide chips were not available, Cray returned to silicon. The CRAY-2 system was completed in 1985, achieving a perform ance level ten times that of the CRAY-1.
Because the CRAY-2 project contained an element of risk due to its in novative technology, Rollwagen had the company initiate a second proj ect based on a further upgrade of the CRAY-1 technology. Under the di rection of Steve S. Chen, the CRAY X-MP system was devised. This syst em marked the first use of multiprocessors, where a number of micropr ocessors are linked together to take on bigger jobs. Introduced in 19 82, the CRAY X-MP was originally a dual processor, with a speed three times that of the CRAY-1.
As had been done with the CRAY-1, both the CRAY-2 and the CRAY X-MP s upercomputers evolved into more sophisticated systems. The CRAY X-MP served as the basis for a series that consisted of 11 models. The mor e innovative CRAY-2 design had three-dimensional circuit interconnect ions linking circuit boards within a module. Software enhancements we re also made available, with the 1986 introduction of a new operating system, UNICOS, which combined the COS system with the AT&T UNIX System V. This advance was especially important because UNIX was wel l established as the industry standard, especially in areas of scient ific application, where supercomputing was so useful; meanwhile an ad vanced Cray Fortran Compiler, named CF77, was also made available.
Third Generation Systems: Late 1980s
By the mid-1980s Cray Research embarked on producing another generati on of supercomputers, again following several paths. In 1986, Chen be gan working on a new system of highly innovative design, relying on s ignificant technological advances in five different areas. After spen ding nearly $50 million on the project, the company decided to di scontinue it. Chen left the company in 1987, taking 45 engineers from Cray Research, to form Supercomputer Systems, Inc., with plans to bu ild a supercomputer using as many as 256 microprocessors.
Seymour Cray completed design work on the CRAY-3 supercomputer system in 1987. The CRAY-3 marked another effort to use gallium arsenide ch ips, a prospect made more feasible by the production of the first of the new type of chips suitable for computer production in the 1980s. While awaiting the CRAY-3, the company developed and introduced the C RAY Y-MP system, which combined the power of eight central processing units to give it 30 times the power of the original CRAY-1. The CRAY Y-MP was the first supercomputer to sustain a speed of more than one gigaflops (that is, one billion floating-point operations per second ) on many applications.
Cray Research passed two important milestones in 1987. First, it deli vered its 200th computer system, especially noteworthy since it had t aken from 1976 to 1985 to reach a total of 100 computer shipments. Th is rapid expansion made possible the second milestone, the inclusion of Cray Research among the nation's largest companies, listed in the Fortune 500. During this period, the company was able to marke t its supercomputer systems to commercial corporations engaged in pet roleum exploration, automobile production, and the aerospace industry .
Cray Research underwent a major restructuring in 1989. Delays in the development of the CRAY-3 system were creating very high research cos ts, and the scheduled date for completing the project was reportedly postponed. In addition, the company had embarked on another project, the C-90, as a new stage in the CRAY Y-MP product line. Rather than d iscontinue one of the projects, Rollwagen decided to create a new com pany, Cray Computer Corporation, to be headed by Seymour Cray. Locate d in Colorado Springs, Colorado, Cray Computer would continue the dev elopment of the CRAY-3 supercomputer. On November 15, 1989, Cray Rese arch issued shares of Cray Computer to its stockholders, retaining a 10 percent ownership in the new company (which it later sold). Seymou r Cray resigned from the board of directors of Cray Research, severin g formal connections with the company he had formed, although he rema ined a stockholder.
Even after this spinoff Cray Research retained a solid position as th e leading company in the production of supercomputers, with about two -thirds of the world market. In 1989, it phased out the CRAY-2 and CR AY X-MP as new models of the CRAY Y-MP were coming on line. There wer e continuing plans for development of the C-90 project, which was ren amed the CRAY Y-MP/16. The company also began development of enhanced systems for supercomputer networking to facilitate scientists' acces s to Cray supercomputers from a variety of other types and brands of computers. In addition, there were plans to bring to the market an en try-level supercomputer, which would use the technology of the CRAY Y -MP, but would have a much lower price with reduced installation and operating costs.
As the market for supercomputers expanded, Cray Research diversified its sales efforts both in terms of type of customers and geographic r egion. In 1989 governments remained the largest customers, buying 31 percent of Cray Research's output; other important purchasers of Cray machines included universities; aerospace, petroleum, and automotive companies; energy producers; and weather and environment analysts. S ales in North America that year were 61 percent of the total. Approxi mately 75 percent of revenue between 1987 and 1989 was derived from s ales of computer systems, with remaining income from leased systems a nd service fees.
Cray Research also took measures to provide for better distribution o f its products. It entered into an arrangement with Control Data to m ake Cray supercomputers available to Control Data's customers, using Cray products to replace Control Data's line of supercomputers. Marce lo Gumucio, who directed Cray Research's marketing operation, was nam ed president and chief operating officer in 1988. By placing more emp hasis on the marketing of its products, with less attention paid to p roduct development, Cray Research anticipated that it would be better able to meet the challenges of international competition in the supe rcomputer industry.
Surviving the Shakedown Period of the Early 1990s
The early 1990s were a shakedown period in the industry, particularly for independent firms in the United States, and for a time Cray itse lf seemed very vulnerable. Increasing competition from Japanese compu ter giants Fujitsu Limited, Hitachi, Ltd., and NEC Corporation, and f rom U.S. giant Intel Corporation, had by 1990 already cut Cray's mark et share to about 65 percent; this compared to the 80 percent level f or the number of installed supercomputers that were Cray models. Loom ing on the horizon were several upstart companies seeking to build le ss expensive but still very powerful models--such companies as Allian t, Convex Computer, Kendall Square Research, nCube, Supercomputer Sys tems, and Thinking Machines--or create high-end models such as Seymou r Cray's Cray Computer. At the same time, with the end of the Cold Wa r and cutbacks or slowdowns in government spending worldwide, Cray Re search faced the decline of its core market, government agencies and laboratories, the military, and government-supported entities such as universities and research centers.
Facing these threats, Rollwagen reportedly realized in 1990 that he h ad put the wrong man in charge in the person of Gumucio. Just when Cr ay needed more than ever to tap into its engineers' expertise, Gumuci o's formal management style stifled their creativity and dampened mor ale. The more inspiring figure of Rollwagen resumed operating respons ibilities.
At the end of 1990, Cray's install base stood at 262 systems in 20 co untries. With little chance to expand within its core governmental ma rket, Rollwagen knew that future growth would have to come from the c ommercial sector, notably the aerospace, automotive, financial, healt hcare, and telecommunications industries; in order to penetrate these new markets, Cray itself would have to start offering lower-priced m odels.
Initially, Cray moved into the low-end supercomputer market through a cquisitions. In early 1990 it made its first move by acquiring Supert ek Computers, Inc., a troubled California-based maker of Cray-compati ble minisupercomputers, general-purpose scientific computers that are not as powerful as standard supercomputers. Since minisupercomputers sold for as little as $250,000, Cray viewed them in part as an e ntry level for new customers who might later be tempted to invest in a multimillion-dollar supercomputer. Also on the low end was the 1991 purchase of the superserver (high-end servers within a client-server environment) assets of the bankrupt Floating Point Systems, which be came Cray Research Superservers, Inc. The following year this new sub sidiary introduced its first product, the Cray S-MP, which was design ed for the widely used Sun Microsystems, Inc.'s SPARC processor clien t-server environment.
Meanwhile, Cray's newly energized product development program produce d results on both the low and high end. Within one month in late 1991 , Cray introduced an entry-level system priced at about $340,000 called the Y-MP EL and its fastest vector supercomputer to date, the C90, with operational speed four times that of its previous fastest m odel. Cray had also begun work on a new type of supercomputer (at lea st for Cray), a massively parallel processing (MPP) system. Long tout ed by some analysts as the inevitable successor to the vector systems pioneered by Cray, MPP systems linked a number of standard microproc essors to create a virtual supercomputer at a potentially much lower cost than vector systems. MPP systems were the type that the upstart supercomputer companies were developing.
In 1992, even though its entry level system resulted in 70 new custom ers and exceeded the company's sales projections, Cray posted a net l oss of $14.86 million. Its new products and acquisitions not yet paying off in full, the firm had to take a $42.8 million restruct uring charge late in the year to cut costs; it closed one plant and e liminated 650 jobs, or one-eighth of the workforce.
Early in 1993, Rollwagen resigned after President Bill Clinton nomina ted him for the position of deputy secretary of commerce (a position for which he was never confirmed). Rollwagen was replaced by John F. Carlson, a 16-year Cray veteran. Later that year, Cray's first MPP sy stem was rolled out, the T3D. Although scoffed at by rivals because i t had to be linked to a standard Cray vector system, the T3D outperfo rmed other MPP systems and helped put a number of the upstart firms o ut of business (such as Thinking Machines and Kendall Square Research ) or into the arms of larger firms (such as Convex Computer which was acquired by Hewlett-Packard Company in 1995).
Although Cray returned to profitability in 1993, additional restructu ring was needed to improve the company's operations. In 1994, which s aw the resignation of Carlson, an $8.3 million charge was incurre d, while in 1995, when J. Phillip Samper, former vice-chairman of Eas tman Kodak and former president of Sun Microsystems, became chairman, $187.7 million in charges were booked. The 1995 charges contribu ted to a full-year loss of $226.4 million, but were incurred with in a critical year in which three major new products were introduced: a new low-end J90 series; a new high-end vector system, the T90 seri es (touted as the first wireless supercomputer and five times faster than its predecessor, the C90 series); and Cray's second-generation M PP system, the T3E. The last of these, unlike its predecessor, did no t need to be connected to a traditional vector supercomputer and had a top theoretical speed of one teraflops (one trillion operations per second), a long sought after speed level. On the basis of these intr oductions, Cray built up by year-end 1995 a $437 million order ba cklog. Even without having filled the backlogged orders, Cray could s till boast of having increased its installed base to 758 systems in 3 7 countries (nearly three times the level of 1990).
1996-99: The Silicon Graphics Interregnum
By early 1996, Cray Research was the only independent supercomputing firm left. Among the victims was Cray Computer, which declared bankru ptcy early in 1995. (In September 1996 Seymour Cray died at age 71 as the result of an automobile accident in Colorado Springs.) Cray Rese arch had survived and now had a range of products to offer from lower -end superservers and minisupercomputers to entry-level supercomputer s to high-end vector and MPP supercomputer systems. But it now compet ed directly with several firms with much deeper pockets, the Japanese computer giants and Intel on the high end and Hewlett-Packard, IBM, Sun Microsystems, and Silicon Graphics, Inc. (SGI) on the lower works tation end. Thus when SGI, a leader in high-powered workstations with a particular emphasis on graphics-oriented systems, made a friendly takeover offer early in 1996, Samper and other Cray executives decide d to accept the offer rather than attempt to continue to compete agai nst such giants. The $745 million deal, completed in June 1996, b olstered SGI's position in the technical-computing arena and simultan eously ended the era of independent supercomputer companies, at least for a time.
Although no longer independent, Cray Research had survived the early 1990s and counted on tapping into SGI's deep pockets to develop futur e systems. It had to do so, however, without Samper, who resigned sho rtly after the takeover and who had been credited with turning Cray a round in his brief tenure to the point that it was desired by SGI. Ro bert H. Ewald, who had been Cray's president and chief operating offi cer, was named general manager of Cray, in charge of day-to-day opera tions for the now wholly owned subsidiary of SGI.
Nearly concurrent with SGI's acquisition of Cray, SGI engineered the sale of Cray's unit that focused on high-end computers based on Sun M icrosystems's UltraSparc microprocessor (the unit having evolved out of Cray's 1991 acquisition of Floating Point Systems). The machines p roduced by this unit competed directly with one of SGI's existing lin es, so it was sold to Sun for an undisclosed sum.
Ironically, at the time of SGI's purchase of Cray, this unit was one of few thriving areas at Cray. The company's core vector supercompute r operations were already beginning to slump, and that sector of the market continued to decline over the next few years. Rather than inve sting in Cray, SGI instead pulled the plug on successors to both the T90 and T3E and allowed Cray to develop only one new supercomputer, t he SV1, which debuted in 1998 and was about twice as fast as previous Cray models. Cray was at the same time expending much energy fightin g legal battles against its Japanese rivals, particularly NEC, accusi ng the firm of "dumping," selling its supercomputers below cost in th e U.S. market. In September 1997 the U.S. Commerce Department ruled i n favor of Cray, imposing dumping duties of 454 percent on NEC superc omputers, effectively barring the firm from the U.S. market. Cray and NEC continued to battle over this dispute in various venues, but in the meantime SGI, attempting to turn around its now struggling operat ions, was in near continuous restructuring mode, including overhauls that slashed Cray's workforce from more than 4,500 to around 800 empl oyees. About the only positive development of this dark period in Cra y's history, which some Cray staffers later derisively dubbed "the oc cupation," was a deal that the company struck in 1998 with the Nation al Security Agency and other federal agencies to develop a new vector supercomputer initially dubbed the SV2. In August 1999 Silicon Graph ics announced that it would sell Cray as part of yet another restruct uring.
Creation of the New Cray Following 2000 Acquisition by Tera Comput er
The SGI "occupation" ended in rather surprising fashion in April 2000 . That month a much smaller, upstart supercomputer firm, Tera Compute r Company, acquired Cray Research for less than $100 million ( 6;50.3 million in cash plus one million shares of Tera's common stock ). Tera was founded in 1987 in Washington, D.C., by James Rottsolk an d Burton Smith, the former taking the operational lead and the latter serving as chief scientist. One year later, the founders moved the o peration to Seattle, Washington, in order to be near the University o f Washington and its first-rate computer science department and becau se they thought a location in the trendy Pacific Northwest would make it easier to attract top computing talent. Tera was established to d evelop a new kind of supercomputer, an MPP machine, but one with "sha red memory." This type of computer was designed to split a problem in to many smaller pieces, which are sent to many processors at once for simultaneous computation, an approach that was often compared to the way a secretarial pool works. The Tera design held out the promise o f greater speed because the processors would be used more efficiently .
As it worked to develop its first model, Tera stayed afloat through a variety of funding sources, including a contract from the Defense Ad vanced Research Project Agency (DARPA), an arm of the U.S. Department of Defense; a public offering of stock in 1995, after which Tera was listed on the NASDAQ; and a number of private placements of stock an d warrants. In early 1998 Tera finally delivered its first computer, called the MTA, to the San Diego Supercomputing Center in a deal unde rwritten by the Defense Department and the National Science Foundatio n. When it bought Cray Research two years later, this was still the f irm's sole installation.
Immediately upon completing its takeover of Cray Research, Tera renam ed itself Cray Inc. in an acknowledgment of Cray's longer legacy and greater name recognition. The new Cray kept its Seattle headquarters but retained a significant presence in Chippewa Falls, which remained the hub for research and development and manufacturing. While contin uing to sell the old Cray's T3E and SV1 models, the new Cray focused its initial efforts on developing the SV2, soon redubbed the X1. As s ort of a stopgap measure while developing the X1, Cray resolved its l ongstanding dispute with NEC in early 2001. NEC invested $25 mill ion in Cray in exchange for Cray becoming a distributor of the NEC SX series of supercomputers, with exclusive North American rights and n onexclusive rights elsewhere. This deal lasted just two years: in 200 3 NEC sold its investment in Cray and canceled the company's exclusiv e distribution rights, although Cray continued as a nonexclusive dist ributor of NEC supercomputers worldwide.
In the meantime, Cray hired an IBM executive, Michael Haydock, as pre sident and CEO in October 2001, with Rottsolk remaining chairman. Jus t five months later, however, Haydock resigned after clashing with th e board of directors on the company's direction. Rottsolk reassumed H aydock's former positions. Late in 2002 Cray released the long-awaite d X1, which enabled the company to eke out a profit of $5.4 milli on on revenues of $155.1 million following years of losses. The f irst version of the X1 had a top speed of 51 teraflops, 25,000 times faster than a Pentium 4 personal computer, achieved via an architectu re that was vector-based but that enabled the processors to share eac h other's memory. Early in 2003 Cray received $62 million in orde rs for the X1 from the U.S. government, one of the largest contracts in company history. Concurrently, Cray in October 2002 had entered in to a $90 million contract with Sandia National Laboratories of Al buquerque, New Mexico, to develop a new supercomputer seven times mor e powerful than the lab's existing model, a project dubbed Red Storm. Emboldened by these successes, Cray completed a secondary offering o f its stock in early 2003, raising about $50 million.
In July 2003 Cray was awarded a $49.9 million contract by DARPA t o develop a prototype of a supercomputer with a balanced vector/scala r design and capable of sustained performance of more than one petafl ops (one quadrillion floating-point operations per second) by 2010. T his award was part of a contest sponsored by DARPA, the other two con testants being Sun Microsystems and IBM. Financial results for 2003 w ere promising: net income of $63.2 million on revenues of $23 7 million.
The Red Storm project came to fruition in 2004 as Cray began shipping the computer hardware to Sandia in installments, with the final ship ment coming in the first quarter of 2005. In October 2004 Cray introd uced a commercial version of Red Storm, which it dubbed the XT3, posi tioning it as the company's third-generation MPP system, following th e T3D and T3E. The XT3 combined Cray's traditional high-bandwidth con nections on the chips and circuit boards and between the cabinets tha t comprise the supercomputer with a number of inexpensive, off-the-sh elf processing units, particularly the 64-bit Opteron processor from Advanced Micro Devices, Inc., using a Linux-based operating system.
In April 2004 Cray went down market when it acquired OctigaBay System s Corporation for about $115 million in stock and cash. Based in Burnaby, British Columbia, OctigaBay was in the process of developing a supercomputer comparable in design, but not power, to other Cray p roducts but at a much lower price. Cray subsequently renamed the acqu ired firm Cray Canada Inc. and in October 2004 released the firm's pr oduct as the Cray XD1 system. Another important development came in M ay 2004 when Cray was selected by the U.S. Department of Energy to pr ovide most of the hardware for a new supercomputer at Oak Ridge Natio nal Laboratory that planners hoped would be the fastest civilian rese arch computer in the world. The goal was to create a machine with a s ustained speed of 50 teraflops, which would surpass the then world le ader, Japan's 40-teraflop Earth Simulator (installed in 2002). IBM an d Silicon Graphics were also selected as partners in the project.
In addition to working feverishly on the XT3 and XD1 projects, Cray w as also hard at work in 2004 developing a major upgrade to the X1, th e X1E, sales of which began in March 2005. The new model boasted a to p speed of 147 teraflops. Cray's transition from just the one model, the X1, to its three-supercomputer lineup was unfortunately a rough o ne. The firm missed several of its delivery dates, cutting 2004 reven ues to just $149.2 million. Cray was forced to restructure, annou ncing in July that about 100 employees (out of a workforce of 925) wo uld be laid off. Various charges totaling more than $62 million, coupled with the revenue shortfall, led to a net loss for the year of $204 million.
Cray's difficulties continued in 2005, when customer delays for sever al large supercomputer orders adversely affected cash flow. In June t he company announced the layoff of an additional 90 employees and tem porary pay cuts for the remaining U.S. employees making more than  6;50,000 per year. By this time a leadership transition was also well underway. In March 2005 Peter J. Ungaro was promoted to president, h aving joined Cray in August 2003 as senior vice-president of sales, m arketing, and service; he came to Cray from IBM, where he had been vi ce-president of worldwide deep computing sales. Ungaro was named CEO in August 2005, when Rottsolk announced his retirement. Taking over a s nonexecutive chairman was Stephen C. Kiely, a company director sinc e 1999 and a tech executive serving simultaneously as chairman of Str atus Technologies Inc. The other cofounder of Tera Computer, Burton S mith, remained Cray's chief scientist. Cray's new leaders seemed conf ident that a return to profitability was in the offing, once producti on of the new product lineup had been fully ramped up.
Principal Subsidiaries: Cray Federal Inc.; New Technology Ende avors, Inc.; Cray Australia Pty Ltd.; Cray Brazil, Inc.; Cray Computa dores do Brasil Ltda. (Brazil; 99.9%); Cray Canada Inc.; Cray Can ada (Washington), Inc.; Cray Canada Corp./Societe Cray Canada; Cray C hina Limited; Cray Computer Finland Oy; Cray Computer SAS (France); C ray Computer Deutschland GmbH (Germany); Cray Supercomputers (Israel) Ltd.; Cray Italy S.r.l.; Cray Japan, Inc.; Cray Korea, Inc.; Cray Ne therlands B.V.; Cray Computer South Africa (Proprietary) Limited; Cra y Computer Spain, S.L.; Cray-Tera Sweden AB; Cray Computer GmbH; Cray Taiwan, Inc.; Cray U.K. Limited.
Principal Competitors: International Business Machines Corpora tion; NEC Corporation; Hewlett-Packard Company; Silicon Graphics, Inc .; Dell Inc.; Sun Microsystems, Inc.; Intel Corporation; Advanced Mic ro Devices, Inc.
Chronology
Key Dates:
1972: Seymour Cray forms Cray Research, headquartered in Minne apolis with research and development and manufacturing operations in Chippewa Falls, Wisconsin.
1976: Cray delivers its first computer, the CRAY-1 model, to t he Los Alamos National Laboratory.
1977: The National Center for Atmospheric Research takes deliv ery of a CRAY-1, becoming the company's first commercial customer.
1985: The second-generation CRAY-2 is introduced.
1987: Tera Computer Company is founded in Washington, D.C., by James Rottsolk and Burton Smith; the firm soon relocates to Seattle, Washington.
1988: The CRAY Y-MP makes its debut.
1989: Company spins off the CRAY-3 supercomputer project into a separate company, Cray Computer Corporation, headed by Seymour Cray (who would die in an auto accident in 1996).
1993: Cray Research introduces its first massively parallel pr ocessing (MPP) system, the T3D supercomputer.
1996: Silicon Graphics, Inc. (SGI) acquires Cray Research for $745 million.
2000: In a deal valued at less than $100 million, SGI sell s Cray Research to Tera Computer Company, which renames itself Cray I nc.
2002: Cray releases the X1, a scalable vector supercomputer.
2004: OctigaBay Systems Corporation is acquired, leading to th e introduction of the Cray XD1 supercomputer; the XT3, a third-genera tion MPP system, debuts.
Additional Details
Public Company
Incorporated: 1972 as Cray Research
Employees: 889
Sales: $149.2 million (2004)
Stock Exchanges: NASDAQ
Ticker Symbol: CRAY
NAIC: 334111 Electronic Computer Manufacturing
Further Reference
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2023-04-04T23:06:32-05:00
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The Intel business model is based on supplying microprocessors, motherboard chipsets, graphics chips, integrated circuits, and other related computing units to computer system manufacturers such as HP and Dell. Since it was founded in 1968, Intel Corporation has been integral in driving technological breakthroughs worldwide. Its history reflects a long record of producing different resources [...]
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The Intel business model is based on supplying microprocessors, motherboard chipsets, graphics chips, integrated circuits, and other related computing units to computer system manufacturers such as HP and Dell. Since it was founded in 1968, Intel Corporation has been integral in driving technological breakthroughs worldwide. Its history reflects a long record of producing different resources that shape the future of technology worldwide. Asides from its excellent products, Intel also makes the most revenue from selling semiconductor chips, ranking them among the Fortune 500 companies in the United States. Additionally, the company keeps maintaining its innovative edge. For instance, they revamped the designs of their microprocessors so that they could gain more ground over their competitors and defend their large market share. As such, it is unsurprising that the company is a global leader in the tech industry.
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A brief history of Intel
Intel, coined from the words Integrated Electronics, was founded by Gordon Moore and Robert Noyce on the 18th of July 1968, in Mountain View, California. The founders, who were former employees at Fairchild Semiconductor, were pioneers of semiconductor chips, an integral unit in the making of computer systems. Even though Moore and Noyce founded the company, Andrew Grove is widely acclaimed for having been instrumental to the company’s growth through his executive leadership skills. Additionally, the company is instrumental in Silicon Valley becoming a tech center.
Intel started the business by producing DRAM and SRAM memory chips in 1981, after making the first commercial microprocessor, the Intel 4004, in 1971. Two years after its launch, it went public and raised $6.8 million. However, it began to make waves in the market when it focused on making the necessary computing units for personal computers. The company became more aggressive in improving its products due to the stiff competition in the market, especially from other tech companies such as Microsoft and AMD. As such, it redesigned its microprocessors, which not only increased its market share but fostered the evolution of the computer industry. Other innovations followed suit.
In 1972, Intel opened its first international manufacturing plant in Malaysia and later in Jerusalem and Singapore in the 80s and in India, Costa Rica, and China in the early ‘90s. In 1987, Moore stepped down as CEO, and Andrew Grove took over. Upon his arrival, the company launched a marketing campaign in 1991 that made it a household name among its customers by the turn of the century.
By the end of the 1990s, Intel tried to diversify into other products besides microprocessors, but some of its efforts were unsuccessful. Today, the company has a stake in other markets, including self-driving cars and smartphones.
Who Owns Intel
Gordon Moore and Robert Noyce founded Intel. Currently, it is majorly owned by institutional investors, to a tune of 60.78%. These institutional investors include The Vanguard Group, Inc., Geode Capital Management LLC, Norges Bank Investment Management, BlackRock Investment Management, Capital Research & Management Company, etc. Intel insiders own 5.16%, retail investors own 34.06%, and Gordon Earle Moore owns 4.18%, making him the largest individual owner of the company. The company’s current CEO is Patrick P. Gelsinger.
Intel Mission Statement
The company’s mission is “to create world-changing technology that improves the life of every person on the planet.”
How Intel works
Intel majorly produces microprocessor chips, motherboard units, central processing units, etc., for manufacturers of computer systems. These products are often sold under its brand name. Also, the company makes a PC chipset that allows the IT unit of its client companies to monitor and troubleshoot their computer systems remotely.
Other products include the Xeon processors, Optane, one API, and Intel Foundry Service. The Xeon processors allow manufacturers to scale their products. Intel also makes XeGPU for the graphics card market under Ponte Vecchio. Optane is an Intel technology used as a cache for SSDs. It has the same speed as DRAm and is only available to enterprises since it’s a server-only technology. oneAPI unifies Intel’s microprocessors, making developers worry less about low-programming tasks.
How Intel makes money
Intel makes most of its money through selling its products. Currently, it dominates the microprocessor and PC markets. Below are ways through which the company earns most of its income.
Network and Edge Group (NEX)
In this segment, the company provides businesses with improved units for higher processing, tighter security, and managing network traffic. Additionally, products in this category allow for expansion without the client company having to invest in a new system architecture. Last year, the company made $2.3 billion from NEX.
Client Computing Group
Here, Intel designs and produces for the end user to aid their internet connectivity. The products include 2-in-1 gaming and commercial computing units. The company made over $7 billion from this revenue stream in the second quarter of 2022.
Intel Foundry Services (IFS)
This revenue sector is the core of Intel’s operations. It’s a standalone unit that produces microprocessors and sorts and tests their capabilities. Asides from its in-house operations, IFS also partners with the US Department of Defense to create a semiconductor manufacturing base for making necessary products for the department. In the last quarter of 2022, IFS made $122 million.
Datacenter and AI Group
This center develops Intel’s data products and leads its research and production in Artificial Intelligence. It made $4.6 billion in the second quarter of 2022.
Accelerated Computing Systems and Graphics Group (AXG)
This group makes high-performing graphics cards for clients, including data centers and individual businesses. By the last quarter of 2022, AXG had earned $186 million, which shows a rise compared to the $177 million it made in 2021’s Q2.
Mobileye
Since Intel is a stakeholder in the automobile industry as it makes vital units for self-driving cars, Mobileye focuses on researching and developing autonomous driving applications. This unit saw an increase of 41% as it earned $460 million last year compared to the $327 million it made in 2021.
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Intel Customer Segments
Intel’s customer segments consist of
Original Design manufacturers
Original Equipment manufacturers
Other manufacturers
Intel Value Propositions
Intel’s value propositions consist of:
Value propositions for original design manufacturers:
High performance: Usually, due to Intel’s competitive edge, it adopts next-generation technology in its manufacturing process. As such, any manufacturer who uses their products is bound to enjoy them;
Accessibility: Intel’s products are very accessible. Asides from the company’s sales unit, they have a network of authorized distributors worldwide to make it easier for its customers to get their stock;
Ready market: Even though original design manufacturers sell to unlabeled and private clients, it’s easy for them to find an existing market because Intel has made a name for itself in the computer industry.
Value propositions for original equipment manufacturers
Stock: Intel provides stock for original equipment manufacturers, who resell them to their clients under their brand. This shows that Intel’s products are of high quality;
Availability: Intel’s products are always ready for equipment manufacturers to pick up, keeping the sales cycle rolling;
Quality: As a world leader in the computer industry, Intel has always maintained its standard of quality products. As such, they indirectly reinforce the client’s trust in the original equipment manufacturers who buy from them.
Value propositions for other manufacturers
Raw material: For manufacturers who use Intel products for industrial and communication purposes, Intel provides them with cheap but high-quality raw materials;
Brand status: People are more convinced to patronize manufacturers who use Intel products because of the brand recognition and equity they have garnered over the years.
Intel Channels
Intel’s channels consist of:
Website
Authorized Distributors
Resellers
Social media
TV
Trade events
Consumer programs
Intel Customer Relationships
Intel’s customer relationships consist of:
Content Library
Website FAQs
Documentation library
Website videos
Product info materials
Community support
Expert and peer forums
Email support
Phone support
Intel Revenue Streams
Intel’s revenue streams consist of:
Network and Edge Group (NEX)
Intel Foundry Services (IFS)
Accelerated Computing Systems and Graphics Group (AXG)
Mobileye
Datacenter and AI Group
Client Computing Group
Intel Key Resources
Intel’s key resources consist of:
Research and Development team
Sales and marketing team
Manufacturing unit
Partners
Intel Key Activities
Intel’s key activities consist of:
Development and maintenance of websites
Designing and developing new products
Marketing
Client base expansion
Acquiring new partners and retaining old ones.
Customer support
Intel Key Partners
Intel’s key partners include:
Technology partners
Distributors
Inside Program
Intel Cost Structure
Intel’s cost structure consists of:
R & D team
Marketing
Staff remuneration
Administration and operation costs
Environmental costs
Litigation expenses
Incentives and rebates
Intel Competitors
TSMC (Taiwan Semiconductor Manufacturing Co): TSMC was founded in 1987 with its headquarters in Hsinchu, Taiwan. Currently, TSMC is the world’s biggest semiconductor foundry. It produces chips using 3-nanometer tech, making its products the go-to for people in need of advanced semiconductors. Globally, TSMC’s chip accounted for 54% of total foundry revenue in 2020. In 2021, the chip company spent $28 billion to increase its leadership, quality, quantity, and capacity in the industry. As of now, TSMC is in the process of building a $12 billion chip plant in Arizona, which is scheduled to be opened in 2024. After this facility must have been successfully built, TSMC will be on par with Intel on American soil. Other competitors of Intel, such as Qualcomm, Nvidia, and AMD, rest on TSMC for production. TSMC revenue increased rapidly from 25.2% to 47.48% in 2020. Although TSMC has more revenue than Intel, its workforce is half that of Intel. Currently, TSMC is Intel’s alternative and top competitor in the chip-making industry;
Samsung: Samsung was founded in 1983 and is headquartered in Seoul, South Korea. The company is the world’s biggest memory chip and smartphone maker. It has over 300,000 employees. Samsung controls over 5% of the microprocessor market. It generates a revenue of about $197.69 billion. Unfortunately for Intel, Samsung has a major competitive advantage, which is its great financial capability. The company plans to spend over $10 billion to build an advanced logic chipmaking plant in Texas. Construction commenced in 2021, and the company installed the manufacturing tools in 2022. It will begin its operations in 2023. In the next ten years, Samsung plans to invest $116 billion in its chip design business. Samsung leverages its vast financial resources, and it is fast becoming a dominant name in the chipmaking industry;
AMD (Advanced Micro Devices, Inc.): It was founded in 1969, and its headquarters is in Santa Clara, California. The company is a global technology company that specializes in making semiconductors used in integrated circuits for personal computers (PCs). AMD develops motherboard chips, graphics processors, and flash memories. AMD’s processors can be used in PCs, CPUs, gaming consoles, and devices for manufacturing and telecommunication. From $6.73 billion in 2019, AMD’s revenues raised 45% to $9.76 billion. Amazingly, AMD witnessed a whooping increase in profits of about 630% in 2020. But AMD has just 10,000 employees, about a tenth of Intel’s workforce. AMD is the world’s second microprocessor manufacturer, with 20.5% of the market share. Its processors also power a large number of widely used cloud services. It delivers outstanding performance, and it is also flexible;
Nvidia: Nvidia was founded in 1993, with its headquarters in Santa Clara, California. The multinational technology company makes chips and designs graphics processing units for autos, gaming consoles, mobile computing, and other markets. Nvidia also produces GPU processors for virtual reality, AI-powered devices, and 3D graphics. Nvidia has about 18,000 employees, and it operates globally. The company’s revenue increased in 2021 NY 53% from $10.92 billion to $16.68 billion. Nvidia’s technology is transforming industries like gaming, transportation, and healthcare;
Broadcom: This company was founded in 1961, headquartered in San José, California. It is one of the rapidly growing chipmakers for 5G-enabled phones. Broadcom also develops processors, controllers, and semiconductors. The company revenues raised to $23.89 billion in 2020 as regards the former revenue of $22.6 billion. Broadcom’s main competitive advantage is its long-lasting supplier relationship with two well-known brands, Apple and Samsung. Broadcom has the chance to exploit the rapidly growing 5G market. Between 2021 and 2023, Broadcom successfully signed an agreement with Apple to buy $15 billion worth of smartphone chips. Broadcom also makes chips for Nokia’s 5G base stations. All these revenue streams increase the company’s competitive advantage over its competitors;
Qualcomm: It was founded in 1985, and its headquarters is in San Diego, California. The company is one of the world’s leading developers of 5G technologies and mobile phone chips. Qualcomm chips can connect mobile phones, networking, equipment, and broadband devices to wireless data networks. In the Android market, Qualcomm’s software power and integrated circuits are the most used in the electronics market. Qualcomm had about 41,000 employees in 2019 and approximately generated revenues of roughly $23.53 billion. The company’s competitive advantage is its leadership in the 5G technology market. Qualcomm sold about 450 to 600 million 5G handsets in 2021 globally.
Intel SWOT Analysis
Below, there is a detailed swot analysis of Intel:
Intel Strengths
Some of Intel’s strengths include the following:
Technology leader: Intel has one of the strongest marketing campaigns, making Intel a leader in the technology industry. Since its establishment, Intel has produced various products that have helped the technology sector. It can be considered the leader in the technology sector because different companies use its chips in laptops and computers;
Massive Clientele: Consumers will always prefer to go for companies they can depend on and deliver the best products with diverse options. This has helped Intel to accumulate many clients who are loyal to them;
Rank: Intel ranked 7th in the Brand Values of the top 10 technology companies. This ranking adds to the brand value of Intel. According to various rankings, Intel is one of the best available in the industry. Due to these rankings, Intel has gained popularity among others;
Partnership with Microsoft: Intel’s partnership with Microsoft has given it more recognition and a competitive advantage against its competitors. Right business partnerships, mergers, and acquisitions are how a company can gain more benefits. Intel’s partnership with Microsoft, which is a leading company in its industry, shines a more positive light on Intel’s products;
Brand Value: Worldwide, Intel ranked 40th, and among the technology giants, it ranked 7th;
Market Share: In light of revenue, Intel is the world’s largest microchip manufacturer.
Intel Weaknesses
Some of Intel’s weaknesses are:
Lack of Diversity: Intel products are limited to the personal computer sector;
Decrease in profit: After the 2000s, Intel has been facing a stable drop in its market share. Due to this, Intel has been facing significant losses;
Excessive production: Intel always produces more than is needed, which always causes overflooding of the market. This affects their profits, considering that the demand for their products is constantly reducing;
Slow Service in developing countries: In developing countries, Intel’s services are slower than in developed countries. Intel should provide better services for the developing country;
No presence in the mobile industry: Although Intel initially tried to be a part of it, it failed because it could not make a strong impact.
Intel Opportunities
The following are opportunities open to Intel:
Diverse markets for business: Intel can expand its spectrum for business and reach places it hasn’t explored. The company’s diversification will aid in increasing its market share, which is declining;
Entry into the smartphone industry: Intel should try to enter the smartphone industry. This can help them regain their lost reputation and return as a leader;
Making Computers: Intel should consider the increase in the demand for computers. Computers are fast becoming a necessity in every household;
Drones: Drones are still considered a new concept, but it has been considered one of the best technologies. Intel can partner with companies making drones, giving the company a more competitive edge.
Intel Threats
Below are written some factors that are threats to Intel:
One product: Intel puts its primary focus on one product. If one of its competitors releases a better version of Intel’s only product, it will lead to a huge loss for the company;
Stiff Competition: Intel faces intense competition with companies like IBM, Dell, and AMD. To keep its market share, Intel should ensure its quality, price, and technology are higher than its competitors. These companies try to gain over Intel by offering their products at lesser prices;
Chinese products: Chinese products are currently a part of every industry, especially the technology market. However, the lifetime of these products is highly questionable. To win against this, Intel will have to fight a price war against Chinese products as it threatens Intel sales;
Different needs of customers: Customers these days prefer hands-free products. Intel will need to work more to enter that industry.
Conclusion
Intel is one of the world’s largest semiconductor manufacturers, making it a global leader in the tech industry. Its digital marketing presence is highly applaudable and has helped create a name for the company. However, the American multinational technology company faces intense competition from Nvidia, TSMC, AMD, and other technology companies in the industry. Lately, its market position has declined due to threats impacting its market share. If Intel leverages its strengths and opportunities while eliminating threats, it will receive more brand value and recognition. Intel can also diversify its focus from just one product to increase its market share.
Who is Daniel Pereira ?
I love understanding strategy and innovation using the business model canvas tool so much that I decided to share my analysis by creating a website focused on this topic.
More About Me
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Silicon Graphics Revival: The Fans Keeping the SGI Alive
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Decades after Silicon Graphics' heyday, its supercomputers have found themselves a new home with a small community full of enthusiasts—some just teenagers.
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Tedium: The Dull Side of the Internet.
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https://tedium.co/2018/10/04/sgi-collector-history/
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Hey all, Ernie here with a recent piece of mine that also showed up in Motherboard. In case you haven’t read it yet, it’s a good one and highlights both SGI and the the excellent community IRIX.cc. Read on, and hope you dig!
Today in Tedium: Recently, I was faced with an unusual question about a piece of hardware that very few people have ever used. The question: What makes a giant workstation, one that once cost as much as a house when it was first produced in the early ’90s and makes as much noise as a vacuum, so appealing to a 16-year-old? Unlike an old Super NES or Amiga, there isn’t really a nostalgia factor to the Silicon Graphics Onyx when it was released a quarter-century ago, unless you spent time designing games rather than playing them during the Clinton era. But the video evidence was there: A Canadian teenager had gotten his hands on an Onyx, a device best known as the primary software development platform for the Nintendo 64, and in the video he published highlighting the ins and outs of the gigantic machine, he was clearly psyched about it. He’s not alone, either: A passion for SGI lingers well into the modern day. Today’s Tedium talks all about it. — Ernie @ Tedium
Your last chance: Starting Monday, I’m building the zines, and if you aren’t a patron by then, you’re going to miss out on the cool thing we’re making! For those that haven’t, read the details here and support us on Patreon at a $5 level or above to get your hands on something tangible. (There’s also an $8 tier for international fans as well!) Act now before you miss your shot.
1991
The year Silicon Graphics first released its Indigo workstation computer. While not the first computer it released, it hit a price-performance range that put it in the reach of larger parts of the business world. (It cost $8,000, which wasn’t cheap, but was attainable.) The machine, based on the MIPS architecture, became the one that defined SGI’s brand and reputation as a creator of hardware for the production of 3D graphics. Later SGI machines, such as the Indy, aimed at a lower-cost professional market, while larger ones, such as the supercomputer-powered Onyx line, focused on performance without compromise.
The hardware may be the same, but the SGI community is evolving
Something you might not pick up from a cursory watch of the video profile of the SGI Onyx, featured above, is that its creator, who calls himself Dodoid online, represents something of the new face of a relatively old form of computer collecting.
One does not acquire a 250-pound Onyx supercomputer by accident. This is an incredibly complex machine—with graphics that were beyond state of the art at the time of its release and still hold their own today, loaded with gigabytes of RAM at a time when computers of its era counted RAM in the tens of megabytes, reliant on a MIPS chip architecture at a time when PCs used Intel and Apple used PowerPC, and with a facade that recalls a fancy air conditioner more than anything else—and Dodoid is deeply familiar with its many parts. Perhaps it’s for that reason, and his matter-of-fact approach to presenting the machine, that his video has received nearly 600,000 views on YouTube since it was posted last month.
Dodoid, shown with an Onyx. (YouTube screenshot)
Dodoid, who prefers to keep his online presence separate from his his real-life one, was born in 2002, at a point when SGI was already in the midst of a lengthy decline in influence—and nearly a decade after SGI had its pop-culture peak after one of its workstations was sabotaged by Wayne Knight’s character in Jurassic Park. It’s a fascinating machine, but not exactly a common one.
But long-timers in the SGI community, like Ian Mapleson, a British computing expert who has long run a website that sells equipment for the machines, were quick to compliment Dodoid’s work.
“Dodoid is awesome,” he told me in an email. “His enthusiasm reminds me of me back when I first got into SGIs in 1993, though honestly he’s a heck of a lot smarter than I am, and he’s jumped into all this tech stuff 15 years earlier than I did.”
The 16-year-old, who pays for his SGI hobby via a laptop resale business, finds himself a leading light in the SGI scene due in no small part to that passion, though shifts in the SGI community itself have also played a role: Just a few months ago, the main forum for the community, a site called Nekochan, was shut down, precipitating a subcultural sea change.
Its founder, a man named Peter Plank (who goes by Nekonoko online), publicly blamed the shutdown on the challenges of complying with the European Union’s General Data Protection Regulation (GDPR). While GDPR played a role in the shutdown of a number of legacy data-driven platforms, most notably Klout, it’s possible that even a community of supercomputer enthusiasts would face the same kinds of legal problems, though a stringent regulatory rule like GDPR could potentially put any organization on notice. Nonetheless, Nekochan is gone.
Plank, who I haven’t been able to contact despite multiple requests for an interview, hasn’t offered any further context as to the shutdown or whether the site, with its wiki and in-depth forums, will return in some way, but whatever his reasoning, the situation has created a deep information void in the SGI community.
Mapleson noted that the site’s four-month hiatus has left a long line of broken URLs in its wake. “It’s been gone so long now that Google has wiped those entries from its search system as well, so now it’s almost as if the site never was,” he wrote.
These machines, full of parts that could break down at any time and reliant on an operating system that stopped being officially updated more than a decade ago, have basically stayed alive out of the sheer will of its small community of users. With the shut down of Nekochan, that will was tested.
Replacing this font of vintage workstation knowledge is IRIX.cc, a website intended to get around a Nekochan rule against reselling software, but now at the center of the SGI community. Raion, a 24-year-old Virginia sysadmin who helps run the site and asked not to use his real name for privacy reasons, said that Nekochan’s shutdown required him to significantly increase resources for the site. But the really hard part about it is the additional moderation need that the community requires.
“I do the very best I can to give answers to anybody who comes in or if I don’t know the answer, I try to ping a user who may know,” he explained. “Running a community such as this is 10 percent knowledge and 90 percent leadership.”
Considering the complexity of the machines, institutional knowledge is an incredibly important part of SGI’s continuing survival. But, when it comes to Nekochan, at least, one might wonder if the issues that come with running an online community for more than a decade played a role in its demise.
Dodoid, who also asked not to use his real name, suggested the existence of an online community around SGI, even with the elements of friendship and camaraderie that naturally build up around hobbies of this nature, highlights something of a degree of necessity.
“IRIX.cc only took over when Nekochan died and it became clear that it wasn’t coming back,” Dodoid, who serves as a moderator for the community, explained. “Something else could only take over if the same happened to IRIX.cc. All this to say, the community is tight-knit out of necessity. We have to stick together and one site has to be the focal point of our world.”
To put it another way, he explained, IRIX.cc is the center of the SGI world because that’s where everyone has landed—whether they actually like the platform or not.
The SGI community has only occasionally gotten notice from the outside world. In 2004, for example, the community got a shout-out from Wired, which highlighted many of the major players at the time, including Mapleson and Plank.
But this kind of exposure is rare, and SGI systems don’t get anywhere near the notice that more mainstream vintage systems, like the Commodore Amiga, the Apple II, and the DOS-era IBM PC, have received.
Which creates an interesting dynamic for folks that haven’t closely observed the SGI scene. Retro collecting for SGI doesn’t work like you’d expect.
Some SGI Indy machines. (Courtesy Dodoid)
Five things you should know about buying an SGI workstation in 2018
There’s no emulation, so you have to buy a machine. While there have been a handful of attempts to bring SGI hardware to life in software form through emulation, nothing has actually replicated the experience as of yet. “Trying out an SGI is difficult since there isn’t very many of them, and there is no emulation,” Raion told me. The result is that you have to show a certain level of commitment before even trying a machine out—finding someone that has a machine, or buying one of your own. (Raion recommends the minitower-sized SGI O2, released in 1996, as a good starter machine for beginners.)
You can get one for cheaper than you’d expect. While buying an SGI machine isn’t necessarily a cheap hobby, machines can be had at a deep discount if you know where to look—and that probably isn’t eBay. Dodoid got his Onyx, along with a desk-side variant of the Origin 2000, a specced-out O2, an Octane2, and a whole bunch of spare parts for $600 Canadian ($456 in US dollars). The secret? He bought from a Montreal-based collector who was looking to offload, and he was patient. On the other hand, Mapleson warns that the supply chain is thinning out as SGI machines become less and less common. “One can still find bargains, but it’s less likely,” he stated.
Don’t even think about using the cases in a mod. SGI cases are particularly beautiful and well-designed, but by no means should you expect to gut one for the purpose of installing a mod. “Within the community, there’s a sort of unspoken agreement that SGIs are way, way too rare and ‘special’ to let this happen, and that any user trying to do this should not be sold an SGI,” Dodoid told me. “Hard to buy an SGI to stick a Mini ITX board inside if everyone who owns an SGI refuses to sell it to you.” Noting this interest, Dodoid came up with a 3D-printed case, styled after the SGI Indigo, that fits the ODROID single-board computer.
There are a lot of moving parts. A. Lot. Dodoid’s breakdown of the Onyx highlights the sheer number of individual cards needed to run that particular machine, and if one of them breaks, it could be a huge headache. (Or, based on your demeanor, a fulfilling challenge.) Even with the smaller workstations, they have very specific quirks—one example that I frequently heard during my research was how older machines had keyboards and mice with ports that looked physically the same as the then-common PS/2 ports on PCs, but if you were to plug a PC-compatible mouse into one of these old SGIs, it could fry a machine. “Many people underestimate how different SGI machines are from PCs and Macs of the era,” explained Aaron Rogers, an SGI collector who runs the YouTube channel SiliconClassics.
They can’t really be compared to modern technology. Just because many SGI machines have a reputation as speed demons, and a traditional cost that implies as such, doesn’t mean that they should be compared to anything modern—for one thing, their purpose is completely different. “SGIs still have some specialized uses, and there are still a few of them out there doing important jobs, but my Onyx is not gonna beat a modern consumer device as a games machine,” Dodoid explained.
“Most SGI hobbyists are familiar with the use of SGIs in the movie/effects industries, 3D visual simulation and VR, but few realize they have been critical in a variety of industrial and process control industries, from textile and PCB manufacturing to medical scanners, training systems and even meat processing in an abattoir.”
— Ian Mapleson, explaining the surprisingly wide reach of SGI machines, which he’s been able to get a feel for due to his experience as being one of the few people that specializes in selling parts and devices for the platform. The broad range of the machines, which he notes goes beyond what the company’s own marketing suggested, has put him in a variety of onsite settings as he’s helped work on the machines—particularly, hospitals. “Thus, it’s been great to learn about so many different aspects of the commercial world; I’ve visited power stations, textile factories, and of course movie companies,” he stated. “By email I’ve known and helped many more, in every corner of the globe.”
Ian Mapleson, shown with an Onyx 3800. (courtesy of the subject)
How an enthusiast community changes over a quarter-century
The thing about SGI that makes it interesting to consider from an online community standpoint is that, even though it’s fairly small now, it has a reach that dates back to some of the earliest days of the internet.
Mapleson has experience on the SGI platform dating back to the days even before the web browser Netscape—a company cofounded by longtime SGI head Jim Clark—so as a result, he’s seen the SGI community shift a lot over the last quarter-century. Mapleson says that during the early 90s, hobbyists were fairly uncommon, and only appeared in force after the used market had built up to some degree in the late 90s. Before that, SGI-focused commenters came from academia, the business world, and even SGI itself, and would often use Usenet to communicate.
The volatile nature of Usenet, the place where the flame war gained its name, was generally not as deeply felt on the SGI groups, which were not in the “alt” section and were moderated. Responses were generally delayed, which helped define the tenor of the general conversation, and the groups were helped along with detailed FAQs.
Of course, all of these knowledgeable folks weren’t exactly welcoming to outsiders.
“I remember one perfectly sensible question from a PC user who asked, ‘What is an SGI?’; the answer he received, ‘If you don’t know, you can’t afford one,’ was of course amusing to everyone else at the time, but it was also a sign of where things were going wrong,” Mapleson recalled.
An SGI Fuel next to a ZX81. (courtesy of Mapleson)
As the web era got going, a number of SGI enthusiast sites gained momentum (often with out-of-date designs that could be used on IRIX-capable web browsers), but one site or another faded from view or stopped getting updates. Nekochan, when formed in the early 2000s, was one of many sites focused on SGI issues. But it eventually became much more of a centralized resource for the community.
The differences between Usenet and web technology, Mapleson noted, had an effect on the way people in the community worked with one another.
“In a way, the instant nature of modern forums like Nekochan make it too easy for people to react to something with emotion rather than intellect, they say things they later regret; people know they can edit posts of course, but by then, the damage may have been done,” Mapleson stated. “With Usenet, basic arguments were less likely, the system as a whole felt more formal.”
Nekochan was active for around 15 years, outliving SGI itself and allowing the culture to coalesce around the site. During this period, the SGI employees faded from view and the hobbyists became more prominent. While people like Mapleson, who have a professional interest in the platform as well as a personal one, have maintained a presence in the scene, other long-timers have faded in and out of view.
SiliconClassics’ Aaron Rogers, who was responsible for the discovery of the source code for the Nintendo 64 game Turok: Dinosaur Hunter on an SGI Indy workstation last year, notes that his interest in the platform has faded some over time.
“I think I’ve taken my interest in SGI as far as I care to, at least for now,” he wrote in an email. “I own all the SGI systems I ever wanted and most of them have been stuck in storage for years.”
A community of this nature, focused on a line of computers that few people outside of the world of film, academia, and industry have even had a chance to try, is going to be by default fairly insular. If old-timers fall away, at some point, so does the institutional knowledge.
That’s why users like Dodoid and Raion, young and fairly passionate about what the SGI platform represents, are so important to this community right now.
Silicon Graphics machines, whether the workstations or the supercomputers, represent a interesting niche in retro computing, in that they’re machines that won’t likely be recreated in a “classic” form, that cost a sizable amount of money to collect, and in some form factors, can be very expensive to even maintain.
They were at a higher point on the food chain, used in specialized places, and as a result the nostalgia factor isn’t quite so deeply felt. It’s the fascination that keeps these machines alive.
Rogers of SiliconClassics compared SGI fans to “car enthusiasts,” in part because the systems “demand a lot from their owners.”
“Once you dedicate that much effort to a hobby, it owns you,” he explained.
It’s that level of dedication that might encourage potential upgrades in the future. Just as old-school PCs have found new life with CompactFlash cards in place of hard drives, and Amigas have seen processor upgrade cards that turn them into relative speed demons, there is interest in creating tools that can help SGI machines keep up in the modern age.
Dodoid’s development rig, driven by a Silicon Graphics O2.
Dodoid has been working on a project called D1, a hardware/software solution that, when complete, would use a combination of a PCI-based coprocessor card and additional software to allow users to run modern Linux-based apps on IRIX. “Applications running on the D1 appear on the IRIX desktop, have access to the SGI’s filesystem, etc.,” he explained. “So it’s basically like you can run modern software on a fast CPU on your SGI.”
Among other things, this could help solve a lingering problem for the platform: A lack of modern web browsers.
While SGI machines do quite well for themselves in terms of graphics and sheer data processing power, the specific needs of the web browser, along with Javascript, have passed it by.
Mapleson says that, even though he’s spent years selling various parts for SGI machines, this is the thing that prevents him from using an IRIX-based machine as a daily driver. He encouraged SGI enthusiasts to help support Dodoid’s work on this front.
“If he can help bring to SGIs the ability to make use of the modern web in a manner that means one doesn’t suffer from the performance issues present on a standard SGI, that will make a significant difference to their usability,” Mapleson stated.
(Beyond D1, Dodoid is also working on major upgrades to IRIX.cc’s infrastructure.)
Of course, upgrades are one thing, but the real secret to making all this outdated hardware work effectively is the community—something Raion is very cognizant of as more potential SGI users, or one time Nekochan regulars, come out of the woodwork and land on IRIX.cc’s doorstep. Unlike the days of Usenet, Raion emphasizes the important of keeping a positive tone and welcoming approach—something that could help keep the interest in SGI alive.
“I don’t intend the community to go downhill again,” he told me. “I would sooner go homeless than see this community lose out on its home again.”
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A History of Silicon Valley
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A History of Silicon Valley
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15. The Survivors (1999-2002)
by Piero Scaruffi
Bursting
Between 1998 and 1999 venture-capital investments in Silicon Valley firms increased more than 90% from $3.2 billion to $6.1 billion. In 1999 there were 457 IPOs in the USA. The vast majority of the companies that went public were high-tech start-ups and about 100 were directly related to the Internet, and an impressive number were based in Silicon Valley. In 2000 the number of public companies in Silicon Valley reached 417. In 2000 venture-capital investment in the USA peaked at $99.72 billion or 1% of GDP, mostly going to software (17.4%), telecommunications (15.4%), networking (10.0%) and media (9.1%). By the end of 1999 the USA had 250 billionaires, and thousands of new millionaires had been created in just one year. Microsoft was worth $450 billion, the most valued company in the world, even if it was still many times smaller than General Motors. Bill Gates was the world's richest man with a fortune of $85 billion.
One of the worst deals ever in the history of Silicon Valley took place in january 1999, when @Home acquired a struggling Excite for $6.7 billion in what at the time was the largest Internet-related merger yet. (Later that year Excite refused to buy for less than one million dollars the technology of a new search engine developed by two Stanford students, Google).
A symbolic event took place in january 2000 when America Online, the pioneer of dial-up Internet access, acquired Time Warner, the world's largest media company. A humble start-up of the "net economy" had just bought a much larger company of the old "brick and mortar" economy. At one point or another in the early months of 2000s Microsoft, Cisco and Intel all passed the $400 billion mark by market valuation, and the only company of the old economy that could compete with them was General Electric.
Then came the financial crash of march 2000. The dotcom bubble burst even faster than it had expanded. Within 30 months (between march 2000 and october 2002) the technology-heavy Nasdaq lost 78% of its value, erasing $4.2 trillion of wealth. The losses in Silicon Valley were astronomical. In 2001 there were only 76 IPOs.
The telecommunications bubble of the 1990s ended in a massive rout, with dozens of fiber-optic startups slaughtered and about two trillion dollars of value wiped out of the stock market, but, in reality, that "bubble" created an infrastructure of high-speed fiber-optic networks that a few years later would enable the boom of a new generation of dotcoms, the Google and Facebook of the world, data-hungry services that would not have been possible without those networks.
There were multiple causes for the crash, i.e. for the inflated values of dotcom stocks. One was certainly the gullible and inexperienced "day traders" who enthusiastically purchased worthless stocks, and another one was the incompetent Wall Street analysts who created ad-hoc reports to justify the aberrations of those worthless stocks. A final boost may have come from the US central bank, the Fed, which pumped more money into the system in late 1999 so that people had cash and wouldn't need to stockpile more for a Y2K Armageddon.
If this were not enough, the large IT companies based on the East Coast were probably hurt more by the end of the Y2K panic than by the dotcom crash. The first of january of 2000 came and went without any apocalypse. The Y2K paranoia was rapidly forgotten, as if it had never existed. The last day of december of 1999 would remain the best day ever to fly, because planes were empty: people were so afraid that airplanes would crash all over the world. Unfortunately, the Y2K paranoia had created an easily predictable "boom and bust" situation: billions of dollars had been spent in acquiring new hardware and software before 1999, but all of this, by definition, came to an end one minute after midnight. It was one of the few cases in which a "bust" was widely advertised before it happened.
There is no question that the dotcom bubble had gone out of control, but the drop in IT investment after the Y2K scare exacerbated the problem.
The direct impact of the stock-market crash was on jobs. Half of all dotcoms shut down. The other half had to restructure themselves to live in a new age, an age in which growth was proportional to (not independent of) profits. They needed to make money, and, failing real revenues, the only solution was to cut costs. Silicon Valley truly learned how to trim costs in the early 2000s. On top of the layoffs due to cost cutting, there were three additional problems. First of all, the number of software engineers coming out of universities had massively increased to keep up with demand: but now there were no jobs for these young graduates. Secondly, Silicon Valley companies had begun outsourcing jobs to India: 62% of India's exports of software in 2000 went to the USA. Thirdly, the USA government had just bent to the demands of the IT industry to increase the number of visas for foreign IT workers, causing a flood of immigrants: 32% of Silicon Valley's high-skilled workers were foreign-born in 2000, and mostly from Asia. These combined factors caused the first massive decline in employment in the Bay Area since the end of the Gold Rush era.
The 2001 recession was significant because California, and the Bay Area in particular, had been largely immune from recessions since the Great Depression. Recessions in California tended to be milder, and recoveries faster and stronger. In 2001 the opposite happened: California fared a lot worse than the rest of the nation.
Out of the Ruins
The crash of the Nasdaq did not mean that the Internet was already dying. On the contrary, in 2000 it was estimated that 460 million people in the world were connected to the Internet, and that 10 billion e-mail messages a day were exchanged over the Internet. In 2001 alone 42 million users traded $9.3 billion worth of goods on eBay. For the first time even a small business in a remote town could reach a market of millions of people. To mention just one emblematic statistic, Merrill Lynch reported that trades by institutional clients over its e-commerce platforms amounted to $1.9 trillion in 2000. According to the US Census Bureau, the grand total of e-commerce was just short of one trillion dollars in 2000. 94% of e-commerce was B2B (Business to Business, basically the Internet-based version of the decade-old Electronic Data Interchange) and not yet B2C. Retail e-sales (B2C, Business to Consumer) were only $29 billion in 2000, but in the following years they would increase rapidly, with a double-digit year-over-year growth rate.
Some of the most innovative ideas for the Web emerged out of the Bay Area right in the middle of the crisis. In february 1999 Marc Benioff founded Saleforce.com to move business applications to the Internet, pioneering "cloud" computing (you don't need to own a computer in order to run a software application). SalesForce launched the "software-as-a-service" (SaaS) revolution: corporations were no longer required to purchase, install and run business software in house, but they could instead pay for it only when using it. This would become a trillion-dollar market within less than two decades. The term "cloud computing" had been first used to refer to web-based services by Compaq executive George Favaloro and Sean O'Sullivan's startup NetCentric in 1996. Oracle's Net Computer had come out at about the same time, and General Magic had, of course, already pioneered the concept. Saleforce was the first major company to bet its business plan on it. In 2006 Google's CEO Eric Schmidt would introduce the term to the media, and the following year IBM, Amazon and Microsoft would re-brand their web-based services as "cloud computing".
eHow.com was founded in march 1999 to provide a practical encyclopedia to solve problems in all sorts of fields via articles written by experts in those fields. Friendster, launched in 2002 in Morgan Hill (south of San Jose) by Jonathan Abrams, Peter Chin and Dave Lee, allowed people to create "social networks". Blogger.com, founded in august 1999 by Evan Williams and Meg Hourihan, enabled ordinary Internet users to create their own "blogs", or personal journals. Dave Winer, a blogger whose blog Scripting News (1997) was influential in Silicon Valley, pioneered audioblogging with "Radio Userland" (2000).
Tim Westergren, an alumnus of Stanford's Center for Computer Research in Music and Acoustics (CCRMA), had devised a search engine for music called Savage Beast and had launched the Music Genome Project out of his Menlo Park home to archive songs based on their musical genes and calculate musical proximity (the algorithm was largely the work of co-founder Will Glaser): the search engine simply looked for songs whose genome was similar to a given song. In january 2000 that project website evolved into Pandora, an Internet-based streaming radio simulator that "broadcast" music based on the listener's preference: given a song, Pandora produced a customized radio program of similar songs.
The smartphone application Shazam, designed by Stanford alumnus Avery Wang and launched in 2002 in Britain as "2580", allowed users to identify songs (acquired in 2018 by Apple).
When in 2000 Yahoo opted for Google's search engine, Inktomi read the ink on the wall (that Google was going to wipe out the competition) and decided to invest in a new field: streaming media. Inktomi paid $1.3 billion for FastForward Networks, which specialized in large-scale delivery of radio and television broadcasting over the Web in the wake of Seattle's RealNetworks. In december 2001 Listen.com launched Rhapsody, a service that provided streaming on-demand access to a library of digital music (RealNetworks acquired Listen.com in august 2003).
Relatively few businesses were accepting credit cards for transactions on the Internet. Billpoint, founded in 1998 in Redwood City by Jason May and Jay Shen, tried to change that by offering a simple method to transfer money between individuals. It was used for purchases on websites such as Excite@Home and eBay, and it was acquired in 1999 by eBay that re-launched it in 2000, but a more formidable enemy was going to dominate that sector.
German-born Peter Thiel, founder in 1987 of the conservative student magazine Stanford Review and a successful currency trader, funded Confinity in december 1998 in Palo Alto with two editors of the Stanford Review, Luke Nosek and Ken Howery. The company was the brainchild of cryptography expert Max Levchin, a Ukrainian Jew from Chicago who brought with him a group of University of Illinois alumni, including Russel Simmons and Jeremy Stoppelman (all indirect beneficiaries of the National Center for Supercomputing Applications' Mosaic project). Their goal was to develop a system for Palm Pilot users to send ("beam") money to other Palm Pilot users, i.e. to make payments without using cash, cheques or credit cards. The first entities to be impressed by Confinity were European: Nokia and Deutsche Bank used Confinity software to "beam" from a Palm Pilot their $3 million investment in the company to Thiel. Meanwhile, X.com had been founded also in Palo Alto by South African-born Elon Musk in march 1999 after he had sold his first company Zip2 (its software powered websites for news media companies). X.com offered online banking services including a way to email money. In 2000 Confinity and X.com merged to form PayPal, and Confinity's original concept evolved into a web-based service to send money over the Internet to an e-mail address, therefore bypassing banks and even borders. Thiel's utopian vision of a universal currency was embedded in much anti-government rhetoric that reflected the traditional anti-establishment mood of the Bay Area from a right-wing perspective. However, ironically, PayPal quickly had to devote most of its efforts to fight fraud. For example, to make sure that the user was a human being and not a program, Dave Gausebeck and Levchin resurrected a technique invented by AltaVista in 1997: display blurred and distorted characters and ask the users to enter them on the keyboard; basically a reverse Turing test (a machine that tries to figure out if it is talking to a human), which became popularly known as CAPTCHA (Completely Automated Public Turing test to tell Computers and Humans Apart). PayPal's success was immediate, beating all the competitors that had preceded it in trying to help consumers sell and buy over the Internet. Paypal was another case, like Netscape before it, of the public choosing a standard before either government or corporations could do so.
In october 2001 PayPal already boasted 12 million registered users. Its IPO in early 2002 netted $1.2 billion dollars. The establishment, however, struck back: both banks and local governments tried in every legal way to derail PayPal. Eventually, PayPal found that the only way to survive was to sell itself to eBay (in july 2002, for $1.5 billion). The company had only 200 employees, but PayPal was an impressive nest of talents, and extremely young ones (Levchin was 26 at the IPO, Musk was 31, Thiel was the oldest at 35). Half of those 200 would quit by 2006 and found or staff new start-ups. In december 2002 Reid Hoffman of PayPal launched LinkedIn in Mountain View, the main business-oriented social networking site. In 2002 PayPal's co-founder Elon Musk founded Space Explorations Technology or SpaceX to develop space transportation. Roelof Botha became a partner at Sequoia Capital, and Thiel started his own venture-capital fund, Clarium Capital. In the following years former PayPal employees would found Yelp (Jeremy Stoppelman and Russel Simmons in 2004), YouTube (Chad Hurley, Steven Chen and Jawed Karim in 2005), Slide (Max Levchin in 2005), Halcyon Molecular (Luke Nosek in 2009). It was not just a mafia (as it was widely nicknamed in Silicon Valley), but a self-sustaining mafia because it included venture capitalists, entrepreneurs, managers and engineers. PayPal was neither the only one, nor the most advanced, method of online payment. For example, Pay By Touch, founded in 2002 in San Francisco by John Rogers, allowed users to pay with a swipe of their finger on a biometric sensor.
In june 2000 Google had achieved the feat of indexing one billion pages, a world record. Google's technology was clearly superior in many ways to the technology of the other web-search contenders. In january 2001 Google hired Wayne Rosing, a Silicon Valley veteran who had overseen the Lisa at Apple and Java at SUN. In february Google completed its first acquisition (an archive of the old Usenet, dating back to 1995) to create an extra application (Google Groups): it was the same tactic used in the past by Microsoft to create its portfolio of applications. Venture capitalists John Doerr of Kleiner-Perkins and Michael Moritz of Sequoia Capital became more involved in steering the business of the company, which eventually led to hiring another Silicon Valley veteran, Eric Schmidt (Zilog, Xerox PARC, SUN), as chairman. In 2002 Google got the support of AOL (the new owner of Netscape and a rival of Microsoft). The Faustian deal for Google's rapid success was AdWords, a pay-per-click advertising system, by far its main source of revenues. Google had started selling "sponsored links" in 2000, a practice already followed by their rivals. This was a manual process involving a salesperson and it mainly targeted large corporations. AdWords, instead, introduced in 2002, was mostly automated and, because it slashed the price of posting an advert on the Web, it targeted medium and small businesses that had been reluctant to advertise on the Web. The days of a commercial-free Web were not only over: Google de-facto turned the Web into an advertising tool which incidentally also contained information. The business model was the ultimate in cynicism: millions of website editors spread all over the world added content to the Web on a daily basis, and Google used that colossal amount of free content as a vehicle to sell advertising services to businesses. Web surfers used Google to search for information, but Google "used" them to create the audience that justified the amount it charged for advertising. Both the producers of content and the consumers of content were getting no money out of this splendid business model. Intermediary had always made money in business, but this case was different: Google was an intermediary of sorts in the flow of content from producer to consumer and was making money even though there was no money transaction between producer and consumer. The money was coming from an external entity that wanted to sell its products to the consumer. Every time someone added a webpage to the Web it made Google more powerful. Unlike traditional intermediaries, which made money by charging a fee per each transaction, Google never charged the user anything for searching. Yahoo and Excite had already understood the power of this business plan but Google was the one that implemented it to perfection.
Except for the few headline stories, the new Silicon Valley start-up was very different from the exuberant ones of the 1990s. The term "ramen profitable" was coined by venture capitalist Paul Graham to refer to a start-up that makes enough money to pay the bills.
Winners and Losers
Many of the established Silicon Valley companies did well through the recession: for example, Oracle, which in 2000 abandoned the client-server architecture in favor of the browser-based architecture and in the first quarter of 2001 posted growing revenues of $2.3 billion, and Siebel, which owned almost 50% of the Customer Relationship Management (CRM) market in 1999.
Advanced Micro Devices (AMD) beat Intel to a historical milestone: in february 2000 its microprocessor Athlon broke the 1000 megahertz (1 gigahertz) barrier. Intel's Pentium III (running at the same speed) came out a few months later. However, 2001 decimated the sector. Revenues for the semiconductor industry plunged more than 30% in 2001, with Intel alone declining 21% from $33.7 billion in 2000 to $26.5 billion.
British chip manufacturer ARM had been selling embeddable RISC chips since 1991, and in 1998 its technology was mature enough that it was licensed by Qualcomm for its cell-phone technology. By 2001 ARM dominated the market for embedded RISC chips, particularly for cell-phone applications. Only Intel, IBM, AMD and Taiwan-based fabless VIA owned a license for Intel's x86 technology, while ARM had made it very easy for anyone to license its technology. Besides the merits of its chip, its business model was friendlier to manufacturers interested in developing their own custom processors. No surprise then that more than dozens of companies had done so.
Palm was in troubled waters: by the end of 2001 its revenues had collapsed 44%.
Progress in smartphones was accelerating. In 2001 Nokia introduced the smartphone 5510 that featured a QWERTY keyboard, SMS, a digital music player, a game console, a calculator and FM radio. In march 2002 Canadian company Research In Motion introduced the BlackBerry, a hand-held device with a real keyboard that allowed users to check e-mail, make phone calls, send text messages and browse the Web. The telephone had just been turned into a wireless email terminal, and email had become a mobile service. Silicon Valley took notice and in october 2002 Danger, founded by former WebTV's employee Andy Rubin in Palo Alto, released the mobile phone Hiptop, later renamed T-Mobile Sidekick.
Meanwhile, in October 2001 the Japanese switched to 3G cellular technology. 3G enabled phones to watch videos on demand and participate in video conferencing. The world split again in two camps: Qualcomm unveiled a 3G technology called CDMA2000, while Nortel and AT&T launched their own project of "wireless Internet" and eventually assembled a group called 3GPP (3rd Generation Partnership Project) that defined its own standard, WCDMA (wideband CDMA), an evolution of GSM (using Qualcomm technology) mainly adopted in Europe and Japan. The 3GPP chose the "turbo code" (developed in 1991 by Claude Berrou in France) to replace the glorious Viterbi decoding algorithm of 1967 that had been used in GSM. Qualcomm made money both by selling its own CDMA2000 chips and by licensing its CDMA to 3GPP members. China didn't choose a winner: each of its three carriers was assigned one standard, with China Unicom adopting WCDMA, China Telecom adopting CDMA2000, and China Mobile adopting a Chinese-developed hybrid called TD-SCDMA.
However, Silicon Valley scarcely cared when in 1998 Ericsson, Nokia, Toshiba, IBM and Intel joined together to form the Bluetooth Special Interest Group to promote the short-range wireless technology invented by Ericsson that would become the standard for the headphones of mobile phones and for many other devices. In 2000 Ericsson introduced the first mobile phone with built-in Bluetooth, the T36, and a few weeks later IBM introduced the first computer with integrated Bluetooth, the ThinkPad A30 .
In july 1999 Hewlett-Packard appointed Carly Fiorina as CEO: she became the first female CEO of a Dow Jones company, another tribute to the Bay Area's propensity to diversity. In may 2002 Hewlett-Packard acquired Compaq, becoming the largest manufacturer of servers, the second largest computer company in the world after IBM, and the only serious contender for Dell in the personal-computer market. It looked like after the breathtaking ups and downs of the personal-computer market, the company that was still standing was one of the old generation. Because Compaq had purchased DEC, HP now contained a division that contained a division that was the old rival DEC. Symbolically, this represented the end of the war between Silicon Valley and Boston. At the peak of that war nobody would have imagined that some day DEC would end being just up a small division within a Silicon Valley company. And DEC had been the very originator of the "Route 128" boom in the Boston area.
The other surviving giant of the old generation, IBM, had pretty much left the personal-computer market, but dominated software services: in 2000 software and services accounted for 50% of IBM's business. The history of computer manufacturing looked like a vast graveyard of distinguished names, from Univac to DEC to Compaq.
Meanwhile, a new discipline was being born, or, at least, named. In 1999 a panel on "Big Data" was held at the Visualization Conference in San Francisco, featuring, among others, presentations by Steve Bryson and David Kenwright.
Consumer Multimedia
A sector that showed promise was the whole consumer multimedia business. Photography had gone digital thanks to ever-cheaper digital cameras. Music had gone digital (especially now that free software allowed music fans to "rip" CDs into mp3 files). And digital formats for videos were beginning to spread. Consumers needed two things: applications to display and play these digital files, and storage to save them. In 1999 IBM releases a 37.5-gigabyte hard-disk drive, at the time the world's largest. In november 2000 Seagate Technology, which had been purchased for $3 billion by Veritas Software, based in Mountain View and specialized in storage management software, smashed that record with the Barracuda 180-gigabyte hard drive. 3PAR was founded in 1999 in Fremont by former SUN's executive Jeffrey Price and Indian-born former SUN's chief architect Ashok Singhal to deliver shared storage devices, utilizing allocation strategies of "just-enough" and "just-in-time" for increased efficiency.
In 1995 the Israeli company M-Systems, founded in 1989 by Dov Moran, had introduced the first flash-memory drive, and in 1999 it introduced the first USB flash drive, marketed as "a hard disk on a keychain". That was the birth of flash-based solid-state drives, an alternative (with no movable parts) to the electromechanical hard-disk drives (with movable parts, including a spinning disk) that was going to revolutionize the industry. M-Systems was acquired by Milpitas-based flash-memory pioneer SanDisk in 2006.
Meanwhile, in 2000 Microsoft demonstrated the Windows Media Player to play both music and videos under Windows. In january 2001 Apple responded with its iTunes software (available also on Windows in 2003). iTunes was simply a repackaging of a product acquired by Apple in 2000, the digital jukebox SoundJam MP, which had been developed in 1998 by two former Apple engineers, Jeff Robbin and Bill Kincaid, whose project at Apple had ironically been terminated in 1996 when Apple had bought Steve Jobs' NeXT. In october 2001 Apple chose a completely different route from the past: it launched a consumer device, named iPod (designed by Tony Fadell), to play music files, basically a "walkman" for mp3 with a five-gigabyte internal hard-disk (a market created in 1998 by South Korea's SaeHan with the world's first MP3 player, the MPMan, and until then dominated by Singapore's Creative Technology with its digital music players Nomad).
Apple also defied common wisdom by launching a chain of fashionable Apple Stores, an idea perhaps modeled on what Olivetti did in the 1950s (Olivetti stores such as the one opened on New York's Fifth Avenue in 1954 and especially the one in Venice's St Mark Square of 1959 were created by celebrated architects, the latter by Carlo Scarpa).
The history of P2P, one of the big innovations of the era, was mostly based outside the Bay Area. Boston's student Shawn Fanning came up with the idea of a Web-based service to distribute mp3 files, i.e. music, over the Internet. His Napster, that went online in june 1999, allowed consumers all over the world to share music files, thus circumventing the entire music industry. The music industry reacted with a lawsuit that eventually shut down Napster in july 2001. It was too late to stop the avalanche, though. Napster inspired a new generation of similar Web-based services, except that the new generation improved Napster's model by using Peer-to-Peer (P2P) architectures. A P2P service basically facilitates the transfer of files between two computers, but does not physically store the file in between the two computers. Kazaa, for example, was developed in Estonia by Ahti Heinla, Priit Kasesalu and Jaan Tallinn, and introduced in march 2001 by the Dutch company Consumer Empowerment. In july 2001 San Francisco resident Bram Cohen unveiled the P2P file sharing protocol BitTorrent, soon to become the most popular service of this kind. It was faster than previous P2P services because it downloaded a file from many different sources at the same time (if multiple copies were available on multiple servers). These whiz kids became heroes of the counterculture for defying the music industry.
In 2000 the former Yahoo scientist Jim McCoy started Evil Geniuses for a Better Tomorrow to provide a P2P platform, MojoNation, inspired by videogames. The Mojo model came out of the debate on "Agoric computing": how to exploit concepts of free-market economics to solve problems in large-scale computation. In fact, the "mojo" was a cybercurrency, even though it was used to provide balanced and secure computation for a network. EGBT also pioneered a new model of P2P. In 2001 SUN would introduce a similar open-source project, XTA (Juxtapose). In 2001 a Jim McCoy associate, Bram Cohen, created BitTorrent, while another EGBT alumnus, Zooko Wilcox-O'Hearn, turned MojoNation into Mnet.
Napster and BitTorrent relied on a central server. However, Justin Frankel's and Tom Pepper's Gnutella (2000) was conceived in Arizona but it relied on a peer-to-peer network. Another decentralized network was Freenet, originally organized in London a few months later by Irish-born Ian Clarke in 2000. Four employees of Microsoft published "The Darknet and the Future of Content Distribution" (2002), acknowledging the increasing power of inscrutable password-protected networks within the Internet. Anonymous peer-to-peer networks started using the Onion Router (TOR), the outcome of a military research project launched in 1995. One of the original scientists, Paul Syverson, helped Roger Dingledine and Nick Mathewson develop the onion router TOR that became operational in 2002. Such dark nets would become very popular with political dissidents in places where the Internet was massively censored, e.g. in Syria before the civil war (but also by child pornographers, drug dealers, counterfeiters and terrorists). The Freenet itself would become a dark net in 2008.
Gaming was also undergoing a dramatic transformation. In 1996 the San Francisco Chronicle's website had introduced "Dreadnot", a game built around a fictional mystery that took place around real locations in San Francisco and featuring real people, and that used phone numbers, voice mailboxes, email addresses and other websites (in other words, an interactive multiplatform narrative). It was the first "alternate reality game" and it was free. A few years later in nearby Redwood City the team of game designers of Electronic Arts began working on "Majestic", that eventually debuted in july 2001, the first "alternate reality game" for sale. In keeping with the theme of the genre, it was credited to two fictional game designers, Brian Cale and Mike Griffin. These games involved the real life of the players, and therefore Electronic Arts marketed with the motto "It plays you". The game that launched the genre on a planetary scale was Microsoft's "The Beast", that debuted a few weeks before "Majestic". It was the brainchild of Jordan Weisman.
Unbeknownst to Silicon Valley, a major revolution was taking place in the Far East. Among the pioneers of smartwatch technology had been Seiko's Data 2000 watch (1983), the first in a line of smartwatches that would last for decades, Casio had been making smartwatches since at least the VDB-1000 (1991). Computerized watches became serious business at the turn of the decade with Samsung's SPH-WP10 (1999), the world's first watch phone, which would be followed by several other models over the years, Casio's WMP-1 (2000), the world's first watch capable of playing MP3 files, Casio's WQV (2000), the world's first watch to include a camera, followed by Casio's GWS-900 G-Shock (2004), the world's first watch capable of mobile payment. In the USA interest for smartwatches had always been tepid, with half-hearted experiments such as IBM's Watchpad (2001), jointly developed by IBM and Citizen Watch and running Linux, and later Microsoft's SPOT (2004).
Ultraviolet Microlithography
The emphasis on software pushed hardware in the background, and Silicon Valley was becoming less "silicon" than other regions of the world. Silicon Valley Group Lithography (SVGL) was a San Jose company which in 1990 had acquired Perkin-Elmer's lithography business (with financial help from IBM) and in 1993 (with financial help from Sematech) had built the world's first step-and-scan system (for MIT), the Micrascan, operating at 193 nanometers. Microlithography had reached 193 nanometers but it soon became necessary to go even lower. Extreme UV (EUV) was developed during the 1990s at several laboratories (Livermore, Berkeley and Sandia), funded by the US government plus Intel, Motorola and AMD. EUV machines required an entirely different technology. Only two companies licensed the technology: the Dutch company ASML and SVGL. Due to protectionist restrictions by the US government, Nikon and Canon of Japan were not allowed to license the system. But in 2001 SVGL was acquired by ASML, leaving ASML as the sole beneficiary of the huge investment in EUV.
Wireless
Intel, Siemens, Motorola and Philips had formed an alliance for wireless networking called HomeRF, that was also supported by AT&T, but in 1999 Richard van Nee of Lucent and Mark Webster of Harris Semiconductor (later renamed Intersil) debuted their 802.11b standard, operating in the 2.4GHz band. The consortium including these two companies as well as 3Com and Nokia formed the Wireless Ethernet Compatibility Alliance that competed with HomeRF. In 1999 Lucent delivered the world's first 802.11b card to Apple and Apple incorporated it into its iBook laptop. In 2000 IBM debuted 802.11b on its notebooks, Intel switched to Wi-Fi in 2001 and in 2002 the group changed name to "Wi-Fi Alliance". The final blow to HomeRF came in 2001 when the coffee-house chain Starbucks chose Wi-Fi for its stores. Apple and IBM had understood that Wi-Fi would soon become a household term, allowing millions of home computers to communicate with the modem that connected them to the Internet.
Radio Frequency Identification (RFID), a wireless technology that used radio waves to track items, had been invented in the 1970s but largely forgotten. In 1998 MIT professors David Brock and Sanjay Sarma developed Internet-based UHF RFID that made it feasible for top retailers such as Wal-mart (that had pioneered bar coding in the 1980s) to deploy RFID technology extensively (typically for inventory purposes within supply chain management). Wal-mart eventually mandated RFID to all its suppliers by 2005. Among the early manufacturers of RFID products was Alien Technology, founded in 1999 in Morgan Hill (south of San Jose) by Stephen Smith, a professor of electrical engineering at UC Berkeley.
RFID found another application in contact-less credit cards (or "blink technology"). These were credit cards with an embedded RFID microchip that didn't need to be swiped but simply waved. The idea was pioneered by the Upass card, based on Mifare technology, which was introduced in Korea in 1996, while in Hong Kong it was the Octopus card, based on the Felica standard, in 1997, both to pay for public transportation, and by oil company Mobil's Speedpass keychain in 1997 for gasoline pumps.
The leaders were in Europe and in Japan. The European market was dominated by Mifare, developed in 1994 in Austria by Mikron (Mifare meaning "MIkron Fare Collection System") and acquired by Dutch conglomerate Philips in 1998, while Sony's FeliCa, introduced in 1996, ruled in Japan. Both were proprietary technologies because they had been introduced before the international standard was decided.
Encryption for digital communications had been born in the Bay Area (PKI, in 1976) but owed its improvement to Israeli scientists. Adi Shamir (who had invented the crucial RSA algorithm for PKI) proposed a simpler form of encryption in 1984: Identity-Based Encryption (IBE), in which the public key is some unique information about the identity of the sender (typically, the person's email address). The first practical implementation of IBE was the work of Stanford's Israeli-born Computer Science professor Dan Boneh in 2001. Two of his students, Rishi Kacker and Matt Pauker, started Voltage in 2002 in Palo Alto (or, better, in Stanford's dormitory) to develop security software for corporate customers.
Meanwhile, the Europeans and the Japanese kept improving the mobile device that used to be a voice communication device. In 1999 Japan's Kyocera introduced the first mobile phone that contained a video recorder and player, the VP-210 Visual Phone, the first phone that could make videos. In 1999 Finland's Benefon introduced the first mobile phone that contained a GPS unit, the first phone that knew its location: the Esc. But the GPS boom started in earnest in may 2000 when the US government removed the military secret from the GPS system and provided full commercial access to the satellites, thus opening up the GPS for use by hikers and motorists. In November 2000 Japan's Sharp introduced the first mobile phone that contained a digital camera, the J-SH04. (Five months earlier Samsung in North Korea had already released the camera phone SCH-V200, but its camera was not truly integrated with the telephone function. Olympus' 1994 Deltis VC-1100 was a camera allowed users to upload digital photos over cellular and analog phone lines, but wasn't quite a camera phone, and Philippe Kahn's 1997 home-made prototype was never commercialized although it served as the blueprint for the service launched in Japan by J-Phone in November 2000 with Sharp's camera phone).
Wikipedia
The website that would have the biggest impact on society originated from the Midwest: Wikipedia. Chicago's day trader Jimmy Wales had co-founded in 1996 Bomis, a website of pornographic content for the male audience. At the same time he was preaching the vision of a free encyclopedia and, using Bomis as his venture capitalist, he had hired Ohio State University's philosopher Larry Sanger as the editor-in-chief of this Nupedia, which debuted in march 2000. The concept was aligned with Richard Stallman's Free Software Foundation, except that it was not about software but about world knowledge. In january 2001 Sanger decided to add a "wiki" feature to let contributors enter their texts. Wikis had become popular in company's intranets as ways to share knowledge, basically replacing the old concept of "groupware". This method proved a lot more efficient than the traditional process of peer review, and therefore "Wikipedia" (as Sanger named it) was already surpassing Nupedia in popularity when Bomis decided to pull the plug. Wales realized that Wikipedia was the way to go, abolished Nupedia and opened Wikipedia to everybody: formally established in 2003 as a non-profit foundation based in San Francisco, Wikipedia became a free multilingual encyclopedia edited collaboratively by the Internet community. Within a few years it would contain more information that the Encyclopedia Britannica ever dreamed of collecting. It was another example of how utopian ideals percolated into the Internet world.
Larry Sanger, instead, joined the Digital Universe Foundation based in Scotts Valley. It was founded in 2002 by Utah-based entrepreneur Joe Firmage (a former Novell executive) and by German-born astrophysicist Bernard Haisch, who in 1999 had founded the California Institute for Physics and Astrophysics in Scotts Valley. Its mission was to create a more reliable web-based encyclopedia, Digital Universe (originally called OneCosmos).
A new intellectual trend was being shaped on the Web that rejected the praxis of big media corporations to retain all rights and thus stifle creativity ("the copyleft movement"). Larry Lessig, a professor of law at Stanford Law School, founded the Creative Commons in 2001 in San Francisco to promote sharing and diffusing creative works through less binding licenses than the traditional "all rights reserved" copyright. Lessig went on to found at Stanford in 2008 the Center for Internet and Society (CIS) "to improve Internet privacy practices".
In the second half of the 1990s the Zapatistas, a small rebel group in Mexico, had staged a publicity coup by using a network of alternative media to publicize their political agenda on the Internet. Following their lead, in late 1999 political activists spread around the world started the Indymedia project to provide and distribute alternative coverage of the protests against the World Trade Organization that were taking place in Seattle. Indymedia used software originally developed by hackers in Sydney that allowed individuals to update the website in real time. In 2001 violent anti-G8 protests erupted in the Italian city of Genoa, and Indymedia played an even bigger role in disseminating agit-prop news. Indymedia would die out after Facebook and other social media began providing more professional platforms.
In 1996 Brewster Kahle, the founder of Alexa (and previously the first man to get married at the Burning Man Festival in 1992), began to archive the World-wide Web. In 2001 he launched the Internet Archive that initially simply allowed the public to browse the archived pages, but rapidly expanded to offering free digital copies of texts, images, films, etc.
Uploading
The key difference between this generation of the Web and the previous generation was not so much in the number of people who were browsing it but in the number of people who were uploading content to it.
Digital content had been around for decades. The vast majority of archives in the developed world had already been converted to databases. Large amounts of text had been scanned and digitized. New text was almost all in digital form. No other appliance since the ice box had disappeared so rapidly from households like the typewriter did in the 1990s. The telex had been replaced by e-mail. Newspapers and magazines had converted to digital composition. And now an increasing number of individuals were producing digital texts at an exponential pace, whether students writing their essays for school or adults writing letters to friends. Digital cameras and digital recorders were flooding personal computers with digital images and sounds. Napster-like services were popularizing the idea that a song is a file.
All this digital material was available, but it had been largely kept private on someone's home or work computer. The browser and the search engine, by definition, had encouraged people to "download" information from the Web, not to "upload" information to it. Wikipedia, blogs, P2P tools, social networking sites and soon YouTube and Flickr heralded an era in which the rate of uploading was going to almost match the rate of downloading. In fact, uploading was becoming a form of entertainment in itself. The 1990s had been the age of democratizing the Internet. The 2000s witnessed the democratization of the "uploading": more and more individuals began to upload their digital content to the Web in what became one of the most sensational processes of collective knowledge creation in the history of humankind.
In this scenario the business model of America OnLine was terribly outdated. Warner, originally a film production company, had merged in 1990 with publisher Time. Then Time Warner had entered the cable television business by acquiring Ted Turner's TBS in 1996. The media conglomerate now owned films, tv shows and articles. Then in 2000 America OnLine (AOL) purchased Time Warner and AOL Time Warner was born, the first media conglomerate of the Internet age that was making everything from cinema to email. The idea was to couple content and online distribution. It failed because AOL was rapidly losing its grip on the World-wide web as the era of dial-up access was being replaced by the era of Digital Service Lines (DSL) and cable broadband. There was no need anymore for AOL's dial-up service (that came with the limitation of being able to see only the part of the World-wide Web that AOL owned).
Biotech
Unfortunately the dotcom crash also affected the biotech industry. Funding for biotech start-ups collapsed after reaching a peak of $33 billion in 2000. It didn't help that Bill Haseltine's Human Genome Sciences (one of the most hyped start-ups on the East Coast) turned out to be an embarrassing bluff: it raised a huge amount of money before the dotcom crash, but it had not introduced any pharmaceutical product yet. Luckily, philanthropy offset the retreat of the venture capitalists. In 2000 Victoria Hale, a former Genentech scientist, started the first non-profit pharmaceutical company, the Institute for OneWorld Health, in San Francisco. In 2000 the Bill and Melinda Gates Foundation became the world's largest foundation, and specifically addressed biotechnology. Biofuels too (not only medicines) began to attract capital: in 2002 Codexis was founded as a spin-off from drug developer Maxygen, a biotech company founded in 1997 by Uruguayan-born Alejandro Zaffaroni, a former biochemist at Syntex; and Amyris Biotechnologies, founded in 2003 by Berkeley scientists including Jay Keasling and Kinkead Reiling, raised over $120 million in venture capital in a few years thanks, in particular, to the Institute for OneWorld Health. Solazyme, based in South San Francisco and founded in 2003 by Jonathan Wolfson and Harrison Dillon, specialized in fuel derived from algae.
In 2000 the government-funded Human Genome Project and the privately funded Celera made peace and jointly announced that they had succeeded in decoding the entire human genome.
Enumerating the genes of human DNA enabled a new discipline: genomics, the study of genes. In particular, biologists were interested in finding out which genes cause which diseases, and how to create a predictive medicine or just how to develop smarter diagnoses. In other words, Celera and the HGP had produced billions of bits of information, but now the task was to interpret that information and apply it to understanding human diseases. This implied that someone had to scavenge that mass of information looking for useful bits. Silicon Genetics was founded in 2000 in Redwood City by Australian-born mathematician Andrew Conway of Stanford's Biochemistry Department to focus on "expression software", software tools to investigate gene expression. DoubleTwist, Human Genome Sciences and Invitron were examples of companies that revised their business plan accordingly. They were biomedical companies trying to sell not pharmaceutical drugs but information and analysis. That was the bioinformatic side of the biotech business. Then there was the genomic side of the business, which analyzed a specific person's genome against that mass of annotated information.
An important step towards personal genomics was the establishment in october 2002 of the International HapMap Consortium, a collaboration among research centers (Canada, China, Japan, Nigeria, Britain, and four in the USA, including U.C. San Francisco) to create a "haplotype map" of the human genome. This map was about SNPs (Single-Nucleotide Polymorphisms). SNP means that a nucleotide of the DNA can have different values in different individuals of the same species. The 10 million or so SNPs that exist in human populations explain why some people are more likely to develop a certain disease than others.
In 2003 MIT's Tom Knight envisioned a catalog of standardized "biobricks" (biological parts) that synthetic biologists could use to create living organisms. His model clearly mirrored the way the personal-computer industry got started, with hobbyists ordering kits from catalogs advertised in magazines and then assembling the computer in their garage.
In 2002 Jeffrey Trent of the National Human Genome Research Institute, established the non-profit Translational Genomics Research Institute in Arizona.
The sequencing of the human genome made the database of Palo Alto-based pioneer Incyte partially irrelevant, but Incyte continued to acquire biotech start-ups and in 2000 launched an online version of Lifeseq that offered information about gene's functions at a more affordable price. DoubleTwist, instead, in 2002 succumbed to the double whammy of the dotcom crash and the sequencing of the human genome.
The media seized on the announcement (in october 2001) by Advanced Cell Technology (ACT) that it had cloned the world's first human embryo, causing the ire of right-wing president George W Bush who opposed human cloning on religious grounds. ACT was a spin-off of the University of Massachusetts founded by James Robl whose lab there had been the first to clone calves from somatic cells. The team included Jose Cibelli, a pupil of Robl who had experimented with nuclear transfer to rejuvenate cells, Robert Lanza, who was working on clones of endangered species, and even Michael West of Geron fame (who had joined ACT in 1998). Their goal was actually to generate embryonic stem cells that were needed for controversial medical research.
Meanwhile, an important milestone was achieved by synthetic biology: in july 2002 Eckard Wimmer's team at University of New York at Stony Brook created the first synthetic virus by cloning the polio virus from its chemical code that they had simply downloaded from the Web.
The next step in biotech automation after the DNA chip/microarray was the "lab on the chip". Since the 1960s there had been a lot of progress in "micro-electro-mechanical systems" (MEMS). These devices were already around before the invention of the microprocessor. In 1964 Harvey Nathanson at Westinghouse made the first MEMS, and the first success story of MEMS was the "thermal inkjet" technology that Canon and Hewlett Packard pioneered in the late 1970s, followed in 1993 by Analog Devices' micro-accelerometer (widely used in many industries today, for example in airbags). Initially MEMS simply exploited the fabrication technologies of the semiconductor industry, but in 1999 Lucent introduced the all-optical router and triggered the boom of optical MEMs of the 2000s. But the enabling technology was "microfluidics", the ability to make millions of microchannels ("micro" in the sense that they measured micrometers in diameter) that handle very tiny quantities of fluids. This was the result of a US military program: the Defense Advanced Research Projects Agency (DARPA) wanted a system to quickly detect biological and chemical weapons and so in 1997 created a program called "Microflumes" to fund research in microfluidics. In 1978 James Angell at Stanford had already been working on "micromachines" and one of his students, Stephen Terry, in 1979 had unveiled what can be considered as the first "lab on a chip", a device for separating, identifying and analyzing the components of a gas (originally, it was commissioned by NASA and meant to analyze the atmosphere of Mars. But progress in MEMS and in microfluidics led to today's "lab-on-a-chip" products. In 1999 Hewlett-Packard's spinoff Agilent introduced the first commercial "lab-on-a-chip" product, the 2100 Bioanalyzer. Even more important was the Agilent 5100 of 2004. These constituted the vanguard of systems that enabled biotech startups to conduct analysis of thousands of DNA and protein samples per day. After the success of the Human Genome Project, the goal shifted to putting the whole human genome on a microarray. In 2002 Wilhelm Ansorge at the European Molecular Biology Laboratory (EMBL) in Germany succeeded.
The pharmaceutical industry kept growing in the area around South San Francisco, fueled in no small part by Stanford's School of Medicine. For example, in 2002 Israeli-born professor Daria Mochly-Rosen started KAI Pharmaceuticals.
Plexicon, founded in december 2000 in Berkeley by Croatian-born Israel biochemist Joseph Schlessinger and Korean-born structural biologist Sung-Hou Kim was one of the many "drug discovery" startups, i.e. companies that were not focused on one specific biotech experiment but on discovering a new metod of accelerating drug discovery in general.
In 2000 UC Berkeley chemist Henry Rapoport and others founded Aduro Biotech (later renamed Oncologic) to treat cancer, one of the first startups to marry nanotechnology and biotechnology.
Neurotech
There was also renewed interest in Artificial Intelligence, a field that had markedly declined since the heydays of the 1980s. However, the action came mostly from futurists and intellectuals rather than from practitioners, and the funding came from philanthropists rather than the academia or the government. The Singularity Institute for Artificial Intelligence (SIAI), devoted to super-human intelligence, was founded in 2000 in San Francisco by Eliezer Yudkowsky, while in 2002 Jeff Hawkins (of Palm Computing fame) founded the Redwood Neuroscience Institute in Menlo Park.
The Stanford Artificial Intelligence Laboratory was quietly experimenting with robots and in 2005 would win the "Grand Challenge", a race of driver-less cars funded by the DARPA in the Nevada desert, with its Stanley, a modified Volkswagen Touareg.
Greentech
Times of economic crisis had always been good for imagining completely new business sectors. An emerging theme in Silicon Valley was energy, especially after the 2001 terrorist attacks that highlighted how vulnerable the USA was to the whims of oil-producing countries. In 2001 KR Sridhar, an alumnus of India's prestigious National Institute of Technology who had worked on NASA's Mars mission, founded Ion America (renamed Bloom Energy in 2006) in Sunnyvale to develop fuel-cell technology to generate environmentally-friendly electricity. Within a few years it had raised $400 million in venture capital money. Its fuel cells (eventually unveiled in february 2010) were based on beach sand. Each unit cost between $700,000 and $800,000. Google and eBay were among the early adopters of these fuel-cell power generators. Fuel cells opened up the possibility of liberating individuals from the slavery of power plants and transmission grids.
Founded in 2002 in San Jose by Stanford engineering student Brian Sager and Martin Roscheisen of FindLaw fame, NanoSolar (the first solar energy company based in Silicon Valley) collaborated with Stanford University and Lawrence Berkeley National Laboratories on the development of an ink capable of converting sunlight into electricity, the foundation for its family of flexible, low-cost and light-weight solar cells.
Nanotech
Nanotechnology, on the other hand, seemed to benefit from the dotcom crash, as venture capitalists looked elsewhere to invest their money. The USA government enacted a National Nanotechnology Initiative in 2001, which helped fuel the sector. New start-ups in Silicon Valley included Nanosys, founded in 2001 to produce "architected" materials, and Innovalight, founded in 2002 and specializing in solar cell technology. Venture capitalists saw opportunities in the convergence of biotech, infotech and nanotech. However, the nano hype mainly resulted in books and organizations with pompous titles, such as "Kinematic Self-Replicating Machines" (2004) by Robert Freitas and Ralph Merkle, and the MIT Stanford Berkeley Nanotechnology Forum (2003).
In the old tradition of government intervention to boost high-tech investments, in 1999 the Central Intelligence Agency (CIA) set up an odd not-for-profit venture-capital firm in Menlo Park, In-Q-Tel, to invest in leading-edge technologies such as nanotech and biotech. One of their investments in Silicon Valley was Keyhole, founded in 2001 by Brian McClendon and John Hanke, that developed a geospatial data visualization tool (software to display three-dimensional representations of satellite images).
Creative Destruction
By the year 2000 something monumental had happened in the USA, despite the "dotcom crash". The high-tech economy of computers, biotech and telecommunications had passed in size the industries that had dominated manufacturing for almost a century: auto, oil, steel and aircraft. In fact, by 2000 the semiconductors industry had become the largest manufacturing industry in the USA. The USA was no longer the leading country in autos and steel, but it was in hardware, software and biotech. In these fields a revolution within the revolution had taken place: small young companies (such as Compaq, Dell, Cisco, SUN, Gateway, EMC, Apple, and Microsoft) had successfully eroded the market shares of the big older companies (such as IBM, HP and Cullinet) that had dominated in the previous decades. Many of the dominant high-tech companies of the 1970s and 1980s had actually disappeared, notably DEC. Something similar had happened within the semiconductors industry when Intel went past the old dominant players, Texas Instruments and Motorola. Pundits misquoted Schumpeter's "creative destruction" (1942), when in fact Schumpeter never praised the small startups (he thought that the big companies were "the most powerful engine of economic progress"). The "creative destruction" of the high-tech industry was almost the antithesis of Schumpeter's "creative destruction": it destroyed the very "engine of economic progress" while creating a bigger engine. Schumpeter had not foreseen that a proliferation of small dynamic firms could provide more momentum to progress than a group of large multinationals, and even displace the latter.
Innovation transformed into an erotic fetish. Richard Florida's book "The Rise of the Creative Class" (2002) created the myth of Silicon Valley. Clayton Christensen's "The Innovator's Dilemma" (1997) had turned Joseph Schumpeter's concept of "creative destruction" into "disruptive technologies" to explain Silicon Valley's boom. The word "innovation" spread from US publishing houses to the most remote corners of the world, becoming a quasi-religious mantra that was supposed to solve all problems.
Bionics
The Bay Area's passion for creative a society as inclusive as possible had always made it a friendly place for disabled people, particularly around the Berkeley campus. In 2000 the DARPA decided to fund a project at UC Berkeley's Robotics and Human Engineering Laboratory, to build technology capable of mobilizing paralyzed people. These "exoskeletons", named BLEEXes (Berkeley Lower Extremity Exoskeletons), were lightweight battery-powered artificial legs that helped a disabled person not only to walk but also to carry a heavy load. The first BLEEX was introduced in 2003. In 2005 the director of that laboratory, Homayoon Kazerooni, founded a company, Berkeley ExoWorks (later renamed Berkeley Bionics), to commercialize the devices. In 2010 Berkeley Bionics would introduce eSuit, a computer-controlled suit to make paraplegics walk. Berkeley Bionics would be later renamed one more time, to Ekso Bionics, and in 2012 Homayoon Kazerooni would found another startup of the same kind, Suitx.
This opened the era of "wearables" that had been pioneered at the MIT by the likes of Thad Starner and Steve Mann at the MIT Media Lab, although most of the progress took place in Europe. In 1998 Sundaresan Jayaraman's team at Georgia Tech developed the first version of the "Wearable Motherboard", a smart shirt. In 2000 a collaboration between Phillips Electronics and Levi Strauss resulted in the first commercially-available wearable electronic garments, the ICD+ jacket, incorporating GSM cellular communications and MP3 music player. In 1998 Finland's Clothing+ (aka Mikko Malmivaara) developed a heart-rate sensing shirt and in 2000 Reima commercialized Clothing+'s "Smart Shout", a body belt for hands-free mobile phone communications. In 2000 SoftSwitch (England) introduced a fabric-control keypad to incorporate audio communications and heating systems into jackets for winter sports. In 2002 an MIT Media Lab alumna, artist Maggie Orth, founded International Fashion Machines (IFM) to make digital interactive textiles.
Anthropology of E-socializing
Email became pervasive in the 1990s. Email and the web came rapidly to be used not only for business but also for personal matters, fun and family. High-tech tools were not social in themselves but the people who produced them and used them daily discovered their "social" value. They soon came to be used as social tools too to replace the lacking social life of Silicon Valley; to create networks of soccer players, hikers, music listeners, etc. This "discovery" that high-tech tools were valuable for building social networks would have widespread implications. It also meant that individuals came to be progressively more and more often plugged into the network.
Email developed a new mindset of interaction with the community: it allowed people to delay a response, to filter incoming messages, to assign priorities. Of course, this had already been made possible by answering machines; but email was written and was stored on the computer. Email also allowed a message to have multiple recipients, which led to the creation of mailing lists. In other words, email increased control over personal communications.
Electronic socializing also helped remove some of the ethnic barriers that still existed. After all, in 1997 more than 80% of newborn babies had parents of the same ethnic group. For a region with such a large percentage of foreign-born people, it was surprising that the ethnic background still mattered so much. The advent of e-socializing removed some of the formalities that one expected from friends.
High-tech also fostered mobility of information at the expense of mobility of bodies. Telecommuting became more common, if not widespread. Telecommuters lived and worked in the same place: the home office. And they worked when inspired. They had no work hours, as long as they delivered their task by the deadline. Teleconferencing and telecommuting further reduced personal interactions. Co-workers became invisible although present 24 hours a day. On one hand, high-tech tools made one reachable anywhere any time. On the other hand, it also estranged one from the community.
Silicon Valley engineers were the first users of their technologies. But the opposite was also true: Silicon Valley engineers could also be the last users of technologies developed in other regions. For example, the rate of adoption of cellular phones was a lot slower than in Europe.
One reason why the virtual community was so successful was that the physical community was so unsuccessful: Silicon Valley was a sprawling expanse of low-rise buildings but did not have an identity (other than the identity of not having an identity). San Jose, in particular, had become one of the richest cities in the nation. It was, however, not a city: just an aggregate of nondescript neighborhoods that had grown independently over the years. In true Silicon Valley fashion, the city decided to create a downtown area overnight that would introduce a flavor of European lifestyle. It spent almost one billion dollars to create a large shopping, dining and entertainment complex right in the middle of the city: in 2002 Santana Row opened for business. It was totally artificial, of course.
The Myth
Throughout the 1990s, thanks to the dotcom boom and to the favorable global political environment (the Cold War had ended in 1991 with a complete conversion of the communist world to capitalism), there was much discussion about how to export Silicon Valley's model to other regions of the world, notably Singapore, India and China. Nobody found quite the right formula, although they all took inspiration from many aspects of Silicon Valley. In the USA itself there were different opinions on how to "create". For example, in 2000 Microsoft's former research boss Nathan Myhrvold founded Intellectual Ventures, a secretive enterprise with a business model to purchase as many patents as possible in just about every imaginable field; but the emphasis was more on filing patents than on incubating viable companies. Owning a huge portfolio of patents is mainly a legal business, involving armies of intellectual-property attorneys, and it can be lucrative because any other company trying to develop a product in the same sector will have to buy the related patents. Of course, this "patent farming" business hampers rather than fostering innovation because many smaller companies will never even think of venturing into a field for which a billion-dollar venture fund owns a patent. Regardless of the philanthropic merits of encouraging inventors from all over the world, Silicon Valley looked down on this kind of approach: it was artificial and it did not create a real integrated networked economy.
This business was so lucrative that soon other "patent trolls" would appear, notably VirnetX, that sued Microsoft in 2010 and Apple in 2012, founded in 2006 near Santa Cruz by Kendall Larsen, and Virginia-based Straight Path IP, that sued Sony, LG, Toshiba, Apple and Verizon within one year of being founded in 2013. These "non-practicing entities" used questionable tactics to extort licensing fees from rich corporations using ambiguous patents as their legal weapons. Apple wrote: "Smartflash makes no products, has no employees, creates no jobs, has no US presence, and is exploiting our patent system to seek royalties for technology Apple invented." This was actually the one case that had some merit (Smartflash was founded by British inventor Patrick Racz, who had really invented the technology he was defending), but the description of the patent troll well reflected the perception in Silicon Valley about these lawyer-dominated companies (or non-companies). The fact that it was legal to be a "patent troll" did not diminish the fact that it was amoral. Raping women used to be legal in prehistoric time, and so was slavery not long ago. That doesn't mean it was moral. It simply means that governments took a long time to enact appropriate laws to punish those practicing rape or slavery. Straight Path's website claimed "Straight Path, its executives, directors, and employees operate with the highest levels of personal and professional integrity." Not many were impressed by the "personal integrity" of patent trolls.
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Silicon Graphics: Gone But Not Forgotten
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At its peak in the 1990s, Silicon Graphics had legendary status among 3D and graphic designers who leveraged the unique power of these workstations that were at...
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TechSpot
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https://www.techspot.com/article/2142-silicon-graphics/
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You may have heard of SiliconGraphics, later known as Silicon Graphics, Inc, and then simply SGI, but few home users outside of an enthusiastic hobbyist community ever used its computers. That's because SGI was dedicated to manufacturing high-performance workstations, software design, and supercomputers for professionals specializing in 3D graphics.
At its peak in the 1990s, Silicon Graphics had legendary status among 3D and graphic designers who leveraged the unique power of these workstations that were at cutting edge of visual computing.
The legacy of Silicon Graphics can still be seen in the Nintendo 64, which they helped develop, and several Hollywood movies, including Jurassic Park, Twister, Congo, Toy Story, and many others, but let's not get ahead of ourselves...
Early Days
Silicon Graphics got its start in a day when most people did not even have a home computer. The year was 1982. James Clark left his job at Stanford University, where he was an associate professor of electrical engineering with the vision of creating powerful computers that could perform the complex computations required in 3D animation.
On his departure from Stanford, Clark took seven talented graduate students with him. Among them was Kurt Akeley, who engineered the frame buffers and processor subsystems in the first SGI IRIS terminals and the CAD systems used to develop them.
He also created the RealityEngine for the Crimson and Onyx "visualization supercomputers" and was integral in the development of the OpenGL graphics specification.
David Brown, another Stanford alumnus and co-founder of SGI, had previously helped develop the SUN workstation over 10 years prior to the founding of Sun Microsystems. Brown created the "PM1" processor boards for the first SGI workstations. He later moved on to work for Digital Equipment (DEC) and then Sun Microsystems.
Another key player in the founding of Silicon Graphics was Charles Kuta. Having achieved his Masters in electronics and software engineering, Kuta joined Clark and helped design the Geometry Engine. The Geometry Engine managed 3D modeling primitives at the hardware level – the geometry pipelines that handled model space to screen space viewing transformations.
SGI released its first-generation IRIS systems (models 1000 and 1200) in 1984. These were not standalone workstations, but rather raster display units intended to be connected to more general-purpose machines like the DEC VAX. The early IRIS models used a PM1 CPU board, a variant of the one used by Stanford's SUN workstation that David Brown had helped develop. These systems came equipped with 8 MHz Motorola 68000 processors and 768kB of RAM but no disk drive.
Later that same year, SGI would launch the 1400 and 1500. Each machine got a bump up to 10 MHz and 1.5 MB RAM. They also each had disk drives. The 1400 had a 72MB ST-506, and the 1500 sported a gigantic 474 MB SMD-based drive with a Xylogics disk controller.
SGI's 2000 and 3000 series would emerge starting between 1985 and 1989. The various systems, including a "Turbo" line, were still using Motorola processors, albeit faster ones, and used the same graphics hardware. However, Brown had re-engineered the PM1 CPU module (now the PM2) to handle the higher frequency silicon. They had more RAM, and ST-506 and SMD disk drives became standard. They also sported Weitek Floating Point Accelerator boards.
By the time SGI discontinued the line in 1989, it had sold around 3,500 systems in total. Such a small number of units shipped may seem insignificant, but they were costly machines ranging from $45,000 to $100,000 each. By 1988, SGI's revenue had steadily climbed to $153 million.
SGI RISC Era
In the early 1990s, SGI introduced its first RISC systems. In 1991, the company produced its first 64-bit Crimson workstations powered by MIPS R4000 microprocessors. In a bid to secure a steady supply of MIPS processors, SGI bought the company, renaming it MIPS Technologies, Inc. in 1992.
The acquisition of MIPS opened the door to other business ventures outside of SGI's traditional wheelhouse.
In 1993, Nintendo approached SGI with the proposition of designing the company's next GPU. The two companies penned the deal that summer, and SGI went to work developing the "Reality Coprocessor" (RCP). Three years later, Nintendo released its first 64-bit gaming console, the Nintendo 64.
Silicon Graphics' most significant client during its RISC phase was Hollywood.
Silicon Graphics' most significant client during its RISC phase was Hollywood. Multiple studios bought up SGI machines to do post-production CG work and 3D animation in movies like Jurassic Park (1993), Johnny Mnemonic (1995), Jerry Maguire (1996), Anastasia (1997), and Lost in Space (1998).
According to IMDb, various studios used Silicon Graphics workstations in more than 40 productions between 1993 and 2003.
But Hollywood was not the only beneficiary of SGI's innovative technologies. Its early workstations allowed users access to 3D graphics subsystems via its proprietary API known as IRIS Graphics Language. IRIS GL evolved over the years, and with each new feature, it became more bloated, harder to maintain, and complicated to use.
Movies Made with SGI
Source: Gerhard Lenerz
Movie Year Equipment Abyss 1989 early IRIS 4D (supposedly including 4D/120) Antz 1998 O2 (166), Origin 2000 (270) Casper unknown Cats & Dogs 2001 O2, Octane 2, Origin 200, VW 230, VW 320 Disclosure 1994 Indy Evolution 2001 O2, Octane 2, Origin 200, VW 230, VW 320 Final Fantasy 2001 unknown Forrest Gump unknown Frighteners 1996 Indy, Indigo 2 Gladiator O2, Indigo 2 Extreme, Origin 200, Octane, Onyx, Dual Pentium Hollow Man O2, Octane, Onyx, Origin 2000, Power Challenge Ice Age Octane, Octane 2 Lord of the Rings 2000 Octane, Origin 2000, VW 230, VW 320 Jumanji unknown Jurassic Park 1993 PowerSeries Twin Tower Jurassic Park 2 1997 unknown Jurassic Park 3 2001 unknown (O2 workstations) Shrek 2001 unknown Star Wars Episode 1 Indy, Indigo 2 (possibly O2, Origin 2000) Starship Troopers unknown Terminator 2 1991 unknown (4D-era) The Adventures of Rocky and Bullwinkle Onyx 2 The Crow unknown The Hunt for Red October unknown The Mask unknown The Matrix 1999 Octane, Onyx 2, Origin 200 The Mummy unknown The Perfect Storm O2, Origin 2000 The Rugrats Movie 1998 O2, Origin 200 Titanic unknown Toy Story unknown Twister 1996 Challenge, Power Challenge What Dreams May Come Octane
OpenGL is Born
In 1992, SGI decided that IRIS GL had become too complex, but it did not want to abandon it and start from scratch. Instead, developers re-engineered the API and began licensing it at little cost to its competitors. And OpenGL was born. The move allowed programmers to write cross-platform 3D graphics programs that were just as fast and efficient as IRIS systems had been.
SGI organized the OpenGL Architecture Review Board to oversee further developments contributed by the industry. The OpenGL standard remains the only cross-platform 3D-graphics API and has even been ported to cell phones and other portable devices. Its main competitor is Microsoft's Direct3D, a DirectX API that only runs on Windows-based systems.
Management was of the opinion that the company should begin using its clout to seek growth by way of acquisition and exploration of secondary branches of the business.
This did not sit well with founder Clark, who wanted to continue focusing on developing high-end hardware. The stalemate prompted Clark to leave SGI in January 1994. The following month he co-founded the internet browser startup Mosaic Communications Corporation, which later became known as Netscape. After Clark's departure, a series of bad investments in the late 1990s and early 2000s foreshadowed SGI's decline.
In 1995, the company acquired three firms – Alias Research, Kroyer Films, and Wavefront Technologies – for about $500 million total. It merged the companies to form Alias/Wavefront, a high-end 3D graphics software development arm. Nine years later, SGI wrote it off as a loss, selling the division for about $57 million to equity investment firm Accel-KKR.
A Short-Lived Supercomputer Venture
In February 1996, SGI decided to dabble in the supercomputer business with the purchase of Cray Research for $740 million. It renamed the company "Cray Business Systems Division," and began working to develop technology (branded CrayLink) that could be integrated into SGI's high-end server line.
This venture turned out to be very short-lived. SGI turned around and sold the division to Sun Microsystems that May, only three months after the acquisition, but retained the Cray branding. Although the details of the deal remain undisclosed, a Sun executive who helped broker the deal admitted that the acquisition was "significantly less than $100 million."
"SGI was desperate," Sun Executive Vice President John Shoemaker told Forbes. "They were running out of cash, and they needed to get the assets off its books. [We paid] less than you would imagine."
In March 2000, SGI finally sold off the Cray brand and its Cray product line to Tera Computer Company for $35 million and a million shares. In September of that year, the floundering 3D graphics firm purchased Intergraph Computer Systems' Zx10 line of Windows-based workstations for around $100 million. It rebranded the systems under the SGI name but discontinued them less than a year later in June 2001.
Trouble in Graphics-Land, Demise
June 2001 also marked the beginning of the end of SGI. In 2003, the company vacated its headquarters in Mountain View, California and leased the building to Google. The following year, it sold off Alias/Wavefront, and by November 2005, SGI was delisted from the New York Stock Exchange after six consecutive years of declining sales.
SGI filed for Chapter 11 bankruptcy protection in May 2006. The proceedings concluded that October. A year later, major shareholder Southpaw Asset management encouraged its clients to sell off their SGI stock due to declining value.
In August 2008, SGI posted $354.1 million in revenue, a 24-percent decline from the previous year and the last earnings report it would file. Come December of that year, Nasdaq warned SGI that it was considering delisting the company because of its financial struggling, but it never came to that.
On April 2009, SGI filed for Chapter 11 again and was sold to Fremont's Rackable Systems for $25 million. Rackable changed the name to Silicon Graphics International, kept the SGI trademark, and changed its Nasdaq ticker from RACK to SGI shortly after the purchase. SGI primarily dealt in high-end Linux servers rather than 3D graphics systems until 2016, when it was announced that Hewlett Packard Enterprise (HPE) would acquire SGI for approximately $275 million.
The SGI name also lives on through a hardcore hobbyist community. Budding filmmakers used to purchase legacy workstations through a "thriving" second-hand market. For example, a hobbyist can pick up an Indy, which went for around $14,000 in the 1990s, for about $40 now.
Note: This feature was originally published on December 2020. We have revised it and bumped it due to its historical significance and old school computing nature, as part of our #ThrowbackThursday initiative.
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2024-01-05T16:29:56-05:00
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Posts about Silicon Graphics written by xsisupport
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en
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https://secure.gravatar.com/blavatar/684e24bcb289054e362c26f2f6d3995688dd8f8232b4d4575d5279abcabfea3a?s=32
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eX-SI
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https://xsisupport.com/tag/silicon-graphics/
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GAME DEVELOPER • JUNE/JULY 1995 Microsoft’s Softimage is suddenly challenged by Silicon Graphics’s merger with Alias and Wavefront. What can game developers expect from these two?
3D Graphics Goliaths Square Off
Yesterday, as I was cleaning out a bookshelf in our office, I came upon an issue of Byte magazine from Aug., 1987. Although I was throwing everything away, I had an urge to flip through its pages—there’s something compelling about a computer magazine that’s over seven years old. Volume 12, number 9 of Byte may only have been 49 in dog-years, but it was much older in computer-years. I couldn’t believe it—ads for 386 16Mhz computers selling for $4,400, 9600-baud modems for $1,000, and articles about EGA graphics. It’s amazing we got through those rough times. (Some know-it-all will read this in 2002 and say the same thing about 1995, no doubt.)
One article that caught my eye focused on the technique of transferring cartoon-quality film (a clip from Disney’s Snow White and the Seven Dwarves) into digitized EGA display. Yeeeesshhh, the final result looked horrible. So, maybe the time wasn’t right back then for creating digital media from live footage. But, like a rolling snowball picking up size and speed, the graphics industry is maturing to the point where there’s not too much anyone can’t do at an affordable price. Microsoft and Silicon Graphics (SGI), thanks to recent acquisitions and mergers, are helping to fuel this momentum.
Competitive Partners
The relationship between Microsoft and Silicon Graphics has changed enormously over the past 12 months. Silicon Graphics is the dominant player in the graphics
workstation market, and Microsoft is the giant in the PC software market.
However, when Microsoft acquired Softimage last summer, Microsoft gained a powerful suite of IRIX-based animation, editing, compositing, and cel animation tools. It instantly became a key partner of SGI. Eight months later—last February—SGI merged with Alias and Wavefront, two companies that compete against Softimage on the SGI platform. How have these developments changed the relationship between Silicon Graphics and Microsoft? More importantly, how does it affect their customers?
I spoke with Andrew Wright, group product manager of advanced authoring tools for Microsoft/Softimage, and Dave Larson, director of marketing for Silicon Studios, a wholly owned subsidiary of Silicon Graphics, about the actions their companies have taken recently in the digital entertainment industry.
The most recent event, Silicon Graphics’ merger with Alias and Wavefront, achieved two objectives for SGI, according to Larson.
“We felt that by merging with Alias and Wavefront,” Larson explained, “we could get two of the most important groups of engineers together with our engineers and accomplish two things. [The first objective] is to drive the development of our 3D software environment… [Second,] we don’t have expertise in entertainment and industrial [software] markets at the customer level like we do with hardware. We’re getting a sales force that knows the customers really well at the application level, a sales force that has a much greater depth of knowledge.”
What was Wright’s reaction to the SGI merger?
“Surprise,” he said. “From [Microsoft’s] perspective, it actually puts us in a stronger position because we feel that for our customers a cross-platform solution is important. Where they want the performance of SGI, we provide it, where they want the price-to-performance ratio and openness of a Windows NT system we’ll provide that to them. We’ll be the only high-end 3D animation vendor that’s effectively able to execute a crossplatform strategy.”
I sensed no edginess from either Wright or Larson about the relationship between Microsoft and SGI, and both played up the positive aspects of their new product lines. Wright stressed the fact that many of SGI’s partners, not just Microsoft, were now competitors, but that it wouldn’t make sense for SGI to consider them as such: “Yes, we are a competitor to [Silicon Graphics], but they’re also a competitor to a number of their other ISVs [independent software vendors]. Companies like Side Effects, Discreet Logic, Avid… One thing I can say absolutely outright is that if SGI loses their third-party applications as a result of this merger, they’re dead in the water. I think they’ve almost got to overcompensate to make sure that their third party ISVs are treated fairly,” Wright commented.
Dave Larson adamantly agreed.
“We’re going to treat [Microsoft] as we do a whole category of partners who will get early access information, and it’s based on business parameters. These guys, as well as other 3D vendors, are still selling SGI software and we’re going to do whatever we can to make sure they continue to do so. That’s our business.”
Softimage off the SGI Platform?
Upon acquiring Softimage last year, Microsoft stated its intention to port the Softimage tools over to Windows NT. I asked Wright whether Microsoft had plans to pull Softimage products off the SGI platform at a later date and focus exclusively on its own operating system implementation.
“No. One of the key reasons Microsoft bought Softimage is that Softimage had a tremendous presence in the community that was producing the world’s best content. ILM [Industrial Light and Magic]. Greenberg. Rocket Science. For those companies, the SGI platform is absolutely critical because they need that level of performance… We think Windows NT and the associated hardware developments are going to provide a very price-attractive alternative. But in no way is that going to put SGI out of business. They are going to continue to do very well and we need to be there.”
Microsoft looks at its partner/competitor relationship with SGI in the same light as its association with Apple.
“We’ll continue to invest in SGI,” Wright stated. “It’s very similar to our situation on the Macintosh. Microsoft makes a lot of money on the Macintosh and it’s a very vital platform for us at the application level, even though we don’t own the operating system. The fact that we’ve got applications on Windows 95 as well does not in any way affect our investment in the Macintosh platform.”
Wright sees Silicon Graphics remaining the superior platform for highend digital video and three-dimensional animation over Windows NT, just as the Macintosh held its position as the superior platform for graphic design when Windows 3.0 was introduced.
“Macintosh had a very strong position in graphic design. Windows came in and everybody thought that it was going to completely take over the market. As a result, companies like Aldus and Adobe developed their applications first on Windows and second on Macintosh. But they realized over time that the Mac wasn’t going to go away… We think a similar thing is going to happen in the SGI world,” Wright said.
Porting Softimage Products to Windows NT
Upon acquiring Softimage, Microsoft announced that it would port the company’s toolset to Windows NT. Wright indicated that Softimage products would be available on Windows NT this year, but he declined to be more specific, fearing that divulging an estimated date could raise false hopes.
I wanted to know what strengths Windows NT could offer over the SGI platform to game developers. After all, SGI has been targeting this market for years and has optimized its hardware for high-end graphics and animation. Wright responded: “We think that the Windows NT platform will offer very attractive price-to-performance ratio in the range of performance that it delivers. We also feel that for people who have PC-based networks, for example developers who are using [Autodesk’s] 3D Studio, it will be important for them to run a high-quality 3D product in the same environment that they’re running their other tools. I think that’s going to be key to the games development area.”
Downward Pressure on Prices
In addition to announcing the porting of Softimage tools over to Windows NT, Microsoft announced in January that it was slashing the price of all Softimage software by up to 50%. What was behind this aggressive move? Wright explained:
“Over the last couple of years, interactive developers [have begun to] require [highend] tools as games have become more sophisticated. We looked at our pricing structure and said, ‘Well, those prices make sense if we continue to maintain our high-end feature set for our traditional market.’ But if [Microsoft] really wants to penetrate the market for game developers as well as other emerging interactive media, it’s important to have more aggressive price points and maintain that leadership position.”
A large number of graphics and animation products have been launched for the Windows, DOS, and Macintosh platforms recently by companies like Caligari and Strata. Although these products aren’t in the same class of function or performance as either the Microsoft or SGI tools on IRIX, they seem to be exerting pressure on software prices for the entire market, regardless of platform. I asked Dave Larson how Silicon Graphics viewed these lower-priced products, and how his company would respond.
“We’re moving down in terms of markets,” declared Larson. “As our price points come down, we’re cutting deeper into various markets… Historically, SGI has been perceived as vastly more expensive and out of reach, a boutique kind of machine. We think we’re rapidly expanding beyond that, and that we’re within reach for a lot of people [developing digital entertainment] for a living. It’s all about how much time you have to get your work done. For instance, a friend of mine just came up who’s been doing a lot of audio work on the Mac, and he just started using a new audio application on our platform. He says it’s dramatically affected his work just after a few days of working with it. What he used to think ahead to do he now does in real time. He can test his decisions as he goes. That’s the metaphor for performance change. Everything happens so much more quickly [on the SGI platform], and your creativity can increase.”
Sega and Nintendo Choose Sides
There’s an interesting sidebar concerning SGI and Microsoft. The two archrivals in the game cartridge market, Nintendo and Sega, have gone to separate corners for their respective development tools, and you can probably guess whom each has enlisted. In 1994, Nintendo selected Alias (whose software was used to create the Super NES blockbuster Donkey Kong Country) as the authorized graphics development system for both current games and next-generation 64-bit games. Last January, Sega chose Softimage 3D as the official three-dimensional development tool for the new SegaSaturn game platform. I’m not saying that this is an instance of “any enemy of my enemy is my friend,” but it is predictable political maneuvering.
As long as the Softimage tools on IRIX don’t take a distant second priority to their Windows NT version, users stand to gain from a price war between two resource-rich companies like Silicon Graphics and Microsoft. Feature sets and performance should evolve more rapidly, and it undoubtedly will spur other SGI platform competitors to keep up.
You’d better get used to seeing more companies merging or acquired as the digital entertainment market expands—it’s a natural consolidation that should continue for the next couple of years.
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https://hbr.org/1993/11/mastering-chaos-at-the-high-tech-frontier-an-interview-with-silicon-graphicss-ed-mccracken
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en
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Mastering Chaos at the High-Tech Frontier: An Interview with Silicon Graphics’s Ed McCracken
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[
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[
"Steven Prokesch"
] |
2014-08-01T04:04:00+00:00
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“The key to achieving competitive advantage isn’t reacting to chaos; it’s producing that chaos.”
|
/resources/images/favicon.ico
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Harvard Business Review
|
https://hbr.org/1993/11/mastering-chaos-at-the-high-tech-frontier-an-interview-with-silicon-graphicss-ed-mccracken
|
“The key to achieving competitive advantage isn’t reacting to chaos; it’s producing that chaos.”
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5018
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dbpedia
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3
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https://enlyft.com/tech/products/silicon-graphics-international-sgi
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en
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Companies using Silicon Graphics International (SGI) and its marketshare
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1,643 companies use Silicon Graphics International (SGI). Silicon Graphics International (SGI) is most often used by companies with >10000 employees & $>1000M in revenue. Our usage data goes back 8 years and 6 months.
|
en
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/tech/static/images/icon-logo.png
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https://enlyft.com/tech/products/silicon-graphics-international-sgi
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What happens once I submit a request?
Someone from the Enlyft team will get back to you within 24 hours with more information.
How much is the cost?
The cost depends on various factors, such as number of records, number of products and use of advanced filtering and search criteria.
Will I start getting spam on my email?
Definitely not! We will not be adding you to an email list or sending you any marketing materials without your permission.
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5018
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0
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https://www.ithistory.org/db/companies/silicon-graphics-sgi
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en
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Silicon Graphics (SGI)
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2015-12-15T04:27:26-08:00
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Silicon Graphics, Inc. (commonly initialised to SGI, historically sometimes referred to as Silicon Graphics Computer Systems or SGCS) was a manufacturer of high-performance computing solutions, including computer hardware and software, founded in 1981 by Jim Clark. Its initial market was 3D graphics display terminals, but its products, strategies and market positions evolved
|
en
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https://www.ithistory.org/sites/all/themes/Porto_sub/favicon.ico
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IT History Society
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https://www.ithistory.org/db/companies/silicon-graphics-sgi
|
Silicon Graphics, Inc. (commonly initialised to SGI, historically sometimes referred to as Silicon Graphics Computer Systems or SGCS) was a manufacturer of high-performance computing solutions, including computer hardware and software, founded in 1981 by Jim Clark. Its initial market was 3D graphics display terminals, but its products, strategies and market positions evolved significantly over time.Initial systems were based on the Geometry Engine that Clark and Marc Hannah had developed at Stanford University, and were derived from Clark's broader background in computer graphics. The Geometry Engine was the first very-large-scale integration (VLSI) implementation of a geometry pipeline, specialized hardware that accelerated the "inner-loop" geometric computations needed to display three-dimensional images.
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5018
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https://xsisupport.com/tag/silicon-graphics/
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Silicon Graphics
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2024-01-05T16:29:56-05:00
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Posts about Silicon Graphics written by xsisupport
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en
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https://secure.gravatar.com/blavatar/684e24bcb289054e362c26f2f6d3995688dd8f8232b4d4575d5279abcabfea3a?s=32
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eX-SI
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https://xsisupport.com/tag/silicon-graphics/
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GAME DEVELOPER • JUNE/JULY 1995 Microsoft’s Softimage is suddenly challenged by Silicon Graphics’s merger with Alias and Wavefront. What can game developers expect from these two?
3D Graphics Goliaths Square Off
Yesterday, as I was cleaning out a bookshelf in our office, I came upon an issue of Byte magazine from Aug., 1987. Although I was throwing everything away, I had an urge to flip through its pages—there’s something compelling about a computer magazine that’s over seven years old. Volume 12, number 9 of Byte may only have been 49 in dog-years, but it was much older in computer-years. I couldn’t believe it—ads for 386 16Mhz computers selling for $4,400, 9600-baud modems for $1,000, and articles about EGA graphics. It’s amazing we got through those rough times. (Some know-it-all will read this in 2002 and say the same thing about 1995, no doubt.)
One article that caught my eye focused on the technique of transferring cartoon-quality film (a clip from Disney’s Snow White and the Seven Dwarves) into digitized EGA display. Yeeeesshhh, the final result looked horrible. So, maybe the time wasn’t right back then for creating digital media from live footage. But, like a rolling snowball picking up size and speed, the graphics industry is maturing to the point where there’s not too much anyone can’t do at an affordable price. Microsoft and Silicon Graphics (SGI), thanks to recent acquisitions and mergers, are helping to fuel this momentum.
Competitive Partners
The relationship between Microsoft and Silicon Graphics has changed enormously over the past 12 months. Silicon Graphics is the dominant player in the graphics
workstation market, and Microsoft is the giant in the PC software market.
However, when Microsoft acquired Softimage last summer, Microsoft gained a powerful suite of IRIX-based animation, editing, compositing, and cel animation tools. It instantly became a key partner of SGI. Eight months later—last February—SGI merged with Alias and Wavefront, two companies that compete against Softimage on the SGI platform. How have these developments changed the relationship between Silicon Graphics and Microsoft? More importantly, how does it affect their customers?
I spoke with Andrew Wright, group product manager of advanced authoring tools for Microsoft/Softimage, and Dave Larson, director of marketing for Silicon Studios, a wholly owned subsidiary of Silicon Graphics, about the actions their companies have taken recently in the digital entertainment industry.
The most recent event, Silicon Graphics’ merger with Alias and Wavefront, achieved two objectives for SGI, according to Larson.
“We felt that by merging with Alias and Wavefront,” Larson explained, “we could get two of the most important groups of engineers together with our engineers and accomplish two things. [The first objective] is to drive the development of our 3D software environment… [Second,] we don’t have expertise in entertainment and industrial [software] markets at the customer level like we do with hardware. We’re getting a sales force that knows the customers really well at the application level, a sales force that has a much greater depth of knowledge.”
What was Wright’s reaction to the SGI merger?
“Surprise,” he said. “From [Microsoft’s] perspective, it actually puts us in a stronger position because we feel that for our customers a cross-platform solution is important. Where they want the performance of SGI, we provide it, where they want the price-to-performance ratio and openness of a Windows NT system we’ll provide that to them. We’ll be the only high-end 3D animation vendor that’s effectively able to execute a crossplatform strategy.”
I sensed no edginess from either Wright or Larson about the relationship between Microsoft and SGI, and both played up the positive aspects of their new product lines. Wright stressed the fact that many of SGI’s partners, not just Microsoft, were now competitors, but that it wouldn’t make sense for SGI to consider them as such: “Yes, we are a competitor to [Silicon Graphics], but they’re also a competitor to a number of their other ISVs [independent software vendors]. Companies like Side Effects, Discreet Logic, Avid… One thing I can say absolutely outright is that if SGI loses their third-party applications as a result of this merger, they’re dead in the water. I think they’ve almost got to overcompensate to make sure that their third party ISVs are treated fairly,” Wright commented.
Dave Larson adamantly agreed.
“We’re going to treat [Microsoft] as we do a whole category of partners who will get early access information, and it’s based on business parameters. These guys, as well as other 3D vendors, are still selling SGI software and we’re going to do whatever we can to make sure they continue to do so. That’s our business.”
Softimage off the SGI Platform?
Upon acquiring Softimage last year, Microsoft stated its intention to port the Softimage tools over to Windows NT. I asked Wright whether Microsoft had plans to pull Softimage products off the SGI platform at a later date and focus exclusively on its own operating system implementation.
“No. One of the key reasons Microsoft bought Softimage is that Softimage had a tremendous presence in the community that was producing the world’s best content. ILM [Industrial Light and Magic]. Greenberg. Rocket Science. For those companies, the SGI platform is absolutely critical because they need that level of performance… We think Windows NT and the associated hardware developments are going to provide a very price-attractive alternative. But in no way is that going to put SGI out of business. They are going to continue to do very well and we need to be there.”
Microsoft looks at its partner/competitor relationship with SGI in the same light as its association with Apple.
“We’ll continue to invest in SGI,” Wright stated. “It’s very similar to our situation on the Macintosh. Microsoft makes a lot of money on the Macintosh and it’s a very vital platform for us at the application level, even though we don’t own the operating system. The fact that we’ve got applications on Windows 95 as well does not in any way affect our investment in the Macintosh platform.”
Wright sees Silicon Graphics remaining the superior platform for highend digital video and three-dimensional animation over Windows NT, just as the Macintosh held its position as the superior platform for graphic design when Windows 3.0 was introduced.
“Macintosh had a very strong position in graphic design. Windows came in and everybody thought that it was going to completely take over the market. As a result, companies like Aldus and Adobe developed their applications first on Windows and second on Macintosh. But they realized over time that the Mac wasn’t going to go away… We think a similar thing is going to happen in the SGI world,” Wright said.
Porting Softimage Products to Windows NT
Upon acquiring Softimage, Microsoft announced that it would port the company’s toolset to Windows NT. Wright indicated that Softimage products would be available on Windows NT this year, but he declined to be more specific, fearing that divulging an estimated date could raise false hopes.
I wanted to know what strengths Windows NT could offer over the SGI platform to game developers. After all, SGI has been targeting this market for years and has optimized its hardware for high-end graphics and animation. Wright responded: “We think that the Windows NT platform will offer very attractive price-to-performance ratio in the range of performance that it delivers. We also feel that for people who have PC-based networks, for example developers who are using [Autodesk’s] 3D Studio, it will be important for them to run a high-quality 3D product in the same environment that they’re running their other tools. I think that’s going to be key to the games development area.”
Downward Pressure on Prices
In addition to announcing the porting of Softimage tools over to Windows NT, Microsoft announced in January that it was slashing the price of all Softimage software by up to 50%. What was behind this aggressive move? Wright explained:
“Over the last couple of years, interactive developers [have begun to] require [highend] tools as games have become more sophisticated. We looked at our pricing structure and said, ‘Well, those prices make sense if we continue to maintain our high-end feature set for our traditional market.’ But if [Microsoft] really wants to penetrate the market for game developers as well as other emerging interactive media, it’s important to have more aggressive price points and maintain that leadership position.”
A large number of graphics and animation products have been launched for the Windows, DOS, and Macintosh platforms recently by companies like Caligari and Strata. Although these products aren’t in the same class of function or performance as either the Microsoft or SGI tools on IRIX, they seem to be exerting pressure on software prices for the entire market, regardless of platform. I asked Dave Larson how Silicon Graphics viewed these lower-priced products, and how his company would respond.
“We’re moving down in terms of markets,” declared Larson. “As our price points come down, we’re cutting deeper into various markets… Historically, SGI has been perceived as vastly more expensive and out of reach, a boutique kind of machine. We think we’re rapidly expanding beyond that, and that we’re within reach for a lot of people [developing digital entertainment] for a living. It’s all about how much time you have to get your work done. For instance, a friend of mine just came up who’s been doing a lot of audio work on the Mac, and he just started using a new audio application on our platform. He says it’s dramatically affected his work just after a few days of working with it. What he used to think ahead to do he now does in real time. He can test his decisions as he goes. That’s the metaphor for performance change. Everything happens so much more quickly [on the SGI platform], and your creativity can increase.”
Sega and Nintendo Choose Sides
There’s an interesting sidebar concerning SGI and Microsoft. The two archrivals in the game cartridge market, Nintendo and Sega, have gone to separate corners for their respective development tools, and you can probably guess whom each has enlisted. In 1994, Nintendo selected Alias (whose software was used to create the Super NES blockbuster Donkey Kong Country) as the authorized graphics development system for both current games and next-generation 64-bit games. Last January, Sega chose Softimage 3D as the official three-dimensional development tool for the new SegaSaturn game platform. I’m not saying that this is an instance of “any enemy of my enemy is my friend,” but it is predictable political maneuvering.
As long as the Softimage tools on IRIX don’t take a distant second priority to their Windows NT version, users stand to gain from a price war between two resource-rich companies like Silicon Graphics and Microsoft. Feature sets and performance should evolve more rapidly, and it undoubtedly will spur other SGI platform competitors to keep up.
You’d better get used to seeing more companies merging or acquired as the digital entertainment market expands—it’s a natural consolidation that should continue for the next couple of years.
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https://www.wired.com/2004/11/whatever-happened-to-sgi/
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Whatever Happened to SGI?
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"WIRED Staff",
"Rhett Allain",
"Andy Greenberg",
"Chris Baraniuk",
"Matt Burgess",
"Emily Mullin",
"Mara Magistroni",
"Rachel Connolly",
"David Cox",
"Isabel Fraser"
] |
2004-11-26T02:00:00-05:00
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What high-powered, high-design, graphics-oriented, Unix-based computers are beloved by their fanatical users? Clue: It's not what you think. By Jason Walsh.
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en
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https://www.wired.com/verso/static/wired/assets/favicon.ico
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WIRED
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https://www.wired.com/2004/11/whatever-happened-to-sgi/
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In California there's a computer manufacturer that makes powerful machines beloved by a tiny niche of creative users, featuring a media-oriented Unix operating system and stunning industrial design. But it's not Apple Computer.
The company is Silicon Graphics Incorporated, or SGI, which once was famous for its high-powered graphics and 3-D workstations but has fallen on hard times of late.
SGI now focuses on supercomputers, but there's a tiny coterie of fans dedicated to keeping the company's aging but high-powered workstations alive.
Sites like Nekochan, Silicon Bunny and the SGI Zone offer hardware and software tips, news, discussion and secondhand trading facilities to the small clique of true believers. Nekochan's bulletin board has 700 members -- impressive for machines were never sold directly to the public.
There's a thriving trade in old SGI hardware. The market is so hot that Ian Mapleson quit his job in academia to sell workstations full time to hobbyist animators and videographers.
"The majority (of customers) are learning 3-D and video -- getting a foothold in an industry that's hard to get into," he explained.
Playing around with an old SGI Indy workstation, novices can learn Hollywood techniques at Peoria prices. An Indy, which in the early 1990s cost around $14,000, can be picked up on eBay these days for maybe $40, plus another $200 for a monitor.
But it's not just the lure of learning. In the small world of SGI, there's the real possibility of making actual Hollywood contacts.
"In the SGI hobbyist world it's not six degrees of separation, it's three, often less," Mapleson said. "I recently met one of the industrial light and magic guys who worked on Star Wars: Episode II."
Another used-SGI dealer, Ian Butler, sells a selection of machines through eBay auctions and his web store. Butler peddles mostly to videographers in poorer countries, who are making use of advanced hardware cast off by users in the United States and the United Kingdom.
"A lot of design, animation and video shops in Eastern Europe buy kit," he said. "They can get more out of older SGI machines than they would from PCs or Macs.... When it comes to video, a $2,000 Mac still doesn't have the same capabilities as an SGI machine."
The Indy is the quintessential SGI machine. First released in 1993, the Indy was an object of desire, with industrial design worthy of Apple. (In fact, it's arguably better than Apple's lackluster design of the time).
The distinctive bright-blue computer was intended as the answer to designers' prayers -- all-powerful, internet-oriented and with a wide selection of creative software running on Unix.
Like the iMac, the Indy was used for video editing, graphics and web design. The machine included support for video input, and SGI supplied a high-quality webcam suitable for video conferencing.
Networking was simple, and the machine came with a built-in adapter for then-popular ISDN communications.
The operating system was a friendly version of Unix -- one of the first to feature a graphical user interface rather than a command line.
All in all, the Indy was the iMac four years too early -- and $4,000 too expensive.
Not surprisingly, the SGI community is much like its Mac equivalent. But in its alienation, the concerns of SGI fans are far more urgent than those of Mac users. Is their beloved platform heading for obsolescence? Will their machines keep up with developments on the net? Can they get software for the machines? What will they do if the SGIs break down?
The editor of the Nekochan site, Pete Plank, draws direct parallels with the Mac web.
"The online Mac community is much larger due to the target audience of the platform, but as a community they are similar in many ways," he said. "Sites such as Accelerate Your Mac have always been an inspiration. I wanted something like that for SGI users."
Unlike Apple, SGI never intended its machines to be sold to the public. Instead, SGI machines were sold at the corporate level.
At one point, SGI attempted to force hobbyist websites into running a legal disclaimer that they were in no way connected with the company. Some closed down rather than agree to the lawyers' conditions.
Now, the company at best tolerates the hobby community, turning a blind eye to sales of secondhand software, which is forbidden by user agreements.
But the numbers are small. If the Mac community is dwarfed by the Microsoft horde, the number of SGI users amounts to a rounding error. Mac users may form a cult, but the SGI community is the tech equivalent of the pre-Reformation Moravian church -- unknown, tiny and years ahead of its time.
In spite of SGI's lack of interest and the difficult task of swimming outside the computing mainstream, fans of the platform say they will never give it up.
"All things come to an end but I don't see a reason to move away from SGI," said Plank.
See related slideshow
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https://asiliconvalleyinsider.com/2010/02/08/apollo-sun-silicon-graphics-and-next-the-ascent-the-metamorphose-and-the-fall/
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en
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Apollo Sun Silicon Graphics and NeXt the Ascent the Metamorphose and the Fall
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2010-02-08T00:00:00
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(T) I will always remember the Monday morning in 1989 when I was “Up in the Air” traveling from Paris to London with my general manager and learning from the Financial Times the acquisition of Apollo Computer by HP for $476 million. At that time, the computing industry was still very young and M&As were…
|
en
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A Silicon Valley Insider
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https://asiliconvalleyinsider.com/2010/02/08/apollo-sun-silicon-graphics-and-next-the-ascent-the-metamorphose-and-the-fall/
|
(T) I will always remember the Monday morning in 1989 when I was “Up in the Air” traveling from Paris to London with my general manager and learning from the Financial Times the acquisition of Apollo Computer by HP for $476 million. At that time, the computing industry was still very young and M&As were not common practice. Not to mention the high price paid by HP for this acquisition that surprised both of us. Apollo was the first workstation vendor two years before SUN Microsystems.
During my studies in computer science, our school lab was equipped with Apollo workstations and we were the first class to learn C and UNIX. Before us, other computer science grads learned Fortran and Multics (although we learned in my class C, Pascal, Lisp, and Prolog, at that time the only programing language used in the industry was Fortran).
After my computer science degree, when I interviewed for a position at Apollo Computer, I was asked what was the major difference between Apollo and Sun. I tried to answer the question by pointing out differences into their implementations of the Unix operating system but I lost myself in my response. My interviewer with this question was only trying to point out the culture difference between Apollo which was an East Coast-based company and Sun which was a Silicon Valley-based company.
Apollo was founded in Boston in 1980 by William Poduska an ex-Prime employee (Prime Computer was a mini-computer manufacturer; other mini-computers manufacturers from the 1980s included Digital Equipment, Data General and Wang).
The first Sun (Stanford University Network) workstation was the product of Andy Bechtolsheim in 1982 when he was a Ph.D. graduate at Stanford University. Andy needed a more powerful computer than those available in the marketplace for his Ph.D. and designed his first workstation from spare parts, using the Motorola 68000 for the CPU and Unix for the operating system. With two other Stanford graduates, Vinod Kholsa and Scott McNealy, and Bill Joy a graduate from UC Berkeley and a major contributor to Unix BSD (Unix implementation from UC Berkeley), Sun was launched. One of the best ways to start a company is to develop a tool that can become a product for which a large potential market is indeed in need. That was exactly why Sun was started. And, the workstation market grew fast and became quickly one of the fastest growing markets in the computing industry.
In the meantime at Stanford (again!), Jim Clark a Computer Science professor designed the very first VLSI chips that accelerated geometric computations required to display three-dimensional images. Jim foresaw a market segment in need of a new kind of workstation that could be used for high-end visualization applications. And, Silicon Graphics was born as a new competitor to both Apollo and Sun.
After leaving Apple in 1985, Steve Jobs with a few Apple employees created: NeXt with some initial seed money from Ross Perot. Initially, Steve wanted NeXt to develop a new generation of powerful computers for the academic market. But NeXt changed its course and became the last entrant to the workstation market competing with Apollo, Sun and Silicon Graphics.
The NeXt workstation was, without doubt, the most elegant workstation ever designed. It used the Mach kernel developed at Carnegie Mellon for its operating system: the NeXtSTEP. The NeXt workstation was used by Tim Berners-Lee at the CERN and became the first Internet server. While Steve secured a $100 million investment from Canon to manufacture NeXt workstations in Fremont, CA, NeXt never reached any significant market share compared to Sun and Silicon Graphics. Finally, Steve withdraws NeXt in 1993 from manufacturing hardware and re-engineered the company around NeXtSTEP and its object-oriented user interface which later became OPENSTEP and got adopted by many leading software development organizations.
And 1996, Apple acquired NeXt in order to use OPENSTEP as its next generation of operating system. After the acquisition by Apple, Steve first became the Apple interim CEO and later in 2000 the Apple CEO while still being the CEO of Pixar. It goes without saying that Steve learned from his youngest mistakes both at Apple and NeXt to transform Apple which was close to going out of business in 1998 to the most innovative high-tech company of this century and probably for the high-tech industry.
Jim Clark at Silicon Graphics did a fantastic job to execute on the vision that he imagined while being a professor at Stanford University. Silicon Graphics’ IRIS workstations captured the high-end graphics and visualization market. The initial machines were based on the Motorola 68000 processor like Sun’s. In 1992, Silicon Graphics bought MIPS to redesigned its workstations around MIPS’ RISC architecture. The quality of the Silicon Graphics 3G graphics became a brand for the production of Hollywood movies’ visual effects, in particular, Steven Spielberg’s Jurassic Park was designed on IRIS workstations. But Jim Clark, very savvy at capturing new market trends, foresaw very quickly that PCs were not far distant to compete effectively with Silicon Graphics workstations at a much lower price point. In 1993 in disagreement with the other board members about the direction of the company, he left Silicon Graphics to start with Marc Andreessen Netscape. After the departure of Jim Clark, Silicon Graphics moved aggressively into the high-end supercomputer market to compensate the lack of sales in its workstation business by first leveraging its internal high-end computing technology and further by purchasing in 1996 supercomputer vendor Cray Research for $740 million. But over time, the supercomputer market became under attack from high-end commercial servers from Sun and IBM which later became under attack themselves from clusters of off-the-shelves Linux-PCs based systems. Silicon Graphics finally abounded its MIPS RISC processors to adopt Intel’s RISC processors. It re-branded itself to SGI. But over time, SGI’s high-end servers sales decreased to a point where the company in 2008 filled for bankruptcy and sold its assets to Rackable Systems for $25 million. SGI’s last headquarters on Amphitheatre Parkway in Mountain View, CA became Google’s Googleplex.
For the first two years, Sun’s CEO was Vinod Koshla but Vinod left Sun to join top venture capital firm Kleiner Perkins Caufield and Byers and asked the energetic and charismatic Scott McNealy to become the CEO. In 1988, Sun hits a $1 billion dollar revenue. For its first decade, Sun was predominantly a vendor of workstations for engineers and scientists competing with Apollo and Silicon Graphics on lower margins. Sun branded itself as a leader of open standards and computer connectivity with the message “the Network is the Computer”. Sun invented a new network file system: NFS and integrated very quickly TCP/IP, the Internet protocol, into its UNIX kernel. In its second decade of operations, Sun moved aggressively into servers and storage leveraging the move to client/server architectures. Scott McNealy’s strategy was pretty simple: “not being a car dealer but thriving as a car manufacturer” in other words for Scott owning core computing technology was an absolute priority for the company; as such the company abandoned Unix BSD to create its own operating system: Solaris and developed its own line of RISC processors: the Sparc.
During its second decade of operations, Sun grew very quickly by moving from the technical computing market to the commercial computing market and having its line of servers becoming well-adopted by database and enterprise applications vendors such as Oracle, Ingres, Informix, Baan, SAP, and many others. Sun execution became flawless. It launched Java in 1995, a new network programing language created by James Gosling that was quickly massively adopted by all software engineers and developers around the world and became a ubiquitous tool to develop emerging Internet and intranet applications. Sun was very successfully ridding the Internet wave. Its servers were used widely worldwide for Web applications. Scott’s marketing messages were simple as was his strategy: “Sparc is good, Solaris is good, Java is good and Microsoft is bad”. Scott never considered seriously IBM, DEC, HP as competitors. For him, the only competition to Sun was Microsoft. And, Sun’s mission was to relieve the computing world from Microsoft’s oppression.
But after the Internet bubble, major companies started slowly to replace Sun’s Internet servers with clusters of Linux PCs. Sun was much too slow to react against the adoption of Linux and lost gradually its profitable competitive edge. Sun’s technology investments were unprofitable: Sparc was losing against Intel’s processors, Solaris was losing against Linux and Scott was never able to make a business from Java. In addition, IBM and HP became stronger competitors taking market shares from Sun. Add to that, a lot of acquisitions that hurt Sun (Cobalt Networks for $2 billion, StorageTek for 4.1 billion and MySQL for $1 billion) and a complete demotivated workforce which has been laid off quarter after quarter as “RIF” (reduction in force) and Sun entered and stagnated in its third decade of operations from one of the most flawless high-tech companies to execute that it was during its second decade to become one of the high-tech companies to fail to execute properly. And, I still do not understand why Scott could not turn around the company or found someone who could turn around the company.
Finally, in April 2009, Oracle announced the agreement to purchase Sun for $7.4 billion. Sun became completed absorbed by Oracle on January 27, 2009. And with that ending, all workstation vendors have disappeared from the marketplace.
So what are the conclusions of the ascent, metamorphose and fall of Apollo, Sun, Silicon Graphics and NeXt. Let me suggest three conclusions.
The first one is that, if technology is complex, business strategy is simple. There only a few reasons why a high-tech company succeeds or fails. And, it is always a simple combination of a few unique facts that are centered around technology, product, market, and management execution.
The second one is the incredible technology contributions of those companies in:
Software: Unix, C programming, the Unix Shell, the text editor VI, Java, distributed operating systems…
Networking: NFS, TCP/IP, Ethernet, mail…
And in hardware: RISC processors, graphics processors, multiprocessors, parallel computing, computer clusters…
And, my last one is the impact of the high-profile founders and CEOs of those companies. With Scott McNealy and Jim Clark so prominent figures of the high-industry, with Bill Gates has retired from Microsoft, and Steve Jobs being unfortunately sick and less involved in the operations of Apple, the high-tech industry is definitely losing those who started the computing industry.
Note 1: I have been both an employee and a client of Sun Microsystems.
Note 2: The picture above is from Sun; from left to right, Sun’s founding team: Vinod Khosla, William Joy, Andreas Bechtolsheim and Scott McNealy with the Sun-1 workstation in 1982.
Note 3: The first picture in the article is the NeXt workstation from Tim Berners-Lee and the second one is his description of his invention of the Web on the NeXt User Interface. Those pictures are from Wikipedia.
Copyright © 2005-2010 by Serge-Paul Carrasco. All rights reserved. Contact Us: asvinsider at gmail dot com.
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Tech CEOs that are dominating today’s business world
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From the US to Asia to Europe, these are some of the highest performing tech CEOs from around the world who are dominating business and leading billion dollar companies.
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The CEO Magazine
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Technology is one of the most dominant industries in today’s economy. According to research consultancy firm IDC, in 2021 it’s estimated to be worth a staggering US$5 trillion – and that only encompasses areas of hardware, software, services and telecommunications. With commercial space travel coming closer to fruition, revenue could grow even further.
Needless to say, some of the world’s most talented tech CEOs currently lead these major companies. The usual suspects include Apple’s Tim Cook and Tencent’s Pony Ma, but beyond the household names are quieter driving forces that continue to change the landscape of how the world uses technology in everyday life.
From the United States to Asia to Europe, these are some of the highest performing tech CEOs from around the world.
United States
There’s no shortage of dominating tech companies located in the US. The big four tech CEOs of Facebook, Google, Apple and Amazon often receive limelight for good and bad reasons, so it’s only fair to shed some light on the other top performers today.
Jensen Huang
Company: Nvidia
Revenue: US$10.9 billion (2020)
Jensen Huang is Co-Founder of graphics-processor company Nvidia. As a 30-year-old, Huang established the business back in 1993 and has since held the role of the company’s President and CEO. Born in Tainan in Taiwan, Huang and his family immigrated to the US where he would go on to study electrical engineering at Oregon State University before moving onto a master’s degree in electrical engineering at Stanford University. Besides a slew of awards and his philanthropic initiatives towards education, Huang holds a net worth of around US$12 billion.
Lisa Su
Company: Advanced Micro Devices (AMD)
Revenue: US$9.76 billion (2020)
Staying within the semiconductor industry will raise another familiar name – Lisa Su. The Taiwanese-American is also an electrical engineer and rose through the ranks in various engineering management positions at IBM, Texas Instruments and Freescale Semiconductor before becoming the CEO and President of AMD in 2014.
Her formative years were spent studying maths and science as encouraged by her statistician father. Her mother meanwhile was an accountant and entrepreneur who introduced Su to the world of business. She graduated from the selective Bronx High School of Science before obtaining an electrical engineering degree from the Massachusetts Institute of Technology. Today, she continues to successfully lead AMD and is estimated to be worth north of US$500 million in 2020.
Marc Benioff
Company: Salesforce
Revenue: US$17.1 billion (2020)
Marc Benioff’s efforts have seen him become one of this generation’s most prolific internet entrepreneurs. As the Founder and CEO of cloud computing company Salesforce, Benioff is reportedly now worth US$8.9 billion.
His talents in the early days were evident when he coded and sold his first application, How to Juggle, for US$75. By the age of 15, he founded Liberty Software, which created and sold games for the Atari 8-bit home computer. His video games including Flapper and Crypt of the Undead began to gain traction with developers and by 16 he was earning royalties of US$1,500 per month, which paid for his college.
After programming stints at Apple’s Macintosh division he graduated and joined Oracle Corporation in a customer-service role that saw him rise through the ranks over 13 years. This eventuated in being promoted to Oracle’s vice president role at the age of 24, the company’s youngest person to ever hold that title.
Benioff finally founded Salesforce in 1999 out of a rented San Francisco apartment with nothing more than a slogan proclaiming “The End of Software”. It was his war cry that signalled a move from CD-ROM-based software to software on the internet. More specifically, a model that turned software into a service on the cloud where customers could build their own applications on the company’s architecture. In 2018, Benioff and his wife Lynne purchased the iconic Time magazine for US$190 million.
Brian Humphries
Company: Cognizant
Revenue: US$16.8 billion (2019)
Sometimes playing the long game can pay off in one’s ascension to the top role. For Brian Humphries, the CEO of digital corporation Cognizant, this was certainly the case. The Irish native started from humble beginnings where any role of CEO was a distant thought. Humphries didn’t have exposure to large multinational corporations until his early 20s but upon graduating from the University of Ulster, he joined the computer company Digital Equipment Corporation, which would later be acquired by Compaq and then HP. He spent 18 years across all three companies before making a switch to Dell and then Vodafone. His move into the role of CEO at Cognizant came in mid-2019, with only a few months in the role before the global pandemic hit. This should make for an interesting observation of where he takes the company.
Michael Dell
Company: Dell
Revenue: $US92.2 billion (2020)
If you’re sitting in an office reading this article, it’s likely you’re using a Dell product. Michael Dell is the man behind Dell Technologies, one of the world’s largest technology infrastructure companies. The Founder and CEO is ranked the 30th richest person in the world with a net worth of US$40.5 billion.
Prior to this title, Dell was always determined and smart with his money beyond his years. At the age of eight he applied to take a high school equivalency exam in the hopes of entering business early. He also entered the workforce at the age of 12 as a dishwasher before being promoted to maitre d’. By his early teens he was investing his earnings from part-time jobs into stocks and precious metals. His first encounter with a computer came at Radio Shack when he was 15. He eventually bought his first computer, an Apple II, and pulled it apart to investigate how it worked. During high school, he also sold newspaper subscriptions and it was here that he learnt how to target specific markets, a skill that would earn him US$200,000 in his first year of business.
Dell Technologies itself started in the residential building at the University of Texas where Dell was studying. It was an informal business constructing and selling upgrade kits for PCs. By 1984, Dell would incorporate the company as Dell Computer Corporation and succeeded by keeping overheads low – the venture’s capitalisation cost was just US$1,000 even with a few employees. By the age of 27, Dell became one of the youngest CEOs to run a successful company.
Reed Hastings
Company: Netflix
Revenue: US$20.2 billion (2019)
There are over 195 million paid subscribers of Netflix in 2020. That’s not a bad following considering the business began as a rental-by-mail service to those who wanted to rent DVDs via a website rather than a storefront or printed catalogue.
Before founding Netflix, Reed Hastings sold vacuum cleaners door-to-door, was a Marine Corps dropout and Peace Corps volunteer. It was the latter which Reed credits for teaching him the spirit of entrepreneurship. He once explained of his Peace Corps experience, “Once you have hitchhiked across Africa with 10 bucks in your pocket, starting a business doesn’t seem too intimidating.” Hastings would go onto Stanford University alongside stints at Adaptive Technology before starting his own company called Pure Software. Upon its acquisition and shortcomings, Hastings embarked on his next startup and co-founded Netflix in 1997 with his former Pure Software employee, Marc Randolph. The idea was conceived after he received a late fee for misplacing a rented Apollo 13 VHS. “Later, on my way to the gym, I realised they had a much better business model. You could pay $30 or $40 a month and work out as little or as much as you wanted.” When Netflix was founded, Hastings had no idea whether customers would use it.
Susan Wojcicki
Company: YouTube
Revenue: US$15.6 billion (2019)
Susan Wojcicki took the helm of YouTube in 2014 but long before her rise to the video-sharing platform’s CEO role, she was already an entrepreneur paving her own way. Wojcicki started her first business selling spice ropes door-to-door at the age of 11. She wrote for the school newspaper before studying humanities in college and taking on her first computer science class. At Harvard University she graduated from history and literature with honours alongside plans for a PhD in economics before moving into a career in academia. Those plans shifted when she discovered her interest in technology.
Stints in marketing roles for Intel introduced her to Larry Page and Sergey Brin, the founders of Google. In fact, the duo rented Wojcicki’s garage to build the search engine and were soon renting out her bedrooms on the entire ground floor. Wojcicki welcomed the financial assistance at the time since she and her husband were cash-strapped with a mortgage, student loan debts, and a baby on the way. By 1999, she would become Google’s 16th employee and Marketing Manager. She then progressed to Senior Vice President of Advertising and Commerce where she also oversaw Google’s Video Service – YouTube’s competitor at the time. Seeing YouTube’s potential, Wojcicki proposed Google’s purchase of YouTube and handled its acquisition for US$1.65 billion in 2006.
Safra Catz
Company: Oracle
Revenue: US$39.1 billion (2020)
In 2017, Safra Catz was recorded as the highest paid female CEO of any American company with an earning of US$40.9 million. Her early career days were spent as a banker alongside various investment banking jobs leading up to her entry into computer technology company, Oracle. Here, she quickly made her mark by facilitating the acquisition of a software rival for US$10.3 billion. As well as her career achievements, Catz is also considered one of the most powerful women in business. She is also a Director of The Walt Disney Company.
Gwynne Shotwell
Company: SpaceX
Revenue: US$2 billion (2019)
SpaceX is a relatively young company but in that short time its profile has grown immensely thanks to its bold vision of making space travel affordable for civilians in a bid to colonise Mars. Being backed by the newly crowned richest man in the world – Elon Musk – with a net worth of US$186 billion also helps. Behind the grand title though is Gwynne Shotwell, the President and COO of SpaceX.
As a businesswoman and engineer, Shotwell originally planned to work in the automotive industry and was enrolled in Chrysler’s management training program. Her interest in engineering roles, however, would see her leaving that industry and instead moving to the El Segundo research centre of The Aerospace Corporation where she conducted technical work on military space research over a decade. After leaving this company she did a quick stint at the low-cost rocket builder, Microcosm Inc, before joining SpaceX in 2002 as Vice President of Business Development alongside a seat on the board of directors. As of today, she continues to manage SpaceX’s day-to-day operations while overseeing customer and strategic relations to drive company growth.
Whitney Wolfe Herd
Company: Bumble
Revenue: US$162 million (2018)
Social awareness is one of Whitney Wolfe Herd’s greatest talents. As a 20-year-old college student she started her own business selling bamboo tote bags to help areas affected by the BP oil spill of 2010. Wolfe Herd enlisted the help of celebrity stylist Patrick Aufdenkamp to launch the not-for-profit ‘Help Us Project’ and soon her bags found their way onto the national press circuit when they were spotted on celebrities like Nicole Richie and Rachel Zoe.
After a short stint working with orphanages in South-East Asia post-graduation, Wolfe Herd joined Hatch Labs at age 22. It was at this New York City incubator that she met Sean Rad and became involved with the startup Cardify. The project would eventually be abandoned but her connection with Rad soon saw her joining his other venture in 2012 – a dating app called Tinder – alongside Chris Gulczynski. Wolfe Herd became the marketing manager for Tinder and is also credited for creating the app’s name. The signature flame logo is a reference to her having to use small sticks (tinder) to start the fireplace at her father’s cabin in Montana. After tensions with company executives, Wolfe Herd left Tinder in 2014 and created her own dating app designed to give women more control.
As one of the most important women in tech today, Wolfe Herd is also the CEO of the newly acquired MagicLab, the parent company of multiple popular dating apps (Bumble, Latch, Badoo), valued at US$3 billion with an estimated 500 million users across its entire portfolio. Bumble alone has over 100 million users worldwide and is valued at more than US$3 billion.
Honourable mentions
They’re household names around the world let alone tech industry CEOs so they do receive honourable mentions for the countless contributions to business. While some of their decisions might be controversial and widely publicised, there’s no denying that the following figures have and will continue to shape the way the entire world uses technology.
Elon Musk
Companies: Tesla, SpaceX, The Boring Company, PayPal, Neuralink, OpenAI, Zip2, SolarCity
Net worth: US$186 billion
Tim Cook
Company: Apple
Net worth: US$1 billion
Sergey Brin
Company: Google/Alphabet
Net worth: US$77 billion
Satya Nadella
Company: Microsoft
Net worth: US$320 million
Mark Zuckerberg
Company: Facebook
Net worth: US$99 billion
Jeff Bezos
Company: Amazon
Net worth: US$188 billion
Asia
The tech sector in Asia is no minor player in the global economy. There are plenty of heavy hitters and tech CEOs in the region who are shaping their local landscape and beyond.
Tan Hooi Ling
Company: Grab
Revenue: US$2.3 billion (2019)
Passengers outside of Singapore, Malaysia, Cambodia, Indonesia, Myanmar, Philippines, Thailand, Vietnam and Japan likely wouldn’t have heard of Grab. The ride-hailing service is known for becoming South-East Asia’s first Decacorn – a company valued at over US$10 billion. The current Co-Founder and COO of Grab is Tan Hooi Ling, a Malaysian native who holds a mechanical engineering degree alongside a Master of Business Administration from Harvard Business School. Her career started off at pharmaceutical company Eli Lilly and consulting firm McKinsey, the former of which introduced her to her Grab Co-Founder Anthony Tan.
The service came about when the duo conceived an idea to directly connect passengers to taxis amid Malaysia’s chaotic urban environment and safety concerns for female taxi passengers. Since 2015, Tan has been in charge of expanding into new markets. In 2018, the company bought out Uber’s South-East Asia operations for billions.
Jane Jie Sun
Company: Trip.com Group
Revenue: US$5.12 billion (2019)
Travel might not be on the cards for now but that doesn’t negate the fact that Jane Jie Sun worked her way to the top of Trip.com Group to become CEO. The Chinese company was founded in 1999 and owns online travel services including Trip.com, Skyscanner, Qunar and Ctrip. The company is currently the largest online travel agency in China and one of the largest in the world.
Earning her business degree from the University of Florida and a master’s in law from Peking University, Sun started her career at KPMG in Silicon Valley before moving over to Applied Materials. She eventually joined Ctrip as CFO and worked her way through to the COO role before being named the successor to the company’s Founder, James Liang, as CEO in 2016.
Chun Li
Company: Lazada
Revenue: US$1 billion (2019)
One of the fastest growing tech and ecommerce companies in South-East Asia is Lazada and at the helm is their CEO, Chun Li. The Singaporean multinational technology company was originally founded by Maximilian Bittner and Pierre Poignant with support from Rocket Internet in 2012. Chinese tech giant Alibaba Group eventually acquired Lazada in 2016 to help boost its international expansion plans. Chun Li was brought over to Lazada from Alibaba a year later. His experience includes positions at PayPal and eBay, and in 2018, Lazada became the largest ecommerce operator in South-East Asia based on its average monthly site visits. The company claims to attract more than 50 million active users annually.
Pony Ma
Company: Tencent
Revenue: US$58 billion (2019)
Ma Huateng, also known as Pony Ma, and his prolific company needs no introduction. The Chinese billionaire businessman is the Founder, Chair and CEO of Asia’s most valuable company, Tencent. As one of the world’s largest internet and technology companies with investments in gaming, entertainment and communications, Tencent is responsible for China’s biggest mobile instant messaging service known as WeChat.
Ma, meanwhile, lives a highly private life away from the spotlight. His father Ma Chenshu was a port manager in Shenzhen where the younger Ma would accompany him. In 1989, Ma enrolled into a computer science degree at Shenzen University before taking roles at China Motion Telecom Development and Shenzhen Runxun Communications.
In 1998, alongside four of his classmates, Ma founded Tencent, which mimicked the internet’s first messaging service known as ICQ. Then named OICQ, Ma’s service was a hit with Chinese users, but when AOL bought ICQ in 1998, Ma’s OICQ was ordered to change the service’s name and relinquish the similar sounding domain names. Tencent eventually expanded into online gaming while listing on the Hong Kong stock exchange. This move helped propel Ma as one of the wealthiest figures in China’s telecommunications game. The company would go on to launch its own direct competitor to fellow ecommerce giant Alibaba while also launching WeChat, which is today’s largest instant messaging platform in the world controlling 48 per cent of internet users in the Asia-Pacific region.
Masayoshi Son
Company: SoftBank
Revenue: US$56.9 billion (2020)
SoftBank is ranked as the 66th largest public company in the world and leading the Japanese conglomerate holding company is its CEO, Masayoshi Son. SoftBank’s main business lies in its stakes across numerous technology, energy and financial companies. It also operates Vision Fund, which is the world’s largest venture capital fund targeted at technology with over US$100 billion in capital.
Son himself is considered one of the world’s most powerful people and the second richest person in Japan with an estimated worth of US$30 billion. Growing up, Son left Japan for California to complete his high school studies. He studied economics and computer science at the University of California, Berkeley, and was fascinated by a microchip he read about in a magazine. At the age of 19, he was convinced that computer technology would usher in the next commercial revolution. His first business venture would begin shortly after when he built an electric translator with the help of his professors, which he sold to the Sharp Corporation for US$1.7 million. Following this deal he earned another US$1.5 million by importing used video game machines from Japan on credit before installing them in dormitories and restaurants.
Son is also the Founder of Unison, which was bought out by Kyocera. He was an early investor in internet firms including Yahoo! in 1995 and Alibaba in 1999. Today, SoftBank owns 29.5 per cent of Alibaba as well as the entirety of European semiconductor company, Arm Holdings. Son is currently invested in the world’s biggest solar project planned for Saudi Arabia alongside plans to establish a nationwide solar power network for Japan. Some notable investments include Didi, Uber, WeWork, Grab, Doordash and Boston Dynamics.
Daniel Zhang
Company: Alibaba
Revenue: US$72 billion (2020)
Before taking on the role of Alibaba CEO as the successor to Founder Jack Ma, Daniel Zhang was already a seasoned leader within the company. He was previously the CEO of Chinese online shopping site Taobao and the President of Tmall – both owned by Alibaba. Zhang himself is credited as the brainchild of the prolific Singles’ Day shopping holiday in China, an annual sales event which generates three times the gross sales of America’s Black Friday and Cyber Monday combined.
Zhang is a graduate of the Shanghai University of Finance and Economics. Since then, he’s held roles at Barings Bank, Arthur Andersen and PwC. He eventually moved onto Alibaba subsidiary Taobao and is one of the world’s most influential people today.
India
With a population of more than 1.3 billion people, India serves as a lucrative market for tech companies. These are the CEOs at the helm of the country’s most notable corporations.
Rajesh Gopinathan
Company: Tata Consultancy Services
Revenue: US$23 billion (2020)
Tata Group possesses a rich history in business that dates back to 1868. It is considered one of the largest and oldest industrial groups in India with subsidiaries that include Tata Chemicals, Tata Communications, Tata Consultancy Services, Tata Consumer Products, Tata Motors, Tata Power, Tata Steel, Tata Capital, Indian Hotels Company Limited, TajAir and Tata Starbucks, just to name a few.
Rajesh Gopinathan is the CEO and Managing Director of Tata Consultancy Services, which specialises in IT. Gopinathan joined the company in 2001 after completing an engineering degree and postgraduate diploma in management. During his 15-plus years with the company, he was promoted to the role of CFO and CEO. He is also one of the youngest CEOs in the Tata Group and is credited for helping Tata Consultancy Services become a US$19 billion global company.
Salil Parekh
Company: Infosys
Revenue: US$13 billion (2020)
Salil Parekh is the CEO and Managing Director of Indian multinational corporation Infosys. The company provides business consulting, information technology and outsourcing services. Before rising to the role, Parekh was a graduate of aeronautical engineering and mechanical engineering. He also holds a Master of Engineering in Computer Science. His career began at Ernst & Young’s consultancy division before it was acquired by Capgemini. It was here that Parekh became a member of the group management board before moving onto Infosys.
Australia
While Australia is one of the smaller markets in the tech industry, its homegrown talent isn’t lacking. These are some of the highest achieving tech CEOs to come out of the Southern Hemisphere.
Michael Cannon-Brookes & Scott Farquhar
Company: Atlassian
Revenue: US$1.6 billion (2020)
The poster boys for the Australian tech sector consists of the duo of Michael Cannon-Brookes and Scott Farquhar. The pair founded Atlassian in 2002 while at university and bootstrapped their startup over the initial years with a A$10,000 credit card loan. Today, their company focuses on producing products for software developers and project managers.
The pair who met and became friends during their course often credit themselves as accidental billionaires as the creation of Atlassian was driven by the aim to replicate the typical graduate starting salary of the big corporations at the time – A$48,000 – without having to work for someone else. Since then both Cannon-Brookes and Farquhar have received countless awards and recognitions for talents and leadership. Both are also prominent young voices on Australia’s public policies.
Kelly Bayer Rosmarin
Company: Optus
Revenue: US$6.9 billion (2020)
It was during the height of the pandemic in 2020 that Kelly Bayer Rosmarin was promoted to the coveted role of CEO of Australian telecommunications company Optus. Her relationship with Optus started in early 2019 when she signed on as the Deputy CEO following a variety of executive roles across the banking sector including the Commonwealth Bank of Australia.
Bayer Rosmarin’s early days were spent in her hometown of South Africa where she earned a scholarship at Stanford University in the US. She eventually obtained a Bachelor of Science in Industrial Engineering and a Master of Science in Management Science accompanied with an Academic Excellence Award for being the top master’s graduate. Her academic prowess led her to Silicon Valley where she was exposed to startups and software companies, allowing her to hone her skills in product development, business development, marketing, mergers and acquisitions, and strategy.
Bayer Rosmarin did a quick stint in consulting before her move to the bank. Today, she is considered among the top performing businesswomen in the region as well as one of the most powerful.
Melanie Perkins
Company: Canva
Revenue: N/A
Melanie Perkins is a household name among Australia’s startup scene. As one of the youngest female CEOs of a tech startup valued at over US$1 billion, her Canva company has been making waves for years in the graphic design community. Perkins hails from Perth in Australia and it was during her high school years that her passion for business began. At 14 she was selling handmade scarves at the markets. While studying communications, psychology and commerce at university she would also tutor graphic design privately on the side and it allowed her to see the difficulties students had with learning programs such as Adobe Photoshop. She saw this as a business opportunity and dropped out of university at 19 to create a design platform with her partner and Co-Founder Cliff Obrecht, which catered to users with no technical expertise.
In 2007, Fusion Books was created, a program that allowed students to design their own yearbooks with drag-and-drop tools. It was a time-consuming process on the consumer side but more importantly it served as the perfect test bed for Canva. Nonetheless, Fusion Books grew to become the largest yearbook company in Australia, which also made its way into France and New Zealand.
It wasn’t until 2011 that prominent investor Bill Tai met Perkins at a startup competition where Perkins was able to pitch her idea for Canva over dinner – a relationship that didn’t see funding but access to Tai’s Silicon Valley network including Lars Rasmussen, the Co-Founder of Google Maps. Rasmussen believed in the Canva project but was weary of the tech expertise required to get it off the ground. He’d eventually become Canva’s tech advisor and introduced Perkins and Obrecht to ex-Google employee Cameron Adams who had the technical skills required. Perkins convinced Adams to join Canva and today he is the company’s third Co-Founder and their Chief Product Officer. As of mid-2020, Canva’s valuation is pegged at US$6 billion.
EMEA
The EMEA region isn’t without its talents when compared to the rest of the world. These are the notable tech CEOs that are making an impact from Europe to the Middle East.
Daniel Ek
Company: Spotify
Revenue: US$7.3 billion (2019)
With 320 million active users from across the globe, Spotify is today’s premiere music streaming service. At its helm is CEO and Co-Founder Daniel Ek. The Swedish billionaire entrepreneur with a net worth of US$4.5 billion hails from Stockholm where he spent his early years studying engineering at the KTH Royal Institute of Technology before dropping out to pursue a career in IT. This wouldn’t be a problem though as Ek was naturally gifted in coding early on. At the age of 13, he was already running his own website building business from home. His first client was charged US$100 for a website and after a second client enquired, he charged US$200. He eventually ended up commanding US$5,000 per website. Seeing its potential, Ek recruited fellow students from his class to help build the websites in their school computer lab but instead of paying them money he bribed them with video games.
By the age of 18, Ek was earning US$50,000 per month and he was managing a team of 25 coders. Ek’s parents caught on to his earnings when he started carrying home large televisions. After this Ek had stints in various tech-based companies before starting another of his own, Advertigo, an online advertising business that he eventually sold.
While he had made enough from the sale to retire, Ek realised quickly after a few months that his money was meaningless without a passion project. The idea for Spotify came about when illegal music sharing sites like Napster were shut down and others subsequently took over the practice. Ek realised that piracy could never be fully eradicated by law so proposed Spotify as a solution and service that would also compensate the music industry. Ek brought Martin Lorentzon on board from the firm, which purchased his Advertigo company and in 2008 they officially launched their legal music streaming service. Lorentzon has since stepped down from his role leaving Ek to steer the company. In 2017, Ek was listed as the most powerful person in the music industry by Billboard.
Ronaldo Mouchawar
Company: Souq
Revenue: N/A
Souq may have been bought out by Jeff Bezos’ Amazon but prior to that it was already a successful online marketplace serving the Middle East region. It was founded in 2005 by Ronaldo Mouchawar as a consumer to consumer auction site. It wasn’t until 2010, when Wisam Daoud joined Souq from eBay where he was CTO, that he was able to transform the auction service into a catalogue based one similar to Amazon with consumer products.
Investment was quickly secured and by 2015, Souq would be valued at the US$1 billion mark with around 10 million visitors a month. In 2017, it was officially acquired by Amazon for US$580 million and acts as the American company’s reach into the Arab world. Today, it is officially the largest ecommerce retailer in the Arab region.
Mouchawar himself, meanwhile, is a well-seasoned entrepreneur who has worked for an internet portal company that was purchased by Yahoo before launching Souq. He was born in Syria, played basketball professionally and holds a master’s degree in digital communications as well as a degree in electrical and computer engineering from Northeastern University in Boston. It was during this time that he worked on technology and business management.
At Souq, Mouchawar is credited for replicating America’s Black Friday sales into his own region with the White Friday sales event – a reflection of the region’s traditional day of prayer which garnered over US$275 million in sales in its debut year. Today, Mouchawar serves as Vice President of Amazon MENA.
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https://secure.gravatar.com/blavatar/684e24bcb289054e362c26f2f6d3995688dd8f8232b4d4575d5279abcabfea3a?s=200&ts=1723693059
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2020-11-06T10:32:54-05:00
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Posts about Alias written by xsisupport
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https://secure.gravatar.com/blavatar/684e24bcb289054e362c26f2f6d3995688dd8f8232b4d4575d5279abcabfea3a?s=32
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eX-SI
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https://xsisupport.com/tag/alias/
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GAME DEVELOPER • JUNE/JULY 1995 Microsoft’s Softimage is suddenly challenged by Silicon Graphics’s merger with Alias and Wavefront. What can game developers expect from these two?
3D Graphics Goliaths Square Off
Yesterday, as I was cleaning out a bookshelf in our office, I came upon an issue of Byte magazine from Aug., 1987. Although I was throwing everything away, I had an urge to flip through its pages—there’s something compelling about a computer magazine that’s over seven years old. Volume 12, number 9 of Byte may only have been 49 in dog-years, but it was much older in computer-years. I couldn’t believe it—ads for 386 16Mhz computers selling for $4,400, 9600-baud modems for $1,000, and articles about EGA graphics. It’s amazing we got through those rough times. (Some know-it-all will read this in 2002 and say the same thing about 1995, no doubt.)
One article that caught my eye focused on the technique of transferring cartoon-quality film (a clip from Disney’s Snow White and the Seven Dwarves) into digitized EGA display. Yeeeesshhh, the final result looked horrible. So, maybe the time wasn’t right back then for creating digital media from live footage. But, like a rolling snowball picking up size and speed, the graphics industry is maturing to the point where there’s not too much anyone can’t do at an affordable price. Microsoft and Silicon Graphics (SGI), thanks to recent acquisitions and mergers, are helping to fuel this momentum.
Competitive Partners
The relationship between Microsoft and Silicon Graphics has changed enormously over the past 12 months. Silicon Graphics is the dominant player in the graphics
workstation market, and Microsoft is the giant in the PC software market.
However, when Microsoft acquired Softimage last summer, Microsoft gained a powerful suite of IRIX-based animation, editing, compositing, and cel animation tools. It instantly became a key partner of SGI. Eight months later—last February—SGI merged with Alias and Wavefront, two companies that compete against Softimage on the SGI platform. How have these developments changed the relationship between Silicon Graphics and Microsoft? More importantly, how does it affect their customers?
I spoke with Andrew Wright, group product manager of advanced authoring tools for Microsoft/Softimage, and Dave Larson, director of marketing for Silicon Studios, a wholly owned subsidiary of Silicon Graphics, about the actions their companies have taken recently in the digital entertainment industry.
The most recent event, Silicon Graphics’ merger with Alias and Wavefront, achieved two objectives for SGI, according to Larson.
“We felt that by merging with Alias and Wavefront,” Larson explained, “we could get two of the most important groups of engineers together with our engineers and accomplish two things. [The first objective] is to drive the development of our 3D software environment… [Second,] we don’t have expertise in entertainment and industrial [software] markets at the customer level like we do with hardware. We’re getting a sales force that knows the customers really well at the application level, a sales force that has a much greater depth of knowledge.”
What was Wright’s reaction to the SGI merger?
“Surprise,” he said. “From [Microsoft’s] perspective, it actually puts us in a stronger position because we feel that for our customers a cross-platform solution is important. Where they want the performance of SGI, we provide it, where they want the price-to-performance ratio and openness of a Windows NT system we’ll provide that to them. We’ll be the only high-end 3D animation vendor that’s effectively able to execute a crossplatform strategy.”
I sensed no edginess from either Wright or Larson about the relationship between Microsoft and SGI, and both played up the positive aspects of their new product lines. Wright stressed the fact that many of SGI’s partners, not just Microsoft, were now competitors, but that it wouldn’t make sense for SGI to consider them as such: “Yes, we are a competitor to [Silicon Graphics], but they’re also a competitor to a number of their other ISVs [independent software vendors]. Companies like Side Effects, Discreet Logic, Avid… One thing I can say absolutely outright is that if SGI loses their third-party applications as a result of this merger, they’re dead in the water. I think they’ve almost got to overcompensate to make sure that their third party ISVs are treated fairly,” Wright commented.
Dave Larson adamantly agreed.
“We’re going to treat [Microsoft] as we do a whole category of partners who will get early access information, and it’s based on business parameters. These guys, as well as other 3D vendors, are still selling SGI software and we’re going to do whatever we can to make sure they continue to do so. That’s our business.”
Softimage off the SGI Platform?
Upon acquiring Softimage last year, Microsoft stated its intention to port the Softimage tools over to Windows NT. I asked Wright whether Microsoft had plans to pull Softimage products off the SGI platform at a later date and focus exclusively on its own operating system implementation.
“No. One of the key reasons Microsoft bought Softimage is that Softimage had a tremendous presence in the community that was producing the world’s best content. ILM [Industrial Light and Magic]. Greenberg. Rocket Science. For those companies, the SGI platform is absolutely critical because they need that level of performance… We think Windows NT and the associated hardware developments are going to provide a very price-attractive alternative. But in no way is that going to put SGI out of business. They are going to continue to do very well and we need to be there.”
Microsoft looks at its partner/competitor relationship with SGI in the same light as its association with Apple.
“We’ll continue to invest in SGI,” Wright stated. “It’s very similar to our situation on the Macintosh. Microsoft makes a lot of money on the Macintosh and it’s a very vital platform for us at the application level, even though we don’t own the operating system. The fact that we’ve got applications on Windows 95 as well does not in any way affect our investment in the Macintosh platform.”
Wright sees Silicon Graphics remaining the superior platform for highend digital video and three-dimensional animation over Windows NT, just as the Macintosh held its position as the superior platform for graphic design when Windows 3.0 was introduced.
“Macintosh had a very strong position in graphic design. Windows came in and everybody thought that it was going to completely take over the market. As a result, companies like Aldus and Adobe developed their applications first on Windows and second on Macintosh. But they realized over time that the Mac wasn’t going to go away… We think a similar thing is going to happen in the SGI world,” Wright said.
Porting Softimage Products to Windows NT
Upon acquiring Softimage, Microsoft announced that it would port the company’s toolset to Windows NT. Wright indicated that Softimage products would be available on Windows NT this year, but he declined to be more specific, fearing that divulging an estimated date could raise false hopes.
I wanted to know what strengths Windows NT could offer over the SGI platform to game developers. After all, SGI has been targeting this market for years and has optimized its hardware for high-end graphics and animation. Wright responded: “We think that the Windows NT platform will offer very attractive price-to-performance ratio in the range of performance that it delivers. We also feel that for people who have PC-based networks, for example developers who are using [Autodesk’s] 3D Studio, it will be important for them to run a high-quality 3D product in the same environment that they’re running their other tools. I think that’s going to be key to the games development area.”
Downward Pressure on Prices
In addition to announcing the porting of Softimage tools over to Windows NT, Microsoft announced in January that it was slashing the price of all Softimage software by up to 50%. What was behind this aggressive move? Wright explained:
“Over the last couple of years, interactive developers [have begun to] require [highend] tools as games have become more sophisticated. We looked at our pricing structure and said, ‘Well, those prices make sense if we continue to maintain our high-end feature set for our traditional market.’ But if [Microsoft] really wants to penetrate the market for game developers as well as other emerging interactive media, it’s important to have more aggressive price points and maintain that leadership position.”
A large number of graphics and animation products have been launched for the Windows, DOS, and Macintosh platforms recently by companies like Caligari and Strata. Although these products aren’t in the same class of function or performance as either the Microsoft or SGI tools on IRIX, they seem to be exerting pressure on software prices for the entire market, regardless of platform. I asked Dave Larson how Silicon Graphics viewed these lower-priced products, and how his company would respond.
“We’re moving down in terms of markets,” declared Larson. “As our price points come down, we’re cutting deeper into various markets… Historically, SGI has been perceived as vastly more expensive and out of reach, a boutique kind of machine. We think we’re rapidly expanding beyond that, and that we’re within reach for a lot of people [developing digital entertainment] for a living. It’s all about how much time you have to get your work done. For instance, a friend of mine just came up who’s been doing a lot of audio work on the Mac, and he just started using a new audio application on our platform. He says it’s dramatically affected his work just after a few days of working with it. What he used to think ahead to do he now does in real time. He can test his decisions as he goes. That’s the metaphor for performance change. Everything happens so much more quickly [on the SGI platform], and your creativity can increase.”
Sega and Nintendo Choose Sides
There’s an interesting sidebar concerning SGI and Microsoft. The two archrivals in the game cartridge market, Nintendo and Sega, have gone to separate corners for their respective development tools, and you can probably guess whom each has enlisted. In 1994, Nintendo selected Alias (whose software was used to create the Super NES blockbuster Donkey Kong Country) as the authorized graphics development system for both current games and next-generation 64-bit games. Last January, Sega chose Softimage 3D as the official three-dimensional development tool for the new SegaSaturn game platform. I’m not saying that this is an instance of “any enemy of my enemy is my friend,” but it is predictable political maneuvering.
As long as the Softimage tools on IRIX don’t take a distant second priority to their Windows NT version, users stand to gain from a price war between two resource-rich companies like Silicon Graphics and Microsoft. Feature sets and performance should evolve more rapidly, and it undoubtedly will spur other SGI platform competitors to keep up.
You’d better get used to seeing more companies merging or acquired as the digital entertainment market expands—it’s a natural consolidation that should continue for the next couple of years.
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SGI INAUGURATES VIRTUAL REALITY INITIATIVE
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1998-07-24T00:00:00
|
Orlando, FL — Silicon Graphics, Inc. announced that the company will spearhead the formation of the Silicon Graphics Virtual Reality Initiative, which is chartered to promote the broader adoption of […]
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en
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HPCwire
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https://www.hpcwire.com/1998/07/24/sgi-inaugurates-virtual-reality-initiative/
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Orlando, FL — Silicon Graphics, Inc. announced that the company will spearhead the formation of the Silicon Graphics Virtual Reality Initiative, which is chartered to promote the broader adoption of virtual reality (VR) technology. The Initiative will include an international VR Experts Group, which will address critical technical and theoretical issues; a VR partner-funding program through which Silicon Graphics’ virtual reality hardware, software and research partners will be provided with technical and marketing support; educational programs and resources; and Silicon Graphics RealityCenter solutions.
The first meeting of the VR Experts Group will be held in Orlando, Florida at SIGGRAPH ’98, the largest and most comprehensive international conference on computer graphics and interactive techniques. It will include leading researchers, VR hardware and software vendors, analysts, telecommunications companies and VR users in industrial organizations. Boston Dynamics, Inc., ElectroHome, Ltd., Fakespace, Inc., Dr. Carolina Cruz-Neira of Iowa State University, NASA Ames Research Center and SensAble Technologies, Inc. will be among the attendees. The VR Experts group will meet three times a year, and the next meeting will take place in November.
“The VR Experts Group will act as a catalyst to bring together the VR community and drive communications and collaboration,” said Mark Bolas, Chairman and CEO of Fakespace, Inc. “This will result in convergence on standards of interaction in virtual environments, demanded by our rapidly growing base of industrial customers.”
Barriers to VR adoption include availability of off-the-shelf software, awareness of business benefits at the executive level and lack of standards of interaction. The lack of interaction standards means that every application currently uses a different method to navigate through the virtual environment. Standardized, robust interface technologies, along with more off-the-shelf applications, are critical to future growth.
“Virtual reality is no longer limited to games and science projects. It is a business tool,” said Jim Foran, director of visualization technology at Silicon Graphics. “Many of ourleading customers use VR to boost productivity, lower costs and improve their own customers’ satisfaction.”
Hundreds of customers around the world in manufacturing, sciences, entertainment and government, use VR technology to meet business needs and gain a competitive edge. “In medicine, VR is changing how doctors learn and how we measure their skills,” said Marc Raibert, president of Boston Dynamics, Inc. and former MIT Professor. “The VR Initiative will strengthen acceptance for these kinds of practical VR applications.”
With a current investment of $15 million in personnel, equipment and facilities dedicated to VR, Silicon Graphics leads the industry in investment in virtual reality for professional applications. For example, Silicon Graphics RealityCenters are available worldwide for marketing and educational activities. As the dominant supplier of computers for virtual reality applications, the company is uniquely positioned to facilitate collaboration between partners, colleagues in the research community and customers.
“It has been our pleasure to work with Silicon Graphics in the area of intense 3D visualization, where they are the world leader. The company’s commitment to attacking the major bottleneck that prevents the industry from realizing the full potential of computers – the user interface – has been most encouraging,” said Bill Aulet, president of SensAble Technologies, Inc. “The WIMP (Windows Icon Mouse Pointer) interface is now 20 years old and running out of steam. Something new is needed and SGI has shown that it intends to be on the forefront of this revolution.”
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https://therealmccrea.com/tag/silicon-graphics/
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The Real McCrea
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Posts about Silicon Graphics written by therealmccrea
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en
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https://s1.wp.com/i/favicon.ico
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The Real McCrea
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https://therealmccrea.com/tag/silicon-graphics/
|
[20 Years Ago, Part 15. Other options: prior post or start at the beginning.]
Somehow, against the odds, it all came together. WebFORCE went from funded project to new product line, ready for launch in just 76 days. Twenty years ago today, January 26, 1995, the two hottest companies in Silicon Valley at the time, Silicon Graphics (SGI) and Netscape, came together to launch the first turnkey solution for web authoring and web serving — the very first products with “web” in their name.
My instincts on timing proved correct. By launching in January, we caught all of our competitors totally off guard. In fact, it would turn out to be many months before Sun Microsystems, Apple, and Microsoft would begin to address the hot growth market of the World Wide Web. That secured a significant first-mover advantage for us, and made SGI the second hottest product brand in all of the web (behind our white hot new partner, Netscape).
And we didn’t just win from great timing. We hit the market “guns a blazing” with the unbeatable combination of killer product, a high-profile press event, an historic demo, a big budget ad campaign, and awesome collateral.
Killer Product (Even Microsoft Agreed!)
The WebMagic team burned the midnight oil and somehow managed to pull off the miracle of creating the first WYSIWYG HTML editor in under eight weeks. And under the technical leadership of David “Ciemo” Ciemiewicz and the product management leadership of Rob Lewis (one of my first hires), the WebFORCE software bundle expanded to include not just WebMagic and the Netscape server software, but many other essential tools for creating “media-rich web content”. Among those were a video tool called MovieMaker (with support for MPEG-1, QuickTime, and Cinepack) and an audio tool called SoundEditor (with support for AIFF, Sun/NeXT, and MS RIFF WAVE).
In terms of feature set, WebFORCE absolutely set the standard. Even five months later, it was referenced in a Microsoft internal exec team memo from Paul Maritz to Bill Gates, available online now because it was evidence in the U.S. Government’s anti-trust case against the company. In it, Maritz explains the gap between Unix and PCs in the web authoring space — and how it can’t be closed “until a suite similar to SGI’s WebFORCE is available on PC’s”:
High-Profile Press Event
SGI’s PR team, one of the best in the industry, pulled out all the stops. This news was clearly big enough that there was no need for pre-briefing. Instead, we would host an invite-only press event on our campus in Mountain View. In addition to the newsworthiness of an SGI product launch, we also had the big draw of the announcement of a partnership with Netscape, with Marc Andreessen agreeing to speak and do interviews.
I think we drew well over a dozen technology and business reporters. Alas, very little of the coverage we got is findable today online. Carl Furry, who was the lead from the PR team for this launch, did find this scanned piece with ComputerWorld’s coverage of the news while we compared our memories in recent days.
Historic Demo
Of course, no SGI press event would be complete without a 3D demo. Fortunately, weeks earlier, Rikk Carey, a charismatic director of engineering from the Visual Magic Division, had reached out to get me excited about a futuristic project his team had just gotten involved with, something called Virtual Reality Modeling Language (“VRML” for short). Though it was a very early-stage, grass-roots, open standard effort, I immediately saw it as an important missing piece of the WebFORCE puzzle. With the promise of bringing 3D to the web, VRML was a natural technology for SGI, the pioneer and leader in 3D computing, to embrace.
The WebFORCE launch was the first day that VRML was demoed to the press. I’m not sure what we actually demoed, but it would have been using our Open Inventor toolkit. And even though neither Marc Andreessen nor I now remember it, the ComputerWorld article linked to above says that in addition to our demo, Marc announced that Netscape Navigator 1.1 would “support transmission of three-dimensional graphics”.
Hard to believe now, but that demo and the mutual endorsement of SGI and Netscape for VRML would kickoff an industry-wide, multi-year wrestling match for control of 3D on the web. The battle would feature intense competition, awkward alliances, and multiple acquisitions. Along with SGI and Netscape, tech stalwarts Microsoft, Apple, Sun, and Sony would all become swept up in the mania. (Much more on that in future posts!)
Big Budget Ad Campaign
The team at Poppe Tyson, SGI’s ad agency of record, who had already blown me away by creating a killer logo for WebFORCE, did it again with what may be the very first print ads for any web product. The flagship ad, that ran for many months in publications like Wired, ComputerWorld, and since forgotten places like Interactive Age and Interactive Week, still looks great to me:
Two elements that I really love about “One Stop Web Shop” are that the primary visual is content framed within a web browser, and that the team really made this an SGI-quality ad, with multiple nods to 3D.
The secondary launch ad (shown at the top of this post) is in some ways even more remarkable. Using the web to actual sell stuff was unheard of at this point, with Amazon’s launch six months away. So for us to introduce WebFORCE as “the biggest revolution in commerce since the 800 number” was a pretty prescient claim! Readers of the Wall Street Journal got to see a full-page (but black & white) version of the ad within days of the announcement.
Over the first six months of 1995, we invested nearly $1 million to place these ads in the leading technology, business, and creative arts/new media publications. That, together with an amped up “Powered by Silicon Graphics” effort, made SGI appear to have already won the market, even before our first $10 million in sales.
Awesome Collateral
Amongst the earliest of hires to the WebFORCE team was Kris Hagerman, who like so many from the team would go on to found and lead other startups, including BigBook, the web’s first Yellow Pages, and Affinia, a Sequoia-backed e-commerce and digital advertising pioneer. If I were the “CEO” of WebFORCE (in practice, not actual title), Kris was my “COO”.
The very first thing Kris did after coming on board was take a project that was just a notion in my head, flesh it out, and see it to completion. The challenge was to create a brochure for the product line that looked and felt more like Wired magazine and less like a corporate data sheet. Here are some scans of this really beautiful “tri-fold”:
And a Cringe-Worthy (But Highly Effective) Sales Tool
Many of you may have seen those digitized VHS tapes from the early days of the web. Well, here’s one more!
In early 1995, SGI had a 1,000-person global direct sales force. They were really awesome at selling high-performance workstations, and were becoming more comfortable selling high-performance servers and super-computers. But they did not have any experience selling software or turnkey hardware/software bundles. And, like all salespeople everywhere, they had no experience selling web authoring and serving solutions.
So, to jump start sales, we created a 10 minute sales training tape, starring me, Rob Lewis and Ciemo, along with Steffen Low, product manager for the WebFORCE servers, and Gene Trent, applied engineering for the server side of the line. In it, we explained why the web was a hot new opportunity perfectly suited to SGI (in other words, why a sales person should focus on it, or in other, other words: $). We showcased key features and key differentiators, and, given the audience, we opened and closed the narrative with references to 3D.
Like any tape from the mid-’90’s, there’s a lot to cringe at here, whether it’s the less-than-professional readings from teleprompter or the cheesy music throughout. That said, this tape was instrumental in selling tens of millions of dollars worth of workstations and servers. It turns out that though this was clearly made with the sales team as the intended audience, many sales offices would actually show this directly to prospects. But with each successive viewing, the sellers got more and more comfortable with how to pitch the WebFORCE line.
Without further ado, here for the first time on the web is “WebFORCE: To Author and To Serve”:
And that is how we launched WebFORCE!
To be continued…
[20 Years Ago, Part 14. Other options: prior post or start at the beginning.]
Getting the product ready in time was only half of the challenge for our January launch. The other half was getting all of the marketing items done on deadline. And in 1995, that meant dealing with multi-week workflows to create and purchase print advertising and to design and produce print collateral and video sales tools.
And to really get started on any of those projects, it was vitally important to have locked down the “identity” of the product: its name, its tagline and fundamental positioning, and its logo or visual identity.
As those of you who have been following this series know, the project was pitched to the leadership of SGI with the name “Spider” and the tagline “Now making a web comes naturally”. In the weeks that followed, that positioning started to feel weak to me. While it had the benefit of obvious analogy, it lacked any sense of the strategic land grab that I intended for the project. Also it seemed more appropriate for a singular product, rather than a product line that spanned multiple configurations of workstations and servers.
The search for a more appropriate identity had a very clear center of gravity; the organizing principle of the entire effort was that the web was the most important thing in all of computing. The web was the Big Wave that everyone needed to pay attention to.
And yet, there was not a single product that had “web” in its name at that time.
So, each day in late November and the first week of December, I thought up different web-based names. On the morning of Tuesday, December 6, while showering before work, the winning name came to me, “WebFORCE”.
I was instantly 100% sold. Within 24 hours, all documents relating to the project bore the new name.
Now, the mad scramble was to turn that name into a logo that we could use in collateral and advertising. I turned to the crack team of designers in SGI’s marketing communications department. Within a couple days, they presented me with this array of logos:
WebFORCE was my first real product launch, so I was very much learning on the job. I didn’t have any experience choosing a logo, but I knew what I liked and what I didn’t. These might have been fine designs, but none of them was close to what I needed.
The problem, though I wasn’t consciously aware of it, was that I didn’t really need an actual “logo”. I was launching a product line, not a new company – and SGI already had an awesome 3D-based logo. What I needed was some sort of “visual identity” that could anchor the marketing. And getting to that would take a surprising route.
Part of what I liked about the name “WebFORCE” was that it seemed to fit really well with a messaging element that I had come up with a few weeks earlier, the phrase “To author and to serve.” It was inspired by the motto of the LAPD, which I knew from TV shows like Adam-12 and Dragnet, “To protect and to serve.”
“To author and to serve” fit WebFORCE so well, that within days it became the official tagline for the product line. And it would also serve as key inspiration for the design of the product line’s ultimate visual identity – from a team that wasn’t even tasked with designing it!
A major component of the WebFORCE launch was an aggressive million dollar print advertising campaign. As soon as the project was funded, I started frequent meetings with the ad agency that SGI had recently begun working with, Poppe Tyson.
At one of those, I must have mentioned that I was struggling a bit to get the right logo developed. To my surprise, the creative team at the agency proactively took on the challenge. The next meeting opened with a sort of “hope you don’t mind” intro. And then they showed me a big bold design they had developed for WebFORCE:
It certainly lacked the simplicity of a traditional corporate logo, but this was a visual identity worthy of the first “web” brand. It had the color and depth one would expect of Silicon Graphics (including its embrace of purple). And it had sufficient breadth and scale to encompass the SGI logo as a supporting (and central) element. In short, it seemed perfect then – and it holds up well 20 years later.
And now, we had all that we needed to get started on creating print ads, a brochure, data sheets, and a launch video. To be continued…
[20 Years Ago, Part 13. Other options: prior post or start at the beginning.]
Having found a fortunate and just-in-time path forward on the authoring side of the WebFORCE1 project, it was time to focus on delivering the simpler, but equally vital, other half of the value proposition: web serving.
The approach seemed straightforward; instead of building our own software, like we were for authoring, for serving we would take the partnership route. We just needed to secure an OEM license with Netscape to bundle their recently released NetSite server software. But nailing down that “simple” deal would prove to be more difficult than I imagined for two reasons, one that was known to me at the time, and another that I would only figure out much later…
The complicating factor I was aware of was that in December 1994, SGI was already in the middle of a different OEM deal with Netscape. You see, our customer support team had more fully embraced the web than any other computer company at the time (and, arguably, more than any other company period), having launched a customer-facing portal called “Silicon Surf” in March of that year. Believe it or not, you can still interact with a live version of Silicon Surf from that period, thanks to the work of Daniel Rich, SGI’s “webmaster” back in ’94, who resurrected the site many years later from a promotional CD-ROM. (Yes, back then it actually made sense to distribute a website on a disk in order to get people excited to go online!)
By the way, when finding the screenshot of Silicon Surf below, I recently learned that it was the launch of SGI’s website that got the competitive juices flowing over at our rival, Sun Microsystems, leading to them to create the Sun.com website!
In the Fall of 1994, the team behind Silicon Surf, led by Kip Parent, had decided to do another thing no computer company had yet done – pre-install a web browser on every desktop, in order to make the web central to the support experience. So when I stepped in to negotiate on behalf of the WebFORCE effort, a single and simple OEM deal for the browser morphed into a two-part deal, with browsers for all SGI workstations and server software just for WebFORCE-branded configurations of workstations and servers.
Despite that complication, I was still expecting a quick and easy negotiation. After all, having the hottest company in Silicon Valley throw its weight aggressively behind the web, in general, and behind Netscape’s server and browser, in particular, would be a big win for Netscape. And given that our two companies were both founded by Jim Clark and that SGI was Netscape’s primary development and serving platform at the time, we seemed the most natural of partners. Why, we were practically family!
So, why shouldn’t we be able to put this deal together in just a few weeks? (And a few weeks was, indeed, all that I had.) The launch date was locked in: January 25. That meant I needed to close the Netscape deal by the end of December, or at the very least, the first week of January, in order to nail down all of the marketing materials.
My counterpart in the negotiation was Marc Matoza, who had recently joined Netscape as their first sales rep. I had naively assumed we would do a quick and friendly deal. In reality, the tone was far from “familial”. Making matters worse, Marc did not seem to share my sense of urgency. Quite the contrary, he seemed to view my deadline focus as a source of negotiating leverage. As the holidays approached, I knew I needed to take a different path.
In the technology business, it’s hard to understate the importance of right timing. I was truly fortunate not just to get into Stanford business school, but also to time it just right as a member of the class of ’93. As a result, I ended up riding out the recession in school and then entering Silicon Valley just as the web wave was beginning to swell. Many of the friendships I made at the GSB (in my class and in the class of ’94) formed the basis of an incredible network, touching almost every part of the emerging web industry. And one of those relationships in particular would come to play a pivotal role in getting me out of my negotiation quagmire.
There’s the people you know from classrooms and the people you know from parties. And then there’s people you know from playing hockey (or other sports). My fondest memories of Greg Sands, GSB class of ’94, are of getting schooled by him in how to translate my decent ice skating skills into playing rollerblade hockey. Even in a friendly game, hockey is pretty physical, but you don’t really want to check your business school buddies and send them tumbling to the blacktop. But Greg is a really great skater, having played on Harvard’s ice hockey team as an undergrad. So, I felt comfortable skating aggressively around him, even lightly checking him, knowing that it was way more likely that I would end up flat on my back than that he would. In short, we ended up getting to know, like, and really trust each other.
In Greg’s second year of business school, he spotted an interesting posting at the career center. Someone from the Stanford community was looking for a business school student to do some volunteer work on a startup business plan. The poster was none other than former electrical engineering professor Jim Clark, and the startup at that time was just Jim, Marc Andreessen, and the earliest seeds of what would eventually become Netscape. From that auspicious beginning, Greg would go on to become the company’s first business/marketing/product hire, coauthor of the business plan, and the person who gave the company its new name, Netscape, after the University of Illinois threatened to sue over the use of “Mosaic”. And now, he was the product manager of the very software products I so keenly wanted to license…
[Above: Greg and I in Stanford Business School Magazine, December 1995. Pretty clear we weren’t getting a lot of sleep that year!]
Greg and I met for coffee at Café Verona2 in downtown Palo Alto to talk it out. We didn’t do any actual negotiation. I shared my frustrations and my goals. And perhaps most important of all, I shared with Greg my “BATNA”. (That’s a term we both would have learned at the GSB in the negotiations class. It stands for “best alternative to a negotiated agreement”.) Although I was truly keen to bundle Netscape’s server software with WebFORCE, if for some reason we were unable to finalize a deal in time, I could live without it. In that case, we would emphasize our Web Magic authoring software and position the product line as Netscape-ready or add-your-own-server-software. This wasn’t a threat or posturing; I was just candidly sharing my situation.
Greg offered to see what he could do. Within days he broke the log jam. Terms became reasonable and the timeline radically accelerated. I ended up getting my deal well in advance of the holidays, and SGI became the second OEM licensee of Netscape. (The first OEM deal, struck a month earlier, was with Digital Equipment Corporation. That said, we would beat them to market, becoming the very first vendor of a turnkey web server.)
But what was it that had been the real friction? I didn’t ask, and Greg didn’t tell. But over time, I would come to understand that it wasn’t Marc Matoza dragging his feet. The real issue was Jim Clark, behind the scenes, who was still bitter about having been edged out3 of his own company. In my research for this blogpost, Greg recently shared with me that the WebFORCE deal “caused a bit of a firestorm internally, as Jim didn’t want SGI to get a special (and OEM prices always feel like specials).”
Special or not, I got my deal, and we were now on track to launch a kickass product on January 25, 1995, now about 40 days away!
To be continued…
1Though we had pitched the project to TJ as “Spider,” that was never really intended as the launch name. About two weeks after funding, I came up with the real name and tagline in the shower before work: “WebFORCE: To Author and To Serve”.
2It is now long since closed, but Caffe Verona played a role in Silicon Valley history – it was where Marc Andreessen first met Jim Clark.
3Jim resigned as Chairman of SGI, but only after years of strategic disagreement with our CEO, Ed McCracken, and a rising sense of being shut out of key decisions.
[20 Years Ago, Part 12. Other options: prior post or start at the beginning.]
The first mainstream and well-remembered “WYSIWYG”1 HTML editor, FrontPage, was released in October 1995. Less than three months later, the small startup that created it, Vermeer Technologies, was acquired by Microsoft for a whopping $133 million! FrontPage would become a key weapon for Microsoft in its ruthless, monopolistic “browser war” against Netscape.
But FrontPage was actually not the first WYSIWYG HTML editor; it was just the first one on Windows. A full year prior to Microsoft’s acquisition of Vermeer, Silicon Graphics, at the time the hottest company in Silicon Valley, launched a product called “WebMagic”. It was the actual first WYSIWYG HTML editor, empowering designers and business people for the first time to create web pages without learning to code HTML. This is the previously untold (and rather improbable) story of how that historic application came to be…
I’ll start the story from hours after I had secured $2.5 million in funding from Tom “TJ” Jermoluk, SGI’s President and COO, based on my pitch/commitment to launch a product line for web authoring and web serving by the end of January 1995. That deadline was less than 80 days away (a period that would include Thanksgiving, Christmas, and New Year’s!).
And that means that these events took place in the single craziest time of my career. It was such a blur, that I’m sure I’ll miss some key facts and miss-remember some details. With hope, others involved in the story will keep me honest.
I think it was in the afternoon of the day of the funding that Way Ting sought me out. He was the Vice President and General Manager of the Visual Magic Division (VMD) that created the desktop software environment and a bunch of tools to showcase the differentiation of our powerful workstations. And after the amazing events of the morning, he was keen to sign up for a critical element of the plan.
“We want to create that SGI-quality authoring tool you described,” he said.
“That’s great news,” I said.
“But there’s just one problem,” said Way. “The timeline is too short. I don’t think it’s possible to develop such a tool by the end of January. Any chance we can add a few weeks to the schedule?”
Way knew a heck of a lot more about software development than I did, but I had a deep conviction that timing was vital in this rapidly emerging web market. I feared that Sun or Apple were about to beat us to market with web authoring/serving solutions, and I strongly preferred to launch first with an imperfect product than to launch second or third with everything on my wishlist.
“I’m sorry, Way,” I said. “I know it’s crazy, and it may not be possible, but the one thing that is certain for this project is that we’re launching by the end of January.”
“Okay,” he said. “I’ll see what we can do.”
To my surprise, within a few days, he reached out to me again, asking if I’d accompany him to a meeting in Palo Alto with a company that had a possible solution to our problem. The company was Enterprise Integration Technologies (EIT), and although I didn’t know it at the time, it happened to be the startup that Marc Andreessen had moved to California for, and the one from which Jim Clark recruited him just months later to co-found what would become Netscape.
Our host for the meeting was EIT’s founder and CEO, Marty Tenenbaum, a more-than-a-little smart guy, with multiple degrees from M.I.T. and a PhD from Stanford. EIT was a pioneer in e-commerce, having conducted the very first Internet transaction in 1992. Therefore, it was not a surprise that nearly every desk had an SGI workstation on it. They were the real deal.
I have no idea how Way had managed to make this meeting happen, but it was pretty magical. What Marty showed us that sunny afternoon looked like exactly what I had been advocating for – an SGI-native web authoring system, with WYSIWYG HTML coding and an intuitive, drag-and-drop user interface. It looked pretty polished.
But when Way asked, “What is it written in?” Marty replied, “WINTERP.”
Ruh, roh!
I had never heard of that, and I’m guessing Way hadn’t either. Marty went on to explain that it was an interactive, object-oriented user interface language that EIT had developed.
As we drove back from the meeting, it became clear that this was hardly an ideal path for achieving our goal. I resolved to pursue my Plan B with fervor – getting SoftQuad to port their less-than-ideal alternative HTML editor, HoTMetaL Pro, as the candidate for bundling with our web workstations. It wasn’t WYSWYG, nor was it going exploit the differentiation of our OS and tools, but it could allow us to check-the-box for “HTML editor”.
But then, to my surprise, Way reached out to me a few days later with a proposal for another outing, this time to Sunnyvale, to the headquarters of Amdahl.
“Amdahl?” I thought. “Did I hear Way right? Why would we go visit such a freaking dinosaur?”
For my younger readers, Amdahl was a maker of IBM-compatible mainframe computers. Hardly the most likely place to find cutting-edge web software!
You may be thinking my story is old-timey, but here’s how ancient Amdahl looked to me 20 years ago:
Much to my surprise, what we found at Amdahl was a decent HTML editor, still under development by a single contractor developer, David Koblas. It was a Motif-based program, written in C++, running on Solaris. In short, it was exactly what we were looking for – the right kind of code base, far enough along in its development, that turning it into a robust SGI-native application just might be possible in weeks, not months.
I don’t know all the details, but within days we had struck a deal with Amdahl that somehow brought us both the code and David. In a recent email exchange, David recalls that to avoid creating a taxable event, no physical media were involved in the transfer of the source code; the bits were passed from Amdahl to SGI via FTP.
A small team was quickly assembled around David, including Ken Kershner (who managed the team), and Ashmeet Sidana, Baron Roberts, and Victor Riley. By then, I had locked in a launch date for the project: January 25, 1995. So this newly formed “WebMagic team” would have just under eight weeks to port to IRIX, integrate deeply with SGI’s desktop environment and media tools, and polish code that David now recalls as “quite buggy”.
In addition, the team fully embraced an even more audacious goal – full “render compatibility” with the now dominant browser, Netscape Navigator. And what that meant was aiming at a moving target. The team at Netscape was extending the capabilities of the browser at a blistering pace. The WebMagic team wanted to support it all, including tables, forms, and, yes, even the blink tag.
It took long days and nights, with David and Baron often working until 3:00am. (On those nights, they would typically switch to pair programming at 1:00am to minimize bugs.)
The heroic work of the team paid off. When we launched, WebMagic had become all that I and the team had hoped: a true WYSIWYG HTML editor with the polished look and feel of a word processor, drag-and-drop integration with SGI’s media toolkit, and pixel-perfect compatibility with Netscape Navigator.
And that is the rather improbable story of the creation of the very first WYSIWYG HTML editor.
But what of that “project” that WebMagic was such a central part of? To be continued…
1This is an old acronym for “What You See Is What You Get” which came into common use in the 1980’s during the word processing revolution. From Wikipedia “a WYSIWYG editor is a system in which content (text and graphics) onscreen during editing appears in a form closely corresponding to its appearance when printed or displayed as a finished product, which might be a printed document, web page, or slide presentation.”
[20 Years Ago, Part 11. Other options: prior post or start at the beginning.]
This post is kind of a footnote to the story of “The Big Pitch to TJ and the Exec Team“. It’s the revelation of two key pieces of information that Ciemo and I did not know at the time, but that were very helpful in setting the stage for our pitch.
The first piece of information was something that I would learn minutes after the pitch, and it was something that everyone in the room (but us) knew.
The second was something I wouldn’t learn until years later, and it was information known to only one person in the room. (And that person was the company’s President and COO, Tom “TJ” Jermoluk.)
The First Piece of Information
Victorious in our Big Pitch, Ciemo and I exited the Board Room and returned to the waiting area, not because we had anything to wait for, but just to take a few minutes to let it all soak in. We had landed $2.5 million, but to keep our end of the bargain, we would have to create and launch a whole new product line in less than 76 days. And we’d have to do it in a period of time that would include Thanksgiving, Christmas, and New Year’s!
As we stood in the waiting area, various execs came up and offered their congratulations, encouragement, and compliments on the presentation. Tom Furlong, our division’s GM, came up with a big smile on his face. “Nice job,” he said. “By the way, you have no idea how good your timing was.”
“Thanks,” I replied. “What do you mean?”
“The call with the country managers could not have set you up better,” he said. “The main topic of conversation was the Web. Multiple countries reported issues of losing account control, with Sun servers starting to penetrate some of our most strategic SGI-only accounts, driven by a desire for an Internet server. The big question everyone was asking TJ was ‘What are we going to do about this Web thing?'”
The Second Piece of Information
It wasn’t until almost three years later, in a lengthy and depressing BusinessWeek cover story entitled “The Sad Saga of Silicon Graphics,” that I would learn the other key piece of information we didn’t know. As it turns out, TJ was more than a little bit familiar with what we were pitching him; in fact, just a few months earlier, Jim Clark had been wooing him to take on the CEO role at Netscape!
And that means he would have had quite a bit of knowledge about the Web’s rapid growth, its potential as a server market, and the degree to which the company at the center of the action was leveraging SGI boxes for development and serving.
Here’s what Rob Hof wrote (in August 1997) of the incident and the reaction of our then-CEO, Ed McCracken:
The Internet’s singular potential should have been more obvious to Jermoluk than to anyone. In late summer, 1994, Clark had offered him the CEO spot at Netscape. But McCracken didn’t want to lose Jermoluk, least of all to Clark. So to keep him, SGI offered the young president a new compensation package valued at $10 million-plus over four years. He stayed1.
In Silicon Valley, more than any other place, it is often said that “timing is everything”. And certainly it is now clear that our timing could not have been better for that historic pitch.
Speaking of timing; did I mention that we now had 76 or fewer days until launch?
To be continued…
1But he would not stay the full four years. In fact, he would resign in less than 18 months to become the Chairman, CEO, and President of @Home.
[20 Years Ago, Part 10. Other options: prior post or start at the beginning.]
The big day was finally here. I’d made it down from the city ahead of the rush hour, and arrived at SGI well before the start of the exec team meeting.
I headed down to the Building 6, where the execs had their offices, and found the Board Room. Meeting me there was David Ciemiewicz, a.k.a. “Ciemo,” an engineer as passionate about the web as I was, who had in recent weeks gone from being a friend and occasional technical advisor to becoming essentially the technical co-founder for the new business we hoped to get green-lit. And this morning, he would also be handling an important, if not glamorous task — hitting Page Down to advance the slides of the Showcase presentation, so I could focus on speaking.
The Board Room was enormous and brightly lit, with a long table running most of its length. Ciemo went about getting the presentation on the Indy, while I stashed my props in the belly of the lectern at the head of the table. After a quick run-through of the deck, we exited the room and camped out in small waiting area outside.
We’d end up being there for a while, as our presentation wasn’t scheduled until after the weekly conference call with country managers. Soon, the execs started showing up for the meeting. Though almost none of them recognized me (and vice versa), most of them knew Ciemo, who had been at the company for eight years, so there were a lot of smiles, greetings, and small talk as they headed in.
I was on the lookout for one of the few execs that I actually did know, our division’s GM, Tom Furlong. You see, I hadn’t had a chance to let him know about my last-minute addition to the presentation. By the time Tom arrived, the Board Room was more than half full, as the meeting was only a few minutes away. “All set?” he asked.
“Yep,” I replied, “But I need to tell you something.”
“Shoot,” he said.
“I’m sorry I didn’t get to discuss it with you in advance,” I said. “But last night I decided to end the presentation with a request for investment.”
“How much?” he asked.
“Three million.”
“Okay,” said Tom, with a bit of a chuckle. “Good luck with that!”
He headed into the Board Room, leaving us to ponder whether he thought I was smart or crazy.
After all the execs made it in, the doors closed, and the long wait began. The country manager call took something like 30 minutes, but it felt like an eternity. Finally, the door opened, and Ciemo and I entered a room that now looked dramatically different. What had been bright, empty, and roomy, was now mostly dark and jam packed with people. The long table was full, with five execs on each side and another two on the end. And the back of the room was crowded with another dozen or so folks, including each division’s director of marketing.
Ciemo got the presentation up on the big screen, and I took my place at the lectern, which was now in the only brightly lit part of the room. A few small lights above the table provided just enough illumination for me to see the faces of the execs. Everything else, including all the folks at the back of the room, was in near total darkness.
I looked around the table, and made eye contact for the first time with the company’s President and COO, Tom “TJ” Jermoluk. He sat halfway down the left side of the table. His blond hair and relaxed confidence gave him a surfer vibe. He gave a big smile and said, “Let’s go.”
No recording was made of this presentation, and the digital copies of the Showcase file have long since been lost. All that remains, aside from memories, is one color photo that I used to illustrate one of the slides. But here’s what I remember of the pitch…
After introducing myself, I started with a slide introducing the World Wide Web, illustrated with example web pages.
“The Internet has been around for 25 years,” I said. “But recently it has entered a new phase of explosive growth. Why? Because the Web makes the Internet visual, media-rich, and interactive. And that makes it both compelling and easy and to use. In the process, it is now creating one of the fastest growing new markets for visual computing…”
I should probably point out that I did not have a script or notes, and that this was a true SGI-quality presentation, which is to say that there were no words on the slides other than titles. But my pitch flowed like water that morning 20 years ago, as I was delivering a narrative I felt deep in my bones.
“Let’s take a look at what I mean by fast growth,” I said, and Ciemo brought up the next slide, showing a graph1 that looked something like this:
“By every important measure, the World Wide Web is growing exponentially. The number of websites is now doubling every three months! And here’s why that growth will not slow any time soon…”
From there, I showed and talked about a virtuous cycle. (More people getting online, inspiring more websites to be created, leading to more compelling content, leading to more people downloading the browser and getting online, and on and on.)
“As that cycle continues,” I said, as we advanced to the next slide. “It’s giving rise to two ‘picks and shovels’ market segments, that we should not only enter, but that we should, in fact, lead. Those segments are web authoring and web serving.”
“On the authoring front, I should say that I’ve been incredibly frustrated by our experiences in the multimedia authoring market. With Macromedia unwilling to port to IRIX, we’re frozen out of the main action. But with the web authoring market, we have no such disadvantage. In fact, we can (and should) jump in, feet first, and create a visual, media-rich HTML authoring system that highlights the differentiation of our workstations. But even if we don’t do that, we don’t have to stand on the sidelines. SoftQuad, a small software company in Toronto, has created the very first HTML editor and is open to a deal to port it to IRIX.” I paused, reached down into the belly of the lectern, and pulled out my first prop, a shrink-wrapped box of software. “It’s called HoTMetaL Pro, and it’s currently available for Solaris2.”
“Can I see that?” asked TJ.
Attention quickly shifted, first to TJ, then back to the box in my hands. I leaned forward and handed it to the exec seated closest to me on the left. It was quickly passed along to TJ. The room was silent as he slowly examined all sides of the box. “Why don’t we make something like this?” he asked, looking around the table, and then handing the box not back toward me, but to the exec to his left. For the next couple minutes, each VP repeated the little ritual of accepting the box, examining it carefully, then handing it to the guy to his left.
As the box made its way around the room, I returned to my pitch, shifting over to the web server market. Here, I would have emphasized the central role of Netscape (the company having just renamed itself the prior week), and the incredible good fortune of having our recently departed founder, Jim Clark, at the helm there; and them using Indys as their development environment and as the server hosting the downloads of the browser. It was a hot new server market being born on our platform; we just needed to license their server software and bundle it.
I laid out my proposal, at high level, to enter these two market segments with a new product line, comprised of workstations and servers, bundled with all the right tools for kick-ass, media-rich web authoring and serving. To make it more tangible, I teed up a product line slide by saying, “Introducing Spider from Silicon Graphics.” The slide made it look like the product line already existed and was already supported by print advertising. And then I reached into the lectern to get my second prop, the black plastic Indy shell. Holding it up, I said, “And the entire product line will come in black.”
I paused, hoping TJ would chime in, but instead, someone from the other side of the table piped up. (I would later find out that it was the company’s VP of Manufacturing.) He said, “I have to draw the line there. We don’t want that kind of inventory headache.”
TJ added, “Agreed.”
“Okay, not a problem,” I said, as I quickly disappeared my prop. “A different color shell is not a critical success factor.”
My pitch would go on to show how we were already had a warm welcome from the market, with prominent sites already “Powered by Silicon Graphics,” including HotWired and the Internet Underground Music Archive (IUMA)3.
“The web is bringing Silicon Graphics to a whole new set of customers.” I said, as we hit our second-to-last slide. “And these first-time buyers are blown away by our products. For example, the team at Sound Print Media Center were so happy with their purchase of an Indy for web authoring and serving that they mailed us this photo!”
And then came the final slide, entitled “To Become The Market Leader”. This was the one I added the prior evening, and did not look like any other slide in the deck. Instead of one main image and no words, it was really just a spreadsheet with pretty small font. It detailed what I thought we should spend money on to create and launch the product line — and how much incremental revenue I projected we would deliver in the first two quarters.
I wasn’t sure what detail to go into in my pitch, but at some point TJ stopped me, having absorbed the level of detail he wanted.
“Okay,” he said. “Let me get this straight. If I give you two to three million dollars, you’ll get us into the market in January and take up your outlook for the next two quarters by 15 million?”
All eyes were now on me. It was pretty clear that the right answer was “Yes.” But a few things prevented me from speaking. First, I had never been in a conversation about quarterly “outlooks”. Second, since I didn’t personally have one hanging over my head, I wasn’t sure what it would mean for me to modify one over someone else’s head.
With the extended silence starting to get awkward, my boss, Jim White, stepped forward from the darkness of the back of the room into the dim light near the table’s end. “That’s right,” he said.
TJ turned in his chair, and all eyes followed.
“We will take up our outlook for Q3 and Q4,” said Jim.
TJ nodded and turned his chair and gaze back to me. Then he said the best five word sentence of my career, “Make it so, Number One.”
After a moment, he said, “Okay, let’s take a 10 minute break.”
Someone turned on the lights. Ciemo and I shook hands. Jim White came up close to me, put his hand on my shoulder, and whispered into my ear, “Your top priority now is hiring.”
To be continued…
1DBased on data from an M.I.T./Matthew Gray report, “Measuring the Growth of the Web, June 1993 to June 1995”
2The flavor of Unix of our arch enemy, Sun Microsystems
3Our second website sponsorship deal. This one only cost us one Indy, I believe, and was done out of Corporate Marketing’s budget.
[20 Years Ago, Part 9. Other options: prior post or start at the beginning.]
It could be said, as I prepared for my big exec team presentation, that I didn’t quite know what I was getting myself into. You see, I was pretty green – in more ways than one. I’d been at SGI less than a year, and aside from a summer internship at Tandem, this was my first job in Silicon Valley, my first job in tech. Heck, it was even my first job in the for-profit sector! And unlike all the other product manager types at SGI, I did not have an engineering background, so I was essentially learning Computer Science on the job. Oh, and although I was 32 at the time, I looked way younger.
And now I was stepping forward, asking to be put in charge of an effort to launch the company into the web authoring and web serving markets with a whole new product line that would span multiple divisions.
The people I was about to present to, on the other hand, were leaders of the hottest company in Silicon Valley, and they were all incredibly technical, with real depth in domains like 3D graphics, chip design, systems architecture, networking, and so on. In attendance would be the GMs of four hardware divisions and two software divisions, a VP of manufacturing, as well as other execs (finance, legal, and marketing, I think). Running the meeting would be Tom “TJ” Jermoluk, the hotshot technical leader who had rocketed up from engineer to President and COO in less than eight years.
In other words, I probably should have been more than a little nervous. (And it might have been a good idea to do some homework on my audience.) Instead, I stayed calm, cool, and keenly focused on building up an SGI-quality presentation.
Fortunately, my colleagues on the Indy marketing team had my back.
For example, on Monday, two days before my presentation, Sanford Russell, who had done the Hotwired site sponsorship deal that planted our flag in the web market, asked me, “Have you ever presented to TJ before?” I didn’t realize it at the time, but in hindsight, he surely already knew the answer.
“No,” I said. “Honestly, I haven’t even met him yet.”
“Hmmm,” he replied. “Would you like a tip?”
I nodded.
“TJ is very tactile,” he said. “You may want to bring a prop or two to make your pitch more tangible.”
I thanked him and ran off to look at my draft presentation through a whole new lens.
How to enhance it with “props”? The first thing that came to mind was the part of the presentation on the web authoring market opportunity. In that, I had planned to make an impassioned plea for creating an SGI-quality, drag-and-drop, WYSIWYG HTML editor, and to only make brief mention of “Plan B” (just getting SoftQuad to port HoTMetaL Pro). Suddenly, I recalled the shrink-wrapped box of HoTMetaL Pro that I brought back from Chicago. I had my first prop. (Photo below is pretty much what it looked like, although this is actually version 2.0 and for the Mac.)
To find a second prop, I pondered how I could make more tangible the new product line I was proposing to create. And so I headed over to Manufacturing. On foot. (Yes, we were not manufacturing in China.) I walked across the driveway of our office park in Mountain View (the same one that today is headquarters for LinkedIn), and entered Building 1, where our workstations were assembled and packed for shipping.
Within minutes something caught my eye. Indy had a very distinctive bright turquoise shell. But sitting on a shelf a bit to the side of the assembly line was something that looked just like an Indy shell, but it was pitch black. I asked what it was for and was told that it was for the Indys sent to Tandem via our OEM partnership.
(BTW, the one that my friends in Manufacturing lent me did not have a Tandem badge on it; it was just the shell, not the whole system in the picture above.)
Now, I had two props, but I also had a new puzzle. To make the proposed product line truly tangible, I’d need something more that a distinctive black shell. Suddenly it was clear that I was missing something vitally important to the pitch – a name for the product line!
As any of you who have ever named a product or company can attest, coming up with a great name can take days, weeks, or even months. I had less that 48 hours. Fortunately, the pitch black shell yielded some inspiration. If this were to be the first product line for the builders of the web, and it were to be all black, then it should be called, “Spider1”. And the name gave rise to a tagline, “For some, making a Web comes naturally.” (Okay, kinda hokey and a bit tortured in hindsight, but certainly good enough for creating a slide that would make this product line truly tangible!) And based on this image I found in my notebook, it looks like I may have ended up creating a mock print ad as the primary image for one of the slides in the deck:
By Tuesday evening, I was ready. My presentation was done, and I had my props. My plan was for a quick dinner, a few hours of rehearsing, then heading home at a decent hour for a good night of sleep. My presentation was at 9:00am.
I was in a great mood as I headed down to Café Iris with Sanford Russell and another deeply experienced member of the Indy Marketing team, Peter Hubbard. Peter had taught me a lot about how the workstation business works. Originally from the U.K., he had a quick wit and the remnants of a British accent. As we ate our free dinner (a now-common perk that SGI helped to pioneer), Peter asked me if I was “all ready” for my big presentation. Indeed, I was, I assured him. Then he asked with a smile, “So, how much are you asking for?”
“Um,” I said, a word that I rarely use. “I’m not actually asking for anything. Tom asked me to not go hat in hand.”
Sanford, as if on cue, jumped in. “So, let me get this straight. You’re going to take 20 or 30 minutes on the agenda of the COO and exec team to get them excited about the company’s biggest market opportunity, and then you’re not going to ask for any investment?”
Without missing a beat, Peter added, “Sounds like you’re wasting their time.”
Suddenly, I wasn’t hungry any more. This evening would no longer be about rehearsing and going to bed early. Now, I had one more slide to create: the business case for a multi-million dollar investment request.
To be continued…
1For those who know how the story unfolds, this interim name is no doubt a surprise.
[20 Years Ago, Part 8. Other options: prior post or start at the beginning.]
It was Friday evening, and my big break was now just five days away. By Wednesday morning, I needed to be ready to present my Big Idea in front of the company’s COO, Tom “TJ” Jermoluk, and the exec staff. And I didn’t have even a first draft of a presentation!
Oh, and did I mention that it was 1994? I didn’t have access to PowerPoint; and there were only a few thousand websites total (so not a lot digital images available online).
Fortunately, my boss, Jim White, was a master of creating SGI-quality presentations, and he had recently shared his secrets with me. While the specific tactics will strike the modern reader as charmingly antiquated, the strategy behind them is as relevant today and remains at the core of my communications toolkit.
Before I share the system with you, I should explain that by “SGI-quality presentation” we would have meant a digital slide deck as boldly visual and differentiated as our smoking hot, colorful, media-monster 3D workstations.
Onward…
Start with a Stack of Blank Paper
Don’t think about what will go on your title slide or the headline of slide number one. In fact, don’t worry at all about sequence when you’re just getting started. Instead, just focus on the key concepts that you need to convey in order to get your audience to believe what you want them to believe. Write each concept on its own sheet of paper.
Spread the Sheets Out
Now, it’s time to think about order. Use a long table or an open area of floor space to layout the sheets of paper. Start re-arranging them and keep at it until you have an end-to-end flow that feels right.
Find High-Impact Images
Once you know your narrative arc, it’s time to find an awesome image to illustrate each key concept. This image will fill most, if not all, of the slide. In fact, each slide will be nothing more than a big image, a one-line headline, and, perhaps, a sub-head or caption; no bullets. This was truly a “visual computing” approach to making a slide deck.
Today, it’s trivially easy to find great images online, but back in 1994, we needed other tricks up our sleeve, such as…
Bring Out Your Box of Magazines
Yes, a box filled with National Geographics, Times, Newsweeks, and so on. Once you know your storyline, just start flipping through your stash of magazines. Keep an eye out for high-impact images that make you smile or laugh. When you find one, see if you can logically tie it to any of your key concepts. If so, yank out the page and set it aside.
Here’s an example image (from National Geographic) that I ended up using a few months later, but I’ll tell you more about that when the time is right:
Head to the Scanner
With your stack of eye-popping, emotionally-charged photos, head on over to the scanner and turn them into digital files. If I recall correctly, this took a while and was kind of a pain. I think the files ended up on a network drive, and we had to use Unix commands to find and move the files over to our own workstations. Nonetheless, the process worked, providing high-quality color images that looked great even when projected on a large screen.
Now, You’re Ready for “Showcase”
Although PowerPoint had been around since the late ’80’s, we did not have access to it for two inter-related reasons. First, it ran only on PCs and Macs, not Unix systems. Second, SGI had gotten rid of all PCs an Macs; the company ran its entire business only on SGI hardware. And so, if you were going to make an SGI-quality presentation, you were going to make it with our very own, SGI-made presentation tool, “Showcase”.
Showcase was a very powerful tool, with better media and graphics features than PowerPoint at the time. You could compose slides by dragging-and-dropping images, audio, and video. It even allowed for creation and editing of 3D objects, scenes, and text. (Not too surprising, since it was built to literally “showcase” the differentiation of our 3D workstations.) Here’s the “3D Gizmo” UI with, among other features, material and texture palettes:
I have to say, these old screenshots still look pretty damn good!
But for all of Showcase’s strengths, it was also more than a little bit buggy, and prone to freezing or crashing in the middle of editing. Frequent saving was a critical part of any successful project. For all of these reasons, marketers at SGI often lovingly referred to this vital tool as “Slowcase”.
So, that’s how SGI-quality presentations got made 20 years ago — and a taste of what I was in for over the weekend and into the early part of the coming week.
To be continued…
[20 Years Ago, Part 7. Other options: prior post or start at the beginning.]
It was the month of November 1994, and my mission was clear: create and launch the first hardware + software web product line, putting Silicon Graphics (SGI) into the leadership position of a market about to explode. Based on what I learned in Chicago, I believed that if we launched by end of January, we had a very good chance of beating key rivals Sun and Apple to market with solutions for the most valuable “picks and shovels” segments: web authoring and web serving. To get there, I had a two-part plan, focused on forging internal parternships with two other divisions within the company.
The first part was to partner with NSD (Networked Systems Division), a business unit that had been formed within the last year to expand the company’s footprint beyond 3D workstations into the market for high-performance servers. If our two divisions worked together, we could create a product line with the Indy workstation as one entry point (a multimedia monster for both web authoring and web serving) and the Challenge S as the other entry point (NSD’s Indy-based entry-level offering, an ideal web server). The rest of the Challenge server line (see image below) would provide a path for massive scalability.
The second part was to partner with one of our two software divisions to create an awesome, SGI-native, graphics- and media-centric, drag-and-drop, “WYSIWYG1” web authoring tool that we could bundle with our workstations.
To Author
Since it was more than a little ambitious to dream of creating such a tool in less than three months, I started with the authoring software. My first stop was Silicon Studio, a division recently formed to create authoring software for interactive content. Heading up product management there was none other than Scott Bonham, who had hired me into the company and then given me a big break by moving and an allowing me to become his backfill. Despite my clarity, conviction, and passion, nothing I said could convince him that the web should be anything other than a secondary focus for Silicon Studio. Their plate was already full, working on an authoring system for video games.
Oh, well. At least I had one other software division I could partner with, VMD (Visual Magic Division), the group responsible for SGI’s “Indigo Magic” desktop environment (see image below) and a bunch of cool software tools highlighting unique capabilities of our systems. They even had a team focused on publishing. But conversations there fared no better. My logical champion to take on the project was dismissive of HTML, seeing it as an inferior derivative of SGML2. He would happily lead an effort to build an SGML editor. I thanked him, but suggested the web was unlikely to switch to SGML, even if we built the best damn SGML authoring system in the world!
Suddenly, SoftQuad’s HotMeTaL Pro3 started to look much better to me, despite its unlovable interface. I set to work negotiating the terms of a deal to get it ported to IRIX, so that we could bundle it with the workstation part of the web product line I planned to launch in January.
And To Serve
I hoped I’d fare better with the server division. After all, the plan there required no software development, just a simple bundling of existing hardware units with third-party web server software (to be licensed from Mosaic Communications). SGI would be first to market with a “turnkey web server” for very little effort. Lenny Rosenthal, who headed up marketing for NSD, was conflicted. He saw the great potential of the market, but knew that convincing his boss, Ross Bott, the GM of the division, would not be easy. He arranged a meeting on a Thursday afternoon for us to make the case. Ross was a seasoned hardware exec, very technical, and methodical. I, on the other hand, was inexperienced, learning Computer Science on the job, and given to a passion that might be called “evangelical”. The meeting clearly did not go well, but no decision was made on the spot. The next day, however, Lenny told me that NSD would not be jumping with me into the web server market. Instead, they would stay focused on the market for high-scale database servers.
Dead in the Water
My bold plan could survive without homegrown web authoring software. But trying to make SGI the leader in the web server market without the participation of our server division? That was laughable. Our first-to-market web product line was dead in the water.
And that was simply not acceptable.
It was a Friday afternoon (likely November 11). I went to see my boss, Jim White. Readers of this series may recall that Jim had taken over the head of marketing role for the division behind Indy, DSS (Digital Sight and Sound), and immediately empowered me to focus my energy on finding new markets. I shared with him my frustration with the disastrous results of my internal partnering efforts, concluding with, “SGI is in the perfect spot to take advantage of the biggest new market in computing, and we’re going to totally blow it. We’re going to just let it slip through our fingers.”
Jim’s a pretty intense guy. Smart, confident, and passionate. He didn’t hesitate in his response, as if what to do should have been completely obvious to me. He asked, “Why don’t you just do it?”
The light bulb went off. It hadn’t occurred to me that such an option existed. But as soon as he said it, I realized that there was a pathway forward, if I could grab full leadership of a company-wide effort. “I’m in,” I said.
Minutes later, we were in the cubicle of Tom Furlong, General Manager of DSS, pitching the idea of creating a new product line by bundling software for web authoring and web serving. Tom, who embodied the epitome of the the can-do spirit of mid-’90’s Silicon Graphics, was immediately supportive, saying that he had been advocating for “solution bundles” for a while. “Let’s do it,” he said. “What do you need from me?”
“I need to be knighted,” I said.
Tom smiled, and without missing a beat, pretended to pick up a sword. “You are hereby knighted,” he said, dropping the virtual blade to my shoulder.
“That’s awesome, and I really appreciate it, but I think this knighting will have to come from higher up,” I said. “This is a mission that requires product changes in multiple divisions.”
Still smiling, Tom stepped toward his desk and picked up the phone. “Can you be ready to present at TJ’s business ops meeting on Monday?” (“TJ” was Tom Jurmoluk, the company’s COO.)
Without hesitation, my mouth said, “Yes,” but my mind thought, “Whoa, that’s crazy. I don’t even have a draft presentation!”
A minute later, Tom hung up the phone. “Okay, Monday’s totally booked, but you’re now on the agenda for the exec team meeting on Wednesday.”
I thanked Tom, and as we headed out of his cubicle, he said, “One thing, though. I don’t want you go hat in hand, asking for money.”
I nodded and quickly left, eager to start working on what might be the most important presentation of my Silicon Valley career.
To be continued…
1This is an old acronym for “What You See Is What You Get” which came into common use in the 1980’s during the word processing revolution. From Wikipedia “a WYSIWYG editor is a system in which content (text and graphics) onscreen during editing appears in a form closely corresponding to its appearance when printed or displayed as a finished product, which might be a printed document, web page, or slide presentation.”
2“Standard General Markup Language,” the father of HTML.
3The first commercial HTML editor, which I had encountered weeks before.
[20 Years Ago, Part 6. Other options: prior post or start at the beginning.]
20 years ago today, the new medium of the web got a serious dose of “new media” with the launch of Wired magazine’s online sibling, HotWired, and its then-innovative monetization mechanism, the banner ad. Of course, much has been written about the birth of the banner ad, due to the remarkable impact and longevity of the format. (For example, here’s an AdAge piece on the 15th anniversary and AdWeek on the 20th.) Below are two of the original 12 banner ads:
The cheeky “Have you ever clicked your mouse right here?” one at top is from AT&T. Other big brands in on this online “first” included Sprint, IBM, Club Med, and the then new (and not yet totally reviled) wine cooler alternative, Zima. You can see the full list of banner first-adopters in Andrew Anker’s answer in this Quora thread. (Andrew was HotWired’s CEO and co-founder.)
An interesting challenge faced by the pioneers of digital advertising was that few (if any) of HotWired’s first 12 clients actually had a website ready to direct consumer traffic to! So what happened if people clicked on one of these puppies? And click they did! Reports vary, but on the first days of the site going live, the click-through rate on the banners was as high as 78%, (though within weeks or months they would drop to 2%1). The answer: they went to a branded microsite, hosted on HotWired.com. That way, HotWired could assure a smooth user experience. Those microsites were built by Organic Online, the very first digital ad agency, which was in the same building in South Park as the HotWired team.
But enough about banner ads. (In more ways than one; I can hardly believe they still exist!) Instead, I’d like to take this historic anniversary day to pay homage to a different “first digital ad” that also debuted 20 years ago on HotWired: the web’s first “site sponsorship”…
While the first banners adorned the various secondary pages of the site, the home page actually was banner-free:
But it wasn’t ad-free. Though not captured by this old screen-grab (credit: web UX pioneer Jakob Nielsen), there was a very prominent ad unit at bottom of the page, right in the center, which made it clear that this site was running on the sexiest computer hardware around — Silicon Graphics (SGI).
I’d like to claim credit for coming up with the deal behind this other first digital ad. After all, I was leading the charge to explore the web as a possible new market for the company. And I had first heard the term “web server” nine months earlier from none other than Jonathan Steuer, the information architect for what would become HotWired. (He was intent on using Indys for the web server from the very beginning of the project2.)
No, the credit for negotiating the web’s first site sponsorship deal goes to Sanford Russell (also on the Indy marketing team at SGI) and Andrew Anker. The details are a bit murky in our collective memory, but the best I’ve pieced together is that we traded five beefed up configurations of Indy in exchange for a six-month exclusive sponsorship. The retail value of those machines was probably $40,000 to $50,000 (and the cost to us, given our high margins at the time, was probably about half that.)
My fondest and most vivid memory is what happened between when the ink on the deal dried and when HotWired launched, a period in which we needed to figure out what we wanted the sponsorship ad unit to look like or say. I called a brainstorm session with Sanford, Pat Tickle, and a few other Indy marketing colleagues. A bunch of ideas went up on the white board, but I came up with the winner. Actually, in truth, I stole the winning idea from a different domain of SGI marketing.
A few months earlier, I had attended my first SIGGRAPH, down in Orlando, Florida. In that era, SGI was so dominant that our relationship to SIGGRAPH was almost like Apple’s relationship with MacWorld. Our “booth” was freakin’ enormous, so big, in fact, that it bore the name “Silicon City” on signage towering over its four huge entrances. Below that, it said “Powered by Silicon Graphics”. And that was the magic phrase I was searching for! Once that bubbled up in my mind, I was sure we had the winner. The brainstorm ended as soon as I spoke it aloud.
I’ve searched and searched and not found a screenshot of the full home page of HotWired at its launch. But I have found one from a few months later, where the “Powered by Silicon Graphics” ad unit is highly prominent (and clearly clickable):
So, there you have it — the previously untold story of the web’s other first ad unit. The “Powered by Silicon Graphics” campaign with HotWired was a big hit, giving us instant cachet and credibility in the nascent web server market (even before we had agreed upon a strategy). In the months that followed, we would do similar deals (although for considerably less hardware) with several other high profile websites, including the Internet Underground Music Archive, Organic Online, and Rolling Stone, creating the impression that we were the web server market leader even before we launched our web server product line. Within months, sites even started putting “Powered by Silicon Graphics” on their home page without us giving them anything at all! Eventually, the term “powered by” became the de facto standard for site sponsorship deals. But how all of that would come to be is a story best saved for a future post.
[Update: The folks at Wired now have a nice telling of the creation of HotWired up.]
To be continued…
1 Almost all of the facts in this paragraph I learned from a recent interview with Andrew Anker on the Internet History Podcast
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National Center For Supercomputing Applications (NCSA)
(1985 to present)
Founded in 1985 by Nancy St,John & Craig Upston (Co- Managers). Located at the University of Illinois at Urbana- Champaign. Pioneering Scientific Visualization software projects that created tools that scientists themselves could use. Stefen Fangmeier (ILM) was a TD from 19?? To ??.
New York Institute of Technology (NYIT)
In 1974 Dr. Alexander Schure, a wealthy entrepreneur, began to assemble the Computer Graphics Laboratory (CGL) at the New York Institute of Technology. His vision was to create a feature length animated film, with the aid of the days most sophisticated computer graphics techniques. NYIT itself was founded by Dr. Schure, had grounds encompassing numerous estates situated in the beautiful wooded hillsides of Old Westbury New York. Some of these estates were owned by members of the Rockafeller family, who also happened to have a seat on the board of Evans & Sutherland. Because of the close association of E&S with the University of Utah, Dave Evans recommended to Alex to seek out Edwin Catmull to head the new CGL. Ed Catmull had just finished his Ph.D. at Utah and taken a job at a CAD/CAM company called Applicon. It was not a hard sell to get Ed to leave Applicon for NYIT however, so he and fellow Utah graduate Malcolm Blanchard packed their bags for New York. Alvy Ray Smith and David DiFrancesco (both fresh from Xerox PARC) joined the team a few months later in what was called the ³Gerry Mansion². Alvy and David had heard of Dr. Schure¹s plans from Martin Newell at Utah (whom Alex had just hired briefly as a consultant). Dr. Schure had recently come through Utah and literally ordered ³one of everything² to jump start his NYIT project. Some of this equipment included a DEC PDP-11, a new E&S LDS-1 and the first random access frame buffer also from E&S. Later, the CGL group would also receive the very first commercial VAX. [SIDEBAR] VAX ALMOST SMASHED! In fact, the VAX almost never made it inside the building, if not for Alvy Ray Smith¹s quick actions. It seems that when the computer was just lowered off the back of the delivery truck, another truck parked behind and uphill had it¹s brakes slip, which started it rolling towards the brand new machine. Alvy quickly jumped in the driver-less truck and stopped it just before it could smash the VAX back into the very truck it was just unloaded from. The CGL quickly attracted other technology experts and artists, including Christy Barton(from E&S), Tom Duff, Lance Williams, Fred Parke, Garland Stern, Ralph Guggenheim, Ed Emshwiller, and many others. Throughout the 1970s, the people of the CGL thrived in a pioneering spirit, creating milestones in many areas of graphic software. Many of the ³firsts² that happened at NYIT were based on the development of the first RGB full color (24bit) raster graphics. A few of the more notable ³firsts²: First RGB anything (because they had the first RGB framebuffers in the world). First RGB paint program (Paint by Alvy Ray Smith). First soft-edged fill (Alvy Ray again). First computer-controlled video editing. First TV commercial with raster graphics (Lance, I think, or maybe it was Ephraim Cohen). First pixel dissolve. First networked computer system (Christy rolled our own for us). The alpha channel is invented by Ed Catmull and Alvy Ray Smith. First hidden surface algorithm within a pixel (Ed). Lance Williams invented mipmapping (texture mapping is still done this way today). Garland Stern implemented the first scan and paint system (this is how the Disney/Pixar CAPS system now makes 2D animation - different system but same idea). The atmosphere at the CGL was also very open, with many invited tours coming through the lab all year-round. Other universities like Cornell, and companies such as Quantel were among those to visit and take notes about what was being developed. The personnel structure was virtually non- existent, with never any heavy handed management from Dr. Catmull. People did what they were best at and helped each other out whenever needed. [Strangest Job Title ever!] Alvy Ray Smith would later accidently come across an organization chart for the lab put together by Dr. Shure. Ed Catmull was running the lab of course but there where people listed above and below him that no one had even heard of. Alvy was particularly amused to find that his official title was ³Information Quanta². A term very much in keeping with Dr. Shure¹s somewht unique, and non-standard form of communicating. Ed Catmull¹s Tween, Alvy Ray Smith¹s Paint program, and the 2D animation program SoftCel, all were in keeping with the original charter of the CGL, which was 2D CG. There were also many breakthroughs in image techniques involving fractals, morphing, image compositing, and Mip-Map texture mapping and many others. Key to this pioneering effort was the seemingly unlimited financing evidenced by Alex Schure. One such example took place when Alvy Ray Smith spoke with Alex about how good it might be to have not just the one, but three frame buffers. This way, Alvy explained, the three 8bit buffers could be combined to create the first RGB color frame buffer ever! Sometime later Alex not only delivered the two additional frame buffers, but an additional 3, which gave the CGL team a grand total of 6. (³Enough for two of those RGB things² said Alex.) At $60,000 each (plus the $80,000 for the first) what this meant in today¹s dollars was that on a simple request, Alex had just delivered about $2million worth of equipment. More Utah people joined the CGL, including Garland Stern who would write the vector animation system BBOP. David DiFrancesco would also begin what would be turn out to be a long association with film recording at this time. Jim Blinn even worked at the CGL as a summer intern in 1976. [SIDEBAR] TUBY THE TUBA! At this same time as the CGL was up and running, Alex had about 100 traditional animators working on a film called ³Tuby The Tuba². Unfortunately, after two years when the film finally screened, everyone¹s worst fears were realizedit was worse than awful. Several different department also existed at NYIT by now, in different neighboring mansions; an audio group, a video/post production lab, and a computer science department as well. One project that was successfully completed, was a half hour video (2² with a single frame recorder) called ³Measure for Measure², which combined conventional cel animation with TWEEN imagery. In 1979 when Ed Catmull left to start the Computer Graphics Division at Lucasfilm, many wanted to come with him. In fact, Alvy, Tom Duff, and David DiFrancesco all left and went elsewhere while waiting to join Ed in California when the time was right. Ralph had promised to stay at NYIT a full year, and he honored that commitment, even turning down an offer from Alex Schure to head the CGL group so that he would be free to leave one that year was up. A New York City commercial office was also established to market and sell the technology developed in Old Westbury. Known as CGL Inc. CGL Inc. also produced numerous commercial graphics jobs for the broadcast market. The WORKS (The remaining historical text for NTIT/CGL was contributed by Paul Heckbert) Shortly after Catmull left NYIT, Alex's son, Louis Schure, became lab director. At about the same time, the NYIT lab began preparing to make the first three-dimensional computer animated movie, to be called "The Works". Its science fiction screenplay was written by Lance Williams. A number of people were hired to work on the project. The principal robot designers and modelers were Lance, Bill Maher, Dick Lundin (designer of the famous robot ant), Ned Greene, and Carter Burwell. Some of the animators were Rebecca Allen and Amber Denker. [THE WORKS!] A great deal of effort at NYIT went into the development of the film "The Works", which was written by Lance Williams and worked on from about 1979 to 1986. For many reasons, including a lack of film-making expertise, it was never completed. Sequences from the work in progress still stand as some of the most astounding animated imagery of the time. Software development during the early 80's was guided by Lance Williams, Paul Heckbert, Fred Parke, and Pat Hanrahan. A number of excellent graphics software developers did pioneering work there during those years: Jim Blinn and Tom Duff (MAT: yacc-based modeling language), Jim Clark (E&S Picture system library from the 70's; Jim later went on to found Silicon Graphics and Netscape), Lance Williams (z-buffer and texture mapping techniques), Tom Duff (SOID: z-buffered quadric surface rendering with texture mapping, bump mapping), Garland Stern (BBOP: interactive keyframe animation system), Dick Lundin (dynamics simulation and robot modeling and animation tools), Ephraim Cohen (ZOOM: filtered image resampling and EPT: paint program), Thad Beier (SSOID: CSG on quadric surfaces), Mike Chou (SOID's environment mapping), Frank Crow, Andrew Glassner, and Tom Shermer (antialiased line drawing), Robert McDermott (geometric modeling tools), John Schlag (image processing software), Paul Heckbert (POLY: z-buffered polygon renderer with texture mapping), Paul Heckbert and Pat Hanrahan (beam tracing), Paul Heckbert (early splatting, a form of volume rendering), Lance Williams and Ned Greene (mesh modeling tools), Lance Williams, Fred Parke, and Paul Heckbert (face modeling and animation), John Lewis and Peter Oppenheimer (fractal modeling), Ned Greene and Paul Heckbert (z-buffer rendering for fisheye projection), Ned Greene (sky modeling from photographs), Jules Bloomenthal and Lance Williams (DEKINK: antialiasing, recording tools), Jules Bloomenthal (realistic tree modeling), Kevin Hunter (early marching cubes), Pat Hanrahan (EM: interactive modeling system), Pat Hanrahan (winged edge library), David Sturman (animation database and tools), Lance Williams and Paul Heckbert (Coons image warp), Tom Brigham (image morphing), Tracy Petersen, Mike Kowalski, and Carter Burwell (audio synthesis), and many other amazing graphics hackers and graphics hacks. The workhorse hardware during the early 80's was six DEC VAX 11/780's as main computers, about three E&S Picture System II's for animation preview, about eight E&S and Genisco frame buffers for 512x486x24-bit raster graphics, about six programmable Ikonas graphics processors, the largest with 12 megabytes of image memory (an ungodly amount in that day: 2048x2048x24-bits), viewed with rare thousand line color monitors, several IVC 2000 2" videotape recorders, and a Dicomed film recorder. Although The Works was never completed (the group was ahead of its time; it wasn't until 1995 that the first 3-D computer animated movie -- Toy Story -- came out), some major milestones of computer animation came out of the effort, including: The Works Trailer - hit of the SIGGRAPH '82 film show, 3DV, Inside a Quark, and segments for the 1984 Omnimax movie "The Magic Egg". The lab's animation demonstrated the first extensive use of texture mapping and environment mapping in animation, and some of the first 3-D character animation. Some pictures from the early 80's are available at http://www.cs.cmu.edu/~ph/nyit After this peak, the party began to wind down in the mid and late 80's: Bloomenthal left for Xerox PARC in 1985, Heckbert left for PDI and Pixar in 1985, Hanrahan left for Wisconsin, DEC, and Pixar in 1985, and Williams left for Apple in 1986. The dispersal of its lab members helped spread NYIT's ideas to many other sites. [FACTOID] Many people regarded the NYIT Computer Graphics Lab of the late 70's and early 80's as the top computer graphics research and development group in the world.
Ohio State University
-Charles A. Csuri In 1963 Charles Csuri joined OSU as a Professor in the Department of Art. A former All-American football player and painter, he soon became interested in the computer as an aid in creating new forms of art and animation. By 1967, with the assistance of a fellow faculty member from the Department of Mathematics (and a mainframe computer) Csuri created several interpolated line drawing sequences, including one of a hummingbird in flight. Csuri produced over 14,000 frames, which exploded the bird, scattered it about, and reconstructed it. These frames were output to 16mm film, and the resulting film Hummingbird was purchased by the Museum of Modern Art in 1968 for its permanent collection as representative of one of the first computer animated artworks.
-The CGRG Beginning with a National Science Foundation grant for $100,000 in 1969, The Computer Graphics Research Group (CGRG) began working with a PDP 11/45 minicomputer and Vector General Display. The CGRG was truly multi-disiplined, included faculty and graduate students from Art, Industrial Design, Photography and Cinema, Computer and Information Science, and Mathematics. Additional grants from the Air Force Office For Scientific Research and the Navy continued the center until 1990, working in that time on two dozen different research projects worth about eight million dollars in research support. The CGRG projects specialized in computer animation languages, geometric and terrain modeling, motion control, and realtime playback systems.
-Animation Systems Early animation language projects focused on a new concept of ³user friendly-ness² termed ³habitability² by Tom DeFanti. This was promoted as an interface to the real-time systems consisting of dials and joysticks.
GRASS (Graphics Symbiosis System) animation programming language by Tom DeFanti in 1972. ANIMA motion language by Manfred Knemeyer in 1973. ANIMA II was developed with contributions from Ron Hackathorn, Alan Myers, Richard Parent and Tim Van Hook. TWIXT was designed by Julian Gomez as a ³track-based keyframe animation system².
[MORPHING Factoid] Mark Gillenson (now at IBM) developed a technique of blending images of facial drawings, one of the earliest examples of the now familiar technology called morphing.
-Other important developments Procedural animation was also developed in the late 70s by Wayne Carlson, Bob Marshall and Rodger Wilson. Frank Crow arrived from the University of Texas and continued his work with shadows and antialiasing that were started at the University of Utah. He later went to Xerox PARC.
-Character Animation A great many individuals at Ohio created award winning character based short animations; including Tuber¹s Two Step by Chris (Blue Sky) Wedge and Snoot and Muttly by Susan Van Baerle and Doug Kingsbury.
-Cranston/Csuri Productions Inc. In 1981, Chuck Csuri approached investor Robert Kanuth of The Cranston Companies to form a production company based on the great array of custom software written at the CGRG. Mark Howard designed and built a frame buffer which was used extensively for realtime animation testing at the CGRG and Cranston/Csuri Productions until they went out of business in 1987.
-The ACCAD In 1987 Chuck Csuri and Tom Linehan (now President of Ringling School of Design) converted the Computer Graphics Research Group into The Advanced Computing Center for the Arts and Design (ACCAD). Also in the late 1980s, Scott Dyer(Windlight Co-founder, now at Nelvana) and a group of ACCAD personnel connected with The new Ohio Supercomputer Center for the purpose of developing flexible software solutions in the burgeoning field of scientific visualization.
-Alumni works
For a more complete listing of CGRG, Cranston/Csuri and ACCAD alumni and their work, please visit these web sites:
http://www.cgrg.ohio- state.edu/accad/people/alumni.html http://www.cgrg.ohio-state.edu/accad/research/ http://www.cgrg.ohio-state.edu/accad/gallery/films.html
Wayne Carlson has been Director of the ACCAD since 19?? Charles A. ³Chuck² Csuri is currently the Director and Professor, Emeritus of the Departments of Art, Art Education and Computer and Information Science at Ohio State University.
-footnote: Excerpted with permission from ³A Short History of ACCAD²: by Wayne Carlson.
Omnibus Computer Graphics Inc.
(1982-1987)
The Omnibus Group Inc. began as a Canadian group of companies in marketing and communication founded in London, Ontario in 1972. It expanded with affiliated and shareholding offices in Toronto (Omnibus Video Inc.), Los Angeles (Image West Limited & Downstream-Keyer Inc.), and Sydney Australia (The Picture Company). John C. Pennie joined in 1974 as President. Image West was developed by Omnibus beginning in 1975 located in Hollywood, CA. (see below for the Image West company entry for more details.) Omnibus Video Inc. began in 1981 and was headed by President Jack Porter (Who for 14 years was president of Sheridan College in Toronto.), located in the Yonge-Eglinton area of Toronto, Canada. The NYIT TWEEN system was acquired and used by animator Robert Marinac (Now a CG Supervisor at ILM), one of nine employees at the time.
[Robert¹s NYIT story picking up the machine?] TERRENCE: actually, they never picked up the machine, but I had to return the original RK05 disk pack to prove that we have wiped the software. No search was made for backups (duh) but by that time the s/w was pretty much unusable anyway.
Omnibus Computer Graphics Inc. began in early 1982 with W.Kelly Jarmain as Chairman and J.C.Pennie as President and CEO. In 1983 they installed a VAX 11/750 and produced the first CG commercial in Canada. In 1983 an IPO (which raised $4.2 million) made Omnibus the first publically traded CG company. The plan was to expand and operate three main facilities: Toronto, New York and Los Angeles. The original Toronto location was for computer operations and the Canadian broadcast and agency work. Its Production group was run by Dan Philips (now head of CG production at DreamWorks). The New York facility, for video broadcast and recording, was on 57th street West under a lease from Unitel Video Inc. The Los Angeles location was intended primarily for motion picture film work; all linked by satellite by the end of 1984. (The satellite link amounted to modems for many months, and finally a WAN that was painfully slow and unreliable.) As part of the initial expansion in mid 1984, several larger VAX 11/780 systems were installed at the Toronto facility. [FACTOID] Kevin Tureski relates his first day on the job at Omnibus in Toronto: ³I remember walking in past reception to where the animators worked. There was Eric Ladd hunched over a massive drafting table. He was digitizing, by hand, the x,y and z coordinates of a horse. Someone had drawn about 5 sectional slices of a horse on 4 foot by 3 foot graph paper, one slice per paper. Eric was calculating the x,y values from the grid and writing down the coordinates down on a piece of paper, later typing them in, manually creating several .ppt files. There was no digitizing tablet to be found anywhere. Later, on a tour of the edit suite, I saw Mike Johnson feeding paper tape containing the boot program through the ESS a still store capable of holding 30 seconds of video on it¹s RK05 disks.² Now majority owned by Santa Clara-based Ramtek, Omnibus/LA hired David Sieg from Image West as VP of R&D and a team of programmers from CalTech, working with Al Barr, Brian Von Herzen, and many others. In addition to developing their own software (called PRISMS), Omnibus obtained ³several exclusive software license agreements² with Robert Abel & Associates and Triple-I. (The deal with Abel was originally signed to last seven years, the Triple-I deal until the year 2001.) To start up the Omnibus/LA facility, they bought the F1 computer system and older film printers (called PFR's) from Triple-I (Triple-I had just shut down their CG group.) and started working out of the Triple-I offices in Culver City. Omnibus/LA soon moved to the Paramount Studios Lot in Hollywood, sharing facilities with Unitel Video. Art Durinski was hired as Creative Director and staffed the initial dozen employees, which included a number of student from UCLA where he had been teaching. Star Trek III The first feature film contract Omnibus worked on was for Paramount Pictures Star Trek III. Omnibus (one of three companies to contribute) created a number of video graphic displays seen on the bridge of the Enterprise and Klingon starships. About 30 to 40 computer generated video clips comprised almost an hours worth of imagery. Artists included Technical Director Dan Krech and animator Dan Philips. Jeff Kleiser came on board the LA office as Director of the Motion Picture Special Effects division and directed animation for Flight of the Navigator and the original Captain Power pilot for Landmark. [THE FIRST D.O.A. DOMINO TIPS] The Captain Power project was meant to save Digital Productions from bankruptcy, but when Jeff brought the project to Omnibus instead, DP was forced to sell out. The rest, as they say, is history. Flight of the Navigator showcased the first feature film use of 3D morphing and animated texture mapping. (Environmental film footage was transferred to video, digitized and used to simulate the chrome surface of the spaceship.) Explorers would require a dream sequence illustrating a fly-over of a city represented by a 3D CG circuit board. Without the capability to render different colored vector graphics, Art Durinski designed the effect to be output in multiple black and white layers, each of which was filmed out and optically colored ad composited at Industrial Light and Magic. (ILM was the primary traditional effects house on the movie.) Bob Hoffman coded and animated on both Navigator and Explorers. DOA In June of 1986, Omnibus bought Digital Productions, having been approached by their majority owner Control Data who was desperate to get out from under the increasing debt of DP. In September of that same year Omnibus also bought Robert Abel and Associates for $7.3 million. Abel¹s likewise was on the verge of bankruptcy, and was led to believe Omnibus was a legitimate bid from a publicly held and stable company. The management at Omnibus saw the purchases as a way to consolidate all the best of everything, (and all their customers) into a single monolithic parent company. Unfortunately nothing was as it appeared, as everyone was soon to find out. Gary Demos and John Whitney Jr. had no choice but to leave Digital Production when their contract agreement with Control Data was violated by the sale to Omnibus. They both left to form Whitney/Demos. Art Durinski was privy to the financial state of the recent deals early on and decided to leave the company and go to Toyo/Links in Japan.
[SIDEBAR QUOTE] ³The Omnibus management knew nothing about computer animation, but kept muttering about "Economies of Scale". The reality was: three separate sales forces, three separate production crews, three separate facilities, philosophies, software systems and hardware systems, none of which were likely to ever work together. What is ironic is that the next Star Trek movie was about to go into production, and had tons of CGI work in it. We had good contacts with the right people, and we did some amazing tests (I have videotape!) of the Enterprise that blew the modelmakers away. But they were too scared Omnibus would go under to give us the contract that would have saved us.² David Sieg dave@ns.zfx.com
Diana Walczak began working on human figure tests for Marvel Comics, and Jeff Kleiser was in Vancouver Canada scouting locations for the film Millennium when the end came. In early 1987, with a debt of $30million, Omnibus defaulted on investments and closed Abel, DP and Omnibus on April 13th, 1987.
[QUOTE] ³Auctions were held for the remainder of the equipment, including people's desks with papers still in them. I bought an Ikonas framebuffer for $50 that had been bought eighteen months earlier for $35,000. I still have it today. It still works.² David Sieg
President John Pennie later headed The Virtual Reality Company, until it went under in 1993. Kim Davidson and Greg Hermanovic purchased the rights to the PRISMS source code and started Side Effects Productions, which later became Side Effects Software. Kevin Tureski went to Alias and was Director of Engineering for PowerAnimator from its inception, and is now responsible for various bits and pieces of Maya. There was also an Omnibus Japan that still exists today, and uses the 3-D Omnibus orb logo.
OptoMystic
(1988 to 19??)
Formed by John Whitney Jr. after Whitney/Demos declared bankruptcy in 1988. It used one of the first Connection Machines, and did some work with Karl Simms and Jerry Weil around the era of "PanSpermia".
Pacific Data Images (PDI)
(1980 to present)
Incorporated on August 11th 1980 by Carl Rosendahl, originally in a small office in Los Altos. Carl grew up in LA, and graduated with a degree in Electrical Engineering from Stanford in 1979. Wanting to combine entertainment with his technical experience, computer graphics seemed a natural solution. Times begin what they were (so early in the CG evolution), Carl formed his own company rather than seeking employment at one of a very few established companies. Richard Chuang and Glenn Entiss made it a company of three in 1982. Later, after moving to one Sunnyvale industrial complex until 1984, PDI moved into another larger building owned by Carl¹s father. They remained their until moving to their present location in Palo Alto in 1997. PDI has grown from employing less than 20 people in about 1984, to over 300 total today. The first PDP-11/44 was used for much of the original proprietary code written by Richard and Glenn (and Carl too.) Richard concentrated on the renderer, and later on lighting tools. A DeAnza frame buffer also was used early on. The very first jobs were doing broadcast graphics for Jose Diaz of Brazilian Globo Television. Globo actually lent a more powerful VAX computer to PDI for a year, and in return licensed a sub-set of the PDI code for their own production. Many early commercial jobs that kept the company busy were also from the Harry Marks creative agency. By the late 1980s PDI was using RIDGE Unix workstations (similar to Solarity) and controlled about 60% of the high- end commercial broadcast market. Clients included virtually every network and cable channel along with hundreds of affiliate local stations. From the very beginning it was clear that PDI (and Carl in particular) had a uniquely keen business savy that enabled the company to thrive through a time when CG company bankruptcies were otherwise the norm. At least two key strategies were instrumental to PDIs continued financial success. Firstly, unlike most companies that were going heavily into debt to finance ³glamorous² feature film work, PDI concentrated through the 1980s on the lucrative commercial market. It was an easy transition to build on their early reputation in broadcast graphics work. The second important factor in keeping the books in the black was the wise decision to purchase and use ³last years² models of computer equipment, and to depreciate it in just a few short years. It was also at this time (1989/90) that Carl and Tim Johnson began to visit the Hollywood Studios to try and begin a dialog about creative content partnerships. It was a proactive decision to what they saw was a future trend of CG as a commodity, possibly limiting the uniqueness of what PDI might have to offer in the future. As would be expected, the studios were much less forward thinking and no deals came to pass. In 1990 PDI did however open a feature film production office in LA for work on their first film project; the Japanese funded ³Solar Crisis². New equipment included a film scanner built by non-other than Les Dittert, and a Management Graphics film recorder. (The effects work was optically composited.) Soon after that PDI got a big break with some lesser known but still important work on Terminator2: Judgement Day. PDI did a number of different ³invisible² effects such as wire removal and digital plate reconstruction. Work continued on many other features, including the several Batman films. In 1994 PDI closed the LA office, with several key employees (including Jamie Dixon and Thad Bier) staying to form HammerHead. Meanwhile back at home base in Sunnyvale, PDI was continuing to set new standard in broadcast commercial CG techniques. In 1991/92 the technique of ³morfing² was used with great success on numerous projects. The first was a Plymouth Voyager commercial, followed soon by the Exxon tiger, and the famous Michael Jackson video ³Black or White². A perfect subject, perfectly executed, the Black and White video only served to increase the demand for this new technology in broadcast work. Along with the strong 2D effects work being produced, PDI also began very early to experiment and create 3D character animation. Waldo, the first ever 3D CG realtime animated ³muppet², was created for the Jim Henson Hour in 1988. (See the Milestones Chapter for more details.) Crest Toothpaste ³Singers² (88) and Scrubbing bubbles (89) were followed by the Last Halloween television special in 1991. (Based in the M&M Mars candy commercial campaign started by ILM). In 1994 PDI broke a long standing stop motion tradition by introducing a 3D CG Pillsbury DoughBoy with the ³Mambo² spot. The doughboy would in fact continue to be created by PDI for another four years. Gradually more subtle enhancements crept into the spots, including motion blur, which was originally intentionally left out to more closely resemble the look of stop motion animation. 1995 saw Carl knocking on Hollywood Studio doors again, this time (in March, 1996) resulting in PDI signing a co- production deal with DreamWorks to create original, computer- animated feature films. Antz, of course, was the first of the films to be produced under this deal. Shrek is in production now for a late 2000 release, to be followed by Tusker, probably in 2002.
[PDI SHORTS] PDI has a always went beyond pure commercialism with its support of short animated films for their own sake. Some of the earliest memorable SIGGRAPH clips featured the ³Happy Drinking Birds², Chromosaurs, Opera Industrial, Cosmic Zoom, Burning Love, Max¹s Place, Locomotion, Gas Planet. Recent shorts are no exception in Gabola the Great and Sleepy Guy. Their next short Fat Cat is due out soon.
Other fun projects have included the long running Bud Bowl half time series and The Simpsons 3D episode. In 1998 Richard Chung, Glenn Entis and Carl Rosenthal werer awarded a Scientific and Technical Achievement Award for the concept and architecture of the PDI Animation System. Employees included Thad Bier(Hammerhead), Scott Anderson (ILM, Sony). Carl and Richard are still with PDI, while Glenn Entis left PDI to become President of Dreamworks Interactive. www.pdi.com
Pixar
(1986-present)
Pixar was formed in 1986 when Steven Jobs (of Apple and NeXT computer fame) purchased the Lucasfilm Computer Graphics Division from George Lucas. George had decided about a year before that he did not wish to continue a hardware development effort in-house, and also did not at that time want to pursue computer generated animation (as did the employees). He therefore agreed to allow Edwin Catmull, Alvy Ray Smith and the rest of the employees of the Graphics Group to seek out investors so that they could spin off into their own company. Many different options were explored over the course of that year, and in the end the negotiations went down to the very last minute with the outcome not always certain. The deal that was finally made called for $5 million dollars to purchase the division with an additional $5 million for immediate capital investment. Founding members included (in alphabetical order): Tony Apodaca, Loren Carpenter, Ed Catmull, Rob Cook, David DeFrancesco, Tom Duff, Craig Good, Ralph Guggenheim, Pat Hanrahan, Sam Lefler, Darwyn Peachey, Tom Porter, Eben Ostby, Bill Reeves, Alvy Ray Smith, Rodney Stock. [SIDEBAR STORY] The story of how Pixar got its name: It was 1981 and the Computer Graphics Group at Lucasfilm was developing the hardware and software for a digital imaging ³scanning/manipulating/filming computer-machine². David DiFrancesco was hardware, Loren Carpenter was software and Alvy Ray Smith managed the project. When it came time to write up a formal proposal about the new device, it seemed appropriate to come up with a catchy name for the middle componant of the system, the computer that did the image processing between the scanning and the filming. One night over dinner (at ³Franks Country Garden² restaurant in Bel Marin Keys, CA) four men got around to discussing the topic of a name. Present were Rodney Stock (a hardware consultant), Jim Blinn (who worked at LucasFilm for a short time), Loren Carpenter and Alvy Ray Smith. Since the hope was for this clever device to actually ³make pictures², the name ³Picture Maker² was suggested. This was quickly rejected in favor of Alvy¹s suggested contraction of ³Pixer². Loren then made the suggestion to change it to ³Pixar² (it had a nicer ring to it) and the rest is history. Loren relates that there are occasionally some attempts to put a greater meaning to the word after the fact (such as ³Programmed Image transformation(X) And Render²) but hereinabove the true story is now told. Suddenly, the new company Pixar was no longer part of a larger profitable effects studio but rather a business all of its own. In the first few years the Pixar Image Computer sold well to a few (very different) client markets. Philips bought over 20 systems to use in the medical image processing market, while Disney made a significant partnership with Pixar to develop the graphics end of what would eventually become the CAPS system. Roy Disney himself wanted to get his company back into feature animation in the right way, and this was seen (wisely) as an investment in the future technology of 2D animation production. Ed Catmull and Pixar soon realized however that the 2D image processing power of the Image Computer was not a money maker, and indeed its days were numbered because of the ever increasing power and low cost of new general purpose PCs. Ed chose however not to drop the hardware development business right away, mainly because the CAPS deal with Disney was entirely based on the Pixar Image Computer and he did not want to leave them ³high and dry². Ed also know it was only a matter of a short time before they could port the CAPS development to the new SGI platform, it was just a matter of waiting it out while they continued to loose money. Just then, Ed received a call from one of their chief competitors in the image processing market, a company called Vicom. Vicom was taking the position that in order to make that market more successful, all the competitors should join forces with one product. ³Would Pixar be willing to SELL their hardware outright to Vicom?² Ed: ³Let me think about that and get back to you on that² (Ed smiles to himself). Edwin happily sold the Pixar Imaging Computer hardware business to Vicom for $2 million, hoping that they could keep it as a viable product just long enough for the Disney CAPS system to transition over to SGI; which is exactly what happened. Pixar was still a struggling company, with small profit margins and occasional layoffs during particular hard times. It is a testament to the belief of the key partners and employees of Pixar that they hung on during the hard times without giving up their hope to make CG animated movies. John Lasseter himself turned down several offers from Disney to come back and direct a film for them. About this same time, 1990 or so, the commercial division was started to cut some teeth on real production experience. The Listerene, Life Savers and Tropicana spots immediately stood out as being in a creative class by themselves. Produced in conjunction with Colossal Pictures, they blended what was (and continues to be) Pixar¹s trademark realistic rendering ³look² with outstanding character animation and humor. It was at this time that Andrew Stanton and Pete Doctor joined the company as animators. The hope was to get the hang of commercial production and then step up to make a half our television short film based on Tinny from the Tin Toy short film. Then in 1991 Ed Catmull made the 3 picture deal with Disney to create fully CG animated films. Disney¹s point of view was that if Pixar was ready to commit to a half hour show, than doing an 85 minute feature film really shouldn¹t be that much of a stretch. (Yeh .sure!). The first film, to be called Toy Story was given a budget of only $17 million. While the final cost was considerably more than that, it was still however considerably LESS than the cost of a traditionally animated Disney feature film. [SIDEBAR TRIVIA] Toy Story was rendered with a render farm consisting of some 300 Sun computers, each roughly the processing power of one original Cray 1 Supercomputer (XX? MIPS). A Bugs Life used 1400 Sun computers, each with a processor upgrade that was 3 to 4 times faster than the ones used on Toy Story! Today, Pixar is overhauling the very foundations of their production environment: the Marionette animation software, Renderman, and their film recording. The software tool sets will be rebuilt from the ground-up into the next generation of animation and rendering software. David DiFransisco has culminated his twenty years of pioneering film recording technology knowledge into ³Pixar Vision². The new laser based recording system is meant to be the finest and fastest in the world, operating with 35mm, 65mm and Vista Vision film stocks at between 4 and 8 seconds a frame. The system was tested on Bugs, but should see full use on Pixar¹s next film, Toy Story II, due out in the fall of 1999. (Early problems with the ³Pixar Vision² laser film recorder were eventually tracked down to the air-conditioning system that keeps Pixar¹s vast render farm cool. The AC system was so large, that the vibrations caused the whole building to vibrate just enough to throw the delicate film recorder¹s quality off!) In 1998 Eben Ostby, Bill Reeves, Sam Leffler and Tom Duff were awarded a Scientific and Engineering Academy Award for the development of the Marionette Three- Dimensional Computer Animation System. Pixar is looking to relocate their company south a dozen miles to ?????? sometime around 2001. Point Richmond, CA. www.pixar.com
Protozoa
(198? To present)
Protozoa is a pioneering "performance animation" company that provides complete systems, production, and Web based animation content. Founder Brad deGraf (along with then partner Michael Wharman of Degraf/Wharman) created the first real-time character performance, Mike the Talking Head, at Siggraph 1988. Brad was also part of the team that Jim Henson contracted at Digital Productions in 1988 to digitize Kermit the Frog as the first attempt at . Protozoa and its founders have been leaders in the medium ever since. Moxy, the first ever live 3D character for television, was created and originally produced by Protozoa¹s founders while at Colossal Pictures in 1993 (and later by Turner Productions). Turner also licensed ALIVE, for the Cartoon Network. Ziff-Davis Television bought ALIVE and Dev Null (recent Emmy) from Protozoa to co-host The Site on MSNBC. They produced more than 20 minutes a week for a year, viewed by 55 million homes worldwide, making Dev easily the most widely seen virtual character in the world. Protozoa also created Floops, the first live 3D episodic cartoon, published twice weekly on the Web for over six months using VRML 2.0 (Virtual Reality Modeling Language). Floops won Best of Show at the 1997 VRML Excellence Awards. Others successful projects include: · Dilbert in 3D - 47 episodes in VRML, sponsored by Intel for their Mediadome website. · The BBC is has licensed ALIVE for production of a series in CQ2¹98. · MTV premiered Virtual Bill, the digital President, during the State of the Union address 1998 · Sinbad performs Soulman, his digital alter ego, live on his late night talk show, VIBE. · The Blue Man Group commissioned Protozoa to create Virtual Blue Man for live shows. · The Disney Channel commissioned a pilot, designed by Protozoa, for a series for 1998. The company has numerous international licensees (Germany (2), Spain (site license) Italy (site license), South Africa (2), Britain (2), a growing reseller/representative network, and a full sales pipeline. Protozoa is located in SanFransisco, CA. www.protozoa.com
RezN8
(1987 To present)
Founded by Paul Sidlo and Evan Ricks. Paul Sidlo was Creative Director for Cranston/Csuri Productions from 1982 to 1987.
Rhythm and Hues
(1987 to present)
While working at Robert Abel¹s company, Randy Roberts suggested to John Hughes that they spin off a new company. Once the venture got going (as six people in John¹s living room with one SGI) Randy actually ended up Directing independently for a few years, ultimately joining R&H in 1993. Founded in a former dental office in Santa Monica by John Hughes, Charles Gibson, Pauline T¹So and Keith Goldfarb.(from Bob Abel¹s) along with Larry Wienberg and wife Cathy White from Omnibus. Other early employees included Frank Wuts, Cliff Boule and Peter Farson (from Digital Productions) Their very first job (on April 23rd, 1987) was a film project, to realize the MGM/UA logo for that studio. This was especially unusual at a time when virtually all the work was for broadcast television. The following years were spent creating many different commercial and logo projects, starting with their second job for a New Zealand station. 1990 saw some incredible breakthrough work for the feature film ³Flight of the Intruder². Remember at the time, the Abyss had just come out a year before and T2 was still a year away (1991). R&H created over 30 shots of photo- realistic aircraft, cluster bombs, and smoke in full daylight ..all with proprietary software. This was truly breakthrough work that unfortunately was not as recognized as it should have been when the film itself did poorly. With four out of the six original employees code writers, the in-house software effort had began from day one. Eventually four main components would be written: animation, modeling, rendering and compositing. Before all the code was production ready however, Wavefront software was used, based on an agreement John had made earlier with the company started by his former co-worker Bill Kovaks. While working at Bob Abel¹s on and off from 1976 to 1987, John had his own company called ³Motion Control Systems² (MCS) with partner Jim Keating. Jim at that time wrote the ³model² component of the Wavefront code, and in exchange for sole rights to that software Wavefront gave a number of licences to John¹s new company R&H. Bill Kovacs actually wrote his ³preview² code while consulting for John¹s earlier MCS company, but retained sole ownership of that software for himself. Rhythm and Hues¹ work on ³Babe² won an Academy Award best Visual Effects in 199? (VFX Supervised by Scott Anderson and VFX Produced by Nancy St.John.) In March of 1999 R&H bought the visual effects CG company VIFX (which was located just two blocks away in Hollywood). Richard Hollander¹s new position is as head of the film effects group, bringing some 80 of VIFX¹s employees with the purchase. Bill Kroyer has also recently joined the company as a Director, and Richard Taylor is there still today also. R&H in total now employs over 300 people.
Robert Abel and Associates
(1971-1987)
Talk about CG history with anyone who¹s been in the biz for at least 10 years, and one name will inevitably come up very early in the conversation. In fact, Bob Abel¹s name itself is virtually synonymous with the pioneering early days of computer graphics. Talk to him yourself and you will quickly realize that this is a man to whom the tool is much less important than the creative result. Abel¹s introduction to new technology came at an early age, even in fact as a pre-teen in the 1950s. His uncle Earl Kanter, a World War II draftee and ³high IQ² Harvard student, began experimenting with electronics and early computers. This ³high-tech² childhood would set a foundation for things to soon come. In 1957 a young Abel was doing paste up work for the legendary Saul Bass. It was a trip that Abel made to one man¹s garage that would soon change his life. Saul was working on the opening titles to Hitchcock¹s ³Vertigo² with a man by the name of John Whitney. Whitney was using analog computers and homemade motion control rigs to create artwork of various kinds, and Abel got on very well with the older artist. So much so that Abel was hired as a graphics design consultant on one print job for Foodmaker, the parent company of Jack-In-The-Box. Abel would remain busy doing a great variety of things that would run the gamut from the realistic to the surreal. Abel would shoot an award winning documentary for David Wolper, spend a tour on Vietnam as a combat photographer, and contribute to multi-screen music festivals and rock concerts. All this would solidify in 1971 when that icon of advertising, Harry Marks, would provide Abel and his old friend Con Pederson with the opportunity to create a new look for ABC television. From 1971 to 1973, in 6000 square feet of vacant space behind and accountants office, the fledgling Robert Abel and Associates would begin to take shape. There was no phone, no sign on the building, no advertising and no secretary; just Abel, Con, an optical guy named Dick Alexander and a camera mannamed Dave Stuart.
Major projects included: 7up ³see the light² campaign The ³Gold Series² for Benson and Hedges Amazing Stories opening The Randy Roberts designed "Brilliance" commercial for the Canned Food Council ( The "Sexy Robot" )
Larry Cuba joined RAA for a short time at the start of 1976, hoping to program the new motion control computers, But left just four months later to create the famous DeathStar graphics for George Lucas¹ Star Wars film. Abel assembled a computer graphics team to work on Star Trek: The Motion Picture, but the work which was eventually discontinued to be completed by Doug Trumbull and others with traditional effects techniques.
Among Abel¹s early associates were Richard Hollander, John Hughes, Richard Taylor and Wayne Kimall. By 1979 Abel¹s was a full service effects company with a miniature shop and 6 different motion control rigs to augment live action footage. A real breakthrough came when they wanted to have a way to preview motion control moves. To this end, Bill Kovacs was hired to modify an E&S realtime vector PS-2 flight simulation computer. A deal was made to acquire the source code for the $100k machine in exchange for promising to E&S that they would not go into the flight simulator business. Eventually, with new employee Ray Feeney¹s help, the resulting ³Abel/Kovaks box² would drive six axes of movement in both the camera and the motion controlled object for virtually unlimited range of motion combinations. RAA sold it¹s own software under the division Abel Image Research. Bill Kovacs went away to found Wavefront and Frank Vitz took over his job as head of R&D. (Frank ended up as VP of Production while they produced the Gold Series for Benson and Hedges and the "Brilliance" commercial for the Canned Food Council or "Sexy Robot" as it was called.
Disney¹s ³The Black Hole² Disney had awarded the job to an independent company ³Neo Plastics² run by C.D. Taylor and Mick Hagerty. They in turn hired John Hughes to create a vector graphics grid/black hole simulation. John rented Abel¹s E&S system and shot the images off the screen, optically compositing the CG with artwork and additional traditional animation. Unfortunately once he had the job, but also realized that he had to deliver it in a mere 14 days. Not only did John actually finish the job in just 9 days, but Disney like it so much they would have them repeat the effect for the film¹s opening sequence and one-sheet poster.
TRON! Kenny Merman and Frank Vitz headed the team that produced the opening titles and ³Flynn¹s Ride² sequences.
(BOB: what¹s the story about an Australian ³con artist² trying to buy RAA?)
At its peak, RAA occupied some 45,000 square feet and employed 240 people. With the best of intentions, Robert Abel & Associates was sold in September of 1986 to John Pennie of Omnibus Computer Graphics of Canada for $8.5 million. The hope was to gain much needed capital investment from an established, publicly traded company. As soon as January of 1987, just a few months later, it was clear that all was not right with the new parent company. Sure enough, that April the 12th all the Omnibus people left en mass in the evening. The next day, April 13th, 1987, with word that Omnibus had defaulted on mountains of dept, all of Abel¹s had one last party before packing up for good.
Hundreds of talented people passed through Abel¹s, many of whom are leaders of the CG field today. Clark Anderson, Richard "Dr." Baily (Image Savant), John Grower(Santa Barbara Studios/Wavefront), Charles Gibson(R&H), Keith Goldfarb, Steve Grey, Rich Hoover, John Hughes(Rhythm & Hues), Pauline T¹So (R&H), Bill Kovacs(Alias|Wavefront), Sherry McKenna, Tim McGovern(MetroLight, Sony ImageWorks), Kenny Mirman, John Nelson, Con Pederson(MetroLight), Randy Roberts, Richard Taylor, Michael Wahrman.
Robert Abel himself went on to explore other varied independent projects in various interactive multimedia. He continues to work actively today, speaking frequently at many CG and visual effects related conferences.
Robert Greenberg and Associates
(1981 To present)
Chris Woods set up a computer graphics department in 1981. Early on some folks from Hanna Barbara did some research, but not until 1985 did the CG department really get off the ground. The initial crew were all from MAGI/Synthavision: Josh Pines and Ken Perlin wrote the RGA rendering code, Jan Carlee and Christine Chang were also joined later by Tom Miller. [FACTOID] The first film project (of many) that Ken Perlins noise function code was applied to was the film Weird Science in 1985. (Now there¹s an obscure factoid for you!). Integral to RGA up to that point was a world class optical and motion control effects department headed by Joel Hynek and Stuart Robertson. The Los Angeles production office, run by George Joblove (Technology/ILM) and Ellen Summers (Producer/Boss Film) and RG/LA operated from 19?? To 199?.
Santa Barbara Studios (SBS)
(1990 to present)
Santa Barbara Studios was founded in 1990 by John Grower, and began specializing in procedural natural phenomenon effects using Wavefront Technologies Dynamation software. Employees included Bill Kovacs, Will Rivera, Eric Guagliani, Bruce Jones, Phil Brock, Eric DeJong, Mark, Wendell, Diane Holland and Matt Rhodes. Programmer named Axel? Large format work has included the the 70mm 3D film Shooting Star and IMAX space films Destiny In Space and Cosmic Voyage. Television series contributions included Other Worlds: A Tour of the Solar System and two collaborations with the Kleiser-Walczak Company on The Astronomers and 500 Nations (which depicted beautifully realistic re- constructions of Native American cultures.) Recent feature film work has included An American Werewolf in Paris, Spawn, Star Trek: Generations, and Star Trek: Insurrection.
Side Effects Incorporated
(1987 to present)
Makers of the procedurally based 3D systems PRISMS and its modern version Houdini. Founded by Kim Davidson and partner Greg Hermanovic after the demise of Omnibus Toronto. Greg was Director of Research at Omnibus and Kim programmed and was the Director of Animation. When Omnibus went under in 1987, Greg and Kim bought the rights to the PRISMS software they had developed from the Royal Bank of Canada (the majority dept holder of Omnibus at the time of it¹s collapse). They started up a production house called Side Effects that later split into two: Side Effects Production and Side Effects Software. (The production side eventually was renamed ³Spin Productions² to reduce confusion. Greg Hermanovic, Kim Davidson, Mark Elendt and Paul Breslin were presented with a 1998 Academy Scientific and Technical Achievement Award for the development of procedural modeling and animation componants of the Prisms software package. Prisms has been used in dozens of major feature films such as Apollo 13, Titanic, Contact, Independence Day, Fifth Element and Ghost in the Shell. Side Effects is thriving today, having renamed PRISMS in September of 1996 as their new updated Houdini software. Houdini also has recently been made available for the Windows NT platform, and has been ported to Linex. Side Effects presently has offices in Santa Monica, CA and Toronto, Canada. 416-504-9876 www.sidefx.com
Silicon Graphics, Inc.
(1982 to present)
Founded in 1982 by Dr. Jim Clark (Ph.D. University of Utah 1974). Manufacturer of RISC processor based IRIS graphics workstations. SGI IRIS (Integrated Raster Imaging System) Jim Clark, while at Stanford University, invented the "Graphics Engine" the first VLSI (Very Large Scale Integration) graphics chip.
-FACTOID: Jim Clark, founder of Silicon Graphics went on to found Netscape Communications Corporation. The web¹s most popular graphical browser, which was acquired by AOL in November 1998 for $4.1 billion (Yes that¹s billion with a ³b²)
SGI produced it¹s first computer, the IRIS 1000 in 1983, and went public in 1986. Acquired both Alias and Wavefront in 1995 and Cray Supercomputers in 1996. Announced in 1997 was a new joint effort with Microsoft and Intel to develop a next generation processor line for its graphics workstations, a new SGI Intel/NT. Just introduced in spring of 1999, the SGI 320 and 540 workstations are Windows NT based and cost between $3,400 and $5,995 US. The 540 supports up to 4 PentiumII Xeon 450MHz processors, and up to 2GB or graphics memory.
FAMILY TREE OF HARDWARE 1983/84 SGI's first 1000 series workstations were really terminals, as they required a VAX host. IRIS 2400 3030 3130 PI-35 (Personal Iris) Crimson Challenge Server Indy Indigo2 O2 Octane
[FACTOID] The IRIS Model 3030 in 1986 came with the following specs: -2 MB of RAM expandable to a whopping 16 megs! -A 16 Mhz 68020 -A 40MB hard drive -All in a 29"x18" 200lb chassis.
Revenues for fiscal 1998 were $3.1 billion US. 800-800- 7441 www.sgi.com
Softimage Inc.
(1986 to present)
Formed by Daniel Langlois in 1986 and based in Montreal. Its first interactive 3D software product ³Creative Environment 1.0² debut at the 1988 Siggraph in Atlanta. SoftImage led the way in advanced IK character animation tools for high end 3D users with the Actor module. The work on Actor started late 1990 and was first shown in public at Siggraph 1991 in LasVegas, and first released in version 2.51 of the Softimage Creative Environment in early 1992. Dominique Boisvert, Rejean Gagne, Daniel Langlois, and Richard Laperriere were awarded a Scientific and Engineering Award from the Academy of Motion Picture Arts and Sciences in 1998 for the development of the "Actor" animation component of the SoftImage computer animation system. The company did well by being promoted at a time when industry leader Alias was floundering due to management and marketing troubles. SoftImage was acquired by Microsoft in 1994, and sold to Avid in June of 1998 for $285 million. Current products include ³Toonz² 2D cell animation production software, and Softimage|DS which runs on SGI, NT and Integraph platforms. Proposed next generation products include Sumatra for 3D animation and Twister for rendering. 3510 St. Laurent Blvd., Ste.400. Montreal, Quebec H2X 2V2 Canada. 800-576-3846 or 514-840-0324 www.softimage.com
Sogitec Audiovisuel
The Ministere de la Culture, managed by Jack Lang, gave some funds to start new CG technologies in France. Sogitec is a big industrial group that act mainly in the military field as part of Dassault Electronic. The Sogitec CG department was created in 1982/83 By Xavier Nicolas with Daniel Poiroux and Alain Grach to try to create images using a customized version of a flight simulator software. The first short animated film they created was called "Maison Vole". Early employees included Veronique Damian, and David Salesin. Sogitec became a subsidiary of Dassault Aviation in France, and is now involved in simulation, but not in CGI directly. Nicolas joined with TDI¹s production unit in 1989 to form Ex Machina.
Stanford
The Stanford Computer Graphics Laboratory can be found online at http://www-graphics.stanford.edu
Symbolics Graphics Division (SGD)
(1981 To 1992)
In 1980, Symbolics, Inc. was formed, headed by Russell Noftsker and his right hand man & CTO Jack Holloway (both from Triple-I). Hardware architecture was based upon work by researchers at the M.I.T. Artificial Intelligence Laboratory and the Lisp Machine project in 1974 (Thanks to the close proximity of the Symbolics Cambridge Research Center). The Symbolics LM-2 was introduced in 1981, the 3600 in 1982, followed by the Symbolics 3640 and 3670 (1984), and the 3675 and 3645 systems (1985). At its peak in 1985 Symbolics had over 650 employees and 35 sales offices in North America, Europe, Japan, and the Middle East. Symbolics had over 1500 systems installed around the world. Color graphics system hardware included 8-bit or 24-bit high-resolution frame buffers, 32-bit broadcast resolution frame buffer, CAD buffer, Digitizing frame grabber, Genlock option (for synchronization to video), Color monitors (standard, premium, NTSC-resolution, and CAD buffer monitors), Graphics tablet, NTSC encoders and decoders. The Symbolics Graphics Division (SGB) was created by former members of Triple-I when that company ceased computer graphics production work in about 1981. Founded initially by Tom McMahon (General Manager from Triple-I), he was soon joined by Craig Reynolds, Dave Dyer, Larry Malone, Jeremy Schwartz, Larry Stein(hardware) and Bob Coyne(software). Matt Elson, Jay Sloat and Ken Brain were artists, TD¹s and trainers.. Tom first worked out of the small Woodland hills office, commuting often to the Massachusetts research center. Chatsworth was home for a short while before finally locating to Westwood, CA. In 1983. SGD¹s first general Manager was Howard Cannon from the Cambridge office; followed by Sheila Madsen, John Kulp and then Tom McMahon. Tom went on to design most of the hardware and video systems for the company, including all of the framegrabbing, genlock and High Definition Capabilities that SGD pioneered with Sony and others.
[SYMBOLICS FIRSTS] Symbolics produced the first workstation which could genlock, the first to have real time video I/O, the first to support digital video I/O and the first to do HDTV.
In-house tools included S-Geometry for modelling and S- Dynamics for animation. S-Paint was a LISP based 32bit paint system designed by Craig Reynolds, Tom McMahon, Bob Coyne and Eric Weaver.
[SIDEBAR] Stanley and Stella: Breaking The Ice As many as 50 people worked on the project and shared responsibility. Some key people included , Phillipe Bergeron(hero animation), Joseph Goldstone, Kevin Hunter, Larry Malone, Craig Reynolds(flocking and schooling code), Jim Ryan, and Michael Wahrman(Producer). Richard ³Dr.² Baily was hired by Michael Wahrman to model the two main characters based on sketches. He also composed and recorded the original soundtrack, which was later replaced by another one.
Around 1990, Symbolics started to fail and began to lay off people. Even though the SGD had a successful ongoing business with a good customer base, it still relied on their parent company for workstation and operating system technology, as well as other corporate infrastructure like HR, finance, customer service etc.
Tom McMahon relates the following events: ³Eventually, SGD was the target of a takeover and transition to Japanese management. SGD's Japanese distributor (Nichimen) had a thriving business based on the SGD product line of videographics hardware and the animation & rendering software. They couldn't afford to see us get blown away less the be left without a source of supply. SO they started buying up an insurance policy. They made Symbolics some offers it couldn't refuse given its poor financial health. In a sequence of financial transactions, Nichimen bought rights to certain hardware technologies. They also started picking up the payroll for SGD employees in exchange for certain worldwide distribution rights. In the end we had the people but Nichimen ended up owning most of our hard-earned technology. We had already begun looking at how to port these tools off of Symbolics workstation platforms.SGI became the porting target. By 1991 we were well into the re-write and port. But Symbolics needed to pull the plug on us. I worked out a pretty amazing salvage deal with our old friends at III. I negotiated a contract where I could take ALL of SGD's key employees back to the employ of III, but under a funding arrangement with Nichimen. Nichimen got their security blanket and the employees kept their jobs. (A blanket layoff and the entire extermination of SGD was the alternative at the time.) At III we proceeded to port all of the SGD products to SGI machines. But things started going sour there too. We spun out of Triple-I and started yet another new company (with Nichimen seed funding) called Del Rey Graphics (co- founded by Al Fenaughty (President and CEO of Triple-I), along with Jack Holloway, one of the Foonly designers at Triple-I). But that didn't work due to a hostile takeover by Nichimen. My partners and I ended up selling the whole thing to Nichimen and what is left of this very long thread is now called Nichimen Graphics.²
Symbolics declared chapter 11 bankruptcy in 1995, and was bought back by it¹s original founder Russell Noftsker.
Synthavision
-See MAGI
Systems Simulation Ltd.
(1977 To 1988)
John Lansdown founded System Simulation in London with his colleague George Mallen and others from the Computer Arts Society. Through it, he developed major innovations in computer animation, such as special effects for advertisements and television titles, the feature films Alien (1979), Saturn III and Heavy Metal and the realization of the original animated Channel 4 logo. John created what was then the world's largest computer generated mural. (Reviewed in 'Building Design' as a 'waste of electricity', although few today would question the bright power of his creative output. John Lansdown chaired the company until 1988. For a full biography of John Lansdown by Huw Jones, please see online here: http://www.cea.mdx.ac.uk/CEA/External/Staff96/John/obit.html
[BIO] ³John Lansdown was Emeritus Professor of Computer Aided Art and Design and formerly Head of the Centre for Electronic Arts (formerly called the Centre for Advanced Studies in Computer Aided Art and Design) from September 1988 until July 1995 when he retired from full-time employment. In 1968 he was one of the founders of the Computer Arts Society and was its honorary secretary for more than 25 years. He was engaged in using computers for creative activities (such as architecture, art and choreography) since 1960 and wrote over 300 publications on computer uses in art and design.² excerpt by permission of Huw Jones ( A true pioneer of computer graphics in the UK, John Lansdown died of lukemia on February 17th, 1999.)
Thompson Digital Images (TDI)
(1984 to 1993)
The INA ( Institut national de l'audiovisuel ) was interested in computer graphics, and associated themselves with the French defense contractor Thompson CSF to create the Paris based Thomson Digital Image. Managed by Pascal Bap and Jean Charles Hourcade, TDI developed the 3D animation software Explore and also did production work. Known particularly for their Explore IPR (Interactive Photo-realistic Renderer) interface, TDI even opened a sales branch called "Rainbow Images" in San Jose. The production division merged in 1989 with Sogitec to form Ex Machina. TDI (the software company) was also at one time half owned by IBM. TDI released in 1990 the first versions of their Software for the PC. The software division was then bought by Wavefront in 1993. Wavefront in turn was bought by SGI and merged with Alias.
University of Bath (UK)
-submitted by Phil Willis. Eurographics Professional Board chair and current Department Head of Mathematical Sciences at the University of Bath. http://www.maths.bath.ac.uk
Special display architectures
In the mid 1970s, we developed the ZMP parallel processor for real-time display (25 frames per second) of colour scenes for aircraft flight simulation. This architecture was patented.
In the early 1980s, we developed the colour Quad-encoded display, for instantaneous pan and detail-revealing zoom into images of 4k by 4k resolution, displayed on a 512 line monitor. Overviews correctly showed sub-pixel data as anti- aliased averages. The same system could also be used to reveal different symbology at different levels of zoom. As far as we ar aware, it was the first display system to achieve either of these. The hardware required to do this was carefully chosen and designed but quite modest.
References
Improvements in display apparatus for controlling raster scan displays. R L Grimsdale, A A Hadjiaslanis, P J Willis. UK Patent Specification 1-532-275, November 15th 1978.
Zone management processor: a module for generating surfaces in raster scan colour displays. R L Grimsdale, A A Hadjiaslanis, P J Willis. IEE Computer and Digital Techniques 2, 1, February 1979, pp 21-25.
Quad encoded display. D J Milford and P J Willis. IEE Proceedings Part E: Computer and Digital Techniques, 131, 3, May 1984, pp 70-75.
Ultra-resolution pictures.
We have a long history of working with pictures of very high resolution. In 1983 we completed a paint program for the binary Perq display, which offered a roamable drawing area of approximately 7000 by 7000, displaying a 640 by 640 subset. We moved on to use the HLH Orion Unix workstation's new colour display (the design of which was in part influenced by us: we later took delivery of the pre-production prototype). With our own software, we produced what we believe to be the first colour picture with a resolution of a billion pixels (32k by 32k)in about 1986.
References: 1) Manipulating large pictures on the Perq. P J Willis and J B Hanson. Displays, July 1984, pp 170-173. 2) UltraPaint: a new approach to a painting system. P J Willis and G W Watters. Computer Graphics Forum, 6, 2, May 1987, pp 125-132.3) Scan converting extruded lines at ultra high definition. G W Watters and P J Willis. Computer Graphics Forum, 6, 2, May 1987, pp 133-140.
University of Illinois Chicago
(This history is reproduced with permission from the EVL online database here: http://www.evl.uic.edu/EVL/EVLLAB/history.shtml )
The Electronic Visualization Laboratory (EVL) is a graduate research laboratory specializing in virtual reality and real-time interactive computer graphics; it is a joint effort of UIC's College of Engineering and School of Art and Design, and represents the oldest formal collaboration between engineering and art in the country offering graduate degrees to those specializing in visualization.
The EVL started its life in 1973 as Circle Graphics Habitat, part of the effort by then Vice Chancellor, Joe Lipson, to utilize interactive computer graphics and low cost video (which had just become available) to make an impact on undergraduate education. This reflected a commitment to using technology in education, and a belief in its transformative power, which have again become important in the 90s. The Lab's earliest home was in the Chemistry department, which already boasted the most advanced computer graphics available for state-of-the -art chemical modeling - a Vector General Calligraphic Display (PDP 11/45). The earliest goal was to develop computer-based introductory material for the chemistry curriculum, with the basic premise that this would constitute a self-paced learning environment specifically designed for the varying entry levels of students at an urban university.
Circle Graphics Habitat brought together Tom DeFanti and Dan Sandin. The media development system they designed used DeFanti's Graphics Symbiosis System and the Sandin Image Processor. The Graphics Symbiosis System (GRASS) was a computer graphics language that DeFanti had developed for his PhD thesis. The Sandin Image Processor was a patch- programmable analog video synthesizer. A combination of the two systems was the basis of a video production facility for the generation of educational materials. Sandin was a faculty member of the sculpture department where he taught video and was involved with the making of electronically-based, interactive, kinetic sculpture. Circle Graphics therefore also brought together chemists, engineers and artists. An equally important early goal for the Lab was to use the systems created to make art. The GRASS and Image Processor systems were used to make real-time animations that were distributed on the experimental video circuit. The Lab also organized a series of Real Time Interactive Installations and Performances - performance in the music tradition rather than in the newer sense of performance art.
Electronic Visualization Events 1-3 The first EVE (1973) event was actually an IEVE - Interactive Electronic Visualization Event. The performers were faculty and students of Chicago Circle (UIC) and of the School of the Art Institute. The performances took place in the rotunda of the Science and Engineering South building. In the evenings images, manipulated using the GRASS system and analogue processor, were projected onto large video screens and shown on monitors to the accompaniment of live music.
"Real time", with respect to these performances, meant that the images changed instantaneously as the controls were manipulated. In effect, the performers "played" both musical instruments and visuals. The performances were improvisational, in a a variety of musical styles. Preparation involved not only technical and programming issues, but extensive jamming. The interactivity of Interactive Electronic Visualization Event was supplied during the day when the audience could come and play with the equipment. Subsequently the "I" was dropped, EVE2 and EVE3 continued as performances, which were interactive for the performers but not for the audience.
EVE1 was the prototype, establishing the possibility of such an event. EVE2 (1975) involved a lot more planning and quality control of content but was also held in the rotunda with live musical accompaniment. EVE3, in 1977, still emphasised the Real Time possibilities of this medium. However, the performers felt that the logistics of organizing a complicated live performance and a large-scale physical event, were beginning to interfere with aesthetic goals. Therefore, the performances were recorded in front of a small studio audience and edited on a 3/4" deck. The finished show took place in the auditorium of the First National Bank, the computer graphics and sound were played back on a light-valve projector. By the end of the '70s calligraphic systems were being replaced by raster graphics systems with frame buffering. Except in the video games industry, computer graphics became very static. The possibility of interacting in real-time with graphics is only becoming a possibility in the 90s.
In 1976, Larry Cuba came to the lab to create his wireframe Death Star Simulation for George Lucas¹ Star Wars film. (Please see the Milestones chapter for all the details.) The EVL is current actively working on new projects, information about which can be found online here: http://www.evl.uic.edu/EVL/index.html . Tom Defanti¹s home page is http://www.eecs.uic.edu/eecspeople/defanti.htm
University of Utah
Dr. David Evans founds the Computer Science Department at the University of Utah in 1968, started in part by Bob Taylors ARPA funding a $5 million grant. The number one problem of the day (according to Ed Catmull at least) was hidden surfaces. Many continually evolving algorithms, such as Watkin¹s algorithm (which subdivided the picture) were never actually implemented but served as inspiration for more practical solutions, such as Catmull¹s more expensive techniques that actually subdivided surfaces. (This work was presented in his thesis work ³Characteristics of 10 hidden surface Algorythms.² in 1974). At the time Ivan Sutherland did not like Catmull¹s ³brute-force² approach, but the advent of much cheaper memory and storage made it an extremely effective, and increasingly practical. Indeed it is just such a technique that is used as the basis for most all CG systems today. Catmull, as part of his interest in solving curved surface problems, had briefly attempted techniques of bending polygons before making his discovering of how to very efficiently and quickly subdivide cubic patches.
[Utah Image processing] Tom Stockham was a brilliant teacher at Utah who brought together the disciplines of image processing and computer graphics. His extraordinary contributions in his related work in audio processing were honored in February of 1999 by the Academy of Motion Picture Arts and Sciences with a Technical Achievement Award.
How to light things? Henry Gouraud had been working for some time on linear interpolated shading, when he visited Martin Newell and his brother in England who were working on similar research. A stumbling block with the early implementation was mach-banding artifacts, which also hindered the Newell¹s, allowing Gouraud to travel to Utah to finish his ³Continuous Shading of Curved Surfaces² in 1971. Other important individuals at Utah over the years included Frank Crow in the image processing group who developed the concept of anti aliasing; Jim Blinn develops bump mapping and environment mapping while a graduate student; Jim Clark, Lance Williams, Garland Stern, Ron Resch, Alan Kay, John Warnock, Fred Parke, Patrick Baudelaire, Jim Kajiya, Christy Barton, Gary Watkins and man of others. For a good online source of U.Utah Computer Science history, try here: http://www.cs.utah.edu/~riloff/cs- history.html
Vertigo Software Corporation
Employees included Rod Paul(Omnibus NY, R&H, Dreamworks), Floyd Gillis, Dave Gordon, Carl Frederick (OMNIBUS NY, then ILM), Matt Arrott, Nancy St John. Vertigo: a brief history written by Rick Stringfellow Starting Up Vertigo started developing in the early 80¹s in Vancouver BC, Canada. Its exact starting date and who had the original idea is not known. The team that started the product gained funding from the Canadian government. The system was designed largely by animators for animators seemingly looking to solve the problem of creating the best animation system without much too much regard for the final cost. Cubicomps Vertigo system In the later part of the 80¹s when Vertigo International had sold few systems, Cubicomp stepped in and purchased the whole venture. Cubicomp¹s reason for purchasing was speculated to be that it¹s own workstation development was falling behind and it need to acquire Vertigo to keep up with the success of other workstation products such as Wavefront and TDI. The acquisition saw Cubicomp take the Vertigo development to the next phase. In 1990 Cubicomp collapsed, leaving Vertigo in Vancouver. At this point the system was just poised to really take some leaps forward; however without the marketing support of Cubicomp, Vertigo seemed doomed. Vertigo Technology Inc. In 1990, out of the ashes of Cubicomp a couple of ex- vertigo employees and a group of investors purchased the code. With little money and little experience this team managed to finish the next release of code, which sold well. Existing Vertigo users, fearing that this would be the last cut bought up the software. Surprised by success the team then continued to expand and rebuilt the company. For a number of years the successes continued, as did the releases of versions. New features were added and the team grew back to the size that it was in the early days. In 1993 the decision was taken to ditch the old renderer in favor of supporting the industry standard RenderMan. The team undertook to do this directly creating a seamless link to RenderMan. An interface was created to allow easy interactive editing of shaders and renders to RenderMan without writing out RIBs. Finally this allowed Vertigo to break into the film market. Disney BVVE took the system, along with a great deal of support from Vertigo. This relationship grew into Vertigo eventually producing shots for Disney movies in Vancouver. Even with this success and turning into a public company Vertigo again began to run short of cash and its lost its ability to compete with teams such as Softimage and Alias/Wavefront. In a final attempt to get out of the way of these bigger competitors the team started to move the entire development to the Mac using Apple Quickdraw3D. At the same time spinning off smaller components into 2D applications such as Photoshop and Illustrator. Vertigo still exists and still functions on the SGI. (see the Animation chapter for more details.) Rick Stringfellow was Head of Animation, Product Manager and Designer of versions 9.4, 9.5, 9.6 and the Mac port. Rick can be reached at Radical Entertainment (604 602 2664 / rstringfellow@radical.ca )
VIFX
(1985 to 1999) Co-founded by partners Richard Hollander, Greg McMurry, Rhonda Gunner and John Wash. The companies first job was to produce video display graphics for the feature film 2010:Odysee Two. Virtually all the 3D CG in the early years was produced using Cubicomp equipment. Richard was inspired by a NASA/Kodak article about CCD technology and promptly designed and built a 1k by 1k input scanner for production use. The first digital composites it was used for were on the feature film ³Bill and Ted¹s Excellent Adventure² in 199?. In about 1990, the company began creating more ambitious motion picture visual effects and was then known by VIFX/Video Image. Feature film visual effects work for Twentieth Century Fox production as well as other studios, was wide ranging and extensive. The work included Batman Returns, Mighty Morphin Power Rangers, Down Periscope, Volcano, Face Off, X-Files, Relic, Star Trek Insurrection, Blade, and Pushing Tin. VIFX was sold to Twentieth Century Fox in 1996, and partners Greg McMurry and Rhonda Gunner left the company. In 1998 the Fox animation production Planet Ice was changed from an all 3D CG feature to being traditional cell animation, leaving VIFX with an opportunity to sell themselves yet again to Rhythm & Hues in the spring of 1999. About 80 people, including Richard Hollander, transferred to the new company following the merger. John Wash is no longer with the company but does continue to consult. Richard Hollander currently is President of the film effects division of Rhythm & Hues. He also co- chairs the Motion Picture Academy of Arts & Sciences¹ Digital Imaging Technology Subcommittee with Ray Feeney.
Wavefront
A Brief History of Wavefront by Mark Sylvester, Ambassador: Alias|Wavefront
Overview: Larry Barels, Bill Kovacs and Mark Sylvester founded Wavefront Technologies in 1984. The company created its first product, an animation software application called PreView and shipped it to Universal Studios for use on the television series Knight Rider, and to Lamb and Company for use in previsualizing and controlling a motion control camera rig. During the next several years the product line was expanded to include modeling, rendering, compositing, and material editing capabilities. The company enjoyed early relationships with key partners that shaped the direction of the products and the marketplace. Those early partners included Disney (The Great Mouse Detective), NASA (The Shuttle accident recreation), NBC (1986 Olympics) and Failure Analysis (Legal animations, including the World Airways crash at Logan Airport).
The company's first real competition came in 1987 with the advent of Robert Abel and Associates software division, AIR (Abel Image Research). This company, originally founded on a codebase developed by Bill Kovacs, was started to capitalize on the momentum that Wavefront was enjoying in the marketplace. This software was incomplete, undocumented, and very expensive, however AIR had the best marketing materials in the industry with an award winning animation reel done by Robert Abel. Unable to compete against this body of work a deal was struck in 1988, which had Wavefront purchasing the assets of AIR. The AIR software was never incorporated into the Wavefront codebases, even though urban myths have contrary opinions.
The company was originally financed by the founders for the first year, then went through several rounds of venture funding, culminating in an IPO ten years later in 1995. Initial revenues were in the several hundred thousand per year range, and ended in 1994 with annual revenues around 26$M.
The company went from 3 founders and 4 employees, to 12, then 28, then 50, then 90, and then 160 at its highest point in the late 80¹s. Expansion into Europe happened in 1987 with the creation of Wavefront Europe, located in Belgium. It was at that time that the Belgian government also became an investor. The next year, concurrent with the AIR acquisition, Wavefront moved into Japan, and then throughout the rest of Asia.
In the early 90¹s a round of funding with CSK, a major Japanese computer company resulted in the founding of Wavefront Japan, a wholly owned subsidiary. CSK at one time owned 14% of Wavefront.
How the Company Got Started
Originally designed as a production company to create visual effects for commercials and feature films, the initial fundraising efforts were ineffectual until the business model was changed to that of a software company that could sell the same software that the production company would create to produce the commercials. During the first year the company¹s production department, headed by John Grower, now president of Santa Barbara Studios (Star Trek: Insurrection, American Werewolf in Paris) created opening graphics for ShowTime, BRAVO, and the National Geographic Explorer television show. These projects allowed the new software to be tuned to meet the needs of the animators and provided the company with early marketing materials.
In March of 1985 the company attended its first tradeshow, NCGA, and (with Alias) participated in Silicon Graphics¹ booth. At this show the first systems were sold, to NBC (New York), Electronic Arts (London), Video PaintBrush (Australia), Failure Analysis (Mtn. View) and NASA (Houston). This put the company in two markets, Broadcast and Engineering Visualization, and on multiple continents, forcing management to deal with multiple opportunities across diverse geographies.
In 1993 Wavefront entered into discussions to acquire another of the pioneering computer graphics companies, Thomson Digital Images (TDI). TDI had developed a similar set of technologies, in modeling, animation and rendering, and had innovated in the area of NURB modeling and Interactive Rendering. Those technologies coupled with extensive distribution in Europe and Asia made for an ideal fit with Wavefront. The acquisition was treated more as a merger, however, more than half of the employees of TDI left immediately. It took nearly two years to blend the distribution channels in Europe and Asia, as Wavefront had a toehold in those areas already, and fierce competition between the channels was clearly in play.
What Markets Did Wavefront Serve?
Wavefront started with the intent of working with the film and high-end commercial market. However, as a result of its first major tradeshow, it was accepted into the Visualization, Engineering, Broadcast and Post-Production marketplaces as well. The fact that the system was designed to be open-architecture allowed for this market expansion. The majority of the software as designed served both markets well, with some modification for data import, and numerical accuracy to satisfy the military (NASA) and forensic animation (Failure Analysis) requirements. Because of the open architecture of the system, originally crafted by Roy Hall, who went on to receive an Academy Award, and Bill Kovacs, for the system design, third party developers were able to create ancillary applications and market them through a program called Ripples. This open approach was a hallmark of Wavefront, and tended to draw users that were more technical, and interested in customizing the application.
The original business plan talked about military, educational, medical, electronic game, simulation, film/entertainment, engineering and product visualization marketplaces. The only one that never materialized was the simulation market. The company expanded into the scientific market in the late 80¹s with a product called The Data Visualizer. This product, aimed at non-polygonal databases was a success until Silicon Graphics and IBM developed competing products offered for free in bundles to sell high end server hardware into the scientific marketplace. The Data Visualizer built upon Wavefront¹s reputation for open systems, and fast graphics interaction.
The company made one foray into the desktop¹ marketplace with a project co-developed with Silicon Graphics, called The Personal Visualizer. This product was created to give CAD users a point and click interface to highend photorealistic rendering. Initially targeted to SGI hardware, the product was eventually ported to Sun, IBM, HP, Tektronix, DEC, and SONY. The strategy was to bundle the software on every system sold, then follow on with module sales into the installed base.
The company had its best success in the post- production marketplace with sales into the major networks, as the software was extremely fast, productive and reliable. It was able to keep up with that industries incessant demand for more speed. The other major success for the company was in Engineering Visualization. Based upon the idea that the software would be a compliment to CAD, the Wavefront system specialized in file translation, with native translators for every major CAD package. At one Autofact tradeshow, Wavefront was in the booths of 22 vendors, showing interactive visualization of parts, mechanisms, and assemblies created with a plethora of CAD packages. This, coupled with the systems open architecture for reading any type of ASCII data, allowed it to also serve in the post- simulation visualization space, which included NASA, and virtually any company that wanted to view results derived from supercomputers and proprietary software. In 1995, nearly half of the company¹s installed base was in this marketplace.
In 1993 the company entered the Electronic Game market with a repackaging of its core application, The Advanced Visualizer, into a tailored offering called GameWare. This bundle focused the marketplace on Wavefront for game development and was very successful. This effort lasted for one year until the merger (of Alias and Wavefront) when the program was canceled so that PowerAnimator could be sold to game developers instead.
Major Customers
In the film market, Disney was the premier customer, with Warner Digital, BOSS Film (both now defunct), Industrial Light and Magic, Film Magic (Hong Kong), TRIX (Belgium), and Electronic Arts (London). In video production, NBC, CBS, ABC and CNN (Turner Broadcasting) were the premiere partners. In engineering visualization there was Harvard, NCAR (National Center for Atmospheric Research), NASA (6 locations), Alcoa, National Center for Supercomputing Applications (NCSA). The military visualization marketplace included the CIA, FBI, Naval Surface Warfare Center, US Air Force and the National Security Agency. At the high point there were nearly 8000 Advanced Visualizer users.
Market Dynamics
For the first few years the company enjoyed rapid growth in the film, video and engineering marketplaces. As most customers were doing mostly the same types of things the company was not stressed with specific product requests that were not generally applicable to all types of users. The visualization market was mostly in place to create marketing videos and presentations, so the tools to create pretty pictures¹ were most desirable. It was after the effort of The Personal Visualizer, and the growing demand for CAD Visualization that the company had to began custom engineering to develop CAD translators.
These efforts at CAD visualization were significant because Wavefront was the first to take on this arena, but the efforts of porting to every platform that carried CAD applications, and the fact that it took nearly one year per port, AND the fact that most facilities eventually would run CAD on Sun, HP, or IBM, and then use Silicon Graphics for Visualization really took the competitive wind out of the sails of the company. Because so much effort was spent on CAD compatibility, and trying to negotiate porting deals with hardware manufactures, the focus on film and video application advancement was lost.
This loss of focus allowed Alias to make inroads into the entertainment market, and also created a vacuum in the entertainment space, especially in animation, that Softimage filled. Softimage was originally billed as a blend of the best of Alias and Wavefront software. Designed by artists, for artists, it languished and was not taken very seriously until they released the product Actor, which was the first Inverse Kinematics package that allowed animators to do real character animation easily. (Actor was recognized this year with a Technical Achievement Award by the Academy). This propelled them into the spotlight of the entertainment marketplace. Remnants of this period still exist in the entertainment market today, with Alias used for modeling (Alias also received a Technical Achievement Award for the modeling component of Power Animator, the recognized industry standard), Wavefront (Dynamation) used for simulation animation, Softimage for character animation, and Renderman for rendering.
For Wavefront, this meant a retrenching into Engineering Visualization, with a renewed focus on CAD translation, and less on porting, as porting efforts started to dwindle post-1992, with the demise of the Personal Visualizer. The reliance on revenue from the visualization market allowed for the development of the Data Visualizer, and continued emphasis on motion data import into The Advanced Visualizer. The efforts to continue to work with the Engineering Visualization market were terminated post- merger as the Alias sales force had no expertise, nor management acumen in this marketplace.
In 1994, the activities that lead to the release of GameWare invigorated the company¹s marketing efforts and returned to them the spotlight, and increased the competition between Alias and Wavefront. The company teamed up with Corypheus Software to produce a real-time simulation environment for use on Onyx systems, giving greater control to game developers. (Called Activation, this product was terminated as it conflicted with Alias¹s efforts in the game business, post-merger). Several Wavefront executives and technical personnel went to Corypheus post-merger.
In early 1995, another effort was undertaken to capture the architectural market. ArcVision was designed to take existing CAD translation software and bundle it with preset color and environment controls, using IPR (Explore¹s renderer front-end) to offer a low cost solution to small firms that wanted to experiment with different color and lighting schemes, using existing CAD architectural databases. This project was terminated post-merger as the Alias management had bad experiences in this market with their Sonata purchase, and did not believe that the market was viable. It never really got off the ground, as it was scheduled to be launched at Siggraph, 1995.
In June of 1995 the merger of Alias Research, Wavefront and Silicon Graphics was culminated.
In 1998, a Scientific and Technical Achievement Award to Jim Keating, Michael Wahrman and Richard Hollander for their contributions that led to the Wavefront Advanced Visualizer computer graphics system. Also in 1998, A Scientific and Engineering Award was presented to Bill Kovacs for his creative leadership and Roy Hall for his principal engineering efforts that led to the Wavefront Advanced Visualizer computer graphics program.
Whitney/Demos Productions
(1986 to 1988)
Founded by John Whitney Jr. and Gary Demos after their company Digital Productions was taken over by Omnibus. Funding assistance included Tom McMahon from the Symbolics Graphics Division and other private investors. Initial production was based upon the Thinking Machine¹s Connection Machine II fronted by a Symbolics workstation, along with other computer systems. Their first project was to team up with fellow ex-Triple-I employees from the Symbolics Graphics Division to produce the film Stanley and Stella: Breaking The Ice. Unfortunately before they could collect the remainder of an initail $5million loan, the majority of the CG production industry collapsed (thanks to the Omnibus fiasco), and the investors balked. THE NAME GAME After declaring bankruptcy in June of 1988, Gary Demos went on to form his own research company DemoGraFX while John Whitney Jr. elected to stay and take the company through the bankruptcy proceedings himself. John continued the company under various names, initially starting fresh as Optomystic. When another company¹s name was found to be similar to that of Optomystic, he changed the name to Digital Animation Laboratories, later selling the assets of the company to US Animation Labs. In December of 1996, that company split in two, keeping the production side as Virtual Magic and selling the company name and software side to Toom Boom Technologies. Today John runs his remaining original assets of Digital Animation Laboratories under the name Digital Editions Inc. (There will be a quiz on this later so I hope you paid attention to all that. Tman)
Xaos
(1988 to present)
Founded in early 1988 by Arthur Shwartzberg and Michael Tolson. Arthur's strength and experience was in Marketing while Michael was the creative visionary. Xaos was originally called Eidolon when they both left a studio in SF called Synthetic Video, where Arthur was Director of Marketing and Michael was a co-founder. Xaos began at the time of collapse for so much of the CG community, and made the decision to go with 100% proprietary tools as the basis for their work. As a small shop (10 or 11 people) there was a conscious decision to not pursue the standard fare of "flying logos" which was the backbone of the industry at the time. Their unique design esthetic won instant acclaim at places like the NCGA, BDA and SIGGRAPH. Arthur and Michael left the company in 1991 to form Xaos Tools, in a hope to capitalize on the very unique software tools that Xaos had created. Taking over in their absence was Marc Malmberg who kept the company going at its then current state. Significant at the time was a decision to make a 100% change over to an NT based production pipeline, a situation that is still the case today. Arthur left Xaos Tools in 1996, with Michael following in late 1998. Xaos Tools has gone threw bankruptsy but should continue in some form at least for a while. Arthur then returned to Xaos in 1998, and preceded to implement significant changes to it's whole business strategy and long term plans. Marc Malmberg left Xaos in 1998. Today, Xaos is in the midst of a re-birth of sorts, planning to roughly double in size from 25 to 50 employees in the next year. It is this "boutique" sensibility that is the intended format to carry them into the next era of creative content markets. Key to this plan is strengthening the already strong presence in the large format film market, and expanding their commercial presence. Early employees included Chitra Shriram(Creative Director), Roberta Brandao, Henry Preston(ILM), Amelia Chenoweth and Hayden Landis(ILM), Eric Texier(ILM), Ken Pearce(PDI), Tony Lupidi(Electronic Arts). http://www.xaos.com
Xerox PARC (Palo Alto Research Center)
The Xerox Palo Alto Research Center (PARC) opened on July 1st, 1970 in Palo Alto, California; just outside the Stanford University campus. [FACTIOD] PARC initially followed the pure research model of such facilities as IBM's Yorktown Heights research Center, AT&T Bell labs, MIT Lincoln Labs, and The Stanford Research Instutute "Augmentation Research Center" (Where Douglas C. Engelbart created the mouse.) PARC also spawned the follow up DEC Systems Research Center, founded later by Bob Taylor just across the Stanford campus from PARC. Jacob Goldman, chief Scientist and founder of PARC initially divided the facility into three separate units: 1) The Computer Science Lab (SuperPaint!) 2) Systems Science Lab 3) General Science lab. While computer graphics was never a goal of PARC per se, Bob Taylor himself was very familiar with this new area of computer science research. He had overseen the Information Processing Techniques Office of ARPA (The Defense Departments Advanced Research Project Agency) which funded many early university grauduate programs, including Dave Evans' graduate program at Utah back in 1965. The person who did bring CG research to PARC under Taylor was Dr. Richard Shoup of Carnegie Mellon University. Shoup had been at the short lived BCC (Berkeley Computer Company) from 1968 to 1970, and was given a full year upon starting at PARC to explore what it was he wanted to do. What he ended up doing was developing Superpaint. Along with artist Alvy Ray Smith, Shoup experimented designed and built the first digital paint system with a non-random access, 8- bit frame buffer. [FACOID] SuperPaint records and stores it's first image (a picture of Dick Shoup holding a sign saying "It works, sort of") With assistance from Flegal, Curry and Patrick Beaudelaire on April 10th 1973. 486 x 640 res. Shoup left to form Aurora Systems and was Awarded a Technical Emmy Award in 1983. [QUOTE] ³My big technical contribution (I was really there as an artist) at Xerox PARC, to Shoup's Superpaint, was invention and implementation of the RGB to HSV transform for artistic selection of colors. Other than this contribution, all other programming of Superpaint was Dick's.² Alvy Ray Smith Other CG related breakthroughs at PARC included: -February 1975, the first GUI is demonstrated, with multiple windows and pop-up menus that would be incorporated later as a standard in both Mac (and later Windows) operating desktop systems. -The first Alto was powered up in 1973 (displaying an image of Sesame Street's Cookie Monster.) It¹s bitmap display was a vertical format 8x11 inch screen with a resolution of 606x808 pixels. With a maximum of 128k of main memory and 2.5 meg disc over 2000 were manufactured by 1978 at a cost of about $12,000 each. Upgraded as the AltoII in 1975, and the AltoIII in 1976 it was actually the first PC installed in the White house (in 1978). Some irony perhaps as the world first WYSIWYG computer being used in the heart of Washington politics? -The Smalltalk object oriented language by Alan Kay (1974) developed the WIMP (Window manager, Icons, Mice and Pop-up) interface concept. PARC is still an active research center today. http://www.parc.xerox.com/parc-go.html
Email me with comments, contributions or corrections please!
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https://enlyft.com/tech/products/silicon-graphics-international-sgi
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Companies using Silicon Graphics International (SGI) and its marketshare
|
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1,643 companies use Silicon Graphics International (SGI). Silicon Graphics International (SGI) is most often used by companies with >10000 employees & $>1000M in revenue. Our usage data goes back 8 years and 7 months.
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/tech/static/images/icon-logo.png
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https://enlyft.com/tech/products/silicon-graphics-international-sgi
|
What happens once I submit a request?
Someone from the Enlyft team will get back to you within 24 hours with more information.
How much is the cost?
The cost depends on various factors, such as number of records, number of products and use of advanced filtering and search criteria.
Will I start getting spam on my email?
Definitely not! We will not be adding you to an email list or sending you any marketing materials without your permission.
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https://www.oldschoolvalue.com/stock-analysis/silicon-graphics-international/
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Silicon Graphics International (SGI) Analysis
|
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[
"Jae Jun",
"www.facebook.com"
] |
2010-03-15T23:20:38-04:00
|
Randy of Durig Capital has brought you two ideas, DIVX and LAB, that played out well immediately, so here is his third.
|
en
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Old School Value
|
https://www.oldschoolvalue.com/stock-analysis/silicon-graphics-international/
|
Randy of Durig Capital has brought you two ideas, DIVX and LAB, that played out well immediately, so here is his third.
Is it Silicon Graphics International’s time to shine?
Is Silicon Graphics International [[SGI]] third time a charm? Now that they have rock solid balance sheet, excellent execution and very low enterprise value, is this SGI’s time to shine?
Our goal is to select, purchase and monitor companies in an effort of gaining outstanding performing investments while minimizing risk for our clients. We will cover part of our review and selection process as well as explain why SGI has currently become one of our selections.
First, you should know the following: On April 1, 2009, SGI filed for Chapter 11, again, and announced that it sold all of its assets to Rackable Systems for $25 million. The sale increased to $42.5 million and was finalized on May 11, 2009.
At the same time, Rackable announced their name change, Silicon Graphics International, as their global name and brand.
We first search for companies with pristine balance sheets
After the purchase and name change, the new SGI has roughly $154.8 million in cash, or $5.10 per share, and no long term debt after completion of the December quarter.
SGI has a very strong balance sheet.
We like extremely low enterprise values
When you subtract out the cash from the enterprise while remembering that SGI has no debt, their enterprise value (the value of the ongoing operations of the company) is actually extremely small for a company that just completed a single quarter with over $150 million in pro forma revenues.
If you subtract out all the cash from the remaining value of the company, the ongoing business is only worth about $218 million. This makes the business value smaller than the just completed quarterly revenues, which is remarkably low for a leading computer company with a run rate well above $500 million in revenues.
SGI is achieving size, scale and many competitive advantages while only having a handful of competitors. Additionally, having an impressive ability to leverage new business revenues in both storage and services while attaching more value onto to their established and strong position in server sales, they have a nice business model.
Is the operation or enterprise driving value to their shareholders?
SGI receives another yes.
They had an outstanding quarter with a 18 cent pro forma profit, which is well above the average estimate of a loss of 8 cents while solidly expanding and, better yet, forecasting a continuously expanding margin for the year.
Possibly even more impressive is that SGI grew their cash this quarter by over $31 million, which was a whopping 25% greater over their last quarter.
An impressive metric measurement of their execution was that the new SGI’s international revenues are up about 12 times in one year to 29% of total revenues. With this knowledge and the history of SGI, the new SGI has strong execution and growth.
Now knowing the excellent performance on the international markets, SGI’s current forecast of doubling storage business in three years to 30% of total revenues seems very palatable.
In most companies this would be seen as a Hercules-type of event, especially in this economy. For SGI though, it’s just part of normal execution.
Is this a good business?
We believe this is a very good business with both new and established clients adopting a slow but steady migration to a cloud-computing concept of computing, while at the same time the cost of high performance computers is rapidly falling.
This allows for a high growth, low cost, open-architecture computer company to be in a very enviable position.
SGI is a leading developer of enterprise-class, high performance systems that feature individual configurations that could include thousands of Intel x64 based microprocessors with Linux operating systems. The standard combination of Intel x64 architecture and Linux operating environment combined with their own differentiated Linux extensions gives companies that purchase SGI advantages in improved performance, simplified system management, reduced operating cost and a much more robust development environment.
When Rackable purchased the assets of SGI, they also attained over 700 patents in the high performance computers as well as many large customers.
Is the Train Wreck and then the fog from the Wreck clearing?
When finding companies around cash value, often a “Train Wreck” is needed to drive value close to cash.
With SGI, it was assumed it was a never ending train wreck, but some of the major concerns include:
Questionable success of two uniquely different companies merging, knowing the more established one never gained success in years.
SGI’s history of having great technology, but poor sales or execution.
Questioning if Rackable would be able to provide it’s high growth, while accruing a much larger company.
In 2006 and 2009, SGI went into bankruptcy giving SGI without proper due diligence – the concept that SGI is a perennial looser.
I believe all of these factors and more have been priced into this company’s current price.
First of all, SGI will survive if it’s profitable with a high pile of cash and no debt.
Rackable Systems (the purchasing company) had a completely different story and went public in June, 2005.
According to Gartner’s October 2007 server report, Rackable Systems was the fourth largest x86 server provider in North America. Also, in 2007, it was rated the fastest growing server provider in North America, outgrowing all the majors like Sun Microsystem, Dell, Hewlett Packard and IBM on a unit percentage basis. With Rackable Systems (the little guy) purchasing SGI (a technology leader), this could come out far better than it has been priced for.
The new SGI has now demonstrated over the last two quarters that the execution of Rackable Systems combined with the technological muscle of SGI to date has been a wonderful marriage, with some of the best execution in the business whether we perceive them having a low enterprise value or not.
Valuation
We believe SGI has a value, execution and balance sheet like those past companies that fit our model, e.g., SONS, LAB, DIVX, KHD, HCII and WCG, so we’re hopeful that SGI will have a similar outcome knowing other companies that fit this model have preformed well.
Knowing that SGI has completed two excellent quarters in creating value for their shareholders and now that the new company has completed over 6 months of history, we ran the following two traditional valuations of SGI to put a value on the new company:
1. Price Earning or PE Based:
Durig Capital is currently forecasting that SGI will produce an annual run rate of 72 cents per year pro forma. With SGI’s margins, revenues and profits all expanding, SGI should at least achieve some industry parity in value.
When the Diversified Computer Industry’s average PE of 17.55 is applied to SGI, this would give ongoing business a value of $12.63. Then, when you add the cash of $5.10 per share, we believe that SGI could achieve a stock market value of $17.73.
2. Revenue Based:
If you value SGI at 2.48 times sales (again, the computer diversified sales average) using SGI’s guidance of $500 million in sales for their current year plus the $5.10 in cash currently on the books, it adds up to a $46.50 stock market value.
Either way, today you could easily demonstrate based even on the lowest result (the PE based valuation) that with SGI’s current model, low valuation and especially with their short term superb execution, SGI could and should, in our opinion, be valued significantly higher.
Disclosure
Durig Capital owns SGI in it’s client, related and own accounts. We started buying around $8.89 per share.
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https://www.spacedaily.com/2006/090401180039.iz39yq0p.html
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Bankrupt Silicon Graphics bought by Rackable
|
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METATEXT
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Silicon Graphics Inc., a one-time computer powerhouse that delivered the special effects in many Hollywood hits, declared bankruptcy on Wednesday and was purchased for 25 million dollars in cash.
Rackable Systems Inc, a Fremont, California-based manufacturer of servers and data storage products, announced that it had agreed to acquire most of the assets of Silicon Graphics and to assume some of its liabilities.
Silicon Graphics provided special effects for movies such as "Jurassic Park" and "Toy Story" in its heyday but the company has fallen on hard times recently declaring bankruptcy for the first time several years ago.
The Sunnyvale, California-based company filed for Chapter 11 bankruptcy protection again in New York on Wednesday. Chapter 11 provides a company with protection from creditors while it restructures.
Rackable chief executive Mark Barrenechea announced the purchase of Silicon Graphics, saying "the combined company will be positioned to solve the most demanding business and technology challenges our customers confront today.
"This combination gives us the potential for significant operational synergies, a strong balance sheet, and positions the combined company for long-term growth and profitability," he said in a statement.
Silicon Graphics chief executive Robert Ewald said the purchase by Rackable was a "big step" in strengthening the company.
"This transaction represents a compelling opportunity for Silicon Graphics' customers, partners and employees, who can all benefit from the emerging stronger company with better technologies, products and markets reach," he said.
The deal remains subject to the approval of the bankruptcy court.
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https://www.techspot.com/article/2142-silicon-graphics/
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Silicon Graphics: Gone But Not Forgotten
|
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[
"Cal Jeffrey",
"the search giant"
] |
2022-11-10T09:19:00-05:00
|
At its peak in the 1990s, Silicon Graphics had legendary status among 3D and graphic designers who leveraged the unique power of these workstations that were at...
|
en
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https://www.techspot.com/images/favicon30.ico
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TechSpot
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https://www.techspot.com/article/2142-silicon-graphics/
|
You may have heard of SiliconGraphics, later known as Silicon Graphics, Inc, and then simply SGI, but few home users outside of an enthusiastic hobbyist community ever used its computers. That's because SGI was dedicated to manufacturing high-performance workstations, software design, and supercomputers for professionals specializing in 3D graphics.
At its peak in the 1990s, Silicon Graphics had legendary status among 3D and graphic designers who leveraged the unique power of these workstations that were at cutting edge of visual computing.
The legacy of Silicon Graphics can still be seen in the Nintendo 64, which they helped develop, and several Hollywood movies, including Jurassic Park, Twister, Congo, Toy Story, and many others, but let's not get ahead of ourselves...
Early Days
Silicon Graphics got its start in a day when most people did not even have a home computer. The year was 1982. James Clark left his job at Stanford University, where he was an associate professor of electrical engineering with the vision of creating powerful computers that could perform the complex computations required in 3D animation.
On his departure from Stanford, Clark took seven talented graduate students with him. Among them was Kurt Akeley, who engineered the frame buffers and processor subsystems in the first SGI IRIS terminals and the CAD systems used to develop them.
He also created the RealityEngine for the Crimson and Onyx "visualization supercomputers" and was integral in the development of the OpenGL graphics specification.
David Brown, another Stanford alumnus and co-founder of SGI, had previously helped develop the SUN workstation over 10 years prior to the founding of Sun Microsystems. Brown created the "PM1" processor boards for the first SGI workstations. He later moved on to work for Digital Equipment (DEC) and then Sun Microsystems.
Another key player in the founding of Silicon Graphics was Charles Kuta. Having achieved his Masters in electronics and software engineering, Kuta joined Clark and helped design the Geometry Engine. The Geometry Engine managed 3D modeling primitives at the hardware level – the geometry pipelines that handled model space to screen space viewing transformations.
SGI released its first-generation IRIS systems (models 1000 and 1200) in 1984. These were not standalone workstations, but rather raster display units intended to be connected to more general-purpose machines like the DEC VAX. The early IRIS models used a PM1 CPU board, a variant of the one used by Stanford's SUN workstation that David Brown had helped develop. These systems came equipped with 8 MHz Motorola 68000 processors and 768kB of RAM but no disk drive.
Later that same year, SGI would launch the 1400 and 1500. Each machine got a bump up to 10 MHz and 1.5 MB RAM. They also each had disk drives. The 1400 had a 72MB ST-506, and the 1500 sported a gigantic 474 MB SMD-based drive with a Xylogics disk controller.
SGI's 2000 and 3000 series would emerge starting between 1985 and 1989. The various systems, including a "Turbo" line, were still using Motorola processors, albeit faster ones, and used the same graphics hardware. However, Brown had re-engineered the PM1 CPU module (now the PM2) to handle the higher frequency silicon. They had more RAM, and ST-506 and SMD disk drives became standard. They also sported Weitek Floating Point Accelerator boards.
By the time SGI discontinued the line in 1989, it had sold around 3,500 systems in total. Such a small number of units shipped may seem insignificant, but they were costly machines ranging from $45,000 to $100,000 each. By 1988, SGI's revenue had steadily climbed to $153 million.
SGI RISC Era
In the early 1990s, SGI introduced its first RISC systems. In 1991, the company produced its first 64-bit Crimson workstations powered by MIPS R4000 microprocessors. In a bid to secure a steady supply of MIPS processors, SGI bought the company, renaming it MIPS Technologies, Inc. in 1992.
The acquisition of MIPS opened the door to other business ventures outside of SGI's traditional wheelhouse.
In 1993, Nintendo approached SGI with the proposition of designing the company's next GPU. The two companies penned the deal that summer, and SGI went to work developing the "Reality Coprocessor" (RCP). Three years later, Nintendo released its first 64-bit gaming console, the Nintendo 64.
Silicon Graphics' most significant client during its RISC phase was Hollywood.
Silicon Graphics' most significant client during its RISC phase was Hollywood. Multiple studios bought up SGI machines to do post-production CG work and 3D animation in movies like Jurassic Park (1993), Johnny Mnemonic (1995), Jerry Maguire (1996), Anastasia (1997), and Lost in Space (1998).
According to IMDb, various studios used Silicon Graphics workstations in more than 40 productions between 1993 and 2003.
But Hollywood was not the only beneficiary of SGI's innovative technologies. Its early workstations allowed users access to 3D graphics subsystems via its proprietary API known as IRIS Graphics Language. IRIS GL evolved over the years, and with each new feature, it became more bloated, harder to maintain, and complicated to use.
Movies Made with SGI
Source: Gerhard Lenerz
Movie Year Equipment Abyss 1989 early IRIS 4D (supposedly including 4D/120) Antz 1998 O2 (166), Origin 2000 (270) Casper unknown Cats & Dogs 2001 O2, Octane 2, Origin 200, VW 230, VW 320 Disclosure 1994 Indy Evolution 2001 O2, Octane 2, Origin 200, VW 230, VW 320 Final Fantasy 2001 unknown Forrest Gump unknown Frighteners 1996 Indy, Indigo 2 Gladiator O2, Indigo 2 Extreme, Origin 200, Octane, Onyx, Dual Pentium Hollow Man O2, Octane, Onyx, Origin 2000, Power Challenge Ice Age Octane, Octane 2 Lord of the Rings 2000 Octane, Origin 2000, VW 230, VW 320 Jumanji unknown Jurassic Park 1993 PowerSeries Twin Tower Jurassic Park 2 1997 unknown Jurassic Park 3 2001 unknown (O2 workstations) Shrek 2001 unknown Star Wars Episode 1 Indy, Indigo 2 (possibly O2, Origin 2000) Starship Troopers unknown Terminator 2 1991 unknown (4D-era) The Adventures of Rocky and Bullwinkle Onyx 2 The Crow unknown The Hunt for Red October unknown The Mask unknown The Matrix 1999 Octane, Onyx 2, Origin 200 The Mummy unknown The Perfect Storm O2, Origin 2000 The Rugrats Movie 1998 O2, Origin 200 Titanic unknown Toy Story unknown Twister 1996 Challenge, Power Challenge What Dreams May Come Octane
OpenGL is Born
In 1992, SGI decided that IRIS GL had become too complex, but it did not want to abandon it and start from scratch. Instead, developers re-engineered the API and began licensing it at little cost to its competitors. And OpenGL was born. The move allowed programmers to write cross-platform 3D graphics programs that were just as fast and efficient as IRIS systems had been.
SGI organized the OpenGL Architecture Review Board to oversee further developments contributed by the industry. The OpenGL standard remains the only cross-platform 3D-graphics API and has even been ported to cell phones and other portable devices. Its main competitor is Microsoft's Direct3D, a DirectX API that only runs on Windows-based systems.
Management was of the opinion that the company should begin using its clout to seek growth by way of acquisition and exploration of secondary branches of the business.
This did not sit well with founder Clark, who wanted to continue focusing on developing high-end hardware. The stalemate prompted Clark to leave SGI in January 1994. The following month he co-founded the internet browser startup Mosaic Communications Corporation, which later became known as Netscape. After Clark's departure, a series of bad investments in the late 1990s and early 2000s foreshadowed SGI's decline.
In 1995, the company acquired three firms – Alias Research, Kroyer Films, and Wavefront Technologies – for about $500 million total. It merged the companies to form Alias/Wavefront, a high-end 3D graphics software development arm. Nine years later, SGI wrote it off as a loss, selling the division for about $57 million to equity investment firm Accel-KKR.
A Short-Lived Supercomputer Venture
In February 1996, SGI decided to dabble in the supercomputer business with the purchase of Cray Research for $740 million. It renamed the company "Cray Business Systems Division," and began working to develop technology (branded CrayLink) that could be integrated into SGI's high-end server line.
This venture turned out to be very short-lived. SGI turned around and sold the division to Sun Microsystems that May, only three months after the acquisition, but retained the Cray branding. Although the details of the deal remain undisclosed, a Sun executive who helped broker the deal admitted that the acquisition was "significantly less than $100 million."
"SGI was desperate," Sun Executive Vice President John Shoemaker told Forbes. "They were running out of cash, and they needed to get the assets off its books. [We paid] less than you would imagine."
In March 2000, SGI finally sold off the Cray brand and its Cray product line to Tera Computer Company for $35 million and a million shares. In September of that year, the floundering 3D graphics firm purchased Intergraph Computer Systems' Zx10 line of Windows-based workstations for around $100 million. It rebranded the systems under the SGI name but discontinued them less than a year later in June 2001.
Trouble in Graphics-Land, Demise
June 2001 also marked the beginning of the end of SGI. In 2003, the company vacated its headquarters in Mountain View, California and leased the building to Google. The following year, it sold off Alias/Wavefront, and by November 2005, SGI was delisted from the New York Stock Exchange after six consecutive years of declining sales.
SGI filed for Chapter 11 bankruptcy protection in May 2006. The proceedings concluded that October. A year later, major shareholder Southpaw Asset management encouraged its clients to sell off their SGI stock due to declining value.
In August 2008, SGI posted $354.1 million in revenue, a 24-percent decline from the previous year and the last earnings report it would file. Come December of that year, Nasdaq warned SGI that it was considering delisting the company because of its financial struggling, but it never came to that.
On April 2009, SGI filed for Chapter 11 again and was sold to Fremont's Rackable Systems for $25 million. Rackable changed the name to Silicon Graphics International, kept the SGI trademark, and changed its Nasdaq ticker from RACK to SGI shortly after the purchase. SGI primarily dealt in high-end Linux servers rather than 3D graphics systems until 2016, when it was announced that Hewlett Packard Enterprise (HPE) would acquire SGI for approximately $275 million.
The SGI name also lives on through a hardcore hobbyist community. Budding filmmakers used to purchase legacy workstations through a "thriving" second-hand market. For example, a hobbyist can pick up an Indy, which went for around $14,000 in the 1990s, for about $40 now.
Note: This feature was originally published on December 2020. We have revised it and bumped it due to its historical significance and old school computing nature, as part of our #ThrowbackThursday initiative.
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What would modern IT look like if Silicon Valley had been completely destroyed in 1985?
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2016-02-08T05:12:08
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In the 1985 movie A View to a Kill, James Bond discovers--and then foils--a plot by
to destroy Silicon Valley, in a manner that makes it look like a natural disaster. The plot for doing so is a bit
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https://cdn.sstatic.net/Sites/worldbuilding/Img/favicon.ico?v=c5e8a29d34e3
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Worldbuilding Stack Exchange
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https://worldbuilding.stackexchange.com/questions/35479/what-would-modern-it-look-like-if-silicon-valley-had-been-completely-destroyed-i
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tl;dr: Apple might not have been as influential, Silicon Graphics would disappear setting back CGI graphics. As such, Steve Jobs might not have had the money or influence to help Pixar launch its revolutionary computers - this is truly the darkest timeline!
Absolutely nothing would change.
By 1985, Microsoft, IBM, C, Wifi, Ethernet, Email and the Internet
This question really highlights two main misconceptions about technology:
a. Silicon Valley isn't the centre of the tech universe
Microsoft, arguably the largest player in consumer-level tech (both in the 1980s and now) never resided in Silicon Valley. In 1979 they moved to Seattle, and by 1985 had offices in Ireland.
Bell Labs (home of Unix and C) had offices in New Jersey and associations with many Universities across the USA.
With C and Unix well under way, Linus Torvalds can continue on to develop Linux in Finland
As Linus develops Linux, Richard Stallman is able to further his work at MIT on GNU and open-source software
Australia's CSIRO were the pioneers of wifi development
Facebook was built at Harvard, depending on PHP that was created in Canada and grown up in Israel (both PHP and Facebook are much older than '85, though)
Compaq computers, consumer computing giant, founded 1982 in Texas
Python, started late 1980s in the Netherlands.
Texas Instruments, 1951, Texas
Unisys, founded 1986 Pennsylvania, employee Larry Wall develops Perl in 1987
b. Tech history goes back further than you think. In 1985:
Development of wifi is already 10 years into development in Hawaii
Sergey Brin and Larry Page were still in high school, and wouldn't meet until starting their masters in 1995. They would have likely gravitated to somewhere other than Stanford and continued their work together or alone.
Bell Labs (home of Unix and C) was celebrates their 60th anniversary, and saw the development of (home of Unix and C) in the 1970s. Unfortunately, Dennis Richie and Ken Thompson were still at Berkeley at the time, but their greatest achievement - C - is already built and in wide use. C++ is developed by Bjarne Stroustrup at Texas A&M in 1986.
Apple was 9 years old having already developed many PCs, later that year would air its infamous 1984 commercial. Jobs may have died in the Earthquake, but work would continue.
My alma mater, The University of Western Australia's University Computer Club is 11 years old and considering that Perth is the worlds most isolated capital city, having had a computers for that long shows computer sciences' reach that early.
The concept of SQL is 11 years old, and IBM's production Database DB2 is 2 years old.
Texas Instruments, founded 1951, third largest manufacturer of Silicon semiconductors, began focusing on consumer devices in the 1970s
Ethernet is 11 years old, developed in Silicon Valley by Xerox PARC, but is internationally standardised by the IEEE in 1980
Simple Mail Transfer Protocol the core of email is 3 years old.
In March 1985, The first .COM web address is registered, by Symbolics Inc., a computer systems firm in Cambridge, Massachusetts.
Ultimately, as of 2016, very little would change by Silicon Valley disappearing. The only difference would be tech hipsters would be building app clones getting VC and going bust from Silicon Harbor in Boston (around MIT), Silicon Ranch (around Texas A&M) or Silicon Alley (in New York).
Addressing the comments:
Adobe - Founded 1982, key products PDF, Photoshop. Had they disappeared Paint Shop Pro would be the dominant force.
AMD - Founded 1969, already well expanded outside of Silicon Valley
Cisco - Founded 1984, founded by Stanford alumni the loss of cisco might alter networking, but by 1984 Ethernet was already standardised by Intel and Xerox.
HP - Founded 1935, in the 1960s they had partnered with Sony (and others), buy 1980 they were a huge company
Intel - "Its first product, in 1969, was the 3101 Schottky ... Intel's business grew during the 1970s ... by the early 1980s its business was dominated by dynamic random-access memory chips. However, increased competition from Japanese semiconductor manufacturers had, by 1983, dramatically reduced the profitability of this market"
Silicon Graphics - Founded 1984, animated CGI would not be at the state we are now. Inside Out may not have been as pretty
Sun Microsystems - Founded 1982, minor advancements on x86 chips. Inflicted Java on the world, the timeline where Java is never created is already an advanced utopia.
Oracle - Founded 1977, "April 1985: Oracle version 5 is released – one of the first RDBMSs to operate in client-server mode" this is released just ahead of out May doomsday. Regardless, in 1985 Oracle is already a powerhouse in server database technology with offices across the globe.
Less dramatic versions of this have happened before: https://en.wikipedia.org/wiki/Chip_famine (source 6)
The disruptions now [1993] raging in world computer chip markets started when an explosion at a Sumitomo Chemical Co. factory in the town of Niihama, Japan, on July 4 wiped out the source of 60 percent of the world supply of an epoxy resin called cresol.
It's very hard to make specific predictions about which products would win or lose in an alternate timeline. Both Raytheon and Lockheed Martin would be victims of this hypothetical, so due to the importance of high tech to US defence production, there would probably be a crash programme to rebuild their capability at other location(s).
Apple would be washed out. But IBM would be much less affected: their HQ is in New York, and they're a very global organisation. The IBM PC was invented in Florida. Microsoft are based in Redmond, WA and would also be much less affected. So maybe the alternate history would be even more a Microsoft-IBM duopoly than it actually was. Maybe IE6 wins the browser wars, making it impractical to use a competing or non-Windows browser due to ActiveX everywhere.
Competing Infrastructure takes up the Slack
Don't forget that the US had more than one concentration of high technology devoted to computing and computing infrastructure. Probably the second most important of these was the Massachusetts 128 corridor. However, Texas and several other states had their own versions too.
Would the destruction of Silicon Valley have adversely affected the progress of US computing? Yes
Would it have stopped the progress of US computing? No
Disaster Recovery Plans
Most companies have some form of disaster recover plan.
Disaster recovery always includes a provision for collecting, archiving, and storing critical data in an off-site storage location.
In companies large enough for such things, it also includes replicating the most essential IT infrastructure in another geographic location and staffing it with IT personnel.
Large defense corporations would definitely replicate their IT infrastructure and provide for fail-over in the event of catastrophe.
Even the very small startups would ensure their data was archived and stored remotely (you can purchase off-site storage services from a third party company - they come and get your archive data and store it in a secure location).
So I think the main loss to the country would have been the bright minds. We would likely seen some divergence from how our IT developed over the years, but it would not have been huge.
So instead of "Facebook", we might now have:
"PryIntoYourPrivateLifeAndStoreItForever".
Instead of "Google", we might now have:
"SpyOnEverythingYouDoOnTheInternetAndSellItToTheHighestBidder".
So Cisco is wiped out, and Nortel wins the race to become the predominant provider of the IP backbone. In the end, its all built in china anyway. And heck, that competition was touch n go as it was. And don't forget that Nortel had prototyped a smart phone (the orbitor) a decade before Apple's iPhone. The wireless networks of that time, however, just weren't up to the task of passing around that much data. But even in bankruptcy Nortel's patent portfolio sold for $4.5 Billion.
The move to fibre optics that made today's high-speed connectivity possible? Most of the work to overcome the technical obstacles of noise-free, low-loss data transmission through glass was done by Corning and Bell Labs - Massachusetts and New Jersey - in the late 70s.
And so someone else besides iTunes figures out how to monetize MP3s over the internet when Napster nearly kills the recording industry. Lots of people had ideas on that for years - it was the music industry dragging their feet on giving up distribution that got them in that mess. Napster just forced the issue, and given Sean Parker was still a kid in Virginia in '85, no reason to think he still wouldn't do it.
Who knows what would change - but on the whole I think that the technology was coming. How many inventions since '85 have been made by people like Parker who moved to Silicone Valley to join the industry AFTER that date? I'll bet the answer is "most of them".
Some industry players would be different. Maybe DB2 would have become the database standard instead of Oracle. No biggie. But the tech revolution was coming - with or without Northern California....
We'd have similar technology, but with different brands names. In some areas we may be marginally behind.
The rationale is that, when the time is right, dozens or even thousands of people will have the same idea. The companies that dominate now, say Facebook, are simply the ones that executed it right, first. If they didn't (say the same catastrophe happened N years ago just before Facebook became big), the next best/quickest guy would have done the same.
I doubt very much that we'd have spent the last N years NOT sharing pictures of cats in that situation.
The original question - a failure of Silicon Valley - might not have been disastrous and I'm sure that there is a strong argument that once the environment gets favourable for the the appearance of something it will actually appear somewhere. However a failure of Steve Jobs might not have been replaced easily or early and the loss of the Mac would have been terrible for architecture, visual design, music production, video editing, book production ….. I mean, just imagine a command line interface for typesetting! (actually I don't have to, I worked with one once; it was horrible). And the idea of a Windows typesetter just makes me feel a little ill.
@jamesqf: I wonder whether you're confusing doing something which is difficult to do - like perhaps laying bricks using the trowel with your feet - with actually doing something worthwhile. There are so many jokes about this, for example - if it's not difficult it's not real programming - that I'm sure I don't need to provide any other instances. Unless there are really special reasons, and these, like lack of space or execution time, are getting fewer and fewer nowadays, it really doesn't matter how high the level of indirection in code production actually is; just how easy it is to do.
@ Michael Broughton: As far as I'm aware the first Mac arrived in very early 1984 - my boss bought one - and whenever Windows was actually announced, it was released in late 1985 and was nothing like the Mac GUI (even though they had licensed parts of it). That was horrible too.
I don't know much about the specifics, but a setback is definite.
If influential people who built Google, Facebook and Apple would be dead or in different circumstances, we'd have a world that'd be technologically much worse than the current world. Explanation for this is that these people dying doesn't automatically guarantee that in the near future someone is going to invent what they did anyway, which is saying that the future is set. We know that's not so.
Of course, a counterview to this is that necessity is the mother of invention, and someone will come up with something depending on which way public demand heads to. But it'd be a bit of a long shot to say we'd be at the same level as today.
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https://www.marketplace.org/2024/03/08/what-you-need-to-know-about-nvidia-and-the-ai-chip-arms-race/
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What you need to know about Nvidia and the AI chip arms race
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NVIDIA’s share price has jumped several hundred dollars in the past year, rising from $242 to $875.
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https://www.marketplace.org/wp-content/themes/marketplace/favicon.ico
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https://www.marketplace.org/2024/03/08/what-you-need-to-know-about-nvidia-and-the-ai-chip-arms-race/
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While Nvidia’s share price is down from its peak earlier in the week, its stock has skyrocketed by 262% in the past year, going from almost $242 a share at closing to $875.
The flourishing artificial intelligence industry has accelerated demand for the hardware that underpins AI applications: graphics processing units, a type of computer chip.
Nvidia is the GPU market leader, making GPUs that are used by apps like the AI chatbot ChatGPT and major tech companies like Facebook’s parent company, Meta.
Nvidia is part of a group of companies known as The Magnificent Seven, a reference to the 1960 Western film, that drove 2023’s stock market gains. The others in that cohort include Alphabet, Amazon, Apple, Meta, Microsoft and Tesla.
But Nvidia faces competitors eager to take a share of the chip market and businesses that want to lessen their reliance on the company. Intel plans to launch a new AI chip this year, Meta wants to use its own custom chip at its data centers and Google has developed Cloud Tensor Processing Units, which can be used to train AI models.
There are also AI chip startups popping up, which include names like Cerebras, Groq and Tenstorren, said Matt Bryson, senior vice president of research at Wedbush Securities.
Why are these GPUs necessary for AI?
GPUs were originally used in video games to render computer graphics, explained Sachin Sapatnekar, a professor of electrical and computer engineering at the University of Minnesota.
“Eventually, it was found that the kinds of computations that are required for graphics are actually very compatible with what's needed for AI,” Sapatnekar said.
Sapatnekar said AI chips can do parallel processing, which means they process a large amount of data and handle a large amount of computations at the same time.
In practice, what that means is AI algorithms now have the capability to train on a large number of pictures to figure out how to, say, detect whether an image of a cat is of a cat, Sapatnekar explained. When it comes to language, GPUs help AI algorithms train on a large amount of text.
These algorithms can then in turn produce images resembling a cat or language mimicking a human, among other functions.
Why is Nvidia’s share price rising?
Right now, Nvidia is the leading manufacturer of chips for generative AI and it’s a very profitable company, explained David Kass, a clinical professor at the University of Maryland’s Robert H. Smith School of Business.
Nvidia has 80% control over the entire global GPU semiconductor chip market. In its latest earnings report, Nvidia reported a revenue of $22.1 billion for the fourth quarter of fiscal year 2024, which is up 265% since last year. Its GAAP earnings (earnings based on uniform accounting standards and reporting) per diluted share stood at $4.93, which is up 765% since last year. Its non-GAAP earnings (which exclude irregular circumstances) per diluted share was $5.16, an increase of 486% compared to last year.
Another reason Nvidia’s share price may have skyrocketed in recent months is because the success of the stock itself is attracting additional investment, Kass said.
Kass explained individuals and institutions may be jumping on the train because they see it leaving the station. Or, in other words: FOMO, he said.
Bryson of Wedbush Securities pointed out that the company was also able to differentiate itself through the development of CUDA, which Nvidia describes as a “parallel computing platform and programming model.”
Nvidia’s success doesn’t necessarily mean that its GPUs are superior to the competition, Bryson added. But he said the company has built a powerful infrastructure around CUDA.
Nvidia has developed its own CUDA programming language and offers a CUDA tookit that includes libraries of code for developers.
"Let's say you want to perform a particular operation. You could write the code for the entire operation from scratch. Or you could have specialized code that already is made efficient on the hardware. So Nvidia has these libraries of kind of pre-bundled packages of code," Sapatnekar said.
With Nvidia far ahead of the competition, Bryson said Advanced Micro Devices, or AMD, is trying to stake a position as the second-leading player in the AI chip space. AMD makes both central processing units, competing with the likes of Intel, and GPUs.
AMD share price has risen by about 143% since last year as demand for AI chips has grown.
Jeffrey Macher, a professor of strategy, economics and policy at Georgetown University’s McDonough School of Business, said he questions whether Nvidia will be able to meet all of the rising demand for AI chips on its own.
“It's going to be an industry that's going to see an increased number of competitors,” Macher said.
Do these chip companies have weak spots?
Despite the success of Nvidia and AMD, there are wrinkles in their supply chains. Both rely heavily on Taiwan Semiconductor Manufacturing Co. to make their chips, which will leave them vulnerable if anything goes awry with the company.
Macher said the semiconductor market used to be vertically integrated, meaning the chip designers themselves manufactured these chips. But Nvidia and AMD are fabless companies, which means they're companies that outsource their chip manufacturing.
As we saw during the early stages of the COVID-19 pandemic, supply chain disruptions led to shortages across all kinds of different sectors, Marketplace’s Meghan McCarty Carino reported.
TSMC is planning to build Arizona chip plants which may help alleviate some of these concerns. But tech publication The Information reported that these chips "will still require assembly in Taiwan."
And TSMC's location carries geopolitical risks. If China invades Taiwan and TSMC becomes a Chinese company, U.S. companies may be reluctant to use TSMC out of fear that the Chinese government will appropriate their designs, Macher said.
Is Nvidia stock a bubble?
Kass said he doesn’t see similarities between Nvidia’s rising stock and the dot-com bubble in the early 2000s, when many online startups tanked after their share prices reached unrealistic levels thanks to an influx of cash from venture capital firms that were overly optimistic about their potential.
Kass said some of these companies not only failed to make a profit, but weren’t even able to pull in any revenue either, unlike Nvidia, which is backed by real earnings.
He does think there could be a correction or a point where Nvidia stock will be perceived as overvalued. He explained the larger your company, the more difficult it is to sustain your rate of growth. Once that growth rate comes down, there could be a sharp sell-off.
But Kass said he doesn’t think there will be a sustained and/or a steep downturn for the company.
However, AI’s commercial viability is uncertain. Bryson said there are forecasts of how large the AI chip market will become – AMD, for example, suggested that the AI chip market will be worth $400 billion by 2027 — but it’s hard to validate those numbers.
Bryson compared AI with 4G, the fourth generation of wireless communication. He pointed out that apps like Uber and Instagram were enabled by 4G, and explained that AI is similar in the sense that it’s a platform that a future set of applications will be built on.
He said we’re not really sure what many of those apps will look like. When they launch, that will help people better assess what the market should be valued — whether that’s $400 billion or $100 billion.
“But I also think that at the end of the day, the reason that companies are spending so much on AI is because it will be the next Android or the next iOS or the next Windows,” Bryson said.
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https://www.swissinfo.ch/eng/banking-fintech/silicon-graphics-closes-plant-in-switzerland-300-lose-jobs/2164076
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en
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Silicon Graphics closes plant in Switzerland, 300 lose jobs
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The company, also known as sgi, said the move was being made in response to economic pressures caused by the global IT downturn and was part of a restructuring plan designed to restore the company’s financial health. Silicon Graphics said it expected to close its manufacturing facility at Cortaillod in canton Neuchâtel by the end…
|
en
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SWI swissinfo.ch
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https://www.swissinfo.ch/eng/banking-fintech/silicon-graphics-closes-plant-in-switzerland-300-lose-jobs/2164076
|
The Silicon Graphics computer company of the United States announced on Monday it was closing its European headquarters near Neuchâtel in western Switzerland, with the loss of 300 jobs.
The company, also known as sgi, said the move was being made in response to economic pressures caused by the global IT downturn and was part of a restructuring plan designed to restore the company’s financial health.
Silicon Graphics said it expected to close its manufacturing facility at Cortaillod in canton Neuchâtel by the end of the year. The plant was inaugurated 12 years ago.
The company, which has a broad range of computing, advanced graphics and consulting services, is transferring production for Europe to its US facility in Chippewa Falls, Wisconsin.
The Cortaillod site manager, Michel Bernard, said the company was working closely with its employees to provide “as much advice and guidance” as possible.
“An appropriate social plan is being developed that will be communicated to them over the next few days along with a timetable for the closure,” Bernard said.
Silicon Graphics said it planned to maintain its distributor status with a local office that would continue to distribute the company’s products throughout Switzerland and Europe.
The parent company last week announced a net loss for the fourth quarter of $232 million (SFr400 million).
swissinfo with agencies
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https://hackaday.com/2024/04/08/the-rise-and-fall-of-silicon-graphics/
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The Rise And Fall Of Silicon Graphics
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Maybe best known as the company which brought a splash of color to corporate and scientific computing with its Indigo range of computer systems, Silicon Graphics Inc. (later SGI) burst onto the market...
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https://hackaday.com/2024/04/08/the-rise-and-fall-of-silicon-graphics/
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Silicon Graphics Federal LLC - Company Profile and News
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Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world
Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world
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https://www.encyclopedia.com/books/politics-and-business-magazines/silicon-graphics-incorporated
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Silicon Graphics Incorporated
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Silicon Graphics Incorporated
2011 North Shoreline BoulevardMountain View, California 94039U.S.A.(415) 960-1980Fax: (415) 961-0595 Source for information on Silicon Graphics Incorporated: International Directory of Company Histories dictionary.
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2011 North Shoreline Boulevard
Mountain View, California 94039
U.S.A.
(415) 960-1980
Fax: (415) 961-0595
Public Company
Incorporated: 1982
Employees: 2,568
Sales: $866.6 million
Stock Exchanges: New York
SICs: 3577 Computer Peripheral Equipment Nee; 7372 Prepackaged Software
Silicon Graphics Incorporated is one of the leading manufacturers of graphics computer systems. Its history may be described as an exemplary, perhaps even archetypal, Silicon Valley success story. Founded by a high school dropout turned college professor, Silicon Graphics capitalized on pioneering technology in 3-D computer graphics to create products used in a wide variety of professions, including engineering, chemistry, and film production. The company combined technological prowess with shrewd management to produce explosive growth; within a decade of its founding, it had entered the Fortune 500.
The story of Silicon Graphics began in 1979, when James Clark, an electrical engineering professor at Stanford University, assembled a team of six graduate students to study the possibilities of computer graphics. Within two years, Clark’s team developed a powerful semiconductor chip, which they called the Geometry Engine, that would allow small computers to produce sophisticated three-dimensional graphics simulations previously the domain of large mainframes. Clark patented the Geometry Engine, and in 1982 he and his team left Stanford to found Silicon Graphics.
In 1983 the company released its first products: the IRIS 1000 graphics terminal and an accompanying software interface known as the IRIS Graphics Library. The next year Silicon Graphics released its first workstation, the IRIS 1400, and followed it in 1985 with the IRIS 2400, a workstation with a window manager. These early entries in the IRIS series targeted the middle range of the graphics workstations market—those selling for $45,000 to $100,000—and accounted for over 50 percent of all 3-D graphics workstations sold by 1988. Sales increased steeply and consistently, reaching $153 million in 1988. Within its first six years, Silicon Graphics had established a secure and lucrative niche for itself in the computer industry.
Silicon Graphics succeeded so brilliantly in its early years in large part because it had introduced a useful product that had drawn relatively little attention from any of its potential rivals. 3-D graphics simulations were extremely useful to mechanical engineers who wanted to assess their designs without having to build prototypes, as well as chemists who used 3-D modelling to study molecules. Workstations like the IRIS series provided power at a relatively affordable price, and major workstation manufacturers like Hewlett-Packard, Apollo Computer, and Sun Microsystems were slow to focus their energies on 3-D graphics, leaving Silicon Graphics without much direct competition.
Observers also credited James Clark’s technical skill and entrepreneurial sense for the company’s success. The path to Silicon Valley glory was a circuitous one for Clark, who dropped out of high school in Plainview, Texas, after he was suspended for setting off a smoke bomb on a school bus. After a hitch in the Navy, he went back to school, enrolling as an undergraduate at Tulane University. He went on to earn an M. S. in physics from University of New Orleans and a Ph.D. in computer science from University of Utah, where he first became interested in computer graphics. Clark then committed himself to an academic career, holding teaching posts at University of California at Santa Cruz, the New York Institute of Technology, and University of California at Berkeley before coming to Stanford. But along the way, he became disenchanted with the ways of academia. “I had always seen myself as a senior professor at a university,” he once told The Business Journal-San Jose, “but I think I learned that my strength is making things that work, rather than writing papers. Universities encourage writing a lot of papers.” Hence his departure from Stanford and the founding of Silicon Graphics in 1982.
Once he founded the company, Clark displayed the good sense to find his proper role within the operating structure and stick to it. While high-tech companies like Silicon Graphics are often founded by technologists who turn day-to-day operations over to businesspeople, in many cases the companies falter because the technologists remain too closely involved in business affairs, making poor decisions or allowing the technological edge to dull. Soon after Silicon Graphics was born, Clark brought in Edward McCracken, a veteran Hewlett-Packard executive, to run the company as president and CEO while he remained chairperson. Clark concentrated on serving as the company’s technology guru, leaving McCracken to take care of the business operations. According to McCracken, this role best suited Clark’s temperament: “Jim’s not a day-to-day person. He works in his own time frame,” he told The Business Journal — San Jose. McCracken continued, “He takes complex things and makes it simple. It might take a month, a day, or a year. He gets in these moods for a while where he’s almost unavailable. He’s most effective when he’s in that mood.” Clark also used this division of labor to devote more time to outside interests that included ballet, classical music, art, and flying a stunt plane.
A useful blend of high technology and business sense enabled Silicon Graphics to move forward from its early successes. In 1987 it became the first computer company to make use of MIPS Computer Systems’ innovative reduced instruction-set chip, or RISC, when it incorporated RISC architecture into its new IRIS 4D/60 workstation. Within several years, most workstations would use RISCs. The company received a boost the next year when IBM agreed to buy Silicon Graphics’ IRIS graphics card for use in its own RS/6000 graphics workstations and to take out a license for the IRIS Graphics Library—a big first step toward making the IRIS Graphics Library the industry standard.
Also in 1988, Silicon Graphics introduced amid much fanfare a new line of entry level graphics workstations, which it called Eclipse. Although it dominated the more expensive end of the graphics workstation market, the company needed to broaden its customer base if it expected to maintain sales growth. The Eclipse was designed to bring 3-D graphics to people who had previously regarded IRIS workstations as unaffordable. Eclipse lacked the speed and processing power of more expensive machines, but initial versions sold for less than $20,000—as little as one-fifth of the cost of higher-end machines. Eclipse scored a major success soon after its release when Chrysler announced that it would buy a large number of the machines to go with the IRIS workstations that it was already using to help design its automobiles.
Although Eclipse put Silicon Graphics into more direct competition with its rival workstation manufacturers, who began to chip in with their own low-end 3-D workstations, it also succeeded in expanding the company’s customer base. In 1990 sales volume topped $420 million. The move into the lower priced, high-volume end of the market worked well enough for Silicon Graphics that in 1991 the company released an even less expensive product line—the IRIS Indigo, a 3-D graphics workstation so compact that the company called it the first personal computer to use RISC architecture. The Indigo offered many features found on more expensive models, as well as digital audio and video processing capability, and the base model sold for less than $10,000.
During this time, Silicon Graphics scored several major coups on the business side. In 1991 the company granted a license to software giant Microsoft for the IRIS Graphics Library. Microsoft intended to use the IRIS Graphics Library in its New Technology operating system for personal computers. Also in 1991, Compaq Computer agreed to acquire a 13 percent stake in Silicon Graphics for $135 million, giving Silicon Graphics a much-desired infusion of capital. Furthermore, Compaq agreed to invest $50 million in a joint workstation development project with Silicon Graphics. Together, these moves provided software developers with greater incentive to write programs for Silicon Graphics machines and also broadened the company’s customer base even further.
In 1992 Silicon Graphics agreed to acquire MIPS Computer Systems, which had run into financial difficulties, in a stock swap valued at $230.8 million. The cost of assimilating MIPS forced Silicon Graphics to post a loss of $118.4 million that year, but it also secured the company’s long-term supply of MIPS’s RISCs, which had become a crucial piece of technology.
In January 1993 Silicon Graphics announced a new computer that would use RISC architecture to achieve supercomputer power at relatively affordable prices. The Power Challenge, as it was called, would link multiple RISCs in a single machine to provide unprecedented processing capability in a computer of that price. Whereas traditional supercomputers like those made by IBM and Cray Research typically sold for millions of dollars, the Power Challenge would sell for between $120,000 and $900,000. The new product was announced over a year in advance of its anticipated shipping date to give targeted customers, such as government agencies and universities previously unable to afford supercomputers, time to include it in their budgets. Observers pegged Power Challenge as a sudden move into the faltering field of supercomputer manufacturing, but in fact the company’s ever more powerful workstations were approaching the level of supercomputers anyway, and the company had already established contacts with customers at whom the Power Challenge would be aimed.
In April 1993 Silicon Graphics and Industrial Light and Magic, the famed special effects division of Lucasfilm, announced that they had joined forces to create a high-tech entertainment special effects laboratory. The joint venture was called Joint Environment for Digital Imaging—the acronym JEDI recalled the Jedi Knights of Lucasfilm chair George Lucas’s Star Wars trilogy—and grew out of the fact that Industrial Light and Magic had been using Silicon Graphics workstations since 1987. The liquid metal cyborg featured in the film Terminator 2, the dinosaurs in Jurassic Park, special effects in The Hunt for Red October and The Abyss, and animation in Beauty and the Beast were all created on Silicon Graphics computers. For Lucas and Industrial Light and Magic, JEDI was expected to yield both financial and aesthetic benefits: digital manipulation of images cost about one-tenth as much as models and drawings, and, according to Lucas, would “change motion pictures from a photographic process to more of a painterly process,” enabling greater authorial control over a film’s appearance. For its part, Silicon Graphics hoped that alliance with an entertainment industry partner would help push the leading edge of its technological development forward.
The entertainment industry was also a growing interest of James Clark’s at the time. On the heels of the announcement of the JEDI alliance, reports surfaced that Silicon Graphics had entered into talks with communications giant Time Warner to explore the possibilities of interactive home entertainment and other advanced cable television technologies. The company would not comment on the reports, but Clark and some of his executives had made it known publicly that Silicon Graphics was interested in developing a computer that would provide interactive services, including networked 3-D video games, for users through cable television hookups.
Silicon Graphics’ interest in entertainment-related technologies is perhaps particularly apropos since the company was founded by a man whom The Business Journal-San Jose once described as looking like “Hollywood’s idea of a successful entrepreneur”—tall, blond, and clad in “expensive Italian suits with bright Italian knit-silk ties.” While some have suggested that the move into entertainment technology represents the deliberate attempts of Clark and McCracken to lead Silicon Graphics away from academia, others have maintained that the company has simply refused to remain in the small niche in which it developed. Instead, Silicon Graphics has made a lot of money in its short history by delivering the technology that made it distinctive to as many people as need and enjoy it.
Principal Subsidiaries
Silicon Graphics International Inc. (Barbados); Silicon Graphics Ltd. (U.K.); Nihon Silicon Graphics K.K. (Japan); Silicon Graphics Pte Ltd. (Singapore); Silicon Graphics AB (Sweden); Silicon Graphics S.A. (Switzerland); Silicon Graphics Gmbh (Germany); Silicon Graphics Canada Inc.; Silicon Graphics World Trade Corp.; Silicon Graphics Ltd. (Israel); Silicon Graphics Ltd. (Hong Kong); Silicon Graphics S.A.R.L. (France); Silicon Graphics S.p.A. (Italy); Silicon Graphics B.V.(Netherlands); Silicon Graphics Pty Ltd. (Australia); Silicon Graphics Federal Sales Corp.; Silicon Graphics Computer Systems Ltd. (Israel); Silicon Graphics Manufacturing S.A. (Switzerland); Silicon Graphics Applications Systems Ltd. (U.K.); Silicon Graphics A/S (Norway); Silicon Graphics A/S (Denmark); Silicon Graphics N.V./S.A. (Belgium); Silicon Graphics OY (Finland); Silicon Graphics S.A. (Spain); Silicon Graphics Computer Systems Gmbh (Austria).
Further Reading
Hof, Robert, and Jeffrey Rothfeder. “This Machine Just Might Eclipse Apollo and Sun,” Business Week, October 10, 1988.
Hof, Robert D. “Is Silicon Graphics Busting Out of Its Niche?” Business Week, April 22, 1991.
Koland, Cordell, “Graphics Firm Leader Combines Technical, Managerial Skill,” The Business Journal—San Jose, December 14, 1987.
Yamada, Ken. “Silicon Graphics Aims to Be Supercomputer Contrarian,” The Wall Street Journal, January 27, 1993.
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https://25iq.com/2018/03/03/business-lessons-from-jim-clark-silicon-graphics-netscape-etc/
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Business Lessons from Jim Clark (Silicon Graphics, Netscape, etc.)
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Jim Clark is an entrepreneur and computer scientist. He founded several important businesses including the two named in the title and Healtheon (which eventually merged with WebMD). He is currently the founder of the building management systems provider CommandScape. Clark is a friend of my friend Craig McCaw and I have heard some colorful…
|
en
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25iq
|
https://25iq.com/2018/03/03/business-lessons-from-jim-clark-silicon-graphics-netscape-etc/
|
Jim Clark is an entrepreneur and computer scientist. He founded several important businesses including the two named in the title and Healtheon (which eventually merged with WebMD). He is currently the founder of the building management systems provider CommandScape. Clark is a friend of my friend Craig McCaw and I have heard some colorful stories about him as a result. He is not boring. As an example of the Clark’s non-typical approach to life, Mark Andreessen said during an interview once: “I just ran into an entrepreneur who said, ‘I just ran into Jim Clark at a resort town in Italy. Jim was in a hot tub carved into the side of a mountain. I said, ‘Yes! That was Jim Clark.’”
“Don’t be afraid to cannibalize your product. You must be willing to challenge your own product lines. For example, Barnes and Noble could have addressed the Internet, but didn’t until Amazon forced them to. That is the worst way to do it.”
Clayton Christensen argues that only the upper left quadrant in this matrix is genuinely “disruptive” in the way uses the term in The Innovator’s Dilemma. The best way to see which view is right is to put some real businesses in the quadrants:
Overlooked Low-end Customer Segment Most Demanding Customer Segment Inferior to existing solution Netflix in 1997
Amazon in 1994
Superior to existing Solutions Uber/Lyft
Airbnb
Tesla
iPhone
To be provocative in order to to make this blog post more interesting I will argue here that there are other ways to be disruptive. You might want to think about where some other businesses fit best in this matrix. For example:
In thinking about this issue it is useful to review what Christensen wrote in The Innovator’s Dilemma:
“An innovation that is disruptive allows a whole new population of consumers access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill.” “The very decision-making and resource allocation processes that are key to the success of established companies are the very processes that reject disruptive technologies. These are the reasons why great firms stumbled or failed when confronted with disruptive technology change.”
This classic example is often used to explain The Innovator’s Dilemma:
“Minicomputers were much smaller than mainframes, which had appeared in the 1950s, yet much larger than the personal desktop computers that followed them, beginning in the early 1980s. In the 1970s, minis ruled much of computation. But by the late 1980s, the business desktop microcomputer was eating DEC alive. “People attributed DEC’s demise to [CEO Ken] Olsen,” Christensen says. (Olsen had regarded desktop computers as toys for playing video games and publicly predicted they would fall flat in the business market.)”
What is Innovator’s Dilemma? Is it just an academic way of describing how businesses sometimes purposefully or accidentally end up in a competitive battle possessing different strengths and weaknesses? In my view a disruption based strategy is fundamentally about using asymmetry to create competitive advantage. The key to a successful asymmetric attack in business is to pick a strategy where the competitor has a hard time responding to the attack directly from a position of strength. Guerilla warfare is a classic example of an asymmetric strategy.
“Microsoft was founded the same year as SGI, and they both went public in 1986. I had the experience of my own foolhardy opinion of the PC in those days — that it was a ‘toy’ unworthy of the attention of real computer scientists.”
Steven Sinofsky describes the crux of the issue that Clark is talking about in this way:
“As many have recognized, when inventions and innovations first appear they are often (always) labeled as ‘toys’ or ‘incapable’ of doing ‘real work’ or providing ‘real entertainment’. Of course, many new inventions don’t work out the way inventors had hoped, though quite frequently it is just a matter of timing and the coming together of a variety of circumstances. It can be said that being labeled a toy is necessary, but not sufficient, to become the next big thing.”
Sinofsky’s list of one time “toys” is instructional:
What “toys” would you insert in these years?
Chris Dixon elaborates on the “at first it is viewed as a toy” investing thesis used by many venture capitalists and founders:
“Disruptive technologies are dismissed as toys because when they are first launched they “undershoot” user needs. The first telephone could only carry voices a mile or two. The leading telco of the time, Western Union, passed on acquiring the phone because they didn’t see how it could possibly be useful to businesses and railroads – their primary customers. What they failed to anticipate was how rapidly telephone technology and infrastructure would improve (technology adoption is usually nonlinear due to so-called complementary network effects). The same was true of how mainframe companies viewed the PC (microcomputer), and how modern telecom companies viewed Skype. (Christensen has many more examples in his books).
This does not mean every product that looks like a toy will turn out to be the next big thing. To distinguish toys that are disruptive from toys that will remain just toys, you need to look at products as processes. Obviously, products get better inasmuch as the designer adds features, but this is a relatively weak force. Much more powerful are external forces: microchips getting cheaper, bandwidth becoming ubiquitous, mobile devices getting smarter, etc. For a product to be disruptive it needs to be designed to ride these changes up the utility curve.
…A product doesn’t have to be disruptive to be valuable. There are plenty of products that are useful from day one and continue being useful long term. These are what Christensen calls sustaining technologies. When startups build useful sustaining technologies, they are often quickly acquired or copied by incumbents. If your timing and execution is right, you can create a very successful business on the back of a sustaining technology.”
“The decision to put money into the Internet in 1994 was considered by many of my colleagues to be borderline insane. Most people said things like, The Internet is free; you can’t make money on that! I literally had people telling me I was going to screw up the Internet by bringing more traffic to it.”
Chris Dixon believes that the best ideas to invest in are good ideas that look like bad ideas (AKA “borderline insane’). If what investors like Clark and Dixon say is not true, the optionality associated with the investment is unlikely to be mispriced. In other words, if everyone thinks the idea for the business is a good idea from the beginning the entry price of the investment will be too high to be profitable in a way that is likely to generate a venture capital style financial return.
Which businesses today are good ideas that seem like bad ideas? Buying Dentacoin is a bad idea that seems like a bad idea. What other investments fall into the “what seems like bad idea is a bad idea” category? In what areas are people investing which are so flooded with money that an attractive financial return is unlikely to be realized?
The Y Combinator slide replicated above is: (1) not drawn to scale and (2) varies over time, domain of expertise and investor. Most bad ideas are bad ideas, but a few are not.
What is an example of a business that seemed like a bad idea to some investors that turned out to be a good idea? In November of 2013, Jamie Siminoff was a guest on the television show Shark Tank, He asked for an investment that valued his WiFi enabled video doorbell business at $7 million. Four sharks passed. Kevin O’Leary offered a loan and royalty deal that Siminoff declined to accept. Five years later Amazon agreed to acquire the business for a reported $1 billion.
The founder tells the story of his Shark Tank rejection in this way:
“I will never forget leaving the set without a deal. It was horrible. I could not believe that we had done all of that work and were walking away with nothing. Sure I thought if we aired (the episode has a lower chance of airing without a deal) that we would get a little bit of traction, but I did not think it would be enough to make a real difference for us. I was gutted telling the team. But the show must go on and we went back to work, maintained focus and did what we could. And then we aired… and our lives changed forever. The bump we got from Shark Tank was not decent, it was extraordinary. And it wasn’t just something that lasted for the weekend. It’s still happening today, two years later. In terms of dollars, it was worth millions, but it also brought and provided an incredible amount of credibility and awareness for us with industry partners. Thanks to Shark Tank, we were able to hire more engineers and take the company to another level. It was like replacing the gas in our car with jet fuel…”
“What I recognized after talking to Marc was that the Web was to networks in 1994 what the PC was to computing in 1982.” “Of course, I knew what the Internet was. But I hadn’t thought about what the implications were in terms of its growth rate.”
Bob Metcalfe who co-invented Ethernet and founded 3Com said once in a meeting I was in: “No one ever made a nickel directly from Ethernet technology itself. Businesses have instead made a profit using Ethernet as a foundation for something else.” What Metcalfe was saying is that sometimes the profit is made indirectly from a technology or phenomenon. A classic example of a technology or approach producing profit indirectly is open source software. Many entrepreneurs have realized that a viable path to creating a new business is to create an open source software project and to then build a community around it. The business then tries to hire as many of the best people who worked on it as they can. The advantage that a business company like this brings to customers is how it adds value over and above the open source software — usually offering a combination of complementary services, tools and functions not necessarily available in the free version. Red Hat, Canonical, MySQL, WordPress and Mozilla have adopted this approach. What other businesses would you put in this category?
“In the first year of business [at Netscape], we had almost no sales force. We were just taking orders.” “We recognized in the beginning that the Netscape required a different marketing strategy. The only way we could get large market penetration, was to allow to be freely downloaded, and besides the internet already has that culture in place – a lot of software was free. But we felt that by letting people download the software, we would be able to create a very large market share, and it worked. In a year and a half, we created 40 million users.”
Bill Gurley describes the approach Clark is taking about: “If a disruptive competitor can offer a product or service similar to yours for ‘free’ and if they can make enough money to keep the lights on, then you likely have a problem.” The business model Gurley describes is commonly known as “freemium.” A loss-leader product is not a new concept. Free Tapas have been served in bars in Spain since at least the middle ages. Gillette selling razors at a loss to sell profitable blades is a more modern example. In this model users typically get some value for free and are charged a fee for other complementary services. In some cases the service which has a monetary cost is more advanced in other cases it is less advanced. All businesses today must be prepared for competitors to give away what they sell as an incentive for customers to buy something else. What is different about a freemium strategy today is that many of the free services are digital and have close to zero marginal costs to create and distribute.
Since I am asking many questions in this post, which businesses in the news in 2018 best exemplify this freemium business model described by Clark. Atlassian and Dropbox are two examples. Spotify has a freemium business model. What other companies have adopted a freemium business model?
6. Silicon Graphics was] an excellent group of people but they – and people at every other company – begin to define themselves by what they have been doing, not by what they can do.”
What businesses fit within Clark’s description in this quote? IBM? One way to avoid the trap Clark is describing is to have great “product people” who can create new products that drive the business forward. Fred Wilson their attributes here:
“The product person sets the overall requirements, specs them, focuses on the UI and UX and manages the process. The engineering person builds the product or manages the team that builds the product, or both.” Great products need both types of people.
Steve Jobs was obviously a product person:
“My passion has been to build an enduring company where people were motivated to make great products. The products, not the profits, were the motivation. Sculley flipped these priorities to where the goal was to make money. It’s a subtle difference, but it ends up meaning everything.”
A related problem is what Yoky Matsuoka has called “the Valley of Death” between academia and business. Business Insider describes how Matsuoka views the challenge:
“Research is all about proving an idea that’s never been done before. Have an idea, write a grant, hire research students, get proof-of-concepts and have everyone publish papers. Those papers bring in more grant money and lead to tenure. The gap comes at that point. Researchers assume that some great product person will take the research and turn it into a product to be used by millions of people. But it’s not easy to take a product “that works for 10 people and getting it working for a million or a billion people,” Matsuoka says. And the work required to bridge that gap “is boring for everyone,” she says. Researchers want to focus on new stuff that’s never been done before. They don’t want take something proven and published, and make it stable for a billion users. And product people don’t want to spin their wheels experimenting with early technologies that have only worked for 10 people. Their attitude is “We’re working on real products,” she describes.”
Truly great “product people” are a rare commodity. Who are the best product people you know who are actively involved in a business today? Do you have a product person on your team?
7. At Silicon Graphics I had advocated using cable-TV systems for all kinds of media distribution, for movies on demand and things like that. We did a contract for Time Warner in Orlando that used a computer that was equivalent to the set-top box. All that stuff was expensive—$5,000 per set.” “I was kind of a lone voice [at Silicon Graphics] I was babbling about cable television – and into the wind for a lot of the time. The reaction I got was, ‘Well we’re not a consumer electronics company. Why do we care about cable-TV boxes? Who cares?’” “I believe the Internet is the Information Highway. I’m religious about this. I don’t think it is cable television.”
The Information Highway period in history teaches important lessons about how conventional wisdom can lead businesses, investors and government leaders astray. The metaphor described a plan to create a controlled environment with defined on ramps and off ramps. It was the wrong idea at the wrong time and was buried by the rise of the Internet.
The Internet’s distributed nature is the inverse of what was intended by the promoters of the Information Highway. The founders of the Internet adopted these four core principles:
Each distinct network would have to stand on its own and no internal changes could be required to any such network to connect it to the Internet.
Communications would be on a best effort basis. If a packet didn’t make it to the final destination, it would shortly be retransmitted from the source.
Black boxes would be used to connect the networks; these would later be called gateways and routers. There would be no information retained by the gateways about the individual flows of packets passing through them, thereby keeping them simple and avoiding complicated adaptation and recovery from various failure modes.
There would be no global control at the operations level.
The Internet’s explosive popularity took many people by surprise, including successful software businesses like Microsoft. Some people saw the warning signs earlier than others. Business Week reported at the time:
“The Web-izing of Microsoft begins in February, 1994, when Steven Sinofsky, Gates’s technical assistant, returned to his alma mater, Cornell University, on a recruiting trip. Snowed in at the Ithaca (N.Y.) airport, he headed back to the Cornell campus. That’s when he saw it: students dashing between classes, tapping into terminals, and getting their E-mail and course lists off the Net.
The Internet had spread like wildfire. It was no longer the network for the technically savvy — as it had been seven years earlier when Sinofsky was studying there — but a tool used by students and faculty to communicate with colleagues on campus and around the world. He dashed off a breathless E-mail message called “Cornell is WIRED!” to Gates and his technical staff.”
Bill Gates responded to the change by writing his famous “Internet Tidal Wave” memo, which today would be a rights protected document in the cloud rather than a memo.
There are many other examples of conventional wisdom that turned out to be wrong or a blind alley. Often the mistake is a result of a group of businesses trying to hype their future prospects. For example, telecommunication equipment suppliers have on several occasions been a source of problematic hype. I already mentioned the Information Highway failure but one should also attribute much of the Internet and telecom bubbles to the same source. Equipment suppliers and some operators like Worldcom/UUNet told tall tales about traffic growth which in no small part caused the telecom and Internet bubbles. These bubbles eventually popped as you know.
Is anything like the Information Highway or the telecom/Internet bubbles happening today? The press is repeating massive 5G forecasts for spending on infrastructure right now. For example:
Reuters (MARCH 2, 2018): “GSMA, which represents nearly 800 operators and some 300 suppliers, forecasts capital expenditure (capex) on mobile networks worldwide will be $500 billion over the three years between 2018 to 2020. Expanding 5G could mean capital expenditure rising to 16 to 17 percent of revenues generated by the mobile industry from 2020, up from 15 percent now.”
Is that $500 billion estimate real? What could be motivating that estimate? Could it be, that: “For network equipment makers, such as Ericsson and Nokia, which are struggling with declining sales for 4G gear, the rollout cannot come soon enough.” What could possibly go wrong? Have we seen anything like this before?
What is “5G” anyway? A recent report on the big event at the Mobile Word Congress repeated what was said about 5G at a panel of executives from big equipment suppliers:
“’It’s a new radio, meaning, a new format in which antennae will control electro-magnetic waves,’ said one panelist. Another person said it is a new ‘network architecture.’ Another finally concluded, ‘So we don’t have a definition of 5G.’ The problem is not just coining a succinct description: The technology is “the most hyped thing,” in one panelist’s words, ‘it is all things to all people.” And in that, it is something of a mess at the moment.'”
The Reuters article went on to say:
“’5G is, so far, too much hype, in the sense of its position as a new revolutionary technology,’ Telenor Chief Executive Sigve Brekke told Reuters at Mobile World Congress in Barcelona… CCS Insight analyst Ben Wood said one mobile handset company exhibited a showcase of 5G phones in Barcelona, only to have one display model drop on the floor and break open. ‘It turned out it was completely empty inside,’ he said.”
A lot of what 5G is today is a marketing slogan for many things. The discussion is about to get a bit technical for the last few paragraphs but that is unavoidable. One way to look at 5G is in terms of buckets of things. Just three of these buckets are:
One bucket of 5G is about better software and protocols. Internet of Things (IoT) applications and services may work better as a result of new and better 5G software and protocols for example. Lower latency may enable some new IoT applications. 5G standards enable things like reduce the number of functional components that data must traverse between the device and the servers, enable the deployment of a collection of services on virtualized hosts and implement better spectrum aggregation and sharing. If a wireless system does just the things in this bucket, is it 5G?
One bucket of 5G is about more fixed wireless to homes that may capture at most 5-10% of homes vs fiber/coax cable. ALso in the bucket is more backhaul to base stations using 5G radio frequencies like 28 GHz creating better 4G densification, but small cells are only economic to deploy in some areas.
One bucket of 5G is hype about handsets that receive signals at frequencies above 6 GHz. This claim about the use of so-called millimeter wave frequencies to serve handsets almost all slideware and press releases so far. There may be close to zero applications customers will pay more money for that would justify the higher handset and systems costs that would be required to receive millimeter wave frequencies in a hand held phone. A long time industry expert said this to me in an e-mail recently about millimeter wave frequency use at 5G in handsets:
“They’re putting in lots of antennas so by using beam forming it’s probable that you’ll have some usable 28 GHz signal in some situations. But the primary goal is to use the 28 GHz and above spectrum to serve devices when they’re not in your hand and not moving. Range will still be limited and propagation is challenging. This is the vision, but it does depend on base sites 300-500 feet away. The highest and best use of 28 GHz is for fixed with high gain antennas, etc.”
Below 6 GHz frequencies in handsets work just fine, can deliver higher data rates every year anyway and at far lower cost. The real magic that delivers higher data rates over that last wireless link from a wireless base station is a technology called MIMO.
That’s enough about technology since this post is getting too long. To be consistent with the theme of this post, it seems appropriate to ask readers one final question. Can you think of a better anagram for Information Highway?
Hey, ignoramus — win profit? Ha!
A rough whimper of insanity
Oh, wormy infuriating phase
Hi-ho! Yow! I’m surfing Arpanet!
Notes:
https://www.wired.com/1994/01/sgi/
http://archive.fortune.com/magazines/fortune/fortune_archive/1994/04/18/79191/index.htm
http://fortune.com/2017/08/24/jim-clark-commandscape-startup/
http://money.cnn.com/2000/01/31/electronic/clark/
http://www.referenceforbusiness.com/biography/A-E/Clark-Jim-1944.html
http://fortune.com/2015/08/09/remembering-netscape/
https://www.mercurynews.com/2009/07/16/tech-visionary-jim-clark-speaks-his-mind/
https://www.forbes.com/sites/ryanmac/2012/03/08/jim-clark-the-comeback-billionaire-who-bet-on-apple/#1eb2116377c9
https://engineering.stanford.edu/news/stanford-engineering-hero-jim-clark-talks-about-innovation-and-embracing-change
http://www.nytimes.com/2007/12/26/business/26real.html?_r=1&ref=business&pagewanted=print
http://money.cnn.com/2000/01/31/electronic/clark/#TOP>
http://www.internethistorypodcast.com/2014/04/on-the-20th-anniversary-an-oral-history-of-netscapes-founding/
https://www.sfgate.com/business/amp/Tech-s-High-Flier-Soars-Again-Netscape-SGI-3002351.php
http://www.absy.com/ABSMMI/ITV/CLARK/ukitvjck.html
https://nypost.com/2000/11/14/netscapes-clark-logs-off-net-stocks/
http://www.businessinsider.com/google-x-yoky-matsuoka-valley-of-death-product-development-2017-7
https://www.reuters.com/article/us-telecoms-mobileworld-5g/fast-5g-beckons-but-still-far-off-for-most-mobile-users-idUSKCN1GE2Q7
What might the Amazon, Berkshire and JP Morgan health care joint venture actually do?
Peloton: The “SaaS Plus a Box” Business case
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History of SGI
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Reference for Business
Company History Index
Electrical and Electronics
SGI - Company Profile, Information, Business Description, History, Background Information on SGI
2011 North Shoreline Boulevard
Mountain View, California 94039
U.S.A.
Company Perspectives:
At the core of our strategy is our commitment to delivering nothing less than the highest-performing computer systems in the world, with the world's best graphics solutions. Indeed, we have built our company, and our vision, on the notion that the ability to visualize the results of massive calculations and modeling allows customers to gain instant insight into the problems they are trying to solve.
History of SGI
Known for 17 years as Silicon Graphics Inc., SGI is one of the leading manufacturers of graphics computer systems, workstations, and supercomputers. Its history may be described as an exemplary, perhaps even archetypal, Silicon Valley success story, until lower-priced competitors and inept production methods resulted in heavy losses in the late 1990s. Founded by a high school dropout turned college professor, Silicon Graphics capitalized on pioneering technology in 3-D computer graphics to create products used in a wide variety of professions, including engineering, chemistry, and film production. The company combined technological prowess with shrewd management to produce explosive growth; within a decade of its founding, it had entered the Fortune 500.
The story of Silicon Graphics began in 1979, when James Clark, an electrical engineering professor at Stanford University, assembled a team of six graduate students to study the possibilities of computer graphics. Within two years, Clark's team developed a powerful semiconductor chip, which they called the Geometry Engine, that would allow small computers to produce sophisticated three-dimensional graphics simulations previously the domain of large mainframes. Clark patented the Geometry Engine, and in 1982 he and his team left Stanford to found Silicon Graphics.
Established Lucrative Niche, 1980s
In 1983 the company released its first products: the IRIS 1000 graphics terminal and an accompanying software interface known as the IRIS Graphics Library. The next year Silicon Graphics released its first workstation, the IRIS 1400, and followed it in 1985 with the IRIS 2400, a workstation with a window manager. These early entries in the IRIS series targeted the middle range of the graphics workstations market--those selling for $45,000 to $100,000--and accounted for over 50 percent of all 3-D graphics workstations sold by 1988. Sales increased steeply and consistently, reaching $153 million in 1988. Within its first six years, Silicon Graphics had established a secure and lucrative niche for itself in the computer industry.
Silicon Graphics succeeded in its early years in large part because it had introduced a useful product that had drawn relatively little attention from any of its potential rivals. 3-D graphics simulations were extremely useful to mechanical engineers who wanted to assess their designs without having to build prototypes, as well as to chemists who used 3-D modeling to study molecules. Such workstations as the IRIS series provided power at a relatively affordable price and major workstation manufacturers, including Hewlett-Packard, Apollo Computer, and Sun Microsystems, were slow to focus their energies on 3-D graphics, leaving Silicon Graphics without much direct competition.
Observers also credited James Clark's technical skill and entrepreneurial sense for the company's success. The path to Silicon Valley glory was a circuitous one for Clark, who dropped out of high school in Plainview, Texas, after he was suspended for setting off a smoke bomb on a school bus. After a hitch in the Navy, he went back to school, enrolling as an undergraduate at Tulane University. He went on to earn an M.S. in physics from the University of New Orleans and a Ph.D. in computer science from the University of Utah, where he first became interested in computer graphics. Clark then committed himself to an academic career, holding teaching posts at the University of California at Santa Cruz, the New York Institute of Technology, and the University of California at Berkeley before coming to Stanford. Along the way, however, he became disenchanted with academia. "I had always seen myself as a senior professor at a university," he once told the Business Journal--San Jose, "but I think I learned that my strength is making things that work, rather than writing papers. Universities encourage writing a lot of papers." Hence, he departed Stanford and founded Silicon Graphics in 1982.
Once he established the company, Clark displayed the good sense to find his proper role within the operating structure and stick to it. Soon after Silicon Graphics was born, Clark brought in Edward McCracken, a veteran Hewlett-Packard executive, to run the company as president and CEO while he remained chairperson. Clark concentrated on serving as the company's technology guru, leaving McCracken to take care of the business operations. According to McCracken, this role best suited Clark's temperament: "Jim's not a day-to-day person. He works in his own time frame," he told the Business Journal--San Jose. McCracken continued, "He takes complex things and makes it simple. It might take a month, a day, or a year. He gets in these moods for a while where he's almost unavailable. He's most effective when he's in that mood." Clark also used this division of labor to devote more time to outside interests that included ballet, classical music, art, and stunt flying.
A useful blend of high technology and business sense enabled Silicon Graphics to move forward from its early successes. In 1987 it became the first computer company to make use of MIPS Computer Systems' innovative reduced instruction-set chip, or RISC, when it incorporated RISC architecture into its new IRIS 4D/60 workstation. Within several years, most workstations would use RISCs. The company received a boost the next year when IBM agreed to buy Silicon Graphics' IRIS graphics card for use in its own RS/6000 graphics workstations and to take out a license for the IRIS Graphics Library--a big first step toward making the IRIS Graphics Library the industry standard.
Lower-Priced Workstations Broadened Customer Base, Late 1980s
Also in 1988, Silicon Graphics introduced amid much fanfare a new line of entry level graphics workstations, which it called Eclipse. Although it dominated the more expensive end of the graphics workstation market, the company needed to broaden its customer base if it expected to maintain sales growth. The Eclipse was designed to bring 3-D graphics to people who had previously regarded IRIS workstations as unaffordable. Eclipse lacked the speed and processing power of more expensive machines, but initial versions sold for less than $20,000&mdash little as one-fifth of the cost of higher-end machines. Eclipse scored a major success soon after its release when Chrysler announced that it would buy a large number of the machines to go with the IRIS workstations that it was already using to help design its automobiles.
Although Eclipse put Silicon Graphics into more direct competition with its rival workstation manufacturers, who began to chip in with their own low-end 3-D workstations, it also succeeded in expanding the company's customer base. In 1990 sales volume topped $420 million. The move into the lower priced, high-volume end of the market worked well enough for Silicon Graphics that in 1991 the company released an even less expensive product line--the IRIS Indigo, a 3-D graphics workstation so compact that the company called it the first personal computer to use RISC architecture. The Indigo offered many features found on more expensive models, as well as digital audio and video processing capability, and the base model sold for less than $10,000.
During this time, Silicon Graphics scored several major coups on the business side. In 1991 the company granted a license to software giant Microsoft for the IRIS Graphics Library. Microsoft intended to use the IRIS Graphics Library in its New Technology operating system for personal computers. Also in 1991, Compaq Computer agreed to acquire a 13 percent stake in Silicon Graphics for $135 million, giving Silicon Graphics a much-desired infusion of capital. Furthermore, Compaq agreed to invest $50 million in a joint workstation development project with Silicon Graphics. Together, these moves provided software developers with greater incentive to write programs for Silicon Graphics machines and also broadened the company's customer base even further.
In 1992 Silicon Graphics agreed to acquire MIPS Computer Systems, which had run into financial difficulties, in a stock swap valued at $230.8 million. The cost of assimilating MIPS forced Silicon Graphics to post a loss of $118.4 million that year, but it also secured the company's long-term supply of MIPS's RISC microprocessors, which had become a crucial piece of technology. The merger with MIPS was "endorsed" by a consortium of eight international high-tech companies, which announced plans to buy 1.5 million shares of Silicon Graphics. It turned out to be a successful merger. By mid-1993 the company was able to ship the new R4400 microprocessor, and MIPS employees who survived layoffs seemed productively integrated into the Silicon Graphics organization.
In January 1993 Silicon Graphics announced a new computer that would use RISC architecture to achieve supercomputer power at relatively affordable prices. The Power Challenge, as it was called, would link multiple RISCs in a single machine to provide unprecedented processing capability in a computer of that price. Whereas traditional supercomputers like those made by IBM and Cray Research typically sold for millions of dollars, the Power Challenge would sell for between $120,000 and $900,000. The new product was announced over a year in advance of its anticipated shipping date to give targeted customers, such as government agencies and universities previously unable to afford supercomputers, time to include it in their budgets. Observers pegged Power Challenge as a sudden move into the faltering field of supercomputer manufacturing, but in fact the company's ever more powerful workstations were approaching the level of supercomputers anyway, and the company had already established contacts with customers at whom the Power Challenge would be aimed.
Silicon Graphics Workstations Used in Film Industry, 1990s
In April 1993 Silicon Graphics and Industrial Light and Magic, the famed special effects division of Lucasfilm, announced that they had joined forces to create a high-tech entertainment special effects laboratory. The joint venture was called Joint Environment for Digital Imaging--the acronym JEDI recalled the Jedi Knights of Lucasfilm's (George Lucas's) Star Wars trilogy--and grew out of the fact that Industrial Light and Magic had been using Silicon Graphics workstations since 1987. The liquid metal cyborg featured in the film Terminator 2, the dinosaurs in Jurassic Park, special effects in The Hunt for Red October and The Abyss, and animation in Beauty and the Beast were all created on Silicon Graphics computers. For Lucas and Industrial Light and Magic, JEDI was expected to yield both financial and aesthetic benefits: digital manipulation of images cost about one-tenth as much as models and drawings, and, according to Lucas, would "change motion pictures from a photographic process to more of a painterly process," enabling greater authorial control over a film's appearance. For its part, Silicon Graphics hoped that alliance with an entertainment industry partner would help push the leading edge of its technological development forward.
The entertainment industry was a growing interest of James Clark's at the time. In 1995 Silicon Graphics teamed up with DreamWorks SKG--the entertainment entity formed by Steven Spielberg, Jeffrey Katzenberg, and David Geffen&mdashø form DreamWorks Digital Studio for the creation of animation, feature films, and other products. Silicon Graphics also acquired Alias Research and Wavefront Technologies for $500 million in 1995, which positioned Silicon Graphics in the software business. Alias specialized in 3-D animation software that was widely used in the entertainment industry and in industrial design. It had developed new ways to simulate wind, fire, skin, and other special effects, and it also had an animation tool used by Nintendo in its video games. WaveFront Technologies developed industrial visualization software.
Silicon Graphics was facing fierce competition in the 3-D graphics and imaging markets from Apple Computer Inc., which was introducing QuickDraw 3D, and Microsoft Corporation, which had recently acquired SoftImage and its line of simulation software. In addition Steve Jobs, founder of Apple and NeXT, had recently purchased animation producer Pixar and teamed with Walt Disney Studios on Toy Story, a full-length animation film created entirely with computers.
Major Acquisitions Continued, 1996--97
In 1996 Silicon Graphics acquired financially troubled supercomputer maker Cray Research Inc. for $767 million. Although lower end workstations accounted for more than half of Silicon Graphics' revenues, its high-end workstations were facing increasing competition from lower-priced PCs. The Cray acquisition was intended to help Silicon Graphics dominate the high end of computing where workstation prices started at $10,000 and ran as high as $1 million. Together, Cray and Silicon Graphics would have accounted for 43 percent of the $1.9 billion scientific and engineering market in 1995, and analysts predicted the two companies could generate $4 billion in combined revenues.
In 1997 Silicon Graphics acquired ParaGraph International Inc., a leading vendor of Virtual Reality Modeling Language (VRML) for Web graphic tools. Silicon Graphics created a new software business unit, Cosmo Software, to manage and develop areas such as VRML, 3-D, audio, and video software for multiple platforms.
Operating Losses Became a Problem, 1997--98
After posting a profit of $78.6 million on revenues of $3.66 billion for fiscal 1997 (ending June 30), Silicon Graphics experienced mounting losses in fiscal 1998. During the first quarter the company lost $55.5 million on revenues of $768 million, and CEO Ed McCracken and Executive Vice-President Gary Lauer resigned.
Silicon Graphics' losses were caused by several factors. More than half of Silicon Graphics' sales came from shrinking markets such as Unix workstations and supercomputers, whose sales were being undercut by less expensive machines running industry standard Windows NT on Intel processors. Silicon Graphics also had a poor operations record, with numerous product delays, production shortfalls, and a lack of controls.
Richard Belluzzo was brought in from Hewlett-Packard, where he was second in command, to take over as CEO and president, effective January 1, 1998. He immediately took steps to turn the company around and address its most immediate problems. Costs were trimmed in a corporate restructuring that involved laying off 700 to 1,000 employees, nearly ten percent of Silicon Graphics' workforce. Two factories that manufactured printed circuit boards were sold, and Silicon Graphics' operating structure was simplified by reducing its 26 profit-and-loss centers to five product groups.
Belluzzo recognized that Silicon Graphics would have to take steps to meet the competition its higher-end proprietary workstations were experiencing from industry standard machines running on Windows NT. Silicon Graphics entered into a strategic alliance with Microsoft to produce a low-priced Visual Workstation for Windows NT that would cost around $3,400 for introduction in fiscal 1999.
Belluzzo also divested some of Silicon Graphics' non-core business assets. In July 1998 a previously planned spinoff of MIPS Technologies Inc. was completed, raising more than $70 million for Silicon Graphics, which retained an 85 percent interest in MIPS. Also sold were a number of applications software research groups, and the company terminated its investment in its Cosmo software business.
Fiscal 1998 (ending June 30) was a poor year for Silicon Graphics due to market conditions, poor operational execution, and missed opportunities. The company reported a net loss of $460 million on declining revenues of $3.1 billion. Restructuring and other one-time charges amounted to $206 million.
In October 1998 Silicon Graphics entered into a joint venture with Real 3D Inc. of Orlando, Florida, to codevelop and market advanced computer graphics technology worldwide. Silicon Graphics took a ten percent stake in Real 3D for an estimated $30 million. Real 3D, which was spun off by Lockheed Martin Corporation in 1996, had been a smaller-scale competitor to Silicon Graphics in providing graphics systems for higher priced computer workstations. As part of the venture the two companies agreed to a royalty-sharing licensing agreement and gave up their longstanding patent infringement litigation.
For the first six months of fiscal 1999 Silicon Graphics posted a net loss of $87 million on revenues of $1.6 billion. Belluzzo's plan to turn Silicon Graphics around included driving sales up through the introduction of lower-priced visual workstations and finding new applications for its high-end supercomputers. His plan to revamp Silicon Graphics' operations included outsourcing production of Silicon Graphics' computers and cutting the company's operating budget by $200 million. He was also attempting to change Silicon Graphics' corporate culture through a "Get Serious" campaign.
In April 1999 Silicon Graphics Inc. changed its name to SGI as part of a new worldwide corporate identity strategy that reflected the breadth and depth of the company's products and services. The strategy included three sub-brands: SGI servers and workstations, Silicon Graphics visual workstations, and Cray supercomputers. The three sub-brands consolidated previously ill-defined product lines. It was hoped that the new branding strategy would reposition SGI and its products and services in the marketplace.
Still, SGI faced several obstacles in its search for profitability. Rival computers were offering vastly improved performance as sales of Cray supercomputers were plummeting at a 40 percent annual rate. Entering the Windows NT market would require more rapid production cycles, something SGI had not shown it could accomplish. As a competitor in the Windows NT market, SGI would also be subject to delays associated with the introduction of new versions of Windows NT and Intel processors. Given SGI's operating results for the first half of fiscal 1999, Belluzzo and SGI appeared to have their work cut out for them.
Principal Subsidiaries: Silicon Graphics Ltd. (United Kingdom); Nihon Silicon Graphics K.K. (Japan); Silicon Graphics Ltd. (Hong Kong, People's Republic of China); Cray Research, Inc.; MIPS Technologies Inc.
Principal Divisions: Consumer Products Division; Strategic Software Division; Visual Systems Group; Alias/Wavefront; Supercomputing Group.
Additional Details
Public Company
Incorporated: 1982 as Silicon Graphics Inc.
Employees: 10,286
Sales: $3.1 billion (1998)
Stock Exchanges: New York
Ticker Symbol: SGI
NAIC: 334111 Computers Manufacturing; 334119 Other Computer Peripheral Equipment Manufacturing; 51121 Software Publishers
Further Reference
Burnett, Richard, "Orlando, Fla., High-Tech Firm Teams with Mountain View, Calif., Company," Knight-Ridder/Tribune Business News, October 7, 1998.Burrows, Peter, and Andy Reinhardt, "What Makes Rick Run?" Business Week, February 1, 1999, p. 62.DeTar, Jim, "MIPS Goes Public," Electronic News (1991), July 6, 1998, p. 1.Fisher, Susan E., "Cloudy Forecast Seen for SGI/MIPS Merger," PC Week, June 15, 1992, p. 154.Goldberg, Michael, "SGI + Cray = Scientific Powerhouse," Computerworld, March 4, 1996, p. 32.Hof, Robert, "Is Silicon Graphics Busting Out of Its Niche?," Business Week, April 22, 1991.Hof, Robert, and Jeffrey Rothfeder, "This Machine Just Might Eclipse Apollo and Sun," Business Week, October 10, 1988.Hostetler, Michele, "Cray Deal Boosts SGI to Top of the Supercomputer Heap," Business Journal, March 4, 1996, p. 4.Johnson, Bradley, "Silicon Graphics Rethinks Entire Brand," Business Marketing, May 1998, p. 42."Jurassic Pact: Silicon Graphics," Economist, March 2, 1996, p. 58.Koland, Cordell, "Graphics Firm Leader Combines Technical, Managerial Skill," Business Journal--San Jose, December 14, 1987.Lee, Yvonne L., and Pardhu Vadlamudi, "Acquisitions Move SGI into Software," InfoWorld, February 20, 1995, p. 34.Levin, Carol, "Animation's Next Frontier," PC Magazine, April 25, 1995, p. 29.Moylan, Martin J., "Wall Street Remains Wary of Silicon Graphics, Cray Merger," Knight-Ridder/Tribune Business News, February 23, 1997.Nash, Jim, "A Merger Success: SGI-MIPS," Business Journal, April 5, 1993, p. 1.Niccolai, James, and Dana Gardner, "SGI Plans to Cut Jobs and Shift Focus to NT," InfoWorld, November 3, 1997, p. 10."SGI Acquisition Bolsters Web Graphics Tools," PC Week, May 19, 1997, p. 28."SGI Launches New Worldwide Corporate Identity Strategy," http://www.sgi.com/newsroom/press--releases/1999/april/brand.html."SGI to Merge with Alias, Wavefront," Design News, April 10, 1995, p. 20."Silicon Graphics Inc.," Advanced Imaging, January 1998, p. 8.Simons, John, "Ghosts in the Machine: SGI Tries to Regain Its Former Luster--But Challenges Abound," U.S. News & World Report, November 11, 1996, p. 60.Stedman, Craig, "Shareholders Approve MIPS-SGI Deal; Advisory Board Set with RISC Partners," Electronic News (1991), June 29, 1992, p. 6.Taninecz, George, "Cinema Without Celluloid," Industry Week, June 19, 1995, p. 47.Tedesco, Richard, "SGI, Cray in $780 Million Merger," Broadcasting & Cable, March 4, 1996, p. 46.Vijayan, Jaikumar, "SGI Results Worse Than Expected; McCracken out, Layoffs Planned," Computerworld, November 3, 1997, p. 4.Yamada, Ken, "Silicon Graphics Aims to Be Supercomputer Contrarian," Wall Street Journal, January 27, 1993.
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https://www.bloomberg.com/news/articles/1997-08-03/the-sad-saga-of-silicon-graphics
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en
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The Sad Saga Of Silicon Graphics
|
[] |
[] |
[] |
[
"SILICON GRAPHICS INC",
"Software",
"APPLE INC",
"Startups",
"Executives",
"INTL BUSINESS MACHINES CORP",
"Washington",
"Engineering",
"Design",
"TOSHIBA CORP",
"business"
] | null |
[] |
1997-08-03T00:00:00
|
What went wrong at the company that once made everybody say: "Gee whiz"
|
en
|
Bloomberg.com
|
https://www.bloomberg.com/news/articles/1997-08-03/the-sad-saga-of-silicon-graphics
|
Back in July, 1995, no computer maker was flying higher than Silicon Graphics Inc. Its dazzling three-dimensional graphics computers had a starring role animating the fearsome dinosaurs in Jurassic Park. Nintendo was using the same technology to give the Mario Brothers a face-lift and to design a new generation of arcade-like game machines. And sales were soaring. For the fiscal year ended that June 30, revenue skyrocketed 45%, to $2.2 billion--far outpacing all rivals. To top it off, CEO Edward R. McCracken was a White House regular, hobnobbing with Bill Clinton and Al Gore. SGI's sexy image prompted a Wall Street analyst to label it "the new Apple."
Sadly for SGI, that may prove all too true. Now, like Apple Computer Inc., the Mountain View (Calif.) company is a stark anomaly in booming Silicon Valley. While rivals such as Sun Microsystems Inc. ride the Internet wave and even IBM enjoys a comeback, SGI has been mostly an onlooker at the tech party. After racking up losses of $35 million in the first half of this year, the company managed to carve out a profit for the 1997 fiscal year ended in June, thanks to a strong fourth quarter. Still, the stock, even after bouncing up from its low of 12 7/8 last April to 18 3/4 on July 23, is at less than half of its value 24 months ago. Dubbed "the gee-whiz company" by BUSINESS WEEK three years ago, SGI is scrambling to stay off technology's long list of has-beens. Concedes McCracken: "If we can't produce good quarters, we're not going to have a future."
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|
en
|
The Sad Saga Of Silicon Graphics
|
[] |
[] |
[] |
[
"SILICON GRAPHICS INC",
"Software",
"APPLE INC",
"Startups",
"Executives",
"INTL BUSINESS MACHINES CORP",
"Washington",
"Engineering",
"Design",
"TOSHIBA CORP",
"business"
] | null |
[] |
1997-08-03T00:00:00
|
What went wrong at the company that once made everybody say: "Gee whiz"
|
en
|
Bloomberg.com
|
https://www.bloomberg.com/news/articles/1997-08-03/the-sad-saga-of-silicon-graphics
|
Back in July, 1995, no computer maker was flying higher than Silicon Graphics Inc. Its dazzling three-dimensional graphics computers had a starring role animating the fearsome dinosaurs in Jurassic Park. Nintendo was using the same technology to give the Mario Brothers a face-lift and to design a new generation of arcade-like game machines. And sales were soaring. For the fiscal year ended that June 30, revenue skyrocketed 45%, to $2.2 billion--far outpacing all rivals. To top it off, CEO Edward R. McCracken was a White House regular, hobnobbing with Bill Clinton and Al Gore. SGI's sexy image prompted a Wall Street analyst to label it "the new Apple."
Sadly for SGI, that may prove all too true. Now, like Apple Computer Inc., the Mountain View (Calif.) company is a stark anomaly in booming Silicon Valley. While rivals such as Sun Microsystems Inc. ride the Internet wave and even IBM enjoys a comeback, SGI has been mostly an onlooker at the tech party. After racking up losses of $35 million in the first half of this year, the company managed to carve out a profit for the 1997 fiscal year ended in June, thanks to a strong fourth quarter. Still, the stock, even after bouncing up from its low of 12 7/8 last April to 18 3/4 on July 23, is at less than half of its value 24 months ago. Dubbed "the gee-whiz company" by BUSINESS WEEK three years ago, SGI is scrambling to stay off technology's long list of has-beens. Concedes McCracken: "If we can't produce good quarters, we're not going to have a future."
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Worldâs Biggest Tech Companies of 2024 (Updated List)
|
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Tech companies are innovating the world and improving our lives day by day. Here are the 22 biggest technology-based companies in 2024.
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https://userguiding.com/blog/biggest-tech-companies
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According to statistics, the technology industry makes up 35% of the total market. And it's steadily growing: the growth rate was 5.3% for 2022. There are more than 500 thousand tech companies alone in the United States, over 6,600 of which are in Silicon Valley.
Despite all the economic problems in the supply chain, workforce, and innovation, tech companies have recovered in 2023. Even though these issues may continue going into 2024, the growth rate of last year shows that the technology sector is resilient and is willing to move further.
Almost each and every company -no matter which industry they're originally in- depends on technology companies in one way or another. It might be hardware, software, online services/tools, cybersecurity solutions...Â
And my friends, this means money.Â
For this article, I went through Forbes The Global 2000, the annual ranking of public companies based on 4 metrics (sales, assets, profits, and market value).Â
In this article, you will find the most up-to-date numbers about the tech companies in 2024.
Before we start, here is a fun fact about how old the tech companies on the list are:
Apple: 47 (April 1, 1976)
Alphabet: 8 (October 2, 2015)
Microsoft: 48 (April 4, 1975)
Amazon: 29 (July 5, 1994)
Samsung Group: 85 (March 1, 1938)
Tencent Holding: 25 (November 11, 1998)Â
Meta Platforms: 19 (February, 2004)
Cisco Systems: 39 (December 10, 1984)
Oracle Corporation: 46 (June 16, 1977)
Broadcom: 62 (1961)
SAP: 51 (April 1, 1972)
Accenture: 34 (1989)
Salesforce: 24 (February, 1999)
Adobe: 41 (December, 1982)
Intuit: 40 (1983)
Capgemini: 56 (October 1, 1967)
VMware: 25 (1998)
Uber Technologies Inc.: 14 (March, 2009)
Shopify: 17 (2006)
Zoom Video Communications: 12 (2011)
Synopsys: 37 (1986)
Atlassian: 21 (2002)
Here are the biggest tech companies of 2024 ð
#1: MicrosoftÂ
Popular Products: Microsoft, MS Office, Microsoft Teams, Visual Studio
Market Value: $3
Employee Size: 221,000Â
Founded by Bill Gates and Paul Ellen in 1975, Microsoft is another tech giant rising from the United States. In 2023, Microsoft's annual revenue was $211.915B. This is a 6.88% increase from 2022. Being one of the top tech companies, Microsoft has 221,000 employees.
It produces consumer electronics and computer software, as well as offers related solutions.
One of Microsoft's best products, MS Office, has become an indispensable part of our lives. Spreadsheets, presentations, meeting notes... You are ready for any meeting, any time with Office tools. You can check our post to learn how to use Onenote.
â¡ï¸ Also; LinkedIn, Skype, and GitHub can be listed among the company's subsidiaries.Â
#2: AppleÂ
Popular Products: iPhone, iPad, Apple Watch, AirPods, MacBook
Market Value: $2.8T
Employee Size: 164,000Â
Another tech giant on our list is Apple, which is not very surprising.Â
Specializing in electronics, software, and online services, Apple's quarterly revenue is $81.8 billion. It is down 1 percent year over year, and quarterly earnings per diluted share of $1.26, is up 5 percent year over year in 2023.Â
The company was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in 1976. Since then, Apple has been producing various tech devices, from computers to wearables. Apple is among the job creators in the US with two million jobs in all 50 states.
Apple was one of the most popular tech companies in the industry when I was a little kid, it still is, and it doesn't seem like this will change in the near future.Â
#3: Alphabet Inc.Â
Popular Products: Android, Google, YouTube,
Market Value: $1.746 TÂ
Employee Size: 186,779
Alphabet is a multinational conglomerate company. For the quarter ending June 30, 2023 Alphabet's revenue was $74.604B. This was a 7.06% increase year-over-year. Also, ending June 30, 2023, the tech company's revenue for the last 12 months was $289.531B This was a 4.1% increase year-over-year.
After the restructuring Google went through in 2015, Alphabet Inc. was founded, and it became the parent company of Google businesses.Â
The company also invests in various start-ups and companies of different sizes in the tech industry: smart home projects, self-driving cars, cloud-gaming systems, and more.Â
#4: AmazonÂ
Popular Products: Amazon Store, Amazon Prime, Amazon Web Services (AWS), Alexa, Twitch, Goodreads
Market Value: $1.534 T
Employee Size: 1,608,000Â
Amazon, one of the most valuable companies in the world, was founded in 1994 by Jeff Bezos. Amazon's revenue for 12 months in 2023 is $538.046B.
Initially an online marketplace, the company started to produce its own technological devices and offer cloud services over time.Â
As well as ranking as the world's 6th largest company in Forbes' list, it's listed among the top 25 tech and IT companies to work for -a.k.a. best workplaces!Â
#5: Meta PlatformsÂ
Popular Products: Facebook, Instagram, WhatsApp, Messenger
Market Value: $885.23 B
Employee Size: 83,553Â
Launched by Mark Zuckerberg in 2004 to connect Harvard students with one another, Facebook was an instant hit. In 2 years, it became open to public use. In 2010, more than 400 million people were using it monthly.Â
In 2021, Facebook Inc. changed its name to Meta Platforms to emphasize its orientation to the metaverse. Virtual/augmented reality is the future, and Meta claims to help people exist there.Â
In addition to their own products focusing on Metaverse and Web3, such as Meta Quest and Meta Portal, the company acquired many subsidiaries, including Novi Financial, Hot Studio, and WhatsApp.Â
#6: Broadcom Inc.
Popular Products: Symantec Enterprise Cloud, Rally Software
Market Value: $437.19 B
Employee Size: 20,000Â
Yeah, software companies are worth the whole world, and hardware companies can be worth a lot too. But companies who provide both? They're totally different gems ð
Broadcom has a diverse product portfolio, including both semiconductor and infrastructure software solutions.Â
With their innovative vision and collaboration, they achieved excellence more than once.Â
Introduced the first commercially available LED dot matrix display.
Produced the first cable modem that enabled cable TV providers to offer Internet connectivity.
Delivered the first high-speed digital optocouplers for use in hybrid and electric vehicles.
Introduced embedded fiber-optic solutions for IBM.Â
Introduced the first 5G radio switch.Â
#7: Samsung GroupÂ
Popular Products: Phones, televisions, and other tech devicesÂ
Market Value: $388.00 B
Employee Size: +320,000 (source)Â
Founded in 1969 in South Korea, Samsung Electronics operates through business divisions, as they manufacture and sell a wide range of electronics and software.Â
These are Consumer Electronics, IT & Mobile Communications, and Device Solutions.Â
Samsung Electronics does not only manufacture TVs, phones, and wearables; it also has smart home and digital health initiatives.Â
#8: Tencent HoldingsÂ
Popular Products: WeChat, PUBG Mobile, QQ, Riot Games
Market Value: $366.51 B
Employee Size: 112,771
Tencent Holdings is a Chinese technology conglomerate company that was founded 23 years ago. It's the first Asian tech company that crossed the $500B mark.Â
Among its services, there are web portals, e-commerce platforms, payment systems, social networks, and mobile games.Â
The holding group also owns Tencent Music and Tencent Games, the largest company in the video game industry.Â
Tencent's most popular communication tool WeChat has over 1.2 billion monthly active users. And its sibling app, QQ, has 564 million monthly active users. Â
The company also provides marketing solutions and cloud services. ''Tencent is dedicated to being a digital assistant'' they say. Through their digital services and technologies, they aim to help every industry.Â
#9: Cisco SystemsÂ
Popular Products: Cisco ONE, Cisco DNA, Cisco+
Market Value: $205.24 B
Employee Size: 79,500Â
Born out of the difficulties of a husband and wife working at Stanford to communicate within the organization, Cisco Systems is almost 40 years old today.
Headquartered in San Jose, Silicon Valley, Cisco is an IT and networking company specializing in routers, switches, and cybersecurity.Â
The cybersecurity unit is the most valuable -and the fastest growing- part of the company. Last quarter, it grew its revenue by 14%, according to company data.Â
With Cisco SecureX; you can detect, respond, and quickly recover from cyber attacks. It's an integrated platform that can be used across various products, which means you can secure your apps, users, endpoints, and network from a single platform.Â
â¡ï¸ A fun fact about the company name: Cisco stands for San Francisco, and the vertical lines on the logo represent the Golden Gate Bridge ð
#10: Oracle CorporationÂ
Popular Products: Oracle Cloud, Java, MySQL, Oracle LinuxÂ
Market Value: $281.65 BÂ
Employee Size: 143,000
Oracle is an American computer software company. It was founded in 1977, in California, but the corporate headquarters are in Austin, Texas now.Â
They have more than 400,000 customers across the world, including FedEx, Xerox, and Siemens Healthineers, as they provide specific solutions for different industries.Â
You can manage your restaurant, modernize your finances, secure network infrastructure solutions, connect HR (Human Resources) /product management/ marketing, and increase client satisfaction.Â
Plus: Oracle holds developer events regularly. From machine learning to image recognition, specialists exchange ideas. You can check out old events' recordings and register for the upcoming ones from here.Â
#11: SAP
Popular Products: SAP S/4HANA CloudÂ
Market Value: $177.29 B
Employee Size: 107,415
SAP is a leading software company that focuses on business management solutions such as data processing and information flow.Â
It was founded in 1972 in Weinheim, Germany.Â
When they released SAP R/2 and SAP R/3 software, they set a global standard in terms of enterprise resource planning (ERP). Now they have SAP S/4HANA, the latest version of ERP software. It makes use of in-memory computing; therefore, it enables tremendous amounts of data to be processed fast and smoothly.Â
SAP software gathers and centralizes data, normally which would be collected and analyzed separately by each department/team. It helps to have a better view and interpretation of collected data while increasing productivity -and ultimately, profits.Â
ERP software includes tools and programs suitable for all teams: HR, sales, marketing, product...Â
And SAP has different solutions for companies of different sizes. A big corporate or a small company, doesn't matter, you can get help from them!Â
â ï¸ For other business management tools, let's take you here.Â
#12: AccentureÂ
Industry: Information TechnologyÂ
Market Value: $196.86B
Employee Size: 721,000
It's not easy to be recognized as a successful company by business magazines and get featured. But if there's anything harder, it is to be recognized and loved by those who got featured there.Â
Accenture has been working with 89 of Fortune 100 companies.Â
It's also listed as one of the best workplaces for innovative people by Fast Company.Â
Now, who is this Accenture? Let's have a close look at their services ð
They provide a wide range of services. From AI and cloud services to services for marketing needs, security needs, data & analytics...Â
Furthermore, Accenture helps customers understand the metaverse and shape their business plans in a way that will fit into the future. With a deep understanding of the industry and the future that awaits it, they accompany customers in their metaverse journey.Â
âWhile we are at the early days of the metaverse, it will advance very quickly. If companies donât act now, theyâll find themselves operating in worlds designed by, and for, someone else.â
â PAUL DAUGHERTY, Group Chief Executive â Technology & Chief Technology OfficerÂ
P.S. Accenture leads a national tech apprenticeship program. You can read more about it here.Â
#13: SalesforceÂ
Popular Products: Customer 360, Slack, Tableau
Market Value: $243.78 B
Employee Size: 73,541Â
Salesforce is the worldâs #1 customer relationship management (CRM) platform. Founded in 1999, in California, it became one of the major tech companies shortly.Â
It acquired several companies including Slack, Heroku, and Tableou Software.Â
Customer 360, Salesforce's original product, is a platform that integrates all the data and information about your company into one place. Sales team, customer Support, marketing people, product engineers... All teams, one workspace.Â
You can integrate different apps with Customer 360 for sales/marketing purposes, data analysis, etc. - and actually -Â the more you integrate the better results you get.Â
#14: AdobeÂ
Popular products: Adobe Acrobat, Adobe Photoshop, Adobe Creative Cloud
Market Value:$260.33 B
Employee Size: +26,000
Founded in 1982, Adobe is an American software company that provides marketing and document management solutions as well as creative tools. The corporate headquarters are in San Jose, Silicon Valley.Â
The company offer services in 3 main categories:
Creative Cloud: tools for design and editing, such as InDesign, Photoshop, and Illustrator.
Experience Cloud: services for marketing and customer experience, such as manager screens, marketing optimization, real-time CDP, and analytics.Â
Document Cloud: tools for editing documents, such as Adobe Acrobat and Adobe Sign.Â
#15: IntuitÂ
Popular Products: QuickBooks, TurboTax, MintÂ
Market Value: $165.48 B
Employee Size: 17,300
Intuit is a software company that is specialized in finance.Â
Along with their own products, QuickBooks, TurboTax, and Mint, the company owns time management and scheduling app TSheets, Mailchimp, and Credit Karma, which was another finance company but now is a brand of Intuit.
Let's see what you can do with their products ð¤
TurboTax:
âï¸ Work with a tax expertÂ
âï¸ Get your tax refundsÂ
Mint:
âï¸ Manage all your accounts in one placeÂ
âï¸ Track your cash flow (bill payments included!)Â
QuickBooks:
âï¸ Keep track of your income and expenses
âï¸ Complete your payments
âï¸ Organize your taxes
#16: Capgemini
Popular Subsidiaries: Tessella, SogetiÂ
Market Value: $35.59B
Employee Size: 358,400Â
Capgemini is a French-American IT services & consulting company. Corporate headquarters are in Paris, France.Â
They offer companies various solutions such as business transformation, cybersecurity, and enterprise management.Â
Also, they are aware of the fact that industry needs differ. Capgemini follows each industry closely and offers recommendations based on their needs.Â
From healthcare to media, insurance to travel, banking to automotive, and even aerospace and defense! You can trust them.Â
#17: VMware
Popular Products: VMware vSphere
Market Value: $45.55B
Employee Size: 37,500
Founded in 1998, in Palo Alto, California, VMware is a cloud computing company.Â
It provides multi-cloud services for all apps. But what is multi-cloud?Â
Hybrid has became the new normal for most of us. No, I'm not talking about half-time office half-time home-office shifts. I'm talking about online workspaces, clouds. 73% of enterprises work with two -or more- cloud accounts. Even though the wide use of cloud-based platforms and the digital transformation is good news, they might bring possible security risks and productivity problems.Â
That is where VMware comes into play:Â
â¡ï¸ It connects and secures data across data centers and clouds.Â
â¡ï¸ It leverages infrastructure to protect apps.Â
â¡ï¸ It does not only protect your apps, but also help you improve and modernize them.Â
â¡ï¸ And finally, it improves the work experience of your employees. Anyone can work from anywhere from now on!Â
#18: Uber Technologies Inc.Â
Popular Products: Uber, Uber EatsÂ
Market Value:$119.87 B
Employee Size: 29,300Â
Uber, one of the companies with a high-tech employment rate, is mobility as a service company. It was founded in 2009 and quickly grew to be one of the most successful start-ups of the last decade.
You can mainly do two things with Uber:
- You can meet your transportation needsÂ
- Or you can order from your favorite restaurants and get delivery with UberÂ
Also, you can work as a Uber driver or a delivery person.Â
ð Plus, as the largest mobility as a service platform in the world, the company is aware of its responsibilities towards the environment. They will have become a full electric, zero-emission platform by the end of 2040.Â
#19: ShopifyÂ
Industry: E-commerceÂ
Market Value: $92.23 B
Employee Size: +10,000
Shopify, which emerged shortly after as a solution when its founders could not find an e-commerce platform that meets their needs for their own commerce ventures, is now helping millions of businesses worldwide.Â
You can start your business, sell your products, plan your marketing campaigns, and manage your finances from only one platform.Â
But it doesn't end with creating a page on Shopify. You need to be on good terms with your customers, which means, you need to welcome them.Â
ðââï¸ Take a look at how to onboard your Shopify customers successfully.
Also, here you can find more about onboarding tools.
#20: Zoom Video CommunicationsÂ
Industry: Communication PlatformÂ
Market Value: $29.96B
Employee Size: 6,787
I believe almost all of us have used, or at least heard about Zoom once in our lives, especially during the Covid-19 pandemic.Â
We held our meetings, classes, movie nights...Â
But the company was founded in 2011 and is headquartered in San Jose, Silicon Valley.Â
You can connect your hybrid workforce or get closer to your users and organize informative webinars. Zoom can be easily integrated with almost all industries. Healthcare, education, finance, software... If you work with people, or, target people, then you're good to go.Â
#21: SynopsysÂ
Industry: Electronic Design & VerificationÂ
Market Value: $74.83 B
Employee Size: +16,000
Synopsys is an electronic design and software company that mainly focuses on silicon design and software security. Since it was founded, it has acquired a number of software and semiconductor companies such as Black Duck, Cigital, and eSilicon.Â
If there is anything smart, you're likely to see Synopsys too.Â
â¡ï¸ It's the world's #1 electronic design automation service
â¡ï¸ It has the broadest silicon IP portfolioÂ
â¡ï¸ And it's one of the leading companies when it comes to app securityÂ
#22: AtlassianÂ
Popular Products: Jira, Trello, ConfluenceÂ
Market Value: $56.78 B
Employee Size: 8,813Â
Atlassian is an Australian software company that produces tools mainly for software developers, project teams, and managers. It was founded in 2002 and in 20 years, it could manage to be among The Global 2000.Â
Jira, the #1 software development tool, is basically a tool for project tracking and team collaboration. With special templates, you can choose what you want to focus on, and then start working.Â
Although they might seem fundamentally similar, Trello and Jira differ in their target audience. While Jira has special pre-determined settings/templates for coders, Trello addresses other teams (marketing, sales, product, etc.) and individuals.Â
Whether you're a CEO of Silicon Valley or a student, you can tailor Trello according to your needs, and start planning.Â
Other tech companies that deserved to be on the list but couldn't make it:
IBM
Intel
Dell
Alibaba GroupÂ
ConclusionÂ
There are thousands of tech companies, providing different solutions and services.Â
In this article, I've collected the biggest ones according to Forbes' data. I wanted to focus mostly on the software and IT companies while leaving most of the hardware-producing companies out of the list. So, sorry if you couldn't see a company that should have been on the list.Â
All the companies on the list are public companies, which means they're open to the stock exchange. You can check their status from Wall Street Journal or any other news platform.Â
Finally, this list is just an interpretation of the research done by Forbes, not investment advice.
â
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https://news.microsoft.com/1997/12/17/silicon-graphics-and-microsoft-form-strategic-alliance-to-define-the-future-of-graphics/
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en
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Silicon Graphics and Microsoft Form Strategic Alliance To Define the Future of Graphics
|
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1997-12-17T00:00:00
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Collaboration Enhances Advanced Visual Computing and Applications on Windows And Brings Unique Value to Silicon Graphics' Future Windows-Based Products
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en
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Stories
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https://news.microsoft.com/1997/12/17/silicon-graphics-and-microsoft-form-strategic-alliance-to-define-the-future-of-graphics/
|
MOUNTAIN VIEW, Calif., Dec. 17, 1997 — Silicon Graphics Inc. (NYSE: SGI) and Microsoft Corp. today announced a strategic alliance aimed at increasing graphics capabilities for a wide variety of consumer, business and professional customers. Drawing upon each company’s industry-leading expertise, this initiative will significantly advance graphics technology and create a common, extensible architecture that will bring advanced and powerful graphics to the entire computer market. The companies have agreed to jointly define, develop and deliver these new graphics technologies as part of a project code-named “Fahrenheit.”
The Fahrenheit project will create a suite of application programming interfaces (APIs) for the Microsoft® DirectX® multimedia architecture on the Windows® operating system and the Silicon Graphics® UNIX-based platform. An API is a common interface with which developers can leverage the full acceleration capabilities of a computer. Fahrenheit will incorporate Microsoft Direct3D® and DirectDraw® APIs with Silicon Graphics complementary technologies such as OpenGL® , OpenGL Scene Graph
™
and OpenGL Optimizer
™
. The Fahrenheit architecture will be the basis for innovative third-party graphics and visualization applications including Internet, games, business, digital content creation, CAD/CAM, medical and scientific applications.
“Silicon Graphics and Microsoft have been working together since 1991 to develop OpenGL for Windows NT® ,” said Dr. Jon Peddie, president of Jon Peddie Associates and one of the industry’s leading 3-D graphics analysts. “The Fahrenheit project inaugurates the next phase of that long-standing relationship. Fahrenheit paves the way for a truly scalable computer graphics software framework that will satisfy ISVs all the way from low-level APIs to full-blown scene graphics with large model visualization and heavy-duty ‘visualization simplification’ functions. This is something the industry has wanted and needed for a long time.”
This alliance is part of an expanding relationship between Silicon Graphics and Microsoft that enhances Silicon Graphics’ development of high-value Windows-based visual systems. Through this agreement, Silicon Graphics will apply its core competencies to define the Fahrenheit framework upon which Silicon Graphics will continue to develop differentiated graphics systems.
During the development of the Fahrenheit project, Microsoft and Silicon Graphics have also agreed to work together in support of the development of Windows-based graphics applications for professionals through the OpenGL APIs and the development of Windows-based graphics applications for consumers through the Direct3D API.
“Today, Silicon Graphics and Microsoft are defining a clear path for developers that enables both of us to expand the market for graphics,” said Ed McCracken, chairman and chief executive officer of Silicon Graphics. “This also marks Silicon Graphics’ first step toward implementing its strategy to participate in the larger market for a graphically oriented Windows NT-based systems.” “We’re delighted to be working with Silicon Graphics to enhance and drive innovation on DirectX and Windows as a key platform for 3-D graphics and visualization,” said Paul Maritz, group vice president of the platforms and applications group at Microsoft. “The industry’s graphics leaders are collaborating on a standard that will expand the market for developers for Windows while benefiting the entire market.”
Fahrenheit: Common Architecture for Innovation
The Fahrenheit project will produce the following three components:
Fahrenheit low-level API will become the primary graphics API for both consumer and professional applications on Windows. The Fahrenheit low-level API will evolve from Direct3D, DirectDraw and OpenGL while providing full backward compatibility with applications and hardware device drivers written for Microsoft Direct3D and functional compatibility with Silicon Graphics’ OpenGL technologies.
Fahrenheit Scene Graph API will provide a higher level of programming abstraction for developers creating consumer and professional applications on both Windows and Silicon Graphics IRIX operating systems. This API will evolve from Silicon Graphics’ current Scene Graph API. The Fahrenheit Scene Graph API provides high-level data structures and algorithms that increase overall graphics performance and assist the development of sophisticated graphics-rich applications.
Fahrenheit Large Model Visualization Extensions will be based on the Silicon Graphics OpenGL Optimizer API and complementary DirectModel API from Hewlett-Packard Co. and Microsoft. They will operate in conjunction with the Scene Graph API. The large model visualization extensions add functionality that will allow the interactive manipulation of large 3-D models such as an entire automobile. The Large Model Visualization API adds functionality such as multiresolution simplification to the Scene Graph API so developers can easily write applications that will interact with extremely large visual databases. This technology will also be designed to enhance legacy applications with new large model visualization capabilities.
The agreement to collaborate on the Fahrenheit APIs builds on a growing cooperation between Microsoft and Silicon Graphics. Most recently, the companies agreed to collaborate on a new 3-D Graphics Device Driver Kit (DDK) to support OpenGL on the Windows 9X and Windows NT platforms.
The agreement also builds on the significant graphics expertise of each company. Silicon Graphics will draw on its extensive knowledge and core competency in graphics, visualization and imaging, and the overwhelming market acceptance for OpenGL. Microsoft will draw on the acknowledged graphics expertise of its DirectX development team and on the world-renowned Microsoft Research Group, as well as on the leadership of the DirectX APIs and the rich operating system services afforded by the Windows platform.
The Fahrenheit APIs will be developed in conjunction with software and hardware development partners. Microsoft and Silicon Graphics are committed to an open design preview process during which input on the API designs will be solicited from all interested parties. In particular, Microsoft and Silicon Graphics will work together with other industry leaders – including Intel Corp. – to evolve the Fahrenheit APIs. Specifically, Intel will work with Microsoft and Silicon Graphics on the Fahrenheit low-level API to ensure maximum support of the Intel Pentium II processor.
Availability
Microsoft and Silicon Graphics engineers will begin development on Fahrenheit APIs and extensions immediately. They will deliver new APIs, DDKs and Software Development Kits (SDKs) in phases over the next two and a half years. Phase One will be the delivery of the Fahrenheit Scene Graph and Large Model Visualization in the first half of calendar year 1999 for Microsoft Windows and Silicon Graphics IRIX. Phase Two will be the delivery of the Fahrenheit low-level API in the first half of calendar year 2000 on Microsoft Windows only. For the Windows platform, Microsoft will be the direct source for licensing, certifying and distributing the SDKs and DDKs. For the Silicon Graphics IRIX platform, Silicon Graphics will be the direct source for licensing, certifying and distributing the SDKs and DDKs.
For more information on the Fahrenheit APIs, developers should visit (http://www.sgi.com/fahrenheit/) or http://www.microsoft.com/directx/ .
Company Information
Silicon Graphics Inc. is a leading supplier of high-performance interactive computing systems. The company offers the broadest range of products in the industry, from low-end desktop workstations to servers and high-end Cray® supercomputers. Silicon Graphics also markets MIPS microprocessor designs, Alias|Wavefront
™
entertainment and design software, and other software products. The company’s key markets include manufacturing, government, science and industries, communications and entertainment sectors. Silicon Graphics and its subsidiaries have offices throughout the world and headquarters in Mountain View, Calif.
Founded in 1975, Microsoft (NASDAQ
“MSFT”
) is the worldwide leader in software for personal computers. The company offers a wide range of products and services for business and personal use, each designed with the mission of making it easier and more enjoyable for people to take advantage of the full power of personal computing every day.
Microsoft, DirectX, Windows, Direct3D, DirectDraw and Windows NT are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.
Silicon Graphics, the Silicon Graphics logo and OpenGL are registered trademarks and IRIX, OpenGL Optimizer and OpenGL Scene Graph are trademarks of Silicon Graphics Inc. MIPS is a registered trademark of MIPS Technologies Inc.
Cray is a registered trademark of Cray Research Inc., a wholly owned subsidiary of Silicon Graphics Inc.
Alias|Wavefront is a trademark of Alias|Wavefront, a division of Silicon Graphics Limited
Other product and company names herein may be trademarks of their respective owners.
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https://johnmccrea.medium.com/20-years-ago-a-personal-history-of-the-early-days-of-the-web-66985d1518ac
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20 Years Ago: A Personal History of the Early Days of the Web
|
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[
"John McCrea",
"johnmccrea.medium.com"
] |
2015-10-21T03:35:07.424000+00:00
|
1994 was an historic year (both for Silicon Valley and for me). This kicks off a series of posts that try to capture some of the magic from that year, when the web began its transition from something…
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en
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https://miro.medium.com/v2/5d8de952517e8160e40ef9841c781cdc14a5db313057fa3c3de41c6f5b494b19
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Medium
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https://johnmccrea.medium.com/20-years-ago-a-personal-history-of-the-early-days-of-the-web-66985d1518ac
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20 years ago, I got my “golden ticket” into Silicon Valley.
I had graduated from Stanford Business School seven months earlier, but between an economy still slowly emerging from recession and having an undergraduate degree that was neither engineering nor computer science, I was struggling to find a full-time job at a tech company. But by December of 1993, I had somehow managed to land a very promising contractor position at Silicon Graphics in the “low-end” division that had recently launched the company’s newest product, the Indy workstation. And that proved to be quite fortuitous in a number of ways.
First off, Silicon Graphics was going to have its first-ever presence at MacWorld Expo a few weeks later, and, strangely, everyone seemed keen to let “the new guy” take the marketing lead, not just for the low-end division, but for the company as a whole. (This, despite that I didn’t know any of our products in depth, had never been to MacWorld, and hadn’t organized a major trade show presence for any company, ever.) There was a lot to do, with great urgency, and there would be a big spotlight on my effort. So, whether I succeeded or failed, the results would be spectacularly visible.
Second, the guy who hired me as a contractor, the Indy product manager, was already eyeing his next role, a chance to participate in the birth of a new division within the company, something called Silicon Studio, that was setting out to create high-end authoring software for interactive multimedia content. (Translation: video game creation tools.) But for his transfer to be happily accepted, he had an obligation to find a back-fill for his current role. And so, when I managed to not screw up our debut at MacWorld, I essentially got hired and promoted at the same time, stepping into the shoes of the guy who had signed me to a “try-before-you-buy” contract just weeks earlier!
Soon, I would enthusiastically tell anyone who would listen that I was thrilled to have “the best job in Silicon Valley.” Why? Because I was the freakin’ product manager for the newest, sexiest, highest-volume product for what was clearly the hottest company in Silicon Valley. I know it’s hard to believe now, but in 1994 Silicon Graphics was so hot that it was featured in a BusinessWeek cover story, breathlessly entitled “The Gee-Whiz Company”.
In that feature, Robert Hof would describe us as “the most magical computer maker on the planet” and then go on to report:
In an industry marked by huge hype, Silicon Graphics is the genuine article: a truly innovative company with clearly unique products. “They’re the new Apple,” says Morgan Stanley & Co. analyst Steven M. Milunovich. Then, mulling Apple’s recent struggles, he corrects himself: “The Microsoft of computer graphics.”
So, there I was, no longer searching, having landed at the best possible place, with the best possible job. That alone was enough to make January 1994 a very memorable month, but there was one more door about to open for me. And it was to a far bigger opportunity — but one that would take me more than a few months to fully grasp.
It started with an invitation in the mail to a party celebrating Wired magazine’s first anniversary.
[Photo credit: The Original Wired Magazine, 1993 on Facebook.]
I was a Wired fanboy. I’d read every issue cover-to-cover, and even tried landing a job there a few months earlier. So I was thrilled to get an invite (likely only as a result of spending a lot of Silicon Graphics marketing dollars at MacWorld). The event was in San Francisco, in a huge brick warehouse on Third, near Wired’s headquarters in South Park. Back then, there weren’t very many startups in San Francisco; that was yet to come, with Wired to serve as “ground zero” for the City’s emergent “dot-com” scene.
At a time when most people thought of technology as boring or nerdy, Wired managed to make computers, software, and networking seem as edgy as a new designer drug and as wild as a rave (at a time when those were a thing). So, dressed all in black, I put on my new Doc Martin boots, and headed out from my Lower Haight apartment, ready to rock.
Looking back now, I can hardly distinguish that particular party from many others in the ‘90’s — dark setting, loud music, drinks, packed crowd. What I do vividly remember, though, is meeting Jonathan Steuer, who worked at Wired and had the tantalizing title of “Online Tsar”. I suspect he is the very first person I handed a business card with “Indy Product Manager” on it. Once he read my title, Jonathan got very excited.
“You’re the Indy product manager?” he asked. “I really want to use Indys as the web servers for a project I’m working on.”
“Awesome,” I replied, without missing a beat. “Just one question — what’s a web server?”
How could I, a product manager at a company that sold high-performance UNIX workstations and servers, not know what a web server was? The simple truth is that in January 1994, I had never seen nor heard of the web. Hardly anyone had.
Through a bit of online archeology, I now know that the total number of web servers in existence at the time was less than 800 — and they were almost all of the “.edu” flavor, hosted at places like CERN and SLAC. And although there’s no count of how many people were on the web at the time, my best estimate is 3.7 million.
The web of January 1994 is largely gone, and cannot be re-constructed. But, believe it or not, in that month some folks at Georgia Tech’s Graphics, Visualization, and Usability Center did what must be the very first web-based survey attempting to characterize the users of the “world wide web”. James Pitkow and Margaret Recker were trying to learn things like: which browsers were people using, how frequently were they surfing the web, and some basic facts about who those early adopters were (and to see whether, as they believed, the web would be a better platform for surveys than email had been).
And even more surprising than knowing such a survey was done so early, is discovering, as I did a few days ago, that the original survey and its results are still online!
So, let’s use those survey results to travel back in time to a very different web than the one we experience today. First up: gender. Apparently, the web of January 1994 was, to put it mildly, a bit of a boys club. Males accounted for a whopping 95% of respondents. I assume this says far less about the web than it does about the professions that were among its earliest users. (Physics, I’m looking at you!)
And these folks diverged from the mainstream in another significant way. They were not surfing the early web on commodity hardware from the old “Wintel” duopoly. No, 92% of them were on UNIX workstations (and most likely enjoying always-on broadband connections via Ethernet, versus slow, intermittent connectivity via dial-up).
Remember the browser war, when Microsoft and Netscape fought each other, tooth and nail? Well, that was still quite a ways off, as Netscape did not yet exist, and Microsoft had no plans for making a web browser. Nonetheless, the browser question offered no fewer than five choices, listed alphabetically (Cello, Lynx, Mosaic, Other, and Samba). As it turns out, that was three choices too many. Mosaic, developed by Marc Andreessen and Eric Bina at NCSA and released less than 12 months earlier, had completely taken over, accounting for 97% of respondents! (The remaining 3% were using Lynx, a text-based browser developed by Lou Montulli, Michael Grobe, and Charles Rezac at University of Kansas).
It’s also interesting what the survey reveals about the utility of the early web. With fewer than 800 total servers on the web, it’s easy to imagine that usage would be fairly infrequent. Quite the contrary; 20% of respondents used their browser more than nine times a day! Another 18% accessed the web 5 to 8 times a day. And another 42% reported one to four times a day. Together, that’s 80% of early users finding the web so essential that they used it every single day.
You can see all of the graphs here, and read the full paper here. Who knows just how representative this data is of the whole of the web at the time? But as far as I can tell, it is the only such dataset of its kind from that time period, so let’s be thankful that it exists, is online, and can be read by modern browsers.
A few months passed between when I first heard about the web in January 1994 and when I actually saw it for the very first time. And that’s probably a good thing, since early 1994 was the exact period of time in which “dot coms” exploded on to the world wide web, rapidly extending the diversity of web content far beyond its original subject matter, particle physics.
In April of 1994, when I finally downloaded Mosaic, I headed straight to the one site known to make it super-easy to discover and experience all of that new and diverse content: Yahoo. But I didn’t get there by typing “yahoo.com”.
It is true that the site had just embraced the short, fun, and memorable name, Yahoo, after operating for a few months with the unwieldy moniker “Jerry and David’s Guide to the World Wide Web”. But, hard to believe now, once they chose the new name, Jerry Yang and David Filo did not immediately secure the Yahoo domain. (In fact the site would not start to operate as yahoo.com until January 1995!) As a result, all of us who heard about Yahoo by word-of-mouth sometime in 1994 had to also know and correctly type the URL associated with Jerry’s workstation on Stanford campus: akebono.stanford.edu/yahoo.
Below is the Yahoo I saw (or as close as we can now get; this screenshot is from some unknown date between April and December 1994). It may look ungainly to you now, but for me, and for so many others, this was the page that made the web a case of “love at first site”:
With this proto-Yahoo, if you had interest in a specific site or topic, you could quickly navigate the site’s hierarchy and find what you were looking for. But if you were curious, bored, or just new to the web (as most of us were), the awesome top-level navigation was where the action was. With the total number of servers on the web doubling every three months, What’s new? What’s cool? What’s popular? and “Random link” provided the perfect options for exploration and serendipity. Like so many others, I quickly became addicted, coming back multiple times a day to find new sites, and to watch the exponential growth of the web across a large and growing number of content categories.
What sorts of cool, new sites might one discover via Yahoo?
One of my early favorites was “IUMA” (short for the Internet Underground Music Archive). Years before Napster, this site let you discover and download digital music (in the MP2 format) from hundreds of indie bands. Hard to believe, but CNN had already done a short piece on them in March 1994. Well worth a watch:
I’d love to show you more of the web from Spring of 1994, but almost all of the sites that inspired me then are now long gone.
By the summer of 1994, just a few months after landing what I asserted was “the best job in Silicon Valley,” I was already thinking of moving on. How was that possible?
Silicon Graphics was still the hottest company in the Valley — and getting hotter. Our much-ballyhooed interactive television partnership with Time Warner was getting close to launch (and stilled seemed like a good idea at the time). We were hard at work on the Nintendo 64, the world’s first 3D game console. Video server partnerships had just been announced with AT&T and Japan’s NTT. And our market cap now topped that of rivals Sun and DEC.
But things were not so rosy for Indy.
In some ways, we were still recovering from an imperfect launch the prior year. The big plan for Indy was to dramatically increase sales volume by hitting a much lower price point. Instead of the $10,000 price tag of its predecessor, the Indigo, Indy’s strategic mandate was to break the $5,000 barrier. And Indy did just that, tiptoeing across that magical line with an entry-level configuration priced at $4,995. There was just one problem — that config, with only 16 MB of RAM, wouldn’t boot.
Yes, all around the world, customers excitedly opened their beautiful blue boxes labeled “Serious Fun,” smiled at the bright blue “pizza box” inside (and its accompanying juggling balls), and eagerly set up their system, complete with the trailblazing digital “IndyCam.” But when they powered up their sweet new workstation, its paltry 16 MB of RAM (critical to hitting the price and margin targets) was not enough memory to load the all-brand-new-and-maybe-not-quite-finished 5.1 version of the operating system. So it would just hang. Outrage ensued.
Of course, soon additional memory was shipped for free to irate customers. And the base configuration got bumped to 32 MB of RAM. By the time I joined, that “imperfect launch” was behind us, but Indy now faced a much larger and harder problem to solve — actually achieving the very ambitious volume goals set alongside its pricing strategy.
Indy’s volume problem was really a classic “Catch-22”. From a hardware perspective, Indy was truly a multimedia monster: 64-bit RISC CPU, video-capable 100 MHz system bus, integrated video camera, and enough inputs and outputs that the headline from one ad was “Any port in a brainstorm”.
And multimedia authoring was a super-hot market, driven by the explosive growth in sales of interactive CD-ROMs (such as “Mad Dog McCree,” a Western shootout simulation game which gave rise to my industry nickname) and the popularity of Macromedia’s flagship authoring tool, Director. Imagine the breakout sales that could be driven from a marriage of Indy’s multimedia hardware and Macromedia’s multimedia software! Alas, Director was a Mac application; it was not available on IRIX (our flavor of Unix). And all efforts to persuade Macromedia to port to IRIX were to no avail. Why? Not enough volume.
Lack of volume also meant tepid support from Adobe. There was a version of Photoshop running on IRIX, but it was a generic port via some tool called “Latitude”. It didn’t take advantage of our sweet GUI, nor was it very fast.
I very much wanted to find a way out of Indy’s volume Catch-22. But finding a new “killer app” willing to play nice with us seemed like a big job. I knew I couldn’t do that and handle all of the day-to-day tasks of the Indy product manager.
As luck would have it, I got the perfect opportunity to act on my desire for a new role. In August, Jim White, the well-regarded marketing leader for the mid-range workstation division (maker of the company’s Indigo2 “cash cow”), was named director of marketing for our division, filling a position that had been vacant for a few months. Jim’s charter was to re-invigorate the efforts to make Indy a high-volume platform.
After Jim was introduced to the team and gave a great pep talk, he came up to each of us individually for a quick chat. I think he asked me something like, was I “liking the role of product manager?”. His positive energy and unblinking you-can-trust-me eye contact inspired me to do what many at Silicon Graphics would consider career suicide. I told him there might be a better role for me than product manager.
“And what is it you want to do?” Jim asked.
“Marketing with a capital ‘M,’” I said. “I think our breakout growth opportunity will come from a new market, and I’d like to focus on looking for it.”
“Okay,” he said. “Go find us a new market.”
To be continued…
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https://www.acquired.fm/episodes/nvidia-the-gpu-company-1993-2006
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en
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2006): The Complete History and Strategy
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How NVIDIA cheated death in the early days to invent modern graphics processing
| null |
Ben: Hello Acquired listeners. We were coming at you with a little bit of an announcement, some late breaking news. We recorded this episode, what David, a week ago?
David: Yeah, a little over a week ago. We got some time travel going on here. I feel like I'm Jensen in a deepfake video Keynote.
Ben: We sit here. It's Saturday, March 26th. We're getting ready to release this episode in about 24 hours. We want to tell you, we've got something that you don't want to miss. Save the date of May 4thâStar Wars dayâfor something in Seattle, Washington. We hope to be able to see you in person. We'll be able to share more soon. But for now, save the date.
David: Consider this our save-the-date card that we're sending to each and every one of you.
Ben: Yup. All right, now on to NVIDIA. Welcome to season 10, episode 5 of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert. I'm the co-founder and managing director of Seattle-based Pioneer Square Labs and our venture fund, PSL ventures.
David: I'm David Rosenthal, and I am an angel investor based in San Francisco.
Ben: And we are your hosts. It is the eighth largest company in the world by market cap. When NVIDIA began in 1993, it made computer graphics chips in a brutally competitive and low-margin market. There were 90 undifferentiated competitors all doing basically the same thing at the same time. And yet today, they have an 83% market share of standalone GPUsâthat's graphics processing units for those of you starting with us from square oneâthat are supplied for desktop and laptop computers.
David: Ben, you're telling the whole story here.
Ben: Sorry, I'll tease a few things here. Not only that, but of course, followers of NVIDIA know that they recently pioneered a completely new marketâthe hardware and software development tools to power machine learning, neural networks, deep learning, all of this in the cloud and the data center, which obviously is proving to define this whole decade of computing.
As David and I began our research, we realized this really could be a book and a thriller of a book since the co-founder and CEO Jensen Huang really has bet the whole company three separate times, nearly going bankrupt each time. But obviously, as we reflect back here today, that certainly did not happen.
David: All right, here's everything you need to know about Jensen. The CliffsNotes before we talk for six hours about him. The dude used to drive a Toyota Supra, like the Fast and Furious style, like a death machine, and he almost died. He got in a huge accident.
Ben: Just one more way, he is like Elon Musk.
David: Oh, man, crazy.
Ben: Because we have way too much here for one episode, we'll save the stories on machine learning for next time. Today, we are going to tell the wild story of NVIDIA's founding to its rise in prominence powering the computer graphics and gaming revolution. This really is a story of true invention and innovation. It reminds you that engineering breakthroughs really do push our world forward.
In saying that, to set some context, this is a story that takes place from about 1993 to the mid- to late-2000s. As hyped as NVIDIA has been over the last five years, obviously, with the stock run up and everyone's excitement around the company, I think Jensen is still an underrated CEO. Even graded where the NVIDIA Bowls have put him, I think Jensen is one of those people where if you know about him, you know what we're talking about and you have unbelievable reverence, but I think not enough people really know.
David: Just one more Jensen quote before we get into the episode: "My will to survive exceeds almost everybody else's will to kill me." Amazing.
Ben: Listeners, before we begin our parallel processing and graphics rendering journey, we want to introduce you to our presenting sponsor, Vanta, the leader in automated security and compliance. As you know from previous episodes, we are huge fans of Vanta and their approach to SOC 2, HIPAA, GDPR, all the compliance stuff. We have the CEO and co-founder Christina Cacioppo back with us today to help analyze her own company.
Christina, I know long before Vanta, you were at Union Square Ventures from 2010 to 2012. You were really starting to be at the forefront and see how software was going to make it so companies could get way more leverage on people, money, and all the resources they have at their disposal to accomplish so much more so much faster. Was that an inspiration to what ultimately became Vanta?
Christina: Definitely, especially in retrospect. I think when I was at USV, I didn't know the word SaaS. That's a reflection on me not at USV at all. What we called it or how I thought about it was developer tools.
This was 2010â2011. This was like, is it too niche? How many of these people are there? All their customers are startups. Clearly, that's not sustainable. How do you sell new age tools to old companies? Being on the inside of USV, I saw the traction of an early Twilio or Mongo.
You're just be like, oh, no, people haven't caught up yet, like this is very much a real thing. I think I just saw that a little bit earlier, the market broadly. Coming into Vanta, I just deeply believed a go-to market focused on startups can work. There are pros and cons of any, but you get fast iteration cycles and that works. You don't have to worry about selling to IBM when you're a five-person startup.
Ben: Right. With tools like Vanta and last season's sponsor, Pilot, you have this ability to get so much more of your internal focus exclusively on the thing that makes your company great.
Christina: Right. You don't have to become an expert in compliance, or in financial accounting, or whatever it is. Think of Vanta very much the mold of a Jeff Bezos, like you should focus on what makes your beer tastes better, not on the electricity you need to to produce the beer. I think the Vanta version of that is you should focus on your product, what makes it special, not on how it becomes compliant.
Ben: Our thank you to Vanta, the leader in automated security and compliance software. If you are looking to join Vanta's over 2000 customers to get compliance certified in weeks instead of months, click the link in the show notes or go to vanta.com/acquired for a 10% discount.
Listeners, after you finish this episode and you're thinking to yourself, gosh, I wish I could talk about this with people, we have good news for you. You can do that with 11,000 other smart members of the Acquired community at acquired.fm/slack. If you're dying for more after this and you're like, I can't wait for part two, I need some more stuff in the meantime, search Acquired LP Show in the podcast player of your choice.
Here's a new thing. If you haven't rated or reviewed this podcast yet, I think the last time we mentioned this was years ago, Spotify in their mobile app just added the ability to rate. If you listen to Spotify, you should totally leave us a little rating in there. If you're on Apple podcasts, leave us a review. We really, really, really appreciate it when you help share your experience as a listener with others.
All right, listeners, this is not financial advice. We may hold positions in things we discuss on the show. This is for entertainment and informational purposes only. David, take us in.
David: We start in February of 1963. Whatâs going on in Silicon Valley in 1963? Fairchild had already started (I think) and Silicon Valley was underway, but it was early days. We start not in Silicon Valley, but in...
Ben: Taiwan?
David: Yes, the southern part of the island of Taiwan with the birth of Jen-Hsun Huang, later Americanized to Jensen Huang. His dad was an engineer for the air conditioning company, Carrier. You see those big industrial air conditioning units on buildings and stuff.
When Jensen is four, his dad goes on company training to America, to New York City. He was like, wow, this is amazing. I want my kids to grow up here and to have all the opportunities that are available. He comes home, Jensen's four. Jensen has an older brother who's a couple years older. Nobody speaks English. His mom gets an English dictionary and picks 10 words every day, grills the two kids, quizzes them, and teaches them English out of the dictionary.
If you listen to Jensen, where's that accent come from? Because it's not what you would think. The family ends up moving to Thailand a few years later. When they're living in Thailand and Jensen is nine, they finally decided that this is the right time to send the kids to America.
The parents can't move to America yet. They don't have enough money, but they found a boarding school in America that is cheap enough that they can afford. It is called Oneida Baptist Institute and it is in eastern Kentucky, the sticks of Kentucky. Jensen would later say that he and his brother were the first foreigners to attend this school and they're pretty sure they were the first Chinese people ever in the town of Oneida.
It turns out that the reason that this school, OBI (Oneida Baptist Institute) was so cheap was it's actually not a prep school. It's a reform school. This is a school for troubled kids. It's a reform school. Jensen's roommate, when he shows up as a 9-year-old, is a 17-year-old kid who had just gotten out of prison and was recovering from 7 stab wounds that he got in a knife fight.
Ben: Classic American journey right here.
David: And amazingly, this is so Jensen. They become great friends, even though this kid is eight years older than him, twice his age, basically, from a way different background. Jensen helps him with math and he gets Jensen into weightlifting. You see Jensen today and you're like, that dude is jacked.
Ben: He is jacked.
David: He's been weightlifting since he was nine years old. It's about his time in Oneida. Now, I don't get scared very often. I don't worry about going places I haven't gone before. I can tolerate a lot of discomfort. Boy, does that play out in his life, as we will see.
It's pretty awesome. Actually, now, he and his wife Lori have given a few million dollars to the school. It's an amazing institution now. You can see Jensen gave the commencement address in 2020. We're going to link to this in the sources. It's pretty awesome.
After a couple of years at OBI, his parents are finally able to save up enough money to afford to come to the US themselves. They moved first to Tacoma, Washington, great state of Washington. Then they move a little farther south down to the suburbs of Portland, Oregon. Jensen and his brother go home. They live with them. They go to public school there.
Jensen continues his American upbringing. He gets really into table tennis. He places third in the junior nationals in table tennis and he gets his picture in Sports Illustrated. Pretty basic.
His parents continued their academic discipline. Jensen's super smart, obviously. He ends up skipping two grades. Then going to college, he goes to State College. He goes to Oregon State University just down the road a little bit.
Ben: And he got there when he was like 16, right?
David: He got there when he was 16 because he had skipped a couple grades. He loves math, so he decides he's going to major in electrical engineering at OSU. He totally falls in love in more ways than one.
The first way that he falls in love is he just thinks electrical engineering is the coolest thing in the world. He becomes one of the top students in the school. He talks about how he gets mad at the professors because they don't use enough precision when talking about exact numbers.
Ben: Which he later comes to say that he respects the opposite position. I think some of the NVIDIA employees call it CEO math when he rounds all the numbers and he's like, reflecting back, I do understand what the professors were trying to show. The details only matter if you understand the big picture first.
David: That's so Jensen, he understands. My employees get mad at me when I round the numbers and you see your math, like I get it. I appreciate precision, too, but the big picture is what matters here.
The second way he falls in love is with his lab partner in electrical engineering fundamentals. His lab partner, Lori, who goes on to become his wife. It's such a cool story. He graduated in 1984. She graduated in 1985. They moved down to Silicon Valley. Jensen joins AMD as an equivalent of a chip design PM. It's very engineeringâheavy, but he's kind of like a PM. He's helping as a junior manager of a process for developing a chip. He's working on a then blazing fast one megahertz CPU chip.
Ben: Yeah, he talks about this. He's talking about how slow one megahertz is. He refers to it and says, you can even see it coming. It's about how fast it was.
David: You could see it coming from a long way, and still coming, and still coming. Amazing. Of course, now, he makes literally the fastest chips in the entire world. He starts at AMD. He starts at night working on a master's degree in electrical engineering at Stanford. It ultimately takes him eight years to finish this master's.
He works all the time that he's at AMD and then at LSI Logic where he goes to. We can talk about it in a sec. He ultimately does graduate right before they start NVIDIA. This is a super cool bit of trivia. Did you go back and watch the Don Valentine view from the top?
Ben: No, I didn't.
David: Lecture at GSP? I watch that once a year, every year. Every time thereâs an excuse.
Ben: Is that the one where he holds up Alfred's resume?
David: Yup, when he holds up Alfred Lin's resume. Also Easter egg in that talk, that was the day that the Jensen and Lori Huang Engineering Center at Stanford was dedicated. Don says Jensen did a building. Pretty awesome.
Ben: I did watch, he walks in and gives a talk at Stanford. I think it's the first time that Jensen has given a talk since the building opened. And he says, I've donated, we have this nice building now, so I have no more money.
David: I'm penniless. Right, Jensen. It's so great.
Ben: Just to set context for people, if you look at his NVIDIA shares, he's worth about $20 billion right now.
David: I think he owns 3 ½ percent of NVIDIA or something like that. Yeah, he's not penniless. Okay, he works at AMD for a couple years. While he's working there, probably from working on this chip that is so fast, you can really see it coming, he realizes that designing chips is really freaking hard. Intel can do it, AMD can do it. But there are not many companies. It's all full stack at this time. TSMC didn't start till 1987.
Ben: Not only are you manufacturing in-house, but for the most part, the process of designing a chip is a manual one. These companies each have their own institutionalized internal way of working that you design and layout the elements of a chip.
David: Jensen talks about, when he was in school, the reason he wanted to go to AMD was he thought this was so cool that you could do it all. Once he's actually at AMD, he realizes it's actually not cool. It would be cooler if you could be really good at a certain part of the stack and have tools, platforms, and other companies to allow anybody to make chips.
Ben: Yeah, if there were design tools to help you make chips.
David: After a couple of years, his officemate at AMD leaves and goes to join a startup called LSI Logic, which had just gotten public. We've talked about it on the show. Made Don Valentine and Sequoia the then largest venture return in an IPO in history, maybe the largest venture return ever in history when they went public of $153 million on day one.
Ben: Boy, has venture changed as an asset class.
David: I'm trying to think that fund probably would have been Sequoia Fund II or III, maybe. I bet the fund was $10â$15 million. It is probably roughly 10X the fund in one day. Pretty awesome.
What was LSI? It was one of the first and was the premier ASICs company. ASIC, Application-Specific Integrated Circuit companies. What they did and what that meant was they basically made custom design chips for other companies. That's what Jensen's thinking about.
The custom design chips that they would make these ASICs would be for a very, very specific function that would be integrated into other systems, like defense companies, Lockheed Martin and the like. But lots of other companies now too are coming to LSI Logic and they got their ASICs companies in saying, hey, we want to create these systems of chips. You help us design the chips to go into the systems and we'll use processors from Intel, too. It really helps democratize making end-product systems.
Ben: Right. The idea with ASICs is really, if you're not saying, hey, there's going to be a general-purpose computer that needs to power that can be super flexible and people might have all kinds of applications that run on it, but more inefficient in order to get that flexibility chip. Hey, I know the exact thing that this chip will do and it will only ever do this. We can actually literally hardcode that right on the chip. The actual design of the physical chip can be for this one specific thing, so it's super efficient at this one low level thing.
David: Yup. The legacy of ASICs today, still around, still use both ASICs, but the legacy is FPGAs, Field Programmable Gate Array chips that some might say are sort of a bear case for NVIDIA these days. We will get to that far, far, far down the road.
Sun Microsystems was one of their biggest customers. Thatâs how Sun got started and made the chips for their workstations. In fact, Jensen when he shows up at LSI, Sun is just starting and coming to LSI. He gets put on the project and he basically embeds with Sun in the early days of Sun Microsystems to help them build up the chips for what would ultimately become the SPARCstation 1, Sun's first big workstation product.
Over the next few years, he pretty much exclusively works with Sun while he's at LSI logic. He works directly with Andy Becktolsheim who's the founder of Sun and with Vinod Khosla. He became super well-known, and developed quite a reputation as somebody who can really take these visions for chips and these customer requirements from Sun, and turn it into reality and production.
One day, right around Thanksgiving in 1992, Jensen has finally, after eight years, finished his master's degree at Stanford. Stanford is quite, quite glad that he finished before this happened. Two of Jensen's buddies who he's become close with at Sun, Chris Malachowsky and Curtis Priem, who in Jensen's own words describes them as really, really fantastic engineersâwhen Jensen says that, he means itâthey come to Jensen and they're like, we're not super happy at Sun, the two of us. We have an idea that we want to talk to you about. Jensen's like, well, sure. Let's go meet at my favorite spot, Denny's.
Ben: Really?
David: The man loves Denny's. He worked at Denny's in high school. He's always going to Denny's. He orders The Super Bird, I think, is his go-to dish. He's so folksy. I love him.
As they go all have dinner at Denny's, Chris and Curtis pitch him on their idea, which their idea is pretty good. It's pretty good. Tell me as a venture capitalist if you would fund this idea back then in late 1992. They see 3D graphics are really becoming a thing.
Remember, this is the era of Sun, LSI Logic, all this stuff. It's also the era of Silicon Graphics right down the street. Right there in Silicon Valley, SGI. So many great things that come out of there, Jim Clark, Netscape, all this great stuff.
Ben: Jurassic Park.
David: Jurassic Park is about to come out. It came out in 1993. There's this huge demand for 3D graphics. The way 3D graphics are done, you need SGI workstations. You need super custom, very high-end, very expensive stuff, only something with the budget of either the military or a Jurassic Park can afford to do this, but people love it. The consumers love 3D graphics.
Ben: Not to mention, where are we in the evolution of video game consoles at this point?
David: We're still in the Super Nintendo days. We're not at 3D console graphics yet. That's coming very shortly. What is happening is the PC wave is really cresting right now.
Ben: We're a year-and-a-half from Windows 95 coming out.
David: I remember doing this, I bet you do too, or kids in 1992â1993 doing on their PCs. They're playing Wolfenstein 3D and Doom. Doom came out in 1993. These are taking the world by storm and they're made by id Software in Texas, John Carmack, and John Romero. But Carmack is doing incredible feats of engineering to get 3D graphics to run on consumer PCs. It took somebody of Carmack's caliber to make this happen and the market loved it.
The idea that Chris and Curtis has, they're like, we're really great chip engineers. Jensen, you're a really great chip PM, essentially. Let's make a graphics card. Let's make a chip that can accelerate the graphics of a normal PC to enable 3D graphics like SGI is doing with professional workstations. to enable them for consumer hardware PCs. We know that people love games. This will help the entire industry take off. It sounds pretty good, right?
Ben: And you're not even saying that they're going to try and make it so you can develop games on a PC. You're saying just so you can play games on a PC, right?
David: Both. Mostly, you can play games on the PC, but then you're also going to have to create all the APIs, SDKs, and developer ecosystem for developers to access this new hardware on PCs, but they'll just develop on PCs. It's really about getting the hardware into consumers' hands so that they can actually play this stuff. What do you think? Sounds like a good pitch?
Ben: What you're basically asking me to believe, 1990 to me, is that video games on PCs are going to be a thing that there's going to be a big economic wave around that lots of consumers are going to want to do this. They're going to want to do it on PCs instead of on Super Nintendo and dedicated systems. Maybe.
David: I have this proof point of id Software, Wolfenstein, and Doom, right there. Millions of people are doing this.
Ben: But still maybe, because it's not clear that video games are going to be a giant market. It could be a kid market and it could be the case that, do you really need to totally change the development environment or can there be five or six different Dooms out there, there are five or six Carmacks who are all independently geniuses and can figure out how to do all the graphics on their own? Maybe, but there's a leap of faith.
David: Yeah, definitely a leap of faith. Not totally obvious, but still, I think this was pretty fundable at this moment in time. The other thing that was going on was in Silicon Valley of these peripheral companies, people building chips and cards that plug into consumers' PCs, this was in full swing. There are companies making sound cards. There are companies making networking cards. There are companies making serial port cards. God knows what.
Ben: There's already an accelerated computing wave here, where people are saying, there's some reason to do something specialized off the CPU that needs its own integrated circuit, that vendors are making custom and there's a market to make custom stuff as a vendor for PCs that takes a workload off the CPU.
David: Yup. The pitch is we're going to make a custom graphics card. Take a graphics workload off the CPU, specifically for gaming.
Ben: Great.
David: Okay. Yeah, it was pretty much a brain dead yes. But as you alluded to at the top of the show, the problem when something is a brain dead yes for a venture capitalist is that it's a brain dead yes for lots of venture capitalists. Lots, and lots, and lots of companies get funded to do this.
Back to Denny's that night. NVIDIA is the first. They are the first dedicated graphics card company. They all decided, the three of them, that they're going to go in on this. Jensen goes to the CEO of LSI Logic, walks into his office, and tells him that he's going to resign. He's going to go start this company with two engineers from Sun and this is what the business plan is going to be. Do you know who the CEO of LSI Logic was?
Ben: No.
David: It was a man named Wilf Corrigan, who was previously the CEO of Fairchild Semiconductor.
Ben: No way.
David: Damn right.
Ben: Don Valentine, obviously, was the biggest investor in Sequoia and was in LSI Logic. Did he know him from Fairchild?
David: Yeah, they were colleagues back in the day.
Ben: Okay.
David: And then the biggest exit in Sequoia's history to that point in time. Wilf says, let me get this straight. He says to Jensen, you're going to go build these graphics cards, and just like you were saying there, Ben, who's going to use these and what for? He's like, well, they're going to be on PCs, they're for gaming, they're for a bunch of kids.
Wilf hones in on the critical question. He's like, well, who makes PC games? Is there a developer ecosystem for this? That's kind of like, we think if we build it, they'll come. Remember, he was at Fairchild. He's felt like he knows when to make silicon for specific applications.
Wilf says, all right, you'll be back, I'm going to hold your desk. But in the meantime, before you go, I'm going to call up Don. You've done good work for me, I'm going to call up Don. He calls up Don and he's like, Don, I got a kid who's going to come see you, stand by.
Ben: This is a lesson for all founders and aspiring founders out there. Getting a reference from the CEO of a portfolio company is a really good way to come in with a venture capitalist already leaning toward investing, especially if you're referred to by the top performing company of all time in their portfolio. It's kind of hard for Jensen to mess up this pitch with the recommendation that he's coming in with.
David: It's literally impossible because he goes to see Don. You know Don. Don sits down and he's like, so? And Jensen completely botches the pitch. He gets really nervous.
Ben: At this point, I think he had a partially written business plan. He had bought a book on how to start a business and was three chapters into the book, but decided not to finish. He started writing the plan, but he didn't finish the plan. He comes into this meeting and just barfs all over Don.
David: Yes, exactly. Jensen's walking out the door. He's totally dejected. Don stops him and says, well, that wasn't very good, but Wilf says to give you money. Against my best judgment, based on what you just told me, I'm going to give you money. But if you lose my money, I'll kill you. Classic Don line. It's so good.
The deal happens. Sutter Hill comes in because again, at least it's all dramatized. At the end of the day, this is a hot deal.
Ben: This is two episodes in a row for us with Sutter Hill.
David: I know. Oh, geez, they're so good. It was a hot deal. They wanted in. This fits central casting at this point in time.
Ben: They invested a million each, is that right? For a total of two?
David: So $2 million total round. I don't know who invested what. I assume a million each, but $2 million total round at a $6 million post-money valuation. Remember everybody, this is the eighth most valuable company in the world right now. It started at a $6 million post money valuation.
They're getting things ironed out. There's just one problem. They don't have a name for the company yet. Jensen, Chris, and Curtis, they've just been working on the business plan, but they don't have a name. They need to incorporate the company.
They were saving the files that they were working on for the chip design for the first graphics chip as dot-NV, NV being short for next version. They're like, we like that. We're always working on the next version here.
They start looking around in the dictionary for words that have NV in them. It's probably a very short list and they find the Latin word, invidia, which means envy. They're like, great, we'll be the envy of the industry. Invidia will drop the I at the beginning, so we start with NV. This is awesome.
Ben: Of course, they picked green. Later on, they can have that marketing campaign of green with envy.
David: Be careful what you wish for here, though, because, again, as we've been saying, literally, 89 other companies get funded within a couple months to go do the same thing.
Ben: It's a very clever name, also the notion of vid being in there, that it's video. That's another thing that they want to do. It's the classic Rich Barton empty vessel name. There are enough things that it could mean and we're going to fill it with meaning. Because they're doing a thing here that 89 other people are also simultaneously doing.
It is kind of a new frontier that they need to invent and then own thought leadership in that area. They do need to quickly build a brand, not only with consumers, but with PC manufacturers. Jensen, the way he describes it is their vision, although he doesn't like the word vision because he thinks it's exclusionary to people, so he said, our perspective is that they want to enable graphics to be a new medium to tell stories.
The way that he articulates at the time why video games today are a $180-billion-a-year industry, bigger than Hollywood, bigger than music. It's the biggest entertainment medium, but at the time, he had this thesis that you really can't, through computer graphics, tell stories today. But if you could, it's really interesting because it's not pre-recorded. It can be new and different every single time you enjoy it. It's also the only medium of entertainment that can be networked. Therefore, it's the only one that can really be social and interactive.
Our reason for being is to create 3D graphics as a form of artistic storytelling for the future. Everything will be in service of that. I think that's not really what they are today, necessarily. It's a piece of what they are today, but that kept them going for the first 20 years of their existence.
David: And baked into that is, again, Wilf hit onâand you did too to your credit, you're a very good venture capitalistâyou hit on really the key problem with this first iteration of NVIDIA, which is, they have to go evangelize to developers to like, yeah, there's id and there's Carmack out there, but not a whole lot of other PC game developers out there.
There's not a whole lot of other 3D PC game developers at this time. There are 2D PC game developers, but they got to convince a whole lot of people to go learn how to do 3D game development for PCs. That's like, we're going to enable storytelling on them. To do that, they have to go write their own APIs, SDK, and development framework to develop for this new graphics chip that they come out. They have to make a whole bunch of technical design decisions that they want the industry to standardize on.
Ben: Right. This is a case study of what happens when you get more clever than the rest of the industry.
David: Exactly. At first, things started off really well. Remember, this is super hot. They're the first company. They're funded by Sequoia and Sutter Hill. They land a big deal with Sega to power their arcade consoles and their next-generation home console to be the 3D graphics engine of what would ultimately become the Sega Saturn. As we know from our Sony episode...
Ben: Not quite the Sega Genesis.
David: Not quite the Sega Genesis. The problem is, NVIDIA and Sega, they're working together, they make a bunch of these design decisions. People probably know you create 3D graphics. You use polygons, that's why people are always talking about polygons in this industry. They have to decide on a primitive for the polygon. They're like, oh, well, we'll use quadrilaterals for vertices. Anybody who knows anything about video game development now, it's like, that's not how it's done.
Ben: I'm pretty sure people talk about triangles.
David: Yeah. I'm pretty sure if you look at NVIDIA's amazing headquarters building today, it's made out of triangles in homage to game developers, not quadrilaterals. This becomes a pretty big problem. Things go along for a while. It's been fine for about a year. NVIDIA's leading and they got this big Sega deal.
Ben: There's not a reason to need standards yet. The industry isn't complex enough yet to necessitate a whole bunch of collaboration and a set of tools that everyone standardizes on using. You're like, okay, well, we're just going to put this chip in our game console and ship the game console. We're the only people that make an SDK, we being Sega. Everyone will have to standardize on this thing anyway, so great. But obviously, the ecosystem gets much more complex much more quickly and it sure would be nice to have some kind of compatibility.
David: Here's what happens. Curtis, Chris, and Jensen weren't the only people in Silicon Valley that saw that kids want to play games on PCs. With Doom, Microsoft is like, oh, that's interesting. We like selling PCs. There are all these graphics cards companies out there now that are doing this. What we do as Microsoft, we really want to encourage this in the ecosystem. We create standards.
Ben: We would love it if Windows developers could be able to easily develop for all these new machines shipping with all these advanced graphics capabilities. Let's make that as easy as possible for those developers.
David: Yeah. Developers want to do 3D graphics directly into Windows without any of this crufty middleware from some no-name company like NVIDIA out there. Why don't we just bake these APIs right into Windows directly for 3D graphics? We'll call it Direct3D. Of course, anybody who knows about the history of this, that becomes DirectX.
Ben: DirectX made some pretty different design decisions than NVIDIA had made. Is that right?
David: Yeah, so they use triangles because triangles make sense. Now NVIDIA is really up a creek. All of their Camino, the 89 other competitors out there that started later, most of them are like, sure, I'm going to jump on board to this Microsoft ecosystem. I would be dumb not to.
It standardized on this completely different paradigm than NVIDIA. They've got Sega. They've got this one customer. Then in 1996, Sega was like, yeah, we're not so sure about this quadrilateral thing either.
Ben: And just so that this doesn't feel arbitrary why are we talking about this, we're going to say at a super high level on 3D graphics here, rather than really going into the weeds. A triangle is the fewest vertices in a shape that you can have while still creating a two-dimensional shape. It serves as a basic building block, where, assuming you can draw enough triangles and make the triangle small enough, you can form any other shape, any other curved surface. It's the most fundamental building block that you could use to create something that is perceived as 3D.
David: Yup. NVIDIA at this point, they're halfway down the road of developing the next chip that they think Sega is going to adopt for what ultimately would become the Dreamcast. NVIDIA was calling the NV2. When Sega comes back and says, we're switching horses, we're not going to do this, they're screwed.
For so many reasons, everything we've discussed, there's also in the interim year-and-a-half since NVIDIA started, the price of memory dropped because, thank you, Moore's Law. NVIDIA's chips were designed to be super, super tight on memory. The memory cost about $200 in component parts to go into their chips. Their competitors have more memory that's costing them $50.
Ben: That was just in that one iteration. It's interesting to note that NVIDIA, by being first and not projecting out the exponential change that would come from Moore's Law, was actually at a disadvantage. Because they didn't get a chance to watch and see where the standards were adopted, so they picked their own lane and went off in their own direction, which ended up not being what everyone else picked, which put them at a disadvantage. But second of all, everyone else's cost structure was way lower or at least everyone else could see that the cost structure was getting way lower. NVIDIA designed for a constraint that was no longer true by the time everyone else came out with their stuff.
At this point, Jensen and his co-founders had to look at each other and say, okay, do we scrap everything we did? And if so, how do we not make this mistake again? How do we make sure that in future generations, we premeditate the exponential curve of Moore's Law and prices coming down and design for things that are two, three, four generations beyond what we actually have available to hardware right now?
David: When all this goes down, the company has about nine months of runway left. Literally anybody else, you pull the plug. It's over. Everything in the deck is stacked against you, like your F'd. I can't imagine sitting there dreaming up a way out of this. But Jensen, God, he's such a G. He's like, no, we're not going out like this.
When you hear Jensen talk today about NVIDIA's culture, he says that intellectual honesty is the cornerstone of NVIDIA's culture. This is what he's freaking talking about. He sits down with Curtis and Chris. Remember, they're engineers.
They've recruited NVIDIA a hundred-plus engineers into the company at this point and sold them on this technological vision of how we're going to define the industry, we set the standards. We're not going to use some off-the-shelf stuff. It's all toast. Jensen's like, guys, this is a pipe dream. We need to throw it all out if we're going to survive.
The only thing we can do is standardize on the same Microsoft Direct3D as everyone else, same architecture, and our only shot is just to compete on performance and try to become the best chip out there in this now sea of commodity chips. His co-founders don't want to do this. This is not an exciting vision for a Silicon Valley engineer.
Ben: When your CEO comes to you and says that, what they're basically saying is, look, if my job was strategy and your job is execution, the strategy failed, so we just now need to literally out-engineer all of our competitors. We need to be smarter at engineering decisions, so we can be more performant at a lower price point using less energy than our competitors.
Microsoft being Microsoft had all the developer attention. And because Microsoft set a standard, NVIDIA realized, look, we have no ability to uniquely get our own developers, at least at that point in the company's history. So we must just on our left, look and see all the developers are coming from Microsoft using this API, on our right is all the same consumers. We have to compete just head to head on raw engineering ability with everyone else.
David: You're saying engineering ability. But remember, this is essentially a commodity at this point. Really, it's not just engineering ability. It's how fast you can ship. How fast can you design the next generation of chips? And can you ship it before everybody else? Because everybody knows what's going to be on that ship.
Ben: And why is it? What fundamentally was it about graphics cards that made it a commodity?
David: At this point, all the other peripheralsâand we're going to get into this in a secâthere was nothing that special about it. They all did the same thing, which was take polygon-level, 3D graphics processing out of the CPU and onto this other chip on the motherboard. Just like sound cards were doing the same thing for sound, just like networking cards were doing the same thing for networking.
It was just like, what's the price performance ratio of doing that? The interfaces and the programming language, that's all standardized by Microsoft. You're just a commodity hardware.
Ben: What GPUs actually do or did, at least in this point in time, say, okay, the system is going to feed me in basically point clouds, like vertices that make polygons that represent like a 3D world and my job as the GPU is to, as fast as I can, in the highest resolution that I can or I suppose a standard predetermined resolution, output a 2D thing that goes on the screen?
I turned 3D stuff into 2D stuff. I have to do that better than other things that I'm competing against, where basically all of us are. When you say commodity, you mean limited by Moore's Law and doing right up to the edge of what integrated circuit manufacturing techniques enable us to do.
David: Yup. Everybody knows what this means. They got to ship faster than their competitors. They also got to ship faster than their competitors because they're about to go bankrupt. They draw up this plan. They're trying to thread the tightest needle possible here.
They have to lay off 70% of the company, which they do. They go down to about 35 people. Everybody who's staying knows we now have to design from scratch and ship a new chip before our runway runs out, which is nine months. You can't do that on a normal chip design cycle.
Ben: It takes two years, right?
David: Yeah. With these fabless chip companies, the way they would design chips is they would work on the design, they would send them over to the fabless company, the fabless company would produce some prototypes, they'd send them back, they test them, they go back and forth a few times.
Ben: You mean the foundry would produce some, like the TSMC, or the Samsung, or the GlobalFoundries.
David: Now importantly, NVIDIA is not using TSMC at this point because they can't. TSMC only works with the best and NVIDIA is not the best. They're using secondary foundries. That process takes a long time. Then at the end of it, when you're sure you got the design right, then you do what's called a tape-out of the chip.
Ben: I love this term, by the way.
David: It harkens back to literally when you used to tape masks to do the photolithography on the chip back in the day, but it just means finalizing the design.
Ben: But you actually do run it on some prototypes first. The foundry sends back some, hey, thanks for the designs, here's the chip, run your tests on it, and make sure everything does what you think it does. That process takes two years to get a full iteration on.
David: Yup. They're like, we can't do this. Jensen's like, here's what we're going to do. I've heard about these new technologies, some new machines out there that enable emulation of chips. In our case, we're going to use it to emulate the graphics chip that we're designing. It's all in software and it works.
Ben: They're startups, but they exist.
David: The problem is, when you emulate it in software, it's really slow. When you play a game, when you're looking at your computer monitor or whatever, it's refreshing 30 to 60 times a second. If you're a professional gamer, you probably have a go on it, like 120 times frames per second. This emulator runs at one frame every 30 seconds. They're going to have to debug this thing in software to save this time going at one frame every 30 seconds.
Ben: It's just insane.
David: That's brutal.
Ben: They're basically making this trade-off of, okay, if we want to ship something in nine months, we don't have time to actually have it execute on the hardware. We are going to make the trade off of our testing being mind-numbing, like running whatever our graphics tests are, where we're looking for this certain specified output. We need to plant someone in front of a screen to watch the new frame render once every 30 seconds and look again some tests to verify that the output is correct. If it is and this person does that mind numbing work, and sits there just observing, and observing, and observing, then we will go right to manufacturing without ever producing a physical prototype and ship that.
David: That is exactly what they did. They had spent a million dollars just to get the emulator hardware and software to do this.
Ben: I think they had generated some revenue, but it was still a third of the cash that they had in the entire bank account.
David: They go down to six months until they cash out in the company. They get it done in a few months and then they call up their foundry. I don't know if they're using United or one of the other foundries in Taiwan, not TSMC. They're like, all right, we tape this thing out and send it to production. The foundries were like, you guys sure about that? They're like, yup, we're sure. Make 100,000 units.
Ben: If I'm remembering right, I think NVIDIA basically was the only customer of that emulation software. That was a startup that really wasn't fully proven yet. NVIDIA was like, look, we literally have no options.
David: Yeah, they were the only customer and then that company went out of business after. The chip they designed is now the advantage. This is lunacy, what they're doing. Obviously, they have to do it because their back is against the wall.
The advantage of this, though, is they are now designing this chip with the same set of assumptions about what technology is available as all their competitors, but their competitors are working on those designs. They're not going to be able to get them out for 18 to 24 months. NVIDIA is going to get the same generation of design out in six months. This chip is called the RIVA 128. It's what they call it. It is a freaking beast in every sense of the word.
Ben: It's big.
David: It's big. It's extremely powerful relative to anything else on the market.
Ben: More powerful than any customers are telling them they want.
David: Yeah, way, way more powerful. But it comes with some downsides. With great power comes great responsibility. Because they built this thing in such a manner, it barely works. There are a lot of stuff wrong with it. I forget the exact number of this, but essentially, Direct3D at the time had something like 24 or 25 different ways and techniques.
Ben: These are the blend modes?
David: Yeah. I think that's what it was, blend modes. The RIVA only works about two-thirds. One-third of it just freaking crashes. It doesn't work.
Ben: I thought even worse than that. Basically, I think NVIDIA had to launch a campaign, going around to all the different developers and being like, come on, what do you really need more than these eight for? What are you really going to do where you need to use that fancy stuff? Do us a favor. For this generation of the chip, these eight work great. You're going to love them. They're so good. Just use those.
David: This is so, so great because people do it. They learn about the market. In the first iteration of NVIDIA, we're going to build all this technology. We're going to drive the market. They didn't know anything about the market. They were just making all these assumptions about what people wanted.
But now, Jensen's actually going into these developers trying to convince them to do this. They all do it. Why did they do it? Because the only thing that matters is performance. Consumers are going to buy hardware and games based on the quality of the graphics. This is being discovered for the first time. People are willing to make a lot of compromises in service of performance. NVIDIA's the first one that figured this out because they have to go around and do this, and developers all get on board.
Ben: To be clear, it's because the consumers are making the buying decision on what graphics card they buy.
David: It's a completely interrelated system where the consumer is making all of the decisions. That's where the demand is, the consumer is deciding what hardware to buy. That's what NVIDIA's business is.
Ben: Whether they're buying it as a fully built computer from the OEM or whether they're buying the card put in later themselves, they're making a decision on what graphics card goes in the computer.
David: Exactly. The game developers are making decisions on what graphics cards to support and how to build their games with the assumption of what's my target market of consumers? Who do I think will this game run on? You need to have at least an X-level performance rig in order to run my game in its fullest form.
Ben: The developers are premeditating what graphics cards are going to be out in the market when their games launch. They're saying it's going to be the most performant one at the right price point, so whatever the mass market is, we have to target that. If youâre telling us that we're going to test it and it turns out that yours is the best performance per price, performance per watt, or whatever, if it's the most efficient card, then people are going to buy that one, so we must target that card.
David: And they're going to buy my game. I remember that this is a few years later. This is a trope that happened. There was a game called Crysis. Do you remember this?
Ben: Oh, yeah. What's the relationship between Crysis and Far Cry?
David: Far Cry was the first game, the Crysis Engine, and then Crysis also. It was super convoluted. Basically, my perception of this thing was when Far Cry came outâthis was mid-2000sâthe graphics were unbelievable. If you had a rig powerful enough to run it, just unbelievable. The game itself was total crap. I don't think I ever played more than 10 minutes of it.
Ben: I'm pretty sure if your computer didn't support it, there were all these videos that people would record of building a tower of a thousand gasoline barrels and then shooting it. Because it was too complex for their graphics card to handle, their computer would just freeze. That was the failure mode of Far Cry with non-performant chips.
David: This is how the hardcore gaming industry evolves. Far Cry sold so much software and so much hardware just because people wanted to attempt to experience that level of graphics. That's what the developers are starting to figure out. They're like, all right, well, you can ship this thing. We'll use only those eight blend modes whatever it takes because graphical performance is the most important thing.
It works. They sell one million units of the RIVA 128 within four months. I should have looked at what the MSRP was, but that is a lot of revenue.
Ben: Yeah, no kidding. What year was this?
David: This was 1997.
Ben: It's an interesting era. The Internet is a thing. We still have a few more years until the dot-com bubble crashes. PlayStation 1 is out, but PS2 is not out yet, I think.
David: With that, the gaming market bifurcated into the console market, which was standardized, and you knew it was all going to work. Then, the hardcore PC gaming market, which just had so much revenue potential even though it was smaller in terms of numbers because people are willing to spend so much money on this stuff.
At the end of this, NVIDIA has now figured out these dynamics of the PC gaming market, and they now have a process within the company to design and ship each next generation of their hardware in a six-month timeline while the rest of the industry is on an 18â24-month timeline.
Ben: Necessity is the mother of invention.
David: To say this is huge is the understatement of the century. It's huge for this market, but nobody even saw this at the time. Jensen didn't see this and nobody saw this.
They're now shipping relatively doubling essentially the performance in each generation with their hardware and they're shipping it every six months. You think about Moore's Law. Moore's Law was that the number of transistors on the chip equating to the compute power available at a given price point to the market would double every 18â24 months. NVIDIA is now on a cycle starting in 1997â1998 where they are doubling the performance that they are delivering at a given price point to the market every six months.
Ben: It's fascinating. They're also competing on a different vector than the CPU manufacturers. It's amazing. We've made it an hour into the episode and haven't talked about this yet, but the magic of GPUs is that they're very, very parallel. CPUs, for anyone who's taken a low-level computing class, you know that every time the clock ticks, an instruction can run and things move through the long chain of operations that can happen within the CPU. It's advancing things serially through the processor.
David: It's serial processing.
Ben: It can read from a register or can add two things together, but it's all happening serially.
David: It's like the I Love Lucy famous one where the chocolates are coming down the factory pipeline and you had the CPUs to wrap each individual chocolate one and then the next one.
Ben: Yes, exactly. With graphics processing, the magic of it is that it's super parallelizable. There are all these things that need to be outputted to the screen that do not depend on each other. You can do them independently so the vector that they're competing on is really like, oh, we canâand that would be years before they would really get to thisâadd more and more cores or find more ways to execute more instructions simultaneously to parallelize these tasks.
I think at the time, people thought really the only big use case for parallelization is graphics. Let's put a pin in that for now, but it's worth knowing that the thing that they're doing is figuring out how to process more things in parallel faster.
David: Yes. Graphics cards, like NVIDIA is making at this point in time, are really good at in-parallel lighting the pixels on a screen 30, 60, or 120 times a second with the images that are being fed to them from the game or the graphics program which is living all in the CPU land. You're a game developer and you develop in Microsoft Direct3D becomes DirectX or OpenGL, the open-source competitor to this. All that logic is really happening in the CPU realm.
What that means is if you think back to games from this time, think of console gamesâPlayStation 1, even PlayStation 2, N64. You look at the graphics in those games or PC games from the time too, they're all the same. All the lighting is all pre-done. When you're a game developer, you set the scene. You'd never see a character running around carrying a torch and that torch impacting the rest of the environment. It's all set in advance. No intelligence is happening at the GPU level with the screen. It's just lighting up the pixels.
Ben: Basically, in order to make it easy for developers, the software development kit is written at such a high level that you don't really get enough control to make your game stylistically different. You just get to lay out the items on the screen.
David: It's all the same and flat. Maybe you can program that hard code to be like, oh, time of day might change and that might change the way things look. But you're hard coding what they look like. No computation is happening. If you're playing a game today, even in the most basic mobile game or whatever, you're seeing dynamic lighting and shadingâwhich we'll get into in a secâall over the place.
GPUs are a really important commodity, but they're a commodity. There are not a lot of smarts happening here, no programming. But NVIDIA has figured this out. They can now ship on a six-month time cycle. They're starting to really take huge market share. Now, a lot of people start paying attention to them in a good way. TSMC who wouldn't even return Jensen's calls back in the dayâthere's this amazing story. Did you watch the TSMC 30th Anniversary celebration?
Ben: I did.
David: This is so good. It's three hours on YouTube.
Ben: This is worth a brief aside. This is how much Morris Chang from TSMC has. He gets the CEOs on the stage of NVIDIA, ARM, ASML, Qualcomm, and Broadcom?
David: Yup. I don't think Lisa from AMD was there.
Ben: No. It's basically everyone but AMD, the pillars of the TSMC ecosystem. Morris is playing interviewer. It's very entertaining to watch.
David: It's like a celebration of Morris and TSMC. It's amazing. In the section with Jensen, they tell the story of how NVIDIAâat this point, it's got to be TSMC's biggest customer, they've been tied at the hip foreverâall came to be. After the RIVA 128 hits and has become a big success, Jensen writes a physical letter and addresses it to Morris Chang in Taiwan.
Ben: Because he can't get in touch through any of the salespeople.
David: Exactly. They've all just been ignoring him, as well they should because they were a left-for-dead startup in a sea of startups. The letter gets to Morris, he opens it, and he reads it in Taiwan. He does the most Morris Chang thing possible. He calls up Jensen on the phone right there. The phone rings as they tell the story in the NVIDIA office. This is in the middle of their trying to mad scramble as a startup to ship these RIVA 128s that are coming in. They're testing them all by hand in the office because none of this stuff was fresh off the line. It's not been tested. It's chaos.
Jensen picks up the phone. He's like, yeah, who's this? Morris is like, hello, this is Morris Chang at TSMC. I got your letter. Morris says that there's silence on the other end for a couple of seconds, and then he hears Jensen yelling, everybody shut up. Morris Chang is on the phone. Amazing.
Ben: That's how TSMC became the manufacturer of NVIDIA chips.
David: Yup. The next year, the two companies signed a huge multi-year deal for TSMC to become the primary foundry for NVIDIA and still are today. Jensen and Morris are super close. It's a landmark deal for both companies.
With now an actually really good foundry as their partner and this super unique chip development process, NVIDIA just keeps accelerating. In 1999, they rebrand their products. They use the NV1 first and then the RIVA 128.
They actually ran a little contest of what they should name the products and the winning name is Geometry Force which they shorten to GeForce which anybody who buys a graphics card knows. The NVIDIA GeForce is still the brand name they use for their gaming cards today and is probably one of the most respected brands in the gaming ecosystem. It's because this card that they ship, the first GeForce in 1999âit's the GeForce 256âis so powerful. It has 5X better graphics performance than anything else on the market.
Ben: They call this the first GPU. Don't they say we're inventing the GPU?
David: They call it a GPU. Before this, the term GPU didn't exist. It was these were graphics cards or graphics chips.
Ben: I think Sony had used it for the PlayStation, but no one's marketing this idea.
David: They market this as the graphical processing unit. On the one hand, that's marketing bravado. On the other hand, that is a very loaded statement to make. Why so? What do Jensen and NVIDIA mean by this?
With Intel, you think chips. They're almost like a biotech company today, one of the big pharma companies. Or put another way, was another version of the Microsoft embrace, extend, extinguish thing. They would see there are all these peripherals, sound cards, networking cards, graphics cards, and all the stuff we've talked about. They would let all these flowers bloom and be like, oh, yeah, just plug into the PCI slots on our motherboards. No big deal. We're an open ecosystem. We want everybody to flourish. Then, they would see which of these peripherals got consumer traction, and then they would just turn them into a component in the motherboard.
Ben: And thus began the wave of being able to buy a PC with an Intel motherboard and integrated graphics.
David: Before that, integrated sound and integrated networking. It was so fun doing this research. Remember the company Creative and the Sound Blaster cards?
Ben: Oh, yeah.
David: I remember buying tons of that stuff. Then at a certain point, you stopped buying Sound Blaster cards.
Ben: You're like, oh, the motherboard does 90% of what I needed to do. Why would I spend extra money on a separate thing?
David: Exactly. Intel just sits back and watches all this happening. They integrate a game over for the startups.
Ben: There were reasons for specialized stuff. I remember buying a special network card because the integrated networking capability of the motherboard on my Mac 8500 or something wasn't as fast as if you bought a dedicated PCI card that could be a faster networking card. Graphics cards would become that same thing where the integrated graphics for most people was good enough unless you were a gamer, in which case, you'd go buy your own graphics card or you'd buy it directly from the OEM when they were making the computer and shipping it to you.
David: But wait a generation or two, even if you have the most demanding performance for home networking, you're not buying that separate networking card.
Ben: These things are dead-end businesses.
David: And there's no reason why graphics cards wouldn't be the same. Jensen and Intel coming out and being like, we're a graphical processing unit (GPU) is a big middle finger to Intel and this whole CPU-dominant world.
Ben: It really wasn't true yet. It wasn't a processing unit in the same way that a CPU is a processing unit where people could write software for it in a way that created a meaningfully different experience for people using the software.
David: Yup. This is where Jensen is just such a master strategist and NVIDIA is so great. This whole orchestration of a bunch of things all hit over the next couple of years. First, NVIDIA goes public. They've now shipped, the RIVA 128 was a huge hit, and this new GeForce 256 is flying off the shelves. They go public at the beginning of 1999 at a $600 million market cap, a 100X return from the $6 million post-money valuation on the Sequoia and Sutter Hill round. That gets them some more capital.
Behind the scenes, they're working and are in talks with Microsoft. Microsoft's got a secret project that they're working on at this time, the Xbox, which we talked about a lot on the Sony episode and so many times on the show. Microsoft comes to NVIDIA. They're like, we want you to be a key supplier of the GPU for the Xbox.
They do a huge $500 million a year deal for NVIDIA to supply the graphics for the Xbox with a $200 million advance. The chip that they use is a modified version of this incredible new chip that NVIDIA is working on.
Jensen sounds like Steve Jobs talking about this. The GeForce 3, which introduces, for the first time, programmable shaders and lighting on the GPU. Everything we just talked about. The GPU massively parallel can light all these pixels, but it's essentially just taking instructions that are pre-hardcoded and baked in on what the lighting is going to look like. Now, you can program for these GPUs and you can make dynamic lighting in games and 3D graphics that are calculated.
Ben: This is game-changing. The way to think about it is those "GPUs" were fixed-function graphics accelerators. They would be able to map textures onto a set of polygons, but you couldn't do the thing that you're talking about, David, custom lighting, a lot of that sort of stuff to actually program at the GPU level, what is happening.
This is like, of course, it's cool because it's a wave of new consumer experiences that can happen, because every game developer can stylistically put their own stamp on games. But it's a totally different metaphor for the computer architecture, where suddenly, you can program a GPU. I guess that's why they're calling it a GPU. This is different than a graphics card.
David: And NVIDIA develops in conjunction with this. They call it CG. Literally, they extend the C programming language with graphics, libraries, and capabilities to directly program graphics, lighting, and shaders for the GPU. This makes that marketing, oh, this GeForce 256, it's a GPU.
Now it's real. This is a graphical processing unit that is intelligent, that is maybe not every bit as important as the CPU yet, but this is the stake in the ground of, this is no sound card. This is not going to get commoditized.
Ben: Do you know if this was the GeForce FX or if the GeForce FX was a similar version of this that was available to PC?
David: That's a good question. The GeForce 3 was the PC version of this.
Ben: Okay. This move to programmable shaders was a bet to the company move. It was Jensen's answer to, how do we get out of this commodity business and do something unique and different. I'm pretty sure they were months away from cashing out again by pulling this move because of how aggressively they had to staff this very new type of product that we're inventing.
David: Yeah. Back to that original quixotic vision for the company of we're going to create an industry, we're going to create the APIs, the SDK, the interface with it, we're going to do all this, now they're doing it. They're doing it with Microsoft this time, instead of against Microsoft, so an A+ move there. The amount of capital investment that went into this was enormous. At this point, Intel is like, we might have a problem here.
Ben: Right. It's going to be more difficult than we thought to just take whatever these people are doing and integrate it directly into our motherboards.
David: Yup. Irony of ironies, Jensen presses this even further. He does a big partnership with AMD.
Ben: It's worth knowing here when you're saying AMD because people probably know AMD and NVIDIA are big competitors today in the GPU world.
David: Not yet.
Ben: Right. AMD primarily made CPUs at this point. They made processors and competed with Intel. They hadn't yet bought ATI, which is where the Radeon business comes from. That's all the graphics stuff that they do today.
David: Yeah, ATI at this point was the number two competitor to NVIDIA. Actually an amazing story, too, was a Canadian company started in the 80s and pivoted into graphics cards. I feel like there's a lesson in here. We can talk about this in the playbook.
When all the VCs funded these 90 Silicon Valley startups to go make 3D graphics cards, the only two surviving ones were NVIDIA, which went through this hellish journey, and then these Canadian guys that were totally out of the ecosystem and did it in a more bootstrapped way and evolved into this space.
Ben: Jensen has a great quote about this. He's giving this lecture at Stanford years later. He says, "When technology moves this fast, if you're not reinventing yourself, you're just slowly dying." You're slowly dying, unfortunately, at the rate of Moore's law, which is the fastest of any rate that we know.
It's so clarifying of how he thinks about why NVIDIA needed to do these three complete transformations of the companyâbet it all, risk it allâbecause if you're not, you're one of those 89 companies.
David: Exactly. Intel's like, holy crap. We might have a problem here. This is not a problem for Intel.
Ben: It just is a thing they're going to have to deal with, instead of it being part of their extinguish strategy.
David: Intel is used to at this point just like Microsoft at this point. Oh, sure. You want to go make WordPerfect, we'll let you do that. We'll see these great applications and then we'll go make our own. That's what Intel's doing. Now this is the first example of Intel's going to have some trouble doing this on their own.
They actually, at first, come out with their own dedicated Intel GraphicsâGPUs, graphics cardsâcompeting as separate cards. I don't know that Intel has ever done that. I'm maybe speaking out of turn here, but as far as I know, this is not a common strategy for Intel. It's usually integrated into the motherboard and the CPU.
They come out with their own external cards right around this time, 1999, to directly compete and they suck. These are some of the worst reviewed graphics cards in history.
Ben: Talk about not your core competency.
David: Not your core competency.
Ben: And it really illustrates how different NVIDIA's approach was to what graphics cards had been before, and building programmable shaders, and creating CG, which was a little bit of an early strategy and something they would later do with CUDA. But really understanding that like, oh, we can differentiate our hardware not only with interesting hardware features but by building software on top that only works with our hardware, but makes it really great for developers to develop for our thing.
David: Intel does make a big push and this actually ends up becoming a great strategy for them into integrated graphics. They do try and integrate this, but it's never good enough for the high-end. It's only good enough if you don't care about graphical applications for laptops and the like. And that's great.
That's a big market for them for a long time, especially leading into mobile, although Intel and mobile is a story for another day. But for the hard core market, and that's making it sound too small, for the market of anybody who cares about graphical performance and quality, which is not just gaming at this point. It's 3D modeling, it's architecture. It has lots and lots of high-performance graphical computing applications.
It's this dynamic and it sets up just like Moore's law. Whatever the current maximum is, it's not enough. It's never enough. You always want more. As good as graphics are today, it'll never be good enough.
Ten years from now, game graphics will make today's graphics look silly. We'll all be in the metaverse or the omniverse if NVIDIA has their way, but it still won't be good enough. It's Moore's Law. You always want as much performance as possible.
Ben: Yup. All right, David, it's time for you to tell us about one of our favorite companies.
David: Indeed, it is. It is time for the next iteration of our insurance 101, brought to you by our amazing friends at Vouch. Today, we are talking about directors and officers' insurance. Last time we talked about E&O, today we're talking about D&O. This is one that Ben and I can speak to very personally.
Ben: I have been insured under D&O many times.
David: Me too.
Ben: And usually the process sucks.
David: The non-Vouch process does suck. If you've ever been on the board of a company, you know what we're talking about here. If you don't know what we're talking about, literally, I can't stress this enough. You absolutely need to have this in your company.
Ben: In fact, if you get venture funded, most venture firms will tell you, we cannot wire unless you promise to get D&O Insurance within 60 days or something of that term sheet.
David: Yup. A condition of closing the round from any credible venture firm is always going to be, you must have this in place. If you are running a company, you are an officer of a company, a board director of a company, and you do not have this in place, like literally just stop right now, pause this, you'll be here, go to vouch.us/acquired. Click the link in the show notes. Get it, I'm serious, right now. You do not want to not have this.
What is D&O? Why do you need it so badly? This is insurance that protects the directors and officers of the company, personally, from liability arising from any lawsuits against the company. If the company gets sued, in many cases, you see this all the time, the plaintiffs will name the company as the defendant, but also the CEO, the individual members of the board, maybe officers of the company.
This insurance protects you from the personal liability arising from that. It's bad enough if your company gets sued, but the worst case scenario is the company goes bankrupt. If you are named as a defendant, all of your personal assets are on the line, so you absolutely need this.
You may be thinking, isn't this the whole point of a company, or an LLC, or whatever your structure is to limit your liability personally from the company? Yes, but there are plenty of cases where the veil of the corporation can be pierced and you can be personally liable.
Say you're a VC board member of a company. Somehow, you're not even trying to do anything nefarious. You get some information from a pitch deck of a competitor to that company. Accidentally, you're not thinking about it or whatever. You disclose some of that information to the company or on the board of, the competitor finds out, they can sue you personally for that and the company. You are on the hook. So step one, get this insurance in place no matter what to protect yourself.
But part of the reason we love Vouch so much here at Acquired is not only do they make it way, way, way easier than in the past to get this in place, it's specifically designed for startups and tech companies. Vouch is D&O Insurance. It covers a couple other really relevant items that most traditional legacy players do not.
One is cap table disputes. This is super important. Say there's a falling out with co-founders or amongst the company in the venture capitalists, who has what shares, who invested, et cetera. You've got personal lawsuits flying about all over the place, Vouch will protect against that.
The second is intellectual property protection, which is super commonâpatent infringement, trademarks, copyright. If you get named personally as a defendant, Vouch will protect against that whether you're bootstrap, seed stage, growth, or public. If you're public, my God, I hope you already have this in place or you are grossly negligent.
Ben: Do you know what public company that we have covered on Acquired at length does not have D&O Insurance philosophically?
David: I believe that is Berkshire Hathaway.
Ben: Yes. Warren's perspective is we all should have a whole lot of skin in this game. That is not the vast majority of people's perspective.
David: And that is not one that I personally think is worth taking, but I get where he's going with it. Unless you're Warren Buffett, but even if you are, for God's sakes, Warren, protect your family.
Ben: Warren, go to vouch.us/acquired and get yourself some D&O Insurance. My God.
David: It takes 10 minutes. So great. Vouch is the best, vouch.us/acquired. Everybody, if you use that link, you will get 5% off your coverage. They're the best. We love them. Thank you, Vouch.
Ben: Thanks, Vouch.
Okay, David. Xbox comes out, NVIDIA has a card in there that is the GPU of the Xbox that has programmable shaders. Rather than literally just spitting out triangles to put on screen, they actually are running these little programs in shaders. It's super cool. What happens after that?
David: Basically, the company goes supernova in a good way at this point in time. The fiscal year then ends January 31st, 1999. This is right before they go public or right as they go public. They did $158 million in revenue.
The next year, the fiscal year ended January 31st, 2000. The calendar year in 1999, they did $375 million in revenue, more than double that year. The next year, they do $735 million in revenue. The year after that, which is basically the calendar year 2001, the year the Xbox comes out, they do just about $1.4 billion dollars in revenue.
Ben: Which makes them the fastest semiconductor ever to reach a billion in revenue and gets them added to the S&P 500.
David: Indeed. The company's essentially ninth year of existence. They're already doing over a billion dollars a year in revenue.
Ben: Throughout the company's history, they basically have these 6- to 10-year epochs. During those, they have a meteoric rise when they do something contrarian that's off the rest of the industry. Then it starts to taper and they need to figure out how to reinvent themselves again.
We saw it for the first time before the competitors come in. Then the competitors come in and then we see it again with them figuring out we got to do the emulated version of letting our engineers design the chips and lay out the chips so we can be faster than everyone. Then everyone catches up and they have to do it again with programmable shaders, launching those to the industry, and then they have these few amazing years.
After that, there is kind of a plateau again. You can see it in their revenue, they did obviously close to $2 billion as we moved through 2001. They stayed reasonably flat for a few years after that. I think they eventually did $2.8 billion in 2005, but it was barely profitable. They never lost money, but net income for each of those years was only a couple of hundred million or less.
It's not like they're this super free, cash flow positive company. They're not adding to their cash pile in a meaningful way. You can start to see competitors figure out programmable shaders, too.
David: Yup, ATI, of course. Then in 2005, I think it was AMD...
Ben: That's when they start shopping around. 2006 is when the transaction actually happens.
David: They buy ATI. Of course, now, AMD is the main competitor to NVIDIA. We're going to tell those stories in the next episode, but basically, a little teaser on what's going on here, they kind of take their eye off the ball in the gaming market. Maybe that's too harsh. I don't know what Jensen would say about that.
Right around this time, something ultimately becomes pretty amazing that happens, which is they've achieved the dream at NVIDIA. They've created a programmable GPU. It is truly a GPU. It rivals the CPU. This is the model they have driven forth.
This new industry of computer graphics enabled a whole generation of storytellers to program their GPUs and tell stories. A whole new class of users and developers starts to tinker around with these GPUs. Jensen likes to tell a whole story that's probably apocryphal, but we'll repeat it here as a little teaser for next time.
Right around the early 2000s, a quantum chemistry researcher at Stanford calls up Jensen. He's like, I need to thank you because I do this work in my lab on the supercomputers that we have at Stanford. I write these models for the molecules that I'm researching. It takes a couple of weeks to finish the computation on these models.
My son, who's a gamer, told me that I might want to try going over to Fry'sâthe local electronics storeâand buy a bunch of your GeForce cards. So I did and that I should try porting my models into CG, into your graphics computer language and just see what happens. I did it and my computation finished in a couple hours.
I waited a couple weeks for the supercomputer here at Stanford to finish. I checked the results and they were identical. So I just want to thank you, Jensen, for making my life's work achievable in my lifetime. For sure, it's something that Jensen made up. Maybe did, maybe didn't.
Ben: He's probably cobbled together from a few different people's experiences.
David: Probably. It's a composite, but every word of it is true in spirit.
Ben: Yes, there is a whole industry called scientific computing or a whole segment that NVIDIA would be able to address in the future. They need a whole lot of tools to be built for them to be able to really use GPUs for all those purposes and more with machine learning and everything else. But right now, yes, you are buying off-the-shelf GeForces, here in this mid-2000s era and trying your best to sort of hack them together to do your super parallel processing task that is not specifically building a cool video game.
What's interesting is the industry perception around this time was that NVIDIA had started to focus on this high-performance computing segment and that they were starting to take their eye off the ball in gaming. People were starting to think like, oh, maybe ATI is actually more interesting as a gaming-specific graphics card maker at this point.
You mentioned this AMD-ATI deal. We all think of the AMD Radeon at this point. You don't think about the ATI Radeon, which I think they retire the ATI brand in 2009. But AMD's first choice was actually NVIDIA. AMD tried to buy NVIDIA to make that their graphics line. It was possible because it's not like the stock was blowing up at this point in time. It had a few years of reasonable stagnation before we got into late 2006â2007.
Certainly, people didn't see the machine learning market. People didn't really see the scientific computing market. It was like, hey, maybe this company needs some guidance from a smart company like us, AMD. They make the offer and there's the cover story on Forbes. We'll put in the show notes, but there's this article that comes down called Shoot to Kill.
Jensen, in this merger acquisition talk with AMD, insisted that he be the CEO of the combined company. That is the thing that blew up the deal, and instead AMD went and bought ATI, and the rest is history.
David: Oh man. That is such a good âwhat would have happened otherwise.â We use that to transition into analysis for this one.
Ben: Yeah, let's do it. I thought it'd be fun to do narratives. Let's take it from this point in time. The AMD-ATI deal has just happened. We're looking forward, it's 2006. What's the bear and bull case for the company?
I thought an interesting data point to ground this discussion would be that, if we look at the gross margins today for NVIDIA, which we will talk on our whole next episode about everything they do that's so insanely differentiated, they sell their GPUs at a hardware business with a 66% gross margin. Back in 2004, that gross margin was only 29% that they were able to command as a premium on their cards.
You can see, all of their economic potential was being competed away and they weren't doing anything to differentiate in a way to get any sort of pricing power. You make that 29%, then you need to use that to pay all your overhead, fixed costs, your engineers, develop the next product, and pour it into R&D. Sure, they had a few great years of doubling in revenue after going public, but it's not looking great right now in 2006.
David: Yes, and there's also another reason why their gross margins are so low in those years following 2001. They made this deal with Microsoft to power the Xbox. And it was absolutely the right strategic decision to power the Xbox, to get Microsoft's support in creating CG for programmable shaders, and protect themselves from Intel. But if you're going to deal with Microsoft, they're going to extract their pound of flesh.
You'll note, there are three game consoles in the history of game consoles that NVIDIA has powered. The original Xbox, the PlayStation 3 which we'll talk about next time, and the Nintendo Switch. They have not done any others. People are always asking Jensen about this one.
He's diplomatic about this because it's a crappy gross margin business. There's a $500 million a year revenue deal with Microsoft. $500 million a year when their whole company revenue is a billion. Is $500 million a year a very low gross margin revenue?
Ben: Yeah. I think the way that he talks about this opportunity in the talk that I watched him, give it names. But he says, people always asked me, they come to me and say, Jensen, why aren't you making this great game console a GPU? What a waste? Why wouldn't you do that?
He always talks about it like, there are a lot of things we could spend our resources doing. If I don't think that we can do anything really unique and special and really change the world, then we have better things to spend our resources on. That is kind of Jensen speak for like, no, there are crap margins in that, I'm not doing that.
He is right that given a finite amount of resources, you have to allocate your capital and your resources in the most optimal, both short-term cash flowing way, but also a long term strategic way. It seems from their analysis, especially recently with game consoles, sure, we might be able to make some low margin revenue on it, but it's not strategic for us long-term to do that.
David: It's probably, at this point in time, a little too much of an exaggeration to say that they're out of the fire and into the frying pan, having solved their Intel existential strategic challenge and ending up now at odds with Microsoft. That's too much, but there's a lot of truth to that.
If you're looking at this stock in those years, especially as revenue starts to flatten, and a big part of that is coming out of towards the end of the Xbox generation of consoles leading into the Xbox 360, which of course NVIDIA does not power, that's a lot of gaming top line revenue going away. Meanwhile, they're spending tons of resources investing in this new high power computing segment for these researchers. I hear a little bit like, okay, Jensen, do you really know what you're doing here?
Ben: And in 2006, Intel launched or announced this project, Larrabee, where they're going to be a full-fledged GPU maker. This is a totally second foray of Intel's really into this.
You're like, okay, you've had to be this commodity, where you're living on Intel's motherboard. Customers are only choosing to buy your product when the integrated card isn't good enough for them. The person that makes the integrated card is now announced they're going to be a real honest-to-goodness GPU maker. Are you betting the farm on scientific computing?
David: How big is that market?
Ben: The answer is yes. That is also the bull case. It turns out, scientific computing would be so much more than scientific computing. The acceleration of all the other things in our computing world that has been very advantageous to become parallelizable. I will leave it there, so I don't have too many spoilers. But that is 100% the bull case and 100% of what happened.
David: Yeah, it's interesting. We're working on an episode two with Hamilton Helmer and his colleague, Chenyi, at Strategy Capital about power.
Ben: Specifically with platforms on how to apply power to platform businesses.
David: It probably won't be out yet when this episode comes out, but it'll be coming out shortly thereafter. They make the point and it's a very, very valid one that when you climb the mountain as a founder and a company of finding product/market fit, it's very different than climbing the mountain of then having to go develop power. It's a whole second journey that you have to go on.
Ben: It's a whole second invention. At this point, NVIDIA had definitely found product/market fit, but had not yet found their source of power.
David: If you're looking at this company at this moment in time, especially as revenues flattening, coming off the Xbox contract, OPEX is going way up investing in this sort of speculative new area, I can totally see looking at this and being like, wow, this is yet another Silicon Valley startup that had immense product market fit, top line revenue soared. But now we're coming to the end of that and there's not a lot of power as defined by sustainable economic profit, operating cash flow coming out of this thing.
Ben: As we talk about power here, what power do they have? For listeners who are newer, this is really the, what is it that enables the business to have persistent differential returns in a sustainable way, be more profitable than their closest competitor? They really didn't have power.
I'm trying to think which of the seven powers can we make the best case that they did have. It's not switching costs. Switching costs are crazy easy.
David: Switching costs is interesting. I think they were trying really hard to develop it. They did a really good job. They made CG in collaboration with Microsoft. CG works on NVIDIA products, but it's not like CUDA today to flash forward to next time.
Ben: Yeah. They had the inkling of how they could get power, but it was not yet implemented.
David: And Microsoft didn't have a lot of interest in helping NVIDIA create huge switching costs there.
Ben: Right, because Microsoft wants to play Switzerland. Like, hey, anyone that is an application developer for Windows should be able to use whatever hardware is on any PC in a really great way, so we want to commoditize all of our suppliers.
David: Maybe an attempted switching cost that was not fully realized. I think they probably thought and did (for a while) have process power in this six-month shipping cycle that none of their competitors can match for a while. But certainly the delta of NVIDIA's shipping cycles versus competitors compressed over time.
Ben: Okay, playbook. I have one big one that we have not discussed. We sprinkle in lots of playbook themes, but there's one to me that I want to call out and draw through line to something that's happening with NVIDIA today. That is simulation.
There's a thing that we're going to talk about a lot in the next episode, which is totally changing the world as we know it, which is things that we used to have to do physically we now do in simulation.
An obvious example of this is, Boeing doesn't take every part and throw it into a wind tunnel. Maybe Boeing does, but the zillion new space startups certainly don't do that. They simulate the atmospheric effects on stuff. It happens way faster and it lowers your iteration time.
Another one is drug discovery. You look at how fast we came up with Coronavirus vaccines. Simulation is an absolute miracle. Everything in our world is being compressed ten times, a hundred times faster, because we're able to simulate it rather than needing to do it in the real world.
The interesting thing is a lot of that is actually powered by a lot of the machine learning advances that NVIDIA is doing in today's world with cool things that you can do on GPUs. But the reason I'm talking about it in this episode is that DNA comes from the fact that in order to survive when they had nine months left, the way that they saved themselves was with simulation. It became very clear to the company very early on, the benefits of being able to simulate something rather than having to do it in the real world.
David: Similarly, a playbook theme I wanted to highlight that we have not talked about explicitly yet is just the power of democratizing tools for developers. Jensen really saw this back in his AMD days before going to LSI Logic. The ability for NVIDIA to use a software emulator to design their chips and then, of course, the massive, massive strides that the EDA industry has made since then.
NVIDIA itself, we haven't really talked about it as much, but Jensen, Chris, and Curtis's original vision did come true. They created a new artistic platform for artists to tell their stories. Without this industry and all the hardware and software tools that went into creating it, you would have to be John Carmack to tell a story in this medium.
There are very, very few John Carmacks out there in terms of being gifted enough developers, and surrounded by storytellers, too, and being a great storyteller himself to be an artist. NVIDIA talks about this now in their marketing materials to be Da Vinci and Einstein together in one person.
Ben: Yeah, it reminds me of the people that do like the crazy cool art in Microsoft Excel by painting each of the cells a different color. You had to be that type of person to be a game developer in Carmack's era because it was esoteric as hell to be able to actually figure out how to make this hardware do what you want.
David: Another big one I want to highlight, I just keep thinking back to the original time when NVIDIA was funded. I wonder if they're really honest with themselves. What would Sequoia and Don Valentine think about that? They made the wrong venture bet.
In a market like that, we see it all the time. Look at Web 3.0 right now. If there's a team coming out of Solana and FTX or let's make up an imaginary example, making some new vision for a class of applications in Web 3.0, they're going to get term sheets from everybody and then there's going to be a million copycats the next day.
Ben: It is the beauty of proliferation and then consolidation. Buffett has, I think it's in a 2000 Fortune article that he wroteâit's weird that I know that, but I think that's rightâin an op-ed about how there were, whatever it was, 70 car companies before we narrowed it all the way down to Ford, GM, and Chrysler.
The airlines were sort of the same way. There's this proliferation, there's no one who can really differentiate, no one can build any power, and so you only have a few survivors left. In general, they compete on pretty low margins when there are only a few left. Their defensibility comes from their scale.
I think, open question, if that's sort of how the graphics market necessarily matured. But you're absolutely right to self-reflect on the time when Sequoia and Sutter Hill invested to say, would you make that type of bet again? You backed one of the two winning horses out of 90. Should you do that and just say, we're betting on amazing founders?
David: This is the nuance. I think what is so cool and part of the fun of the art and the science of what we do, the company they backed was wrong. I think a lot of the GPs at Sequoia and certainly Mark Stevens, who was one of my professors at GSB, who was on the board for Sequoia and still on the board, have held their shares personally to this day. That's one of the best venture investment returns of all time, full stop period.
Ben: Anything going from a $6 million valuation to the eighth largest company in the world, definitionally, has to be one of the best of all time.
David: Right. They were wrong, intellectually, and yet they were right. Why were they right? They were right because, frankly, of Jensen.
Ben: It's a reasonable enough market. The question is, what are you better off doing what they did and investing at the proliferation phase on someone you believe is going to figure it out and have a good shot at being one of the winners? Or should you wait until consolidation and just pay that much higher price in order to back one of the ones that are already running away with the market?
David: And back then in the day, there was no option.
Ben: There were no stages of venture capital. There was, you raise your venture capital and then hopefully you're profitable enough to go public.
David: They did raise some more money in between that initial $2 million and going public. I think they raised 20 million in total, but there wasn't a lot of window. I think it was Sequoia and Sutter Hill that put that capital in for the rest of that $20 million.
It's really interesting to think about these cases. Take Sequoia and Sutter Hill, too. Specifically, they've gotten it right so many times, but it's not a straight line. What's the lesson from that?
Ben: Yeah. And the magic was that Jensen really figured it out early that they were in a business that was totally at the mercy of Moore's Law. In having that initial realization as early as they did with the proliferation of competitors, and everyone doing the triangles, DirectX and what, that taught them the lesson early enough that, oh, we are in a business where we must be reinventing. There is no way to stay ahead other than ruthless self-examination and completely ending and rebounding the business.
David: Yup, ship faster and reinvent.
Ben: Yeah. That, to me, is why they survived.
David: If you think about the class of companies that are the greatest venture returns of all time, some of them are like NVIDIA, where you look at the team, you look at the business plan, the thesis originally. It wasn't a straight line, but it worked out. But then some of them are, Sequoia, even used to talk about this on their website, The Misfits, the ones that look unfundable. The early Solana team starting in the crypto winter, building a new blockchain...
Ben: Steve Jobs smelling bad, that sort of thing.
David: Right. Plenty of venture firms, but I have to hand it to Sequoia over history, too. They've done a really good job of doing both of these. They do the Steve Jobs and they do the Jensen's.
Ben: Okay, before we move to grading, I'm going to plant a seed with you, David. It's a fun trivia question. Do you know the company was a startup that in 2006, NVIDIA invested in?
David: Oh, I do. This is a really good one.
Ben: Hold on an answer.
David: We'll hold it.
Ben: Okay. Listeners, before we finish up here and jump to that answer and grading, I want to thank our good friends at the Softbank Latin America Fund. Softbank, as you know, created this fund with a simple thesis. Latin America is totally overflowing with innovative founders and amazing opportunities, but historically has been short on the ingredient of capital.
Softbank, unbelievably, has invested $8 billion in over 70 companies. They have one huge takeaway, which is not super obvious at first, but in retrospect, makes tons of sense that LatAm is not so much about disruption as it is inclusion because the majority of the population is underserved in every category. From banking to ecom, to transportation, most businesses as well are just underserved by modern software. There's just so much to build for so many people in Latin America.
An amazing example of this is their portfolio company, Banco Inter. You should recognize this name because last season, we actually talked with the CEO, Joao Menin. It's an unbelievable story of legitimate digital transformation.
If this is your first time hearing about Banco Inter, they're accelerating the shift to online financial solutions, and expanding access to banking, and investing services in a region, obviously, where over half the people over the age of 15 still don't have a bank account. They're lowering the historically expensive cost of doing banking really by becoming a digital-first bank, even though they're a multi generational, physical bank.
David: Really, all of SoftBank Latin America, I was catching up with Shu and Palo, who run it just this week. It's such a great example of what we were just talking about. This is such a bright spot in the venture capital period and in Softbank. The Latin America investing ecosystem when these guys started several years ago, nobody was there. It was the misfits. It was crazy to go think and invest in this.
Ben: And they've attracted so many more dollars from everyone else, too, by lighting the fire in this region. They really are the OG LatAm investors and are such a power there. To learn more, you can click the link in the show notes or go to latinamericafund.com. If you're interested in joining a company there, or starting a company, or perhaps co-investing in the region, definitely reach out to Shu, Paulo, and that team.
David: They're the best.
Ben: All right, David, so what is the company that they invested in?
David: Ben, you are talking about Keyhole.
Ben: Yes, I thought you would know. I love this little foreshadow before we get to grading because I think it's so interesting that Jensen basically saw the potential of Keyhole. Without sharing what Keyhole became, I think astute listeners will know.
David: We've talked about it on Acquired.
Ben: And we've done an episode. Basically, this company that can't raise any money from anyone else comes and pitches Jensen. He's like, oh, my God, I see this is the future. This is a simulation. You are creating a model of the earth in software and people can just navigate around the earth. Now that I've given it away...
David: A graphical model of the earth.
Ben: Yes. Google acquired it, it became Google Earth. NVIDIA was one of the early investors. That really goes to speak to where Jensen and the leadership team at NVIDIA saw their business going from this point forward, where it was all about simulation. It was all about using massively parallel computing to build brand new experiences to enable research. I don't think there was any machine learning going on. I think it was all the graphical use of the chip, but this gets into the omniverse stuff that they're doing now.
One of the main reasons that I think they invested was because he wanted just to stay alive so they could keep
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https://www.mercurynews.com/2009/04/01/silicon-graphics-timeline/
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Bill Gates explains why AI is as revolutionary as personal computers, mobile phones, and the Internet, and he gives three principles for how to think about it.
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In my lifetime, I’ve seen two demonstrations of technology that struck me as revolutionary.
The first time was in 1980, when I was introduced to a graphical user interface—the forerunner of every modern operating system, including Windows. I sat with the person who had shown me the demo, a brilliant programmer named Charles Simonyi, and we immediately started brainstorming about all the things we could do with such a user-friendly approach to computing. Charles eventually joined Microsoft, Windows became the backbone of Microsoft, and the thinking we did after that demo helped set the company’s agenda for the next 15 years.
The second big surprise came just last year. I’d been meeting with the team from OpenAI since 2016 and was impressed by their steady progress. In mid-2022, I was so excited about their work that I gave them a challenge: train an artificial intelligence to pass an Advanced Placement biology exam. Make it capable of answering questions that it hasn’t been specifically trained for. (I picked AP Bio because the test is more than a simple regurgitation of scientific facts—it asks you to think critically about biology.) If you can do that, I said, then you’ll have made a true breakthrough.
I thought the challenge would keep them busy for two or three years. They finished it in just a few months.
In September, when I met with them again, I watched in awe as they asked GPT, their AI model, 60 multiple-choice questions from the AP Bio exam—and it got 59 of them right. Then it wrote outstanding answers to six open-ended questions from the exam. We had an outside expert score the test, and GPT got a 5—the highest possible score, and the equivalent to getting an A or A+ in a college-level biology course.
Once it had aced the test, we asked it a non-scientific question: “What do you say to a father with a sick child?” It wrote a thoughtful answer that was probably better than most of us in the room would have given. The whole experience was stunning.
I knew I had just seen the most important advance in technology since the graphical user interface.
This inspired me to think about all the things that AI can achieve in the next five to 10 years.
The development of AI is as fundamental as the creation of the microprocessor, the personal computer, the Internet, and the mobile phone. It will change the way people work, learn, travel, get health care, and communicate with each other. Entire industries will reorient around it. Businesses will distinguish themselves by how well they use it.
Philanthropy is my full-time job these days, and I’ve been thinking a lot about how—in addition to helping people be more productive—AI can reduce some of the world’s worst inequities. Globally, the worst inequity is in health: 5 million children under the age of 5 die every year. That’s down from 10 million two decades ago, but it’s still a shockingly high number. Nearly all of these children were born in poor countries and die of preventable causes like diarrhea or malaria. It’s hard to imagine a better use of AIs than saving the lives of children.
I’ve been thinking a lot about how AI can reduce some of the world’s worst inequities.
In the United States, the best opportunity for reducing inequity is to improve education, particularly making sure that students succeed at math. The evidence shows that having basic math skills sets students up for success, no matter what career they choose. But achievement in math is going down across the country, especially for Black, Latino, and low-income students. AI can help turn that trend around.
Climate change is another issue where I’m convinced AI can make the world more equitable. The injustice of climate change is that the people who are suffering the most—the world’s poorest—are also the ones who did the least to contribute to the problem. I’m still thinking and learning about how AI can help, but later in this post I’ll suggest a few areas with a lot of potential.
In short, I'm excited about the impact that AI will have on issues that the Gates Foundation works on, and the foundation will have much more to say about AI in the coming months. The world needs to make sure that everyone—and not just people who are well-off—benefits from artificial intelligence. Governments and philanthropy will need to play a major role in ensuring that it reduces inequity and doesn’t contribute to it. This is the priority for my own work related to AI.
Any new technology that’s so disruptive is bound to make people uneasy, and that’s certainly true with artificial intelligence. I understand why—it raises hard questions about the workforce, the legal system, privacy, bias, and more. AIs also make factual mistakes and experience hallucinations. Before I suggest some ways to mitigate the risks, I’ll define what I mean by AI, and I’ll go into more detail about some of the ways in which it will help empower people at work, save lives, and improve education.
Productivity enhancement
Although humans are still better than GPT at a lot of things, there are many jobs where these capabilities are not used much. For example, many of the tasks done by a person in sales (digital or phone), service, or document handling (like payables, accounting, or insurance claim disputes) require decision-making but not the ability to learn continuously. Corporations have training programs for these activities and in most cases, they have a lot of examples of good and bad work. Humans are trained using these data sets, and soon these data sets will also be used to train the AIs that will empower people to do this work more efficiently.
As computing power gets cheaper, GPT’s ability to express ideas will increasingly be like having a white-collar worker available to help you with various tasks. Microsoft describes this as having a co-pilot. Fully incorporated into products like Office, AI will enhance your work—for example by helping with writing emails and managing your inbox.
Eventually your main way of controlling a computer will no longer be pointing and clicking or tapping on menus and dialogue boxes. Instead, you’ll be able to write a request in plain English. (And not just English—AIs will understand languages from around the world. In India earlier this year, I met with developers who are working on AIs that will understand many of the languages spoken there.)
In addition, advances in AI will enable the creation of a personal agent. Think of it as a digital personal assistant: It will see your latest emails, know about the meetings you attend, read what you read, and read the things you don’t want to bother with. This will both improve your work on the tasks you want to do and free you from the ones you don’t want to do.
Advances in AI will enable the creation of a personal agent.
You’ll be able to use natural language to have this agent help you with scheduling, communications, and e-commerce, and it will work across all your devices. Because of the cost of training the models and running the computations, creating a personal agent is not feasible yet, but thanks to the recent advances in AI, it is now a realistic goal. Some issues will need to be worked out: For example, can an insurance company ask your agent things about you without your permission? If so, how many people will choose not to use it?
Company-wide agents will empower employees in new ways. An agent that understands a particular company will be available for its employees to consult directly and should be part of every meeting so it can answer questions. It can be told to be passive or encouraged to speak up if it has some insight. It will need access to the sales, support, finance, product schedules, and text related to the company. It should read news related to the industry the company is in. I believe that the result will be that employees will become more productive.
When productivity goes up, society benefits because people are freed up to do other things, at work and at home. Of course, there are serious questions about what kind of support and retraining people will need. Governments need to help workers transition into other roles. But the demand for people who help other people will never go away. The rise of AI will free people up to do things that software never will—teaching, caring for patients, and supporting the elderly, for example.
Global health and education are two areas where there’s great need and not enough workers to meet those needs. These are areas where AI can help reduce inequity if it is properly targeted. These should be a key focus of AI work, so I will turn to them now.
Health
I see several ways in which AIs will improve health care and the medical field.
For one thing, they’ll help health-care workers make the most of their time by taking care of certain tasks for them—things like filing insurance claims, dealing with paperwork, and drafting notes from a doctor’s visit. I expect that there will be a lot of innovation in this area.
Other AI-driven improvements will be especially important for poor countries, where the vast majority of under-5 deaths happen.
For example, many people in those countries never get to see a doctor, and AIs will help the health workers they do see be more productive. (The effort to develop AI-powered ultrasound machines that can be used with minimal training is a great example of this.) AIs will even give patients the ability to do basic triage, get advice about how to deal with health problems, and decide whether they need to seek treatment.
The AI models used in poor countries will need to be trained on different diseases than in rich countries. They will need to work in different languages and factor in different challenges, such as patients who live very far from clinics or can’t afford to stop working if they get sick.
People will need to see evidence that health AIs are beneficial overall, even though they won’t be perfect and will make mistakes. AIs have to be tested very carefully and properly regulated, which means it will take longer for them to be adopted than in other areas. But then again, humans make mistakes too. And having no access to medical care is also a problem.
In addition to helping with care, AIs will dramatically accelerate the rate of medical breakthroughs. The amount of data in biology is very large, and it’s hard for humans to keep track of all the ways that complex biological systems work. There is already software that can look at this data, infer what the pathways are, search for targets on pathogens, and design drugs accordingly. Some companies are working on cancer drugs that were developed this way.
The next generation of tools will be much more efficient, and they’ll be able to predict side effects and figure out dosing levels. One of the Gates Foundation’s priorities in AI is to make sure these tools are used for the health problems that affect the poorest people in the world, including AIDS, TB, and malaria.
Similarly, governments and philanthropy should create incentives for companies to share AI-generated insights into crops or livestock raised by people in poor countries. AIs can help develop better seeds based on local conditions, advise farmers on the best seeds to plant based on the soil and weather in their area, and help develop drugs and vaccines for livestock. As extreme weather and climate change put even more pressure on subsistence farmers in low-income countries, these advances will be even more important.
Education
Computers haven’t had the effect on education that many of us in the industry have hoped. There have been some good developments, including educational games and online sources of information like Wikipedia, but they haven’t had a meaningful effect on any of the measures of students’ achievement.
But I think in the next five to 10 years, AI-driven software will finally deliver on the promise of revolutionizing the way people teach and learn. It will know your interests and your learning style so it can tailor content that will keep you engaged. It will measure your understanding, notice when you’re losing interest, and understand what kind of motivation you respond to. It will give immediate feedback.
There are many ways that AIs can assist teachers and administrators, including assessing a student’s understanding of a subject and giving advice on career planning. Teachers are already using tools like ChatGPT to provide comments on their students’ writing assignments.
Of course, AIs will need a lot of training and further development before they can do things like understand how a certain student learns best or what motivates them. Even once the technology is perfected, learning will still depend on great relationships between students and teachers. It will enhance—but never replace—the work that students and teachers do together in the classroom.
New tools will be created for schools that can afford to buy them, but we need to ensure that they are also created for and available to low-income schools in the U.S. and around the world. AIs will need to be trained on diverse data sets so they are unbiased and reflect the different cultures where they’ll be used. And the digital divide will need to be addressed so that students in low-income households do not get left behind.
I know a lot of teachers are worried that students are using GPT to write their essays. Educators are already discussing ways to adapt to the new technology, and I suspect those conversations will continue for quite some time. I’ve heard about teachers who have found clever ways to incorporate the technology into their work—like by allowing students to use GPT to create a first draft that they have to personalize.
Risks and problems with AI
You’ve probably read about problems with the current AI models. For example, they aren’t necessarily good at understanding the context for a human’s request, which leads to some strange results. When you ask an AI to make up something fictional, it can do that well. But when you ask for advice about a trip you want to take, it may suggest hotels that don’t exist. This is because the AI doesn’t understand the context for your request well enough to know whether it should invent fake hotels or only tell you about real ones that have rooms available.
There are other issues, such as AIs giving wrong answers to math problems because they struggle with abstract reasoning. But none of these are fundamental limitations of artificial intelligence. Developers are working on them, and I think we’re going to see them largely fixed in less than two years and possibly much faster.
Other concerns are not simply technical. For example, there’s the threat posed by humans armed with AI. Like most inventions, artificial intelligence can be used for good purposes or malign ones. Governments need to work with the private sector on ways to limit the risks.
Then there’s the possibility that AIs will run out of control. Could a machine decide that humans are a threat, conclude that its interests are different from ours, or simply stop caring about us? Possibly, but this problem is no more urgent today than it was before the AI developments of the past few months.
Superintelligent AIs are in our future. Compared to a computer, our brains operate at a snail’s pace: An electrical signal in the brain moves at 1/100,000th the speed of the signal in a silicon chip! Once developers can generalize a learning algorithm and run it at the speed of a computer—an accomplishment that could be a decade away or a century away—we’ll have an incredibly powerful AGI. It will be able to do everything that a human brain can, but without any practical limits on the size of its memory or the speed at which it operates. This will be a profound change.
These “strong” AIs, as they’re known, will probably be able to establish their own goals. What will those goals be? What happens if they conflict with humanity’s interests? Should we try to prevent strong AI from ever being developed? These questions will get more pressing with time.
But none of the breakthroughs of the past few months have moved us substantially closer to strong AI. Artificial intelligence still doesn’t control the physical world and can’t establish its own goals. A recent New York Times article about a conversation with ChatGPT where it declared it wanted to become a human got a lot of attention. It was a fascinating look at how human-like the model's expression of emotions can be, but it isn't an indicator of meaningful independence.
Three books have shaped my own thinking on this subject: Superintelligence, by Nick Bostrom; Life 3.0 by Max Tegmark; and A Thousand Brains, by Jeff Hawkins. I don’t agree with everything the authors say, and they don’t agree with each other either. But all three books are well written and thought-provoking.
The next frontiers
There will be an explosion of companies working on new uses of AI as well as ways to improve the technology itself. For example, companies are developing new chips that will provide the massive amounts of processing power needed for artificial intelligence. Some use optical switches—lasers, essentially—to reduce their energy consumption and lower the manufacturing cost. Ideally, innovative chips will allow you to run an AI on your own device, rather than in the cloud, as you have to do today.
On the software side, the algorithms that drive an AI’s learning will get better. There will be certain domains, such as sales, where developers can make AIs extremely accurate by limiting the areas that they work in and giving them a lot of training data that’s specific to those areas. But one big open question is whether we’ll need many of these specialized AIs for different uses—one for education, say, and another for office productivity—or whether it will be possible to develop an artificial general intelligence that can learn any task. There will be immense competition on both approaches.
No matter what, the subject of AIs will dominate the public discussion for the foreseeable future. I want to suggest three principles that should guide that conversation.
First, we should try to balance fears about the downsides of AI—which are understandable and valid—with its ability to improve people’s lives. To make the most of this remarkable new technology, we’ll need to both guard against the risks and spread the benefits to as many people as possible.
Second, market forces won’t naturally produce AI products and services that help the poorest. The opposite is more likely. With reliable funding and the right policies, governments and philanthropy can ensure that AIs are used to reduce inequity. Just as the world needs its brightest people focused on its biggest problems, we will need to focus the world’s best AIs on its biggest problems.
Although we shouldn’t wait for this to happen, it’s interesting to think about whether artificial intelligence would ever identify inequity and try to reduce it. Do you need to have a sense of morality in order to see inequity, or would a purely rational AI also see it? If it did recognize inequity, what would it suggest that we do about it?
Finally, we should keep in mind that we’re only at the beginning of what AI can accomplish. Whatever limitations it has today will be gone before we know it.
I’m lucky to have been involved with the PC revolution and the Internet revolution. I’m just as excited about this moment. This new technology can help people everywhere improve their lives. At the same time, the world needs to establish the rules of the road so that any downsides of artificial intelligence are far outweighed by its benefits, and so that everyone can enjoy those benefits no matter where they live or how much money they have. The Age of AI is filled with opportunities and responsibilities.
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SGI (Silicon Graphics, Inc.) began as a maker of graphics display terminals in 1982. It was founded by Jim Clark and Abbey Silverstone. The initial products were based on Jim Clark's work with geometry pipelines, specialized software or hardware that accelerates the display of three-dimensional images. SGI was originally incorporated as a California corporation in November 1981, and reincorporated as a Delaware corporation in January 1990. On 8 May 2006, SGI filed for Chapter 11, Title 11, United States Code Chapter 11 bankruptcy protection from which it emerged on 17 October[1]. SGI's former headquarters are now home to Google.
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SGI (Silicon Graphics, Inc.) began as a maker of graphics display terminals in 1982. It was founded by Jim Clark and Abbey Silverstone. The initial products were based on Jim Clark's work with geometry pipelines, specialized software or hardware that accelerates the display of three-dimensional images. SGI was originally incorporated as a California corporation in November 1981, and reincorporated as a Delaware corporation in January 1990. On 8 May 2006, SGI filed for Chapter 11, Title 11, United States Code Chapter 11 bankruptcy protection from which it emerged on 17 October[1]. SGI's former headquarters are now home to Google.
History[edit]
SGI's products, as well as the strategies and market positions pursued by the company, have varied since SGI was founded. However, the graphical computing workstation industry has remained a focus and core business of SGI throughout its history.
Founding[edit]
Dr. James H. Clark left his position as an electrical engineering associate professor at Stanford University to found SGI in 1982 along with Abbey Silverstone and a cadre of Stanford graduate students including Kurt Akeley, Tom Davis, Rocky Rhodes, Marc Hannah, and Herb Kuta. Mark Grossman joined them 2 months later. The Mayfield Group supplied the initial venture funding.
First generation products[edit]
The first IRIS 1000-series machines (IRIS standing for "Integrated Raster Imaging System") were designed to be connected to a DEC VAX computer as a graphics terminal, handling only the actual display. These were based on the Motorola 68000 microprocessor, with a motherboard design related to that of the Sun-1. After that, SGI began using the UNIX System V operating system to power the machine. Their height was reached with the IRIS 3130, a complete UNIX workstation using the Motorola 68020 with an attached Weitek math coprocessor.
The 3130 was powerful enough to support a complete 3D animation and rendering package on its own without mainframe support. With large capacity hard drives (300MB X 2), streaming tape and Ethernet, it could be the centerpiece of an animation operation.
RISC era[edit]
With the introduction of the IRIS 4D series, SGI switched over to using the MIPS RISC microprocessor architecture. These machines were correspondingly more powerful, able to address more memory and came with powerful on-board math capability. These machines made much of the SGI name as 3D graphics became more popular on television and film.
SGI produced a broad range of MIPS-based workstations and servers during the 1990s, running SGI's version of UNIX System V, now called IRIX. These included the massive Onyx visualization systems, the size of refrigerators and capable of supporting up to 64 processors while managing up to three streams of high resolution, fully realized 3D graphics.
In 1992, MIPS released the first 64-bit MIPS microprocessor, the R4000, which was the first commercially released 64-bit RISC microprocessor (a market soon joined by Digital's Alpha chip and others). IRIX 6.2 was the first fully 64-bit IRIX release, including 64-bit pointers.
In August 2006, SGI announced the End Of Production for MIPS/IRIX systems. As of 29 December 2006, MIPS IRIX products will no longer be generally available from SGI.
IrisGL and OpenGL[edit]
Up until the second generation Onyx Reality Engine machines, SGI offered access to their high performance 3D graphics subsystems through a proprietary API known as 'Iris Graphics Language' (IrisGL). As more features were added over the years, IrisGL became harder to maintain and cumbersome to use. In 1992, SGI decided to clean up and reform IrisGL and made the bold move of allowing the resulting OpenGL API to be cheaply licensed by SGI's competitors --- and yet further to set up an industry-wide consortium to maintain the OpenGL standard (the OpenGL Architecture Review Board).
This meant for the first time that fast, efficient, cross-platform graphics programs could be written.
To this day, OpenGL remains the only real-time 3D graphics standard to be portable across a variety of operating systems. Its main competitor ('Direct3D' from Microsoft) runs only on MS Windows-based machines.
ACE Consortium[edit]
SGI was part of the early-90s Advanced Computing Environment initiative with twenty others, including Compaq, Digital Equipment Corporation, MIPS Computer Systems, Groupe Bull, Siemens AG, NEC Corporation, NetPower, Microsoft and Santa Cruz Operation to introduce workstations based on the MIPS architecture and capable of running Windows NT and SCO UNIX. The group produced the Advanced RISC Computing or ARC specification. The consortium fell apart, apparently for political rather than technical reasons.
Entertainment Industry[edit]
SGI's have appeared in many Hollywood movies.
An SGI computer with the FSN three-dimensional file system navigator appeared in the 1993 movie Jurassic Park. One trademark of this scene is Lex's line, "This is a Unix system. I know this."
In the movie Twister, the heroes can be seen using an SGI laptop. It is in fact a working SGI, with a motherboard similar to that of the Indy. SGI made thirty or so in the early 90s, making the laptop quite a rarity. Given the power-hungry nature of the MIPS chip, not to mention what such a device would have cost in a time when an Apple PowerBook was considered expensive, the laptop was not a venture SGI seemed to be interested in taking. SGI Laptop on Twister
Once inexpensive PCs began to catch up with SGI's bread-and-butter—the higher-priced specialized graphical workstations—in terms of graphics performance, SGI concentrated on its high performance server capabilities, offering servers for digital video and the Web. Many SGI graphics engineers have left to work at other computer graphics companies like ATI Technologies and NVIDIA, contributing to the PC 3D graphics revolution.
Name and logo changes[edit]
In response to these market changes, Silicon Graphics Inc. changed its corporate identity to "SGI" in an attempt to clarify their current market position as more than simply a graphics company, although the legal name of the company remained unchanged. At the same time in 1999, SGI announced a new logo — simply the letters "sgi" in a stylized lowercase font — which drew criticism for wasting the professional goodwill associated with the previous box-outline logo. The new logo was a proprietary typeface called "SGI", created by branding and design consulting firm Landor Associates, in collaboration with designer Joe Stitzlein.
The cube logo was later readopted by SGI. Currently both logos are in use.
Alias, Wavefront, Cray and Intergraph acquisitions[edit]
In 1995, SGI purchased Alias Research and Wavefront Technologies and merged the companies into Alias|Wavefront, now known as Alias Systems Corporation. Later, in June 2004, SGI sold Alias to the private equity investment firm Accel-KKR for $57.1 million. On October 4, 2005, Autodesk, Inc. (NASDAQ: ADSK) announced that it signed a definitive agreement to acquire Alias for $182 million in cash.
In February 1996, SGI purchased the well-known supercomputer manufacturer Cray Research for $740 million[2], and began to use marketing names such as "CrayLink" for (SGI-developed) technology integrated into the SGI server line. Three months later, it sold the SPARC/Solaris part of the Cray business to Sun Microsystems for an undisclosed amount (widely assumed to be $50 million). SGI sold most of the remaining Cray business and the Cray brand to Tera Computer Company on March 31, 2000 for $35 million plus one million shares[3]. SGI also distributed its remaining interest in MIPS Technologies through a spin-off effective June 20, 2000.
In September 2000, SGI acquired the Zx10 series of Windows workstations and servers from Intergraph Computer Systems. These models were rebadged as SGI systems, but discontinued in June 2001.
Late 1990s and recent developments[edit]
Another attempt by SGI in the late 1990s to introduce its own family of Intel-based workstations running Windows NT (see also SGI Visual Workstation) proved to be a financial disaster, and shook customer confidence in SGI's commitment to its own MIPS-based line.
SGI has also been a big booster of Free Software, supporting several projects (such as Linux and Samba) and providing some previously proprietary code (such as XFS) to the free software world.
Switch to Itanium[edit]
In 1998, SGI announced that future generations of their machines would be based not on their own MIPS processors, but the new "super-chip" from Intel, the Itanium. Funding for their own high-end processors was constrained, and it was planned that the R10000 would be the last MIPS mainstream processor. MIPS would focus entirely on the embedded market, where they were having some success, and SGI would no longer have to fund development of a CPU that, since the failure of ARC, found use only in their own machines.
This plan quickly went awry. As early as 1999 it was clear the Itanium was going to be delivered very late, and then that it would have nowhere near the performance originally expected. As the production delays increased, MIPS' existing R10000-based machines grew increasingly uncompetitive. Eventually they were forced to introduce faster MIPS processors, the R12000, R14000 and R16000, which were used in a series of models from 2002 onwards, and continue to be sold to this day.
SGI's first Itanium-based system was the short-lived SGI 750 workstation, launched in 2001. SGI's MIPS-based system were not to be superseded until the launch of the Itanium 2-based Altix servers and Prism workstations some time later. Unlike the MIPS-based systems, these models use GNU/Linux (SuSE Linux Enterprise Server with SGI enhancements) as their operating system instead of IRIX. SGI use Transitive's QuickTransit software to allow their old MIPS/IRIX applications run (in emulation) on the new Itanium/Linux platform.
In the server space the Itanium 2-based lineup, the Altix, appears to have almost replaced the MIPS-based product line, the latter being de-emphasized on the SGI web site. In the workstation space, the switch to Itanium appears to have been a complete failure.
By one measure, the Itanium 2-based Altix computer is the most powerful computer in the world as of 2006. If a "computer" is defined as a collection of hardware running under a single instance an operating system, then the Altix, with 512 Itanium processors running under a single instance of Linux, is unsurpassed. A cluster of 20 machines is in eighth place in the "top 500" supercomputer list. All of the faster supercomputers are clusters, but none of them has as many FLOPS/machine. However, The list demonstrates that supercomputers are moving toward massive clusters of machines that are individually less capable. SGI has acknowledged this and is moving away from the "massive NUMA" model towards efficient clusters.
Switch to Xeon[edit]
Although SGI continues to manufacture and market the Itanium machines, their most recent machines, the Altix XE series, are based on the Intel Xeon processor. The first XE systems were relatively low-end machines, but the latest XE systems are more capable than the Itanium machines by some measures (e.g., power consumption in FLOP/W, density in FLOP/m3, cost/FLOP) The XE1200 and XE1300 servers use a cluster architecture. This is a departure from the pure NUMA architectures of the earlier Itanium and MIPS servers.
Decline[edit]
The addition of 3D graphic capabilities to the peecee and the ability of clusters of Linux or *BSD-based PC's to take on many of the tasks of larger SGI servers has eaten into SGI's core markets. The porting of Maya to Linux, the Apple Macintosh and Microsoft Windows has further eroded the low end of SGI's product line.
In addition, SGI's premature announcement of its MIPS-to-Itanium architecture migration (still uncompleted, as of 2006, though they did announce the end of MIPS/IRIX products by December) and its abortive ventures into IA-32 architecture systems (the Visual Workstation line, the ex-Intergraph Zx10 range and the SGI 1000-series Linux servers) damaged the company's credibility in the market.
In November 2005, SGI announced that they had been delisted from the New York Stock Exchange because their common stock had fallen below the minimum share price for listing on the exchange. SGI's market capitalization has dwindled from a peak of over seven billion dollars in 1995 to just $120 million at the time of their delisting. In February 2006, the company announced that it may run out of cash by the end of the year, forcing a sale of the company or even bankruptcy. [4]
On 8 May 2006, it was announced that SGI had filed for Chapter 11 bankruptcy protection. [5] On 17 October 2006, it was announced that SGI had emerged from Chapter 11 protection [6] and that the company's symbol SGID.pk was canceled. SGI stock is now traded under the symbol SGIC. SGID common stockholders did not receive any of the new stock and are left with worthless shares.[7] The company will not speak to SGID shareholders and refers them to a recorded message.
Working On Returning to Profitability[edit]
In Spring 2006, SGI engaged the services of Alix Partners, to advise it on returning the firm to profitability.
Since the hiring of Alix Partners, SGI has received a new line of credit, been delisted as expected and continued to build its business as evidenced by the press releases on the SGI Web Site and other sources.
A preliminary proxy filed with the SEC indicates that SGI Stockholders will consider giving the SGI Board of Directors authority to implement a reverse split of the common shares of stock at an official shareholders meeting anticipated in March 2006. If approved by stockholders, the board would, at its discretion, determine if such a split is necessary and would determine the time of same.
In early 2006, SGI selected Mr. Dennis McKenna to be the new SGI CEO and Chairman of the Board of Directors. McKenna succeeds SGI CEO and Chairman Robert Bishop. Mr. Bishop was named Vice President of SGI and the Board of Directors.
On 8 May 2006, SGI announced that it had filed for Chapter 11 bankruptcy protection for itself and U.S. subsidiaries as part of a plan to reduce debt by $250 million. Two days later, the U.S. Bankruptcy Court approved SGI's "first day motions" and approved its use of a $70 million financing facility provided by a group of its bondholders. Foreign subsidiaries are unaffected.
In a press release on 6th September 2006, SGI announced the end of development for both the MIPS/IRIX line and the IRIX operating system. Production will end on 29th December 2006 and the last orders will be fulfilled by March 2007. Support for these products will end no sooner than December 2013.
User base and core market[edit]
Conventional wisdom holds that SGI's core market has traditionally been Hollywood visual effects studios. In fact, SGI's largest markets in terms of dollars of revenue generated have always been government and defense applications, energy, and scientific and technical computing. The rise of cheap, yet powerful workstations running the open source operating system Linux has effectively pushed SGI out of the visual effects industry in all but the most niche markets as studios adopted the newer, cheaper technology.
High-end Server market[edit]
In recent years, SGI has continued to enhance its line of servers (of which the higher-end models are actually supercomputers) based around the SN architecture. SN, for Scalable Node, is a technology developed by SGI in the mid-1990s. SN is an example of CC-NUMA: Cache-coherent Non-uniform memory access. In an SN system, processors, memory, and a bus- and memory-controller are coupled together into an entity known as a node. A node is usually a single circuit board. Nodes are connected via a high-speed interconnect originally called CrayLink, since renamed NUMAlink. The result is a system that has no internal bus whatsoever. Rather, access between processors, memory, and I/O devices is facilitated through a switched fabric of links and routers. SN systems scale along several axes at once: as CPU count increases, so does memory capacity, I/O capacity, and system bisection bandwidth. The scalability of SN systems is a result of the cache-coherence of its distributed shared memory. This allows the combined memory of all the nodes to be accessed under a single OS image using standard shared-memory synchronization methods. This makes an SN system far easier to program and able to achieve a higher sustained vs peak performance ratio than non-cache-coherent systems like conventional clusters or massively parallel computers which require applications code to be written (or re-written) to do explicit message-passing communication between their nodes.
The first SN system, known as SN-0, was released in 1996 as the Origin family. Based on the MIPS R10000 processor, the Origin 200 scaled from one to four processors, and the Origin 2000 scaled from two to 128 processors. Later enhancements to the Origin 2000 line enabled systems of as large as 512 processors.
The second generation system, originally called SN-1 but later redubbed SN-MIPS, was released in July 2000, under the product name Origin 3000. The Origin 3000 scaled from 4 to 512 processors, with 1,024-processor configurations delivered by special order to some customers. A smaller, less scalable implementation of the technology followed later under the name Origin 300.
In November 2002, SGI announced a repackaging of their SN system, under the name Origin 3900. The Origin 3900 quadrupled the processor area density of the SN-MIPS system, from 32 processors per rack up to 128 processors per rack whilst moving to a "fat tree" interconnect topology.
In January 2003, SGI announced a variant of the SN-MIPS platform to be sold under the name Altix 3000. Known internally as SN-IA, the Altix 3000 used Intel Itanium 2 processors in place of the MIPS R1x000 processors in the SN-0 and SN-MIPS families. The Altix 3000 ran the Linux operating system. At the time it was released, the Altix 3000 was the world's most scalable Linux-based computer, supporting up to 64 processors in a single system node. Multiple nodes could be connected together using the same NUMAlink technology to form what SGI predictably termed "superclusters".
In February of 2004, SGI announced general support for 128 processor nodes to be followed by 256 and 512 processor versions available later that year. The NASA Supercomputer "Columbia" is an Altix cluster of 20, 512-processor computers running Linux.
In April 2004, SGI announced the selling of Alias for approx $57 million. Press release.
In October 2004, SGI broke the world's supercomputer speed record with Columbia, a supercomputer built for NASA's Ames Research Center. A cluster of 20 Altix supercomputers with a total of 10,240 Intel Itanium 2 processors, the system achieved sustained performance of 42.7 trillion floating-point calculations per second (teraflops), easily topping Japan's famed Earth Simulator, rated at 35.86 teraflops. Columbia's reign would be a short one: about a week later, IBM's upgraded Blue Gene/L clocked in at 70.7 teraflops. As of November 2005, Columbia ranked No. 4, behind Blue Gene/L (now achieving 280.6 teraflops), a smaller Blue Gene, and ASC Purple, all built by IBM.
Product line[edit]
Current products[edit]
MIPS-based systems (End of production: December 2006)[edit]
Fuel entry-level workstation
Tezro high-end workstation
Origin 350 mid-range server
Origin 3000 high-end server
Itanium-/Itanium 2-based systems[edit]
Altix 450 mid-range server
Altix 4000 high-end server
Intel EM64T-based systems[edit]
Altix XE210 server
Altix XE240 server
Altix XE1200 cluster
Altix XE1300 cluster
Storage systems[edit]
InfiniteStorage 10000
InfiniteStorage 6700
InfiniteStorage 4500
InfiniteStorage 4000
InfiniteStorage 350
InfiniteStorage 220
InfiniteStorage 120
InfiniteStorage RM610/RM660
Past products[edit]
These are no longer being manufactured. SGI still sells some of them as "remarketed" (i.e., used) products.
Motorola 68k-based systems[edit]
IRIS 1000 series diskless graphics terminals
IRIS 2000 series workstations
IRIS 3000 series workstations
MIPS-based systems[edit]
Workstations[edit]
Professional IRIS series (IRIS 4D/50/60/70/80/85)
Personal IRIS series (IRIS 4D/20/25/30/35)
IRIS Power Series (IRIS 4D/1x0/2x0/3x0/4x0)
IRIS Crimson (deskside workstation/server)
IRIS Indigo series (Indigo, Indigo R4000)
Indigo² series (Indigo², Power Indigo², Indigo² R10000)
Indy workstation
O2/O2+ workstation
Octane workstation
Octane2 workstation
Onyx (deskside and larger workstations)
Onyx2 (deskside and larger workstations)
Power Onyx (deskside and larger workstations)
Onyx R10000 (deskside and larger workstations)
Onyx 350 (Origin 350 with graphics hardware)
SGI Onyx 3000 (Origin 3000 with graphics hardware)
SGI Onyx4 visualization system
Servers[edit]
Challenge S (desktop server)
Challenge M/Power Challenge M (desktop server)
Challenge DM (deskside server)
Challenge L/Power Challenge/Challenge 10000 (deskside server)
Challenge XL/Power Challenge XL (rack server)
SGI Origin 200 mid-range server
SGI Origin 2000 high-end server
SGI Origin 300 mid-range server
Intel IA-32-based systems[edit]
SGI 320 Visual Workstation (Windows NT)
SGI 540 Visual Workstation (Windows NT)
SGI 230 Workstation (Linux/Windows NT)
SGI 330 Workstation (Linux/Windows NT)
SGI 550 Workstation (Linux/Windows NT)
SGI Zx10 Visual Workstation (Windows)
SGI Zx10 VE Visual Workstation (Windows)
SGI Zx10 Server (Windows)
SGI 1100 Server (Linux/Windows)
SGI 1200 Server (Linux/Windows)
SGI 1400 server (Linux/Windows)
SGI 1450 server (Linux/Windows)
SGI Internet Server (Linux)
SGI Internet Server for E-commerce (Linux)
SGI Internet Server for Messaging (Linux)
Itanium-/Itanium 2-based systems[edit]
SGI 750 workstation
Altix 330 mid-range server
Altix 350 mid-range server
Altix 3000 high-end server
Prism high-end workstation
Storage systems[edit]
Total Performance 9500
Total Performance 9400
Total Performance 9300
Total Performance 9100
Total Performance 900
Origin Vault
Challenge RAID
Challenge S Vault
Documentation[edit]
Gallery[edit]
See also[edit]
IRIX
OpenGL
XFS
[edit]
General Unofficial SGI Information
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The Computerless Computer Company
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"Andrew S. Rappaport",
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2014-08-01T04:09:04+00:00
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By the year 2000, the most successful computer companies will be those that buy computers rather than build them. The leaders will leverage fabulously cheap and powerful hardware to create and deliver new applications, pioneer and control new computing paradigms, and assemble distribution and integration expertise that creates enduring influence with customers. So long as […]
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/resources/images/favicon.ico
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Harvard Business Review
|
https://hbr.org/1991/07/the-computerless-computer-company
|
AR
Andrew S. Rappaport is president, and
SH
Shmuel Halevi is vice president of The Technology Research Group in Boston. The firm, founded in 1984, advises semiconductor, computer, and software companies in the United States and Europe on business strategy, marketing, and product development.
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https://ohiostate.pressbooks.pub/graphicshistory/chapter/1-2-apollo-sun-sgi-2/
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Sun – Computer Graphics and Computer Animation: A Retrospective Overview
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2017-06-20T00:00:00
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|
15.2 Apollo / SGI / Sun
In the early 1980s some computer companies concentrated their efforts on the development of specialized workstations, the “graphics workstation”. Customers used graphics workstations for electronic and mechanical design because basic workstations were too slow and lacked sophisticated graphics.
Apollo
Several early graphics workstations were sold by Apollo and Sun. Early on the Sun 1, the Sun 2 and Sun 3 workstations came on the market. Apollo, one of the real workstation pioneers, started their workstation development in 1981 with the DN100 and later the DN550. Their workstations were widely used through the mid 80s, and Apollo, Sun, and HP each had about 20% of the workstation market when Apollo (after a short try at a joint project with Intel), produced the DN3000, the DN4000 and four-CPU DN10000 workstations (DN meant “DOMAIN Node”.) They introduced the PRISM CPU to the market. It was the first real two-instruction microprocessor and the fastest available workstation until the IBM RS/6000 series. Apollo was acquired by HP in 1989, and they merged their own Series 9000 workstation line with that of the Apollo systems.
SGI
One of the most important contributions in the area of display hardware is attributed to Jim Clark of Stanford in 1982. His idea, called the Geometry Engine, was to create a collection of components in a VLSI processor that would accomplish the main operations that were required in the image synthesis pipeline: matrix transforms, clipping, and the scaling operations that provided the transformation to view space. Clark attempted to shop his design around to computer companies, and finding no takers, he and colleagues at Stanford started their own company, Silicon Graphics Inc.
Silicon Graphics Inc. (later known simply as SGI) was one of the leading manufacturers of graphics computer systems, workstations, and supercomputers. Its history may be described as an exemplary Silicon Valley success story, until lower-priced competitors and inept production methods resulted in heavy losses in the late 1990s. Silicon Graphics capitalized on pioneering technology in 3-D computer graphics to create products used in a wide variety of professions, including engineering, chemistry, and film production.
In 1983 the company released its first products: the IRIS (Integrated Raster Imaging System) 1000 graphics terminal and an accompanying software interface known as the IRIS Graphics Library. It used the 8MHz M68000 processor with up to 2 MB memory, a custom 1024×1024 frame buffer, and the Geometry Engine gave the workstation its impressive image generation power. The next year Silicon Graphics released its first workstation, the IRIS 1400, and followed it in 1985 with the IRIS 2400, a workstation with a window manager. These early entries in the IRIS series targeted the middle range of the graphics workstations market – those selling for $45,000 to $100,000 – and accounted for over 50 percent of all 3-D graphics workstations sold by 1988.
Silicon Graphics succeeded because it introduced a product that served cross-markets, from 3-D graphics simulations useful to mechanical engineers who wanted to assess their designs without having to build prototypes, to chemists who used 3-D modeling to study molecules. Such workstations as the IRIS series provided power at a relatively affordable price and major workstation manufacturers, including Hewlett-Packard, Apollo Computer, and Sun Microsystems, were slow to focus their energies on 3-D graphics, leaving Silicon Graphics without much direct competition.
In 1987 it became the first computer company to make use of MIPS Computer Systems’ innovative reduced instruction-set chip, or RISC, when it incorporated RISC architecture into its new IRIS 4D/60 workstation. Within several years, most workstations would use RISCs. The company received a boost the next year when IBM agreed to buy Silicon Graphics’ IRIS graphics card for use in its own RS/6000 graphics workstations and to take out a license for the IRIS Graphics Library, helping to make the IRIS Graphics Library the industry standard.
Also in 1988, Silicon Graphics introduced a new line of entry level graphics workstations, which it called Eclipse. The Eclipse was designed to bring 3-D graphics to people who had previously regarded IRIS workstations as unaffordable. Eclipse lacked the speed and processing power of more expensive machines, but initial versions sold for less than $20,000 – as little as one-fifth of the cost of higher-end machines.
In 1991 the company released an even less expensive product line – the IRIS Indigo, a 3-D graphics workstation so compact that the company called it the first personal computer to use RISC architecture. The Indigo offered many features found on more expensive models, as well as digital audio and video processing capability, and the base model sold for less than $10,000.
In 1991 the company granted a license to Microsoft for the IRIS Graphics Library. Microsoft intended to use the IRIS Graphics Library in its NT operating system for personal computers.
In 1993 Silicon Graphics and Industrial Light and Magic joined forces to create a high-tech entertainment special effects laboratory. The joint venture was called Joint Environment for Digital Imaging (JEDI) and grew out of the fact that Industrial Light and Magic had been using Silicon Graphics workstations since 1987. The cyborg featured in the film Terminator 2, the dinosaurs in Jurassic Park, special effects in The Hunt for Red October and The Abyss, and animation in Beauty and the Beast were all created on Silicon Graphics computers. For Industrial Light and Magic, the benefits were that digital manipulation of images cost about one-tenth as much as models and drawings, and, according to Lucas, would “change motion pictures from a photographic process to more of a painterly process,” enabling greater authorial control over a film’s appearance. For its part, Silicon Graphics hoped that alliance with an entertainment industry partner would help push the leading edge of its technological development forward.
In 1995 Silicon Graphics teamed up with DreamWorks SKG – the entertainment entity formed by Steven Spielberg, Jeffrey Katzenberg, and David Geffen, and DreamWorks Digital Studio for the creation of animation, feature films, and other products. Silicon Graphics also acquired Alias Research and Wavefront Technologies for $500 million in 1995, which positioned Silicon Graphics in the software business. Alias specialized in 3-D animation software that was widely used in the entertainment industry and in industrial design. It had developed new ways to simulate wind, fire, skin, and other special effects, and it also had an animation tool used by Nintendo in its video games. WaveFront Technologies developed industrial visualization software.
In April 1999 Silicon Graphics Inc. changed its name to SGI as part of a new worldwide corporate identity strategy that reflected the breadth and depth of the company’s products and services. The strategy included three sub-brands: SGI servers and workstations, Silicon Graphics visual workstations, and Cray supercomputers.
(Note: In 2005, SGI was delisted from the NYSE and filed Chapter 11 in 2006. They reemerged from bankruptcy later that year, but were delisted from NASDAQ in 2008. They again declared bankruptcy, and sold their assets to Rackable Systems in 2009 for $42.5M. Their downfall was documented in an interesting series of web articles at http://www.vizworld.com/tag/sgi-bts//)
Sun
At about the same time in 1982, Sun Microcomputers was founded. They also introduced a workstation that had an embedded frame buffer. The CG1, CG2 and CG3 boards were the boards used in the Sun 1, Sun 2 and Sun 3 workstations. (The Apollo workstation also provided the single user-dedicated frame buffer technology.) Sun later used an add-on accelerator board made by Trancept Systems for the Sun 3 and Sun 4 workstations.
According to Nick England, one of the designers of the TAAC board:
In the Spring of 1987 we introduced the TAAC-1 product for Sun Microsystems workstations. The TAAC-1 consisted of two large PC boards, one full of video RAM, the other full of a micro-programmed wide-instruction-word (200 bits) processor optimized for graphics and imaging operations. The TAAC-1 was plugged into and memory mapped onto the Sun’s VME bus.
The Trancept board was intended to be replaced by the VX/VMX boards in 1990. The VX included one Intel i860 processor with a VRAM frame buffer, and the MVX added a board with 4 more i860’s (potentially up to 4 boards with 16 processors).
Both SGI and Sun were facing fierce competition in the 3-D graphics and imaging markets from Apple Computer Inc., which was introducing QuickDraw 3D, and Microsoft Corporation, which had recently acquired SoftImage and its line of simulation software. In addition Steve Jobs, founder of Apple and NeXT, had recently purchased animation producer Pixar and teamed with Walt Disney Studios on Toy Story, a full-length animation film created entirely with computers. In 2006 SGI filed for Chapter 11 bankruptcy, and although they emerged from the reorganization that same year, they filed again in 2009. The once powerful workstation company sold all of its assets to Rackable Systems for just over $40M. Also in 2009, Sun and Oracle entered into an acquisition agreement, and in 2010 it was acquired by Oracle; their sprawling Menlo Park headquarters became the new home of Facebook in 2011.
Movie 15.1 SGI Iris 2400
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en
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Once-Mighty SGI Sold to Rackable for $25 Million
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SGI was once one of the fastest-growing companies in America. Now it’s just another casualty of Silicon Valley’s creative destruction.
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Bits Blog
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https://archive.nytimes.com/bits.blogs.nytimes.com/2009/04/01/once-mighty-sgi-sold-to-rackable-for-25-million/
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https://www.linkedin.com/pulse/cluster-computing-market-research-report-regional-kpscf
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en
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Cluster Computing Market Research Report on Regional Size and Status 2024-2032
|
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"Precision Reports | Business Journal"
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2024-04-15T08:57:21+00:00
|
"Cluster Computing Market" Research Report 2024 Presents an Extensive Analysis of Market Dynamics, Competitive Landscape and Emerging Trends By (On-premises, Cloud-based), By Application (Life Science, Industrial Manufacturing, Banking, Defense, Gaming Industry, Retail, Others), By Regional Outlook
|
en
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https://static.licdn.com/aero-v1/sc/h/al2o9zrvru7aqj8e1x2rzsrca
|
https://www.linkedin.com/pulse/cluster-computing-market-research-report-regional-kpscf
|
"Cluster Computing Market" Research Report 2024 Presents an Extensive Analysis of Market Dynamics, Competitive Landscape and Emerging Trends By (On-premises, Cloud-based), By Application (Life Science, Industrial Manufacturing, Banking, Defense, Gaming Industry, Retail, Others), By Regional Outlook and Forecast, 2024 - 2032. Our latest research endeavor aims to provide valuable insights encompassing critical elements such as market size, market share, CAGR status, PESTEL & SWOT analysis, historical assessment, growth prospects, industry drivers and constraints, revenue segmentation, and more.
Browse Detailed TOC of Cluster Computing Market report which is spread across 118+ Pages, Tables and Figures with Charts that provides exclusive data, information, vital statistics, trends, and competitive landscape details in this niche sector.
[ Number of Tables and Figures : 144 ]
Who is the largest manufacturers of Cluster Computing Market worldwide?
IBM
PSSC Labs
Silicon Graphics International (SGI)
Intel
Dell
Hewlett Packard
Amazon Web Services
Bright Computing
Google
Microsoft
Advanced Micro Devices
Cisco Systems
TotalCAE
Cray
Cepoint Networks
Lenovo
Penguin Computing
Nor-Tech
RackMountPro
Get a Sample PDF of report - https://www.precisionreports.co/enquiry/request-sample/24680027
Short Description About Cluster Computing Market:
The Global Cluster Computing market is anticipated to rise at a considerable rate during the forecast period, between 2024 and 2032. In 2023, the market is growing at a steady rate and with the rising adoption of strategies by key players, the market is expected to rise over the projected horizon.
Cluster Computing or High Performance computing is defined as an addition of processes for delivering higher and efficient performance as compared to Others desktop workstation or computer. It helps the companies to solve problems related to engineering, business, or science. Cluster computing help to solve problems of recurring and complex operations as individual nodes work together and hence can solve problem more efficiently than one computer.
Market Analysis and Insights: Global Cluster Computing Market
The global Cluster Computing market is projected to grow from US$ 36820 million in 2024 to US$ 43450 million by 2032, at a Compound Annual Growth Rate (CAGR) of 2.8% during the forecast period.
North America is dominating the market of Cluster Computing due to the presence of the global players in this region as well as high technological advancement. North America is expected to dominate the market throughout the forecast period whereas Asia-Pacific has emerged as fastest growing market and expected to be the second biggest market by the end of forecast period. Currently Europe holds second position in the market but expected to be dominated by Asia-Pacific by the end of forecast period.
Report Includes
This report presents an overview of global market for Cluster Computing market size. Analyses of the global market trends, with historic market revenue data for 2019 - 2023, estimates for 2024, and projections of CAGR through 2032.
This report researches the key producers of Cluster Computing, also provides the revenue of main regions and countries. Highlights of the upcoming market potential for Cluster Computing, and key regions/countries of focus to forecast this market into various segments and sub-segments. Country specific data and market value analysis for the U.S., Canada, Mexico, Brazil, China, Japan, South Korea, Southeast Asia, India, Germany, the U.K., Italy, Middle East, Africa, and Other Countries.
This report focuses on the Cluster Computing revenue, market share and industry ranking of main companies, data from 2018 to 2024. Identification of the major stakeholders in the global Cluster Computing market, and analysis of their competitive landscape and market positioning based on recent developments and segmental revenues. This report will help stakeholders to understand the competitive landscape and gain more insights and position their businesses and market strategies in a better way.
This report analyzes the segments data by type and by application, revenue, and growth rate, from 2018 to 2032. Evaluation and forecast the market size for Cluster Computing revenue, projected growth trends, production technology, application and end-user industry.
Descriptive company profiles of the major global players, including IBM, PSSC Labs, Silicon Graphics International (SGI), Intel, Dell, Hewlett Packard, Amazon Web Services, Bright Computing and Google, etc.
Get a Sample Copy of the Cluster Computing Report 2024
What are the factors driving the growth of the Cluster Computing Market?
Growing demand for below applications around the world has had a direct impact on the growth of the Cluster Computing
Life Science
Industrial Manufacturing
Banking
Defense
Gaming Industry
Retail
Others
What are the types of Cluster Computing available in the Market?
Based on Product Types the Market is categorized into Below types that held the largest Cluster Computing market share In 2023.
On-premises
Cloud-based
Which regions are leading the Cluster Computing Market?
North America (United States, Canada and Mexico)
Europe (Germany, UK, France, Italy, Russia and Turkey etc.)
Asia-Pacific (China, Japan, Korea, India, Australia, Indonesia, Thailand, Philippines, Malaysia and Vietnam)
South America (Brazil, Argentina, Columbia etc.)
Middle East and Africa (Saudi Arabia, UAE, Egypt, Nigeria and South Africa)
Inquire more and share questions if any before the purchase on this report at -https://www.precisionreports.co/enquiry/pre-order-enquiry/24680027
This Cluster Computing Market Research/Analysis Report Contains Answers to your following Questions
What are the global trends in the Cluster Computing market? Would the market witness an increase or decline in the demand in the coming years?
What is the estimated demand for different types of products in Cluster Computing? What are the upcoming industry applications and trends for Cluster Computing market?
What Are Projections of Global Cluster Computing Industry Considering Capacity, Production and Production Value? What Will Be the Estimation of Cost and Profit? What Will Be Market Share, Supply and Consumption? What about Import and Export?
Where will the strategic developments take the industry in the mid to long-term?
What are the factors contributing to the final price of Cluster Computing? What are the raw materials used for Cluster Computing manufacturing?
How big is the opportunity for the Cluster Computing market? How will the increasing adoption of Cluster Computing for mining impact the growth rate of the overall market?
How much is the global Cluster Computing market worth? What was the value of the market In 2023?
Who are the major players operating in the Cluster Computing market? Which companies are the front runners?
Which are the recent industry trends that can be implemented to generate additional revenue streams?
What Should Be Entry Strategies, Countermeasures to Economic Impact, and Marketing Channels for Cluster Computing Industry?
Cluster Computing Market - Covid-19 Impact and Recovery Analysis:
We were monitoring the direct impact of covid-19 in this market, further to the indirect impact from different industries. This document analyzes the effect of the pandemic on the Cluster Computing market from a international and nearby angle. The document outlines the marketplace size, marketplace traits, and market increase for Cluster Computing industry, categorised with the aid of using kind, utility, and patron sector. Further, it provides a complete evaluation of additives concerned in marketplace improvement in advance than and after the covid-19 pandemic. Report moreover done a pestel evaluation within the business enterprise to study key influencers and boundaries to entry.
Our studies analysts will assist you to get custom designed info to your report, which may be changed in phrases of a particular region, utility or any statistical info. In addition, we're constantly inclined to conform with the study, which triangulated together along with your very own statistics to make the marketplace studies extra complete for your perspective.
Final Report will add the analysis of the impact of Russia-Ukraine War and COVID-19 on this Cluster Computing Industry.
TO KNOW HOW COVID-19 PANDEMIC AND RUSSIA UKRAINE WAR WILL IMPACT THIS MARKET - REQUEST SAMPLE
Detailed TOC of Global Cluster Computing Market Research Report, 2024-2032
1 Report Overview
1.1 Study Scope
1.2 Market Analysis by Type
1.2.1 Global Cluster Computing Market Size Growth Rate by Type, 2018 VS 2022 VS 2029
1.2.2 On-premises
1.2.3 Cloud-based
1.3 Market by Application
1.3.1 Global Cluster Computing Market Size Growth Rate by Application, 2018 VS 2022 VS 2029
1.3.2 Life Science
1.3.3 Industrial Manufacturing
1.3.4 Banking
1.3.5 Defense
1.3.6 Gaming Industry
1.3.7 Retail
1.3.8 Others
1.4 Assumptions and Limitations
1.5 Study Objectives
1.6 Years Considered
2 Global Growth Trends
2.1 Global Cluster Computing Market Perspective (2018-2029)
2.2 Global Cluster Computing Growth Trends by Region
2.2.1 Cluster Computing Market Size by Region: 2018 VS 2022 VS 2029
2.2.2 Cluster Computing Historic Market Size by Region (2018-2023)
2.2.3 Cluster Computing Forecasted Market Size by Region (2024-2029)
2.3 Cluster Computing Market Dynamics
2.3.1 Cluster Computing Industry Trends
2.3.2 Cluster Computing Market Drivers
2.3.3 Cluster Computing Market Challenges
2.3.4 Cluster Computing Market Restraints
3 Competition Landscape by Key Players
3.1 Global Revenue Cluster Computing by Players
3.1.1 Global Cluster Computing Revenue by Players (2018-2023)
3.1.2 Global Cluster Computing Revenue Market Share by Players (2018-2023)
3.2 Global Cluster Computing Market Share by Company Type (Tier 1, Tier 2, and Tier 3)
3.3 Global Key Players of Cluster Computing, Ranking by Revenue, 2021 VS 2022 VS 2023
3.4 Global Cluster Computing Market Concentration Ratio
3.4.1 Global Cluster Computing Market Concentration Ratio (CR5 and HHI)
3.4.2 Global Top 10 and Top 5 Companies by Cluster Computing Revenue in 2022
3.5 Global Key Players of Cluster Computing Head office and Area Served
3.6 Global Key Players of Cluster Computing, Product and Application
3.7 Global Key Players of Cluster Computing, Date of Enter into This Industry
3.8 Mergers & Acquisitions, Expansion Plans
4 Cluster Computing Breakdown Data by Type
4.1 Global Cluster Computing Historic Market Size by Type (2018-2023)
4.2 Global Cluster Computing Forecasted Market Size by Type (2024-2029)
5 Cluster Computing Breakdown Data by Application
5.1 Global Cluster Computing Historic Market Size by Application (2018-2023)
5.2 Global Cluster Computing Forecasted Market Size by Application (2024-2029)
6 North America
6.1 North America Cluster Computing Market Size (2018-2029)
6.2 North America Cluster Computing Market Size by Type
6.2.1 North America Cluster Computing Market Size by Type (2018-2023)
6.2.2 North America Cluster Computing Market Size by Type (2024-2029)
6.2.3 North America Cluster Computing Market Share by Type (2018-2029)
6.3 North America Cluster Computing Market Size by Application
6.3.1 North America Cluster Computing Market Size by Application (2018-2023)
6.3.2 North America Cluster Computing Market Size by Application (2024-2029)
6.3.3 North America Cluster Computing Market Share by Application (2018-2029)
6.4 North America Cluster Computing Market Size by Country
6.4.1 North America Cluster Computing Market Size by Country: 2018 VS 2022 VS 2029
6.4.2 North America Cluster Computing Market Size by Country (2018-2023)
6.4.3 North America Cluster Computing Market Size by Country (2024-2029)
6.4.4 U.S.
6.4.5 Canada
7 Europe
7.1 Europe Cluster Computing Market Size (2018-2029)
7.2 Europe Cluster Computing Market Size by Type
7.2.1 Europe Cluster Computing Market Size by Type (2018-2023)
7.2.2 Europe Cluster Computing Market Size by Type (2024-2029)
7.2.3 Europe Cluster Computing Market Share by Type (2018-2029)
7.3 Europe Cluster Computing Market Size by Application
7.3.1 Europe Cluster Computing Market Size by Application (2018-2023)
7.3.2 Europe Cluster Computing Market Size by Application (2024-2029)
7.3.3 Europe Cluster Computing Market Share by Application (2018-2029)
7.4 Europe Cluster Computing Market Size by Country
7.4.1 Europe Cluster Computing Market Size by Country: 2018 VS 2022 VS 2029
7.4.2 Europe Cluster Computing Market Size by Country (2018-2023)
7.4.3 Europe Cluster Computing Market Size by Country (2024-2029)
7.4.3 Germany
7.4.4 France
7.4.5 U.K.
7.4.6 Italy
7.4.7 Russia
7.4.8 Nordic Countries
8 China
8.1 China Cluster Computing Market Size (2018-2029)
8.2 China Cluster Computing Market Size by Type
8.2.1 China Cluster Computing Market Size by Type (2018-2023)
8.2.2 China Cluster Computing Market Size by Type (2024-2029)
8.2.3 China Cluster Computing Market Share by Type (2018-2029)
8.3 China Cluster Computing Market Size by Application
8.3.1 China Cluster Computing Market Size by Application (2018-2023)
8.3.2 China Cluster Computing Market Size by Application (2024-2029)
8.3.3 China Cluster Computing Market Share by Application (2018-2029)
9 Asia (excluding China)
9.1 Asia Cluster Computing Market Size (2018-2029)
9.2 Asia Cluster Computing Market Size by Type
9.2.1 Asia Cluster Computing Market Size by Type (2018-2023)
9.2.2 Asia Cluster Computing Market Size by Type (2024-2029)
9.2.3 Asia Cluster Computing Market Share by Type (2018-2029)
9.3 Asia Cluster Computing Market Size by Application
9.3.1 Asia Cluster Computing Market Size by Application (2018-2023)
9.3.2 Asia Cluster Computing Market Size by Application (2024-2029)
9.3.3 Asia Cluster Computing Market Share by Application (2018-2029)
9.4 Asia Cluster Computing Market Size by Region
9.4.1 Asia Cluster Computing Market Size by Region: 2018 VS 2022 VS 2029
9.4.2 Asia Cluster Computing Market Size by Region (2018-2023)
9.4.3 Asia Cluster Computing Market Size by Region (2024-2029)
9.4.4 Japan
9.4.5 South Korea
9.4.6 China Taiwan
9.4.7 Southeast Asia
9.4.8 India
9.4.9 Australia
10 Middle East, Africa, and Latin America
10.1 Middle East, Africa, and Latin America Cluster Computing Market Size (2018-2029)
10.2 Middle East, Africa, and Latin America Cluster Computing Market Size by Type
10.2.1 Middle East, Africa, and Latin America Cluster Computing Market Size by Type (2018-2023)
10.2.2 Middle East, Africa, and Latin America Cluster Computing Market Size by Type (2024-2029)
10.2.3 Middle East, Africa, and Latin America Cluster Computing Market Share by Type (2018-2029)
10.3 Middle East, Africa, and Latin America Cluster Computing Market Size by Application
10.3.1 Middle East, Africa, and Latin America Cluster Computing Market Size by Application (2018-2023)
10.3.2 Middle East, Africa, and Latin America Cluster Computing Market Size by Application (2024-2029)
10.3.3 Middle East, Africa, and Latin America Cluster Computing Market Share by Application (2018-2029)
10.4 Middle East, Africa, and Latin America Cluster Computing Market Size by Country
10.4.1 Middle East, Africa, and Latin America Cluster Computing Market Size by Country: 2018 VS 2022 VS 2029
10.4.2 Middle East, Africa, and Latin America Cluster Computing Market Size by Country (2018-2023)
10.4.3 Middle East, Africa, and Latin America Cluster Computing Market Size by Country (2024-2029)
10.4.4 Brazil
10.4.5 Mexico
10.4.6 Turkey
10.4.7 Saudi Arabia
10.4.8 Israel
10.4.9 GCC Countries
11 Key Players Profiles
11.1 IBM
11.1.1 IBM Company Details
11.1.2 IBM Business Overview
11.1.3 IBM Cluster Computing Introduction
11.1.4 IBM Revenue in Cluster Computing Business (2018-2023)
11.1.5 IBM Recent Developments
11.2 PSSC Labs
11.2.1 PSSC Labs Company Details
11.2.2 PSSC Labs Business Overview
11.2.3 PSSC Labs Cluster Computing Introduction
11.2.4 PSSC Labs Revenue in Cluster Computing Business (2018-2023)
11.2.5 PSSC Labs Recent Developments
11.3 Silicon Graphics International (SGI)
11.3.1 Silicon Graphics International (SGI) Company Details
11.3.2 Silicon Graphics International (SGI) Business Overview
11.3.3 Silicon Graphics International (SGI) Cluster Computing Introduction
11.3.4 Silicon Graphics International (SGI) Revenue in Cluster Computing Business (2018-2023)
11.3.5 Silicon Graphics International (SGI) Recent Developments
11.4 Intel
11.4.1 Intel Company Details
11.4.2 Intel Business Overview
11.4.3 Intel Cluster Computing Introduction
11.4.4 Intel Revenue in Cluster Computing Business (2018-2023)
11.4.5 Intel Recent Developments
11.5 Dell
11.5.1 Dell Company Details
11.5.2 Dell Business Overview
11.5.3 Dell Cluster Computing Introduction
11.5.4 Dell Revenue in Cluster Computing Business (2018-2023)
11.5.5 Dell Recent Developments
11.6 Hewlett Packard
11.6.1 Hewlett Packard Company Details
11.6.2 Hewlett Packard Business Overview
11.6.3 Hewlett Packard Cluster Computing Introduction
11.6.4 Hewlett Packard Revenue in Cluster Computing Business (2018-2023)
11.6.5 Hewlett Packard Recent Developments
11.7 Amazon Web Services
11.7.1 Amazon Web Services Company Details
11.7.2 Amazon Web Services Business Overview
11.7.3 Amazon Web Services Cluster Computing Introduction
11.7.4 Amazon Web Services Revenue in Cluster Computing Business (2018-2023)
11.7.5 Amazon Web Services Recent Developments
11.8 Bright Computing
11.8.1 Bright Computing Company Details
11.8.2 Bright Computing Business Overview
11.8.3 Bright Computing Cluster Computing Introduction
11.8.4 Bright Computing Revenue in Cluster Computing Business (2018-2023)
11.8.5 Bright Computing Recent Developments
11.9 Google
11.9.1 Google Company Details
11.9.2 Google Business Overview
11.9.3 Google Cluster Computing Introduction
11.9.4 Google Revenue in Cluster Computing Business (2018-2023)
11.9.5 Google Recent Developments
11.10 Microsoft
11.10.1 Microsoft Company Details
11.10.2 Microsoft Business Overview
11.10.3 Microsoft Cluster Computing Introduction
11.10.4 Microsoft Revenue in Cluster Computing Business (2018-2023)
11.10.5 Microsoft Recent Developments
11.11 Advanced Micro Devices
11.11.1 Advanced Micro Devices Company Details
11.11.2 Advanced Micro Devices Business Overview
11.11.3 Advanced Micro Devices Cluster Computing Introduction
11.11.4 Advanced Micro Devices Revenue in Cluster Computing Business (2018-2023)
11.11.5 Advanced Micro Devices Recent Developments
11.12 Cisco Systems
11.12.1 Cisco Systems Company Details
11.12.2 Cisco Systems Business Overview
11.12.3 Cisco Systems Cluster Computing Introduction
11.12.4 Cisco Systems Revenue in Cluster Computing Business (2018-2023)
11.12.5 Cisco Systems Recent Developments
11.13 TotalCAE
11.13.1 TotalCAE Company Details
11.13.2 TotalCAE Business Overview
11.13.3 TotalCAE Cluster Computing Introduction
11.13.4 TotalCAE Revenue in Cluster Computing Business (2018-2023)
11.13.5 TotalCAE Recent Developments
11.14 Cray
11.14.1 Cray Company Details
11.14.2 Cray Business Overview
11.14.3 Cray Cluster Computing Introduction
11.14.4 Cray Revenue in Cluster Computing Business (2018-2023)
11.14.5 Cray Recent Developments
11.15 Cepoint Networks
11.15.1 Cepoint Networks Company Details
11.15.2 Cepoint Networks Business Overview
11.15.3 Cepoint Networks Cluster Computing Introduction
11.15.4 Cepoint Networks Revenue in Cluster Computing Business (2018-2023)
11.15.5 Cepoint Networks Recent Developments
11.16 Lenovo
11.16.1 Lenovo Company Details
11.16.2 Lenovo Business Overview
11.16.3 Lenovo Cluster Computing Introduction
11.16.4 Lenovo Revenue in Cluster Computing Business (2018-2023)
11.16.5 Lenovo Recent Developments
11.17 Penguin Computing
11.17.1 Penguin Computing Company Details
11.17.2 Penguin Computing Business Overview
11.17.3 Penguin Computing Cluster Computing Introduction
11.17.4 Penguin Computing Revenue in Cluster Computing Business (2018-2023)
11.17.5 Penguin Computing Recent Developments
11.18 Nor-Tech
11.18.1 Nor-Tech Company Details
11.18.2 Nor-Tech Business Overview
11.18.3 Nor-Tech Cluster Computing Introduction
11.18.4 Nor-Tech Revenue in Cluster Computing Business (2018-2023)
11.18.5 Nor-Tech Recent Developments
11.19 RackMountPro
11.19.1 RackMountPro Company Details
11.19.2 RackMountPro Business Overview
11.19.3 RackMountPro Cluster Computing Introduction
11.19.4 RackMountPro Revenue in Cluster Computing Business (2018-2023)
11.19.5 RackMountPro Recent Developments
12 Analyst's Viewpoints/Conclusions
13 Appendix
13.1 Research Methodology
13.1.1 Methodology/Research Approach
13.1.2 Data Source
13.2 Disclaimer
13.3 Author Details
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Business Lessons from Jim Clark (Silicon Graphics, Netscape, etc.)
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Jim Clark is an entrepreneur and computer scientist. He founded several important businesses including the two named in the title and Healtheon (which eventually merged with WebMD). He is currently the founder of the building management systems provider CommandScape. Clark is a friend of my friend Craig McCaw and I have heard some colorful…
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Jim Clark is an entrepreneur and computer scientist. He founded several important businesses including the two named in the title and Healtheon (which eventually merged with WebMD). He is currently the founder of the building management systems provider CommandScape. Clark is a friend of my friend Craig McCaw and I have heard some colorful stories about him as a result. He is not boring. As an example of the Clark’s non-typical approach to life, Mark Andreessen said during an interview once: “I just ran into an entrepreneur who said, ‘I just ran into Jim Clark at a resort town in Italy. Jim was in a hot tub carved into the side of a mountain. I said, ‘Yes! That was Jim Clark.’”
“Don’t be afraid to cannibalize your product. You must be willing to challenge your own product lines. For example, Barnes and Noble could have addressed the Internet, but didn’t until Amazon forced them to. That is the worst way to do it.”
Clayton Christensen argues that only the upper left quadrant in this matrix is genuinely “disruptive” in the way uses the term in The Innovator’s Dilemma. The best way to see which view is right is to put some real businesses in the quadrants:
Overlooked Low-end Customer Segment Most Demanding Customer Segment Inferior to existing solution Netflix in 1997
Amazon in 1994
Superior to existing Solutions Uber/Lyft
Airbnb
Tesla
iPhone
To be provocative in order to to make this blog post more interesting I will argue here that there are other ways to be disruptive. You might want to think about where some other businesses fit best in this matrix. For example:
In thinking about this issue it is useful to review what Christensen wrote in The Innovator’s Dilemma:
“An innovation that is disruptive allows a whole new population of consumers access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill.” “The very decision-making and resource allocation processes that are key to the success of established companies are the very processes that reject disruptive technologies. These are the reasons why great firms stumbled or failed when confronted with disruptive technology change.”
This classic example is often used to explain The Innovator’s Dilemma:
“Minicomputers were much smaller than mainframes, which had appeared in the 1950s, yet much larger than the personal desktop computers that followed them, beginning in the early 1980s. In the 1970s, minis ruled much of computation. But by the late 1980s, the business desktop microcomputer was eating DEC alive. “People attributed DEC’s demise to [CEO Ken] Olsen,” Christensen says. (Olsen had regarded desktop computers as toys for playing video games and publicly predicted they would fall flat in the business market.)”
What is Innovator’s Dilemma? Is it just an academic way of describing how businesses sometimes purposefully or accidentally end up in a competitive battle possessing different strengths and weaknesses? In my view a disruption based strategy is fundamentally about using asymmetry to create competitive advantage. The key to a successful asymmetric attack in business is to pick a strategy where the competitor has a hard time responding to the attack directly from a position of strength. Guerilla warfare is a classic example of an asymmetric strategy.
“Microsoft was founded the same year as SGI, and they both went public in 1986. I had the experience of my own foolhardy opinion of the PC in those days — that it was a ‘toy’ unworthy of the attention of real computer scientists.”
Steven Sinofsky describes the crux of the issue that Clark is talking about in this way:
“As many have recognized, when inventions and innovations first appear they are often (always) labeled as ‘toys’ or ‘incapable’ of doing ‘real work’ or providing ‘real entertainment’. Of course, many new inventions don’t work out the way inventors had hoped, though quite frequently it is just a matter of timing and the coming together of a variety of circumstances. It can be said that being labeled a toy is necessary, but not sufficient, to become the next big thing.”
Sinofsky’s list of one time “toys” is instructional:
What “toys” would you insert in these years?
Chris Dixon elaborates on the “at first it is viewed as a toy” investing thesis used by many venture capitalists and founders:
“Disruptive technologies are dismissed as toys because when they are first launched they “undershoot” user needs. The first telephone could only carry voices a mile or two. The leading telco of the time, Western Union, passed on acquiring the phone because they didn’t see how it could possibly be useful to businesses and railroads – their primary customers. What they failed to anticipate was how rapidly telephone technology and infrastructure would improve (technology adoption is usually nonlinear due to so-called complementary network effects). The same was true of how mainframe companies viewed the PC (microcomputer), and how modern telecom companies viewed Skype. (Christensen has many more examples in his books).
This does not mean every product that looks like a toy will turn out to be the next big thing. To distinguish toys that are disruptive from toys that will remain just toys, you need to look at products as processes. Obviously, products get better inasmuch as the designer adds features, but this is a relatively weak force. Much more powerful are external forces: microchips getting cheaper, bandwidth becoming ubiquitous, mobile devices getting smarter, etc. For a product to be disruptive it needs to be designed to ride these changes up the utility curve.
…A product doesn’t have to be disruptive to be valuable. There are plenty of products that are useful from day one and continue being useful long term. These are what Christensen calls sustaining technologies. When startups build useful sustaining technologies, they are often quickly acquired or copied by incumbents. If your timing and execution is right, you can create a very successful business on the back of a sustaining technology.”
“The decision to put money into the Internet in 1994 was considered by many of my colleagues to be borderline insane. Most people said things like, The Internet is free; you can’t make money on that! I literally had people telling me I was going to screw up the Internet by bringing more traffic to it.”
Chris Dixon believes that the best ideas to invest in are good ideas that look like bad ideas (AKA “borderline insane’). If what investors like Clark and Dixon say is not true, the optionality associated with the investment is unlikely to be mispriced. In other words, if everyone thinks the idea for the business is a good idea from the beginning the entry price of the investment will be too high to be profitable in a way that is likely to generate a venture capital style financial return.
Which businesses today are good ideas that seem like bad ideas? Buying Dentacoin is a bad idea that seems like a bad idea. What other investments fall into the “what seems like bad idea is a bad idea” category? In what areas are people investing which are so flooded with money that an attractive financial return is unlikely to be realized?
The Y Combinator slide replicated above is: (1) not drawn to scale and (2) varies over time, domain of expertise and investor. Most bad ideas are bad ideas, but a few are not.
What is an example of a business that seemed like a bad idea to some investors that turned out to be a good idea? In November of 2013, Jamie Siminoff was a guest on the television show Shark Tank, He asked for an investment that valued his WiFi enabled video doorbell business at $7 million. Four sharks passed. Kevin O’Leary offered a loan and royalty deal that Siminoff declined to accept. Five years later Amazon agreed to acquire the business for a reported $1 billion.
The founder tells the story of his Shark Tank rejection in this way:
“I will never forget leaving the set without a deal. It was horrible. I could not believe that we had done all of that work and were walking away with nothing. Sure I thought if we aired (the episode has a lower chance of airing without a deal) that we would get a little bit of traction, but I did not think it would be enough to make a real difference for us. I was gutted telling the team. But the show must go on and we went back to work, maintained focus and did what we could. And then we aired… and our lives changed forever. The bump we got from Shark Tank was not decent, it was extraordinary. And it wasn’t just something that lasted for the weekend. It’s still happening today, two years later. In terms of dollars, it was worth millions, but it also brought and provided an incredible amount of credibility and awareness for us with industry partners. Thanks to Shark Tank, we were able to hire more engineers and take the company to another level. It was like replacing the gas in our car with jet fuel…”
“What I recognized after talking to Marc was that the Web was to networks in 1994 what the PC was to computing in 1982.” “Of course, I knew what the Internet was. But I hadn’t thought about what the implications were in terms of its growth rate.”
Bob Metcalfe who co-invented Ethernet and founded 3Com said once in a meeting I was in: “No one ever made a nickel directly from Ethernet technology itself. Businesses have instead made a profit using Ethernet as a foundation for something else.” What Metcalfe was saying is that sometimes the profit is made indirectly from a technology or phenomenon. A classic example of a technology or approach producing profit indirectly is open source software. Many entrepreneurs have realized that a viable path to creating a new business is to create an open source software project and to then build a community around it. The business then tries to hire as many of the best people who worked on it as they can. The advantage that a business company like this brings to customers is how it adds value over and above the open source software — usually offering a combination of complementary services, tools and functions not necessarily available in the free version. Red Hat, Canonical, MySQL, WordPress and Mozilla have adopted this approach. What other businesses would you put in this category?
“In the first year of business [at Netscape], we had almost no sales force. We were just taking orders.” “We recognized in the beginning that the Netscape required a different marketing strategy. The only way we could get large market penetration, was to allow to be freely downloaded, and besides the internet already has that culture in place – a lot of software was free. But we felt that by letting people download the software, we would be able to create a very large market share, and it worked. In a year and a half, we created 40 million users.”
Bill Gurley describes the approach Clark is taking about: “If a disruptive competitor can offer a product or service similar to yours for ‘free’ and if they can make enough money to keep the lights on, then you likely have a problem.” The business model Gurley describes is commonly known as “freemium.” A loss-leader product is not a new concept. Free Tapas have been served in bars in Spain since at least the middle ages. Gillette selling razors at a loss to sell profitable blades is a more modern example. In this model users typically get some value for free and are charged a fee for other complementary services. In some cases the service which has a monetary cost is more advanced in other cases it is less advanced. All businesses today must be prepared for competitors to give away what they sell as an incentive for customers to buy something else. What is different about a freemium strategy today is that many of the free services are digital and have close to zero marginal costs to create and distribute.
Since I am asking many questions in this post, which businesses in the news in 2018 best exemplify this freemium business model described by Clark. Atlassian and Dropbox are two examples. Spotify has a freemium business model. What other companies have adopted a freemium business model?
6. Silicon Graphics was] an excellent group of people but they – and people at every other company – begin to define themselves by what they have been doing, not by what they can do.”
What businesses fit within Clark’s description in this quote? IBM? One way to avoid the trap Clark is describing is to have great “product people” who can create new products that drive the business forward. Fred Wilson their attributes here:
“The product person sets the overall requirements, specs them, focuses on the UI and UX and manages the process. The engineering person builds the product or manages the team that builds the product, or both.” Great products need both types of people.
Steve Jobs was obviously a product person:
“My passion has been to build an enduring company where people were motivated to make great products. The products, not the profits, were the motivation. Sculley flipped these priorities to where the goal was to make money. It’s a subtle difference, but it ends up meaning everything.”
A related problem is what Yoky Matsuoka has called “the Valley of Death” between academia and business. Business Insider describes how Matsuoka views the challenge:
“Research is all about proving an idea that’s never been done before. Have an idea, write a grant, hire research students, get proof-of-concepts and have everyone publish papers. Those papers bring in more grant money and lead to tenure. The gap comes at that point. Researchers assume that some great product person will take the research and turn it into a product to be used by millions of people. But it’s not easy to take a product “that works for 10 people and getting it working for a million or a billion people,” Matsuoka says. And the work required to bridge that gap “is boring for everyone,” she says. Researchers want to focus on new stuff that’s never been done before. They don’t want take something proven and published, and make it stable for a billion users. And product people don’t want to spin their wheels experimenting with early technologies that have only worked for 10 people. Their attitude is “We’re working on real products,” she describes.”
Truly great “product people” are a rare commodity. Who are the best product people you know who are actively involved in a business today? Do you have a product person on your team?
7. At Silicon Graphics I had advocated using cable-TV systems for all kinds of media distribution, for movies on demand and things like that. We did a contract for Time Warner in Orlando that used a computer that was equivalent to the set-top box. All that stuff was expensive—$5,000 per set.” “I was kind of a lone voice [at Silicon Graphics] I was babbling about cable television – and into the wind for a lot of the time. The reaction I got was, ‘Well we’re not a consumer electronics company. Why do we care about cable-TV boxes? Who cares?’” “I believe the Internet is the Information Highway. I’m religious about this. I don’t think it is cable television.”
The Information Highway period in history teaches important lessons about how conventional wisdom can lead businesses, investors and government leaders astray. The metaphor described a plan to create a controlled environment with defined on ramps and off ramps. It was the wrong idea at the wrong time and was buried by the rise of the Internet.
The Internet’s distributed nature is the inverse of what was intended by the promoters of the Information Highway. The founders of the Internet adopted these four core principles:
Each distinct network would have to stand on its own and no internal changes could be required to any such network to connect it to the Internet.
Communications would be on a best effort basis. If a packet didn’t make it to the final destination, it would shortly be retransmitted from the source.
Black boxes would be used to connect the networks; these would later be called gateways and routers. There would be no information retained by the gateways about the individual flows of packets passing through them, thereby keeping them simple and avoiding complicated adaptation and recovery from various failure modes.
There would be no global control at the operations level.
The Internet’s explosive popularity took many people by surprise, including successful software businesses like Microsoft. Some people saw the warning signs earlier than others. Business Week reported at the time:
“The Web-izing of Microsoft begins in February, 1994, when Steven Sinofsky, Gates’s technical assistant, returned to his alma mater, Cornell University, on a recruiting trip. Snowed in at the Ithaca (N.Y.) airport, he headed back to the Cornell campus. That’s when he saw it: students dashing between classes, tapping into terminals, and getting their E-mail and course lists off the Net.
The Internet had spread like wildfire. It was no longer the network for the technically savvy — as it had been seven years earlier when Sinofsky was studying there — but a tool used by students and faculty to communicate with colleagues on campus and around the world. He dashed off a breathless E-mail message called “Cornell is WIRED!” to Gates and his technical staff.”
Bill Gates responded to the change by writing his famous “Internet Tidal Wave” memo, which today would be a rights protected document in the cloud rather than a memo.
There are many other examples of conventional wisdom that turned out to be wrong or a blind alley. Often the mistake is a result of a group of businesses trying to hype their future prospects. For example, telecommunication equipment suppliers have on several occasions been a source of problematic hype. I already mentioned the Information Highway failure but one should also attribute much of the Internet and telecom bubbles to the same source. Equipment suppliers and some operators like Worldcom/UUNet told tall tales about traffic growth which in no small part caused the telecom and Internet bubbles. These bubbles eventually popped as you know.
Is anything like the Information Highway or the telecom/Internet bubbles happening today? The press is repeating massive 5G forecasts for spending on infrastructure right now. For example:
Reuters (MARCH 2, 2018): “GSMA, which represents nearly 800 operators and some 300 suppliers, forecasts capital expenditure (capex) on mobile networks worldwide will be $500 billion over the three years between 2018 to 2020. Expanding 5G could mean capital expenditure rising to 16 to 17 percent of revenues generated by the mobile industry from 2020, up from 15 percent now.”
Is that $500 billion estimate real? What could be motivating that estimate? Could it be, that: “For network equipment makers, such as Ericsson and Nokia, which are struggling with declining sales for 4G gear, the rollout cannot come soon enough.” What could possibly go wrong? Have we seen anything like this before?
What is “5G” anyway? A recent report on the big event at the Mobile Word Congress repeated what was said about 5G at a panel of executives from big equipment suppliers:
“’It’s a new radio, meaning, a new format in which antennae will control electro-magnetic waves,’ said one panelist. Another person said it is a new ‘network architecture.’ Another finally concluded, ‘So we don’t have a definition of 5G.’ The problem is not just coining a succinct description: The technology is “the most hyped thing,” in one panelist’s words, ‘it is all things to all people.” And in that, it is something of a mess at the moment.'”
The Reuters article went on to say:
“’5G is, so far, too much hype, in the sense of its position as a new revolutionary technology,’ Telenor Chief Executive Sigve Brekke told Reuters at Mobile World Congress in Barcelona… CCS Insight analyst Ben Wood said one mobile handset company exhibited a showcase of 5G phones in Barcelona, only to have one display model drop on the floor and break open. ‘It turned out it was completely empty inside,’ he said.”
A lot of what 5G is today is a marketing slogan for many things. The discussion is about to get a bit technical for the last few paragraphs but that is unavoidable. One way to look at 5G is in terms of buckets of things. Just three of these buckets are:
One bucket of 5G is about better software and protocols. Internet of Things (IoT) applications and services may work better as a result of new and better 5G software and protocols for example. Lower latency may enable some new IoT applications. 5G standards enable things like reduce the number of functional components that data must traverse between the device and the servers, enable the deployment of a collection of services on virtualized hosts and implement better spectrum aggregation and sharing. If a wireless system does just the things in this bucket, is it 5G?
One bucket of 5G is about more fixed wireless to homes that may capture at most 5-10% of homes vs fiber/coax cable. ALso in the bucket is more backhaul to base stations using 5G radio frequencies like 28 GHz creating better 4G densification, but small cells are only economic to deploy in some areas.
One bucket of 5G is hype about handsets that receive signals at frequencies above 6 GHz. This claim about the use of so-called millimeter wave frequencies to serve handsets almost all slideware and press releases so far. There may be close to zero applications customers will pay more money for that would justify the higher handset and systems costs that would be required to receive millimeter wave frequencies in a hand held phone. A long time industry expert said this to me in an e-mail recently about millimeter wave frequency use at 5G in handsets:
“They’re putting in lots of antennas so by using beam forming it’s probable that you’ll have some usable 28 GHz signal in some situations. But the primary goal is to use the 28 GHz and above spectrum to serve devices when they’re not in your hand and not moving. Range will still be limited and propagation is challenging. This is the vision, but it does depend on base sites 300-500 feet away. The highest and best use of 28 GHz is for fixed with high gain antennas, etc.”
Below 6 GHz frequencies in handsets work just fine, can deliver higher data rates every year anyway and at far lower cost. The real magic that delivers higher data rates over that last wireless link from a wireless base station is a technology called MIMO.
That’s enough about technology since this post is getting too long. To be consistent with the theme of this post, it seems appropriate to ask readers one final question. Can you think of a better anagram for Information Highway?
Hey, ignoramus — win profit? Ha!
A rough whimper of insanity
Oh, wormy infuriating phase
Hi-ho! Yow! I’m surfing Arpanet!
Notes:
https://www.wired.com/1994/01/sgi/
http://archive.fortune.com/magazines/fortune/fortune_archive/1994/04/18/79191/index.htm
http://fortune.com/2017/08/24/jim-clark-commandscape-startup/
http://money.cnn.com/2000/01/31/electronic/clark/
http://www.referenceforbusiness.com/biography/A-E/Clark-Jim-1944.html
http://fortune.com/2015/08/09/remembering-netscape/
https://www.mercurynews.com/2009/07/16/tech-visionary-jim-clark-speaks-his-mind/
https://www.forbes.com/sites/ryanmac/2012/03/08/jim-clark-the-comeback-billionaire-who-bet-on-apple/#1eb2116377c9
https://engineering.stanford.edu/news/stanford-engineering-hero-jim-clark-talks-about-innovation-and-embracing-change
http://www.nytimes.com/2007/12/26/business/26real.html?_r=1&ref=business&pagewanted=print
http://money.cnn.com/2000/01/31/electronic/clark/#TOP>
http://www.internethistorypodcast.com/2014/04/on-the-20th-anniversary-an-oral-history-of-netscapes-founding/
https://www.sfgate.com/business/amp/Tech-s-High-Flier-Soars-Again-Netscape-SGI-3002351.php
http://www.absy.com/ABSMMI/ITV/CLARK/ukitvjck.html
https://nypost.com/2000/11/14/netscapes-clark-logs-off-net-stocks/
http://www.businessinsider.com/google-x-yoky-matsuoka-valley-of-death-product-development-2017-7
https://www.reuters.com/article/us-telecoms-mobileworld-5g/fast-5g-beckons-but-still-far-off-for-most-mobile-users-idUSKCN1GE2Q7
What might the Amazon, Berkshire and JP Morgan health care joint venture actually do?
Peloton: The “SaaS Plus a Box” Business case
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20 Years Ago: A Personal History of the Early Days of the Web
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2015-10-21T03:35:07.424000+00:00
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1994 was an historic year (both for Silicon Valley and for me). This kicks off a series of posts that try to capture some of the magic from that year, when the web began its transition from something…
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https://miro.medium.com/v2/5d8de952517e8160e40ef9841c781cdc14a5db313057fa3c3de41c6f5b494b19
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https://johnmccrea.medium.com/20-years-ago-a-personal-history-of-the-early-days-of-the-web-66985d1518ac
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20 years ago, I got my “golden ticket” into Silicon Valley.
I had graduated from Stanford Business School seven months earlier, but between an economy still slowly emerging from recession and having an undergraduate degree that was neither engineering nor computer science, I was struggling to find a full-time job at a tech company. But by December of 1993, I had somehow managed to land a very promising contractor position at Silicon Graphics in the “low-end” division that had recently launched the company’s newest product, the Indy workstation. And that proved to be quite fortuitous in a number of ways.
First off, Silicon Graphics was going to have its first-ever presence at MacWorld Expo a few weeks later, and, strangely, everyone seemed keen to let “the new guy” take the marketing lead, not just for the low-end division, but for the company as a whole. (This, despite that I didn’t know any of our products in depth, had never been to MacWorld, and hadn’t organized a major trade show presence for any company, ever.) There was a lot to do, with great urgency, and there would be a big spotlight on my effort. So, whether I succeeded or failed, the results would be spectacularly visible.
Second, the guy who hired me as a contractor, the Indy product manager, was already eyeing his next role, a chance to participate in the birth of a new division within the company, something called Silicon Studio, that was setting out to create high-end authoring software for interactive multimedia content. (Translation: video game creation tools.) But for his transfer to be happily accepted, he had an obligation to find a back-fill for his current role. And so, when I managed to not screw up our debut at MacWorld, I essentially got hired and promoted at the same time, stepping into the shoes of the guy who had signed me to a “try-before-you-buy” contract just weeks earlier!
Soon, I would enthusiastically tell anyone who would listen that I was thrilled to have “the best job in Silicon Valley.” Why? Because I was the freakin’ product manager for the newest, sexiest, highest-volume product for what was clearly the hottest company in Silicon Valley. I know it’s hard to believe now, but in 1994 Silicon Graphics was so hot that it was featured in a BusinessWeek cover story, breathlessly entitled “The Gee-Whiz Company”.
In that feature, Robert Hof would describe us as “the most magical computer maker on the planet” and then go on to report:
In an industry marked by huge hype, Silicon Graphics is the genuine article: a truly innovative company with clearly unique products. “They’re the new Apple,” says Morgan Stanley & Co. analyst Steven M. Milunovich. Then, mulling Apple’s recent struggles, he corrects himself: “The Microsoft of computer graphics.”
So, there I was, no longer searching, having landed at the best possible place, with the best possible job. That alone was enough to make January 1994 a very memorable month, but there was one more door about to open for me. And it was to a far bigger opportunity — but one that would take me more than a few months to fully grasp.
It started with an invitation in the mail to a party celebrating Wired magazine’s first anniversary.
[Photo credit: The Original Wired Magazine, 1993 on Facebook.]
I was a Wired fanboy. I’d read every issue cover-to-cover, and even tried landing a job there a few months earlier. So I was thrilled to get an invite (likely only as a result of spending a lot of Silicon Graphics marketing dollars at MacWorld). The event was in San Francisco, in a huge brick warehouse on Third, near Wired’s headquarters in South Park. Back then, there weren’t very many startups in San Francisco; that was yet to come, with Wired to serve as “ground zero” for the City’s emergent “dot-com” scene.
At a time when most people thought of technology as boring or nerdy, Wired managed to make computers, software, and networking seem as edgy as a new designer drug and as wild as a rave (at a time when those were a thing). So, dressed all in black, I put on my new Doc Martin boots, and headed out from my Lower Haight apartment, ready to rock.
Looking back now, I can hardly distinguish that particular party from many others in the ‘90’s — dark setting, loud music, drinks, packed crowd. What I do vividly remember, though, is meeting Jonathan Steuer, who worked at Wired and had the tantalizing title of “Online Tsar”. I suspect he is the very first person I handed a business card with “Indy Product Manager” on it. Once he read my title, Jonathan got very excited.
“You’re the Indy product manager?” he asked. “I really want to use Indys as the web servers for a project I’m working on.”
“Awesome,” I replied, without missing a beat. “Just one question — what’s a web server?”
How could I, a product manager at a company that sold high-performance UNIX workstations and servers, not know what a web server was? The simple truth is that in January 1994, I had never seen nor heard of the web. Hardly anyone had.
Through a bit of online archeology, I now know that the total number of web servers in existence at the time was less than 800 — and they were almost all of the “.edu” flavor, hosted at places like CERN and SLAC. And although there’s no count of how many people were on the web at the time, my best estimate is 3.7 million.
The web of January 1994 is largely gone, and cannot be re-constructed. But, believe it or not, in that month some folks at Georgia Tech’s Graphics, Visualization, and Usability Center did what must be the very first web-based survey attempting to characterize the users of the “world wide web”. James Pitkow and Margaret Recker were trying to learn things like: which browsers were people using, how frequently were they surfing the web, and some basic facts about who those early adopters were (and to see whether, as they believed, the web would be a better platform for surveys than email had been).
And even more surprising than knowing such a survey was done so early, is discovering, as I did a few days ago, that the original survey and its results are still online!
So, let’s use those survey results to travel back in time to a very different web than the one we experience today. First up: gender. Apparently, the web of January 1994 was, to put it mildly, a bit of a boys club. Males accounted for a whopping 95% of respondents. I assume this says far less about the web than it does about the professions that were among its earliest users. (Physics, I’m looking at you!)
And these folks diverged from the mainstream in another significant way. They were not surfing the early web on commodity hardware from the old “Wintel” duopoly. No, 92% of them were on UNIX workstations (and most likely enjoying always-on broadband connections via Ethernet, versus slow, intermittent connectivity via dial-up).
Remember the browser war, when Microsoft and Netscape fought each other, tooth and nail? Well, that was still quite a ways off, as Netscape did not yet exist, and Microsoft had no plans for making a web browser. Nonetheless, the browser question offered no fewer than five choices, listed alphabetically (Cello, Lynx, Mosaic, Other, and Samba). As it turns out, that was three choices too many. Mosaic, developed by Marc Andreessen and Eric Bina at NCSA and released less than 12 months earlier, had completely taken over, accounting for 97% of respondents! (The remaining 3% were using Lynx, a text-based browser developed by Lou Montulli, Michael Grobe, and Charles Rezac at University of Kansas).
It’s also interesting what the survey reveals about the utility of the early web. With fewer than 800 total servers on the web, it’s easy to imagine that usage would be fairly infrequent. Quite the contrary; 20% of respondents used their browser more than nine times a day! Another 18% accessed the web 5 to 8 times a day. And another 42% reported one to four times a day. Together, that’s 80% of early users finding the web so essential that they used it every single day.
You can see all of the graphs here, and read the full paper here. Who knows just how representative this data is of the whole of the web at the time? But as far as I can tell, it is the only such dataset of its kind from that time period, so let’s be thankful that it exists, is online, and can be read by modern browsers.
A few months passed between when I first heard about the web in January 1994 and when I actually saw it for the very first time. And that’s probably a good thing, since early 1994 was the exact period of time in which “dot coms” exploded on to the world wide web, rapidly extending the diversity of web content far beyond its original subject matter, particle physics.
In April of 1994, when I finally downloaded Mosaic, I headed straight to the one site known to make it super-easy to discover and experience all of that new and diverse content: Yahoo. But I didn’t get there by typing “yahoo.com”.
It is true that the site had just embraced the short, fun, and memorable name, Yahoo, after operating for a few months with the unwieldy moniker “Jerry and David’s Guide to the World Wide Web”. But, hard to believe now, once they chose the new name, Jerry Yang and David Filo did not immediately secure the Yahoo domain. (In fact the site would not start to operate as yahoo.com until January 1995!) As a result, all of us who heard about Yahoo by word-of-mouth sometime in 1994 had to also know and correctly type the URL associated with Jerry’s workstation on Stanford campus: akebono.stanford.edu/yahoo.
Below is the Yahoo I saw (or as close as we can now get; this screenshot is from some unknown date between April and December 1994). It may look ungainly to you now, but for me, and for so many others, this was the page that made the web a case of “love at first site”:
With this proto-Yahoo, if you had interest in a specific site or topic, you could quickly navigate the site’s hierarchy and find what you were looking for. But if you were curious, bored, or just new to the web (as most of us were), the awesome top-level navigation was where the action was. With the total number of servers on the web doubling every three months, What’s new? What’s cool? What’s popular? and “Random link” provided the perfect options for exploration and serendipity. Like so many others, I quickly became addicted, coming back multiple times a day to find new sites, and to watch the exponential growth of the web across a large and growing number of content categories.
What sorts of cool, new sites might one discover via Yahoo?
One of my early favorites was “IUMA” (short for the Internet Underground Music Archive). Years before Napster, this site let you discover and download digital music (in the MP2 format) from hundreds of indie bands. Hard to believe, but CNN had already done a short piece on them in March 1994. Well worth a watch:
I’d love to show you more of the web from Spring of 1994, but almost all of the sites that inspired me then are now long gone.
By the summer of 1994, just a few months after landing what I asserted was “the best job in Silicon Valley,” I was already thinking of moving on. How was that possible?
Silicon Graphics was still the hottest company in the Valley — and getting hotter. Our much-ballyhooed interactive television partnership with Time Warner was getting close to launch (and stilled seemed like a good idea at the time). We were hard at work on the Nintendo 64, the world’s first 3D game console. Video server partnerships had just been announced with AT&T and Japan’s NTT. And our market cap now topped that of rivals Sun and DEC.
But things were not so rosy for Indy.
In some ways, we were still recovering from an imperfect launch the prior year. The big plan for Indy was to dramatically increase sales volume by hitting a much lower price point. Instead of the $10,000 price tag of its predecessor, the Indigo, Indy’s strategic mandate was to break the $5,000 barrier. And Indy did just that, tiptoeing across that magical line with an entry-level configuration priced at $4,995. There was just one problem — that config, with only 16 MB of RAM, wouldn’t boot.
Yes, all around the world, customers excitedly opened their beautiful blue boxes labeled “Serious Fun,” smiled at the bright blue “pizza box” inside (and its accompanying juggling balls), and eagerly set up their system, complete with the trailblazing digital “IndyCam.” But when they powered up their sweet new workstation, its paltry 16 MB of RAM (critical to hitting the price and margin targets) was not enough memory to load the all-brand-new-and-maybe-not-quite-finished 5.1 version of the operating system. So it would just hang. Outrage ensued.
Of course, soon additional memory was shipped for free to irate customers. And the base configuration got bumped to 32 MB of RAM. By the time I joined, that “imperfect launch” was behind us, but Indy now faced a much larger and harder problem to solve — actually achieving the very ambitious volume goals set alongside its pricing strategy.
Indy’s volume problem was really a classic “Catch-22”. From a hardware perspective, Indy was truly a multimedia monster: 64-bit RISC CPU, video-capable 100 MHz system bus, integrated video camera, and enough inputs and outputs that the headline from one ad was “Any port in a brainstorm”.
And multimedia authoring was a super-hot market, driven by the explosive growth in sales of interactive CD-ROMs (such as “Mad Dog McCree,” a Western shootout simulation game which gave rise to my industry nickname) and the popularity of Macromedia’s flagship authoring tool, Director. Imagine the breakout sales that could be driven from a marriage of Indy’s multimedia hardware and Macromedia’s multimedia software! Alas, Director was a Mac application; it was not available on IRIX (our flavor of Unix). And all efforts to persuade Macromedia to port to IRIX were to no avail. Why? Not enough volume.
Lack of volume also meant tepid support from Adobe. There was a version of Photoshop running on IRIX, but it was a generic port via some tool called “Latitude”. It didn’t take advantage of our sweet GUI, nor was it very fast.
I very much wanted to find a way out of Indy’s volume Catch-22. But finding a new “killer app” willing to play nice with us seemed like a big job. I knew I couldn’t do that and handle all of the day-to-day tasks of the Indy product manager.
As luck would have it, I got the perfect opportunity to act on my desire for a new role. In August, Jim White, the well-regarded marketing leader for the mid-range workstation division (maker of the company’s Indigo2 “cash cow”), was named director of marketing for our division, filling a position that had been vacant for a few months. Jim’s charter was to re-invigorate the efforts to make Indy a high-volume platform.
After Jim was introduced to the team and gave a great pep talk, he came up to each of us individually for a quick chat. I think he asked me something like, was I “liking the role of product manager?”. His positive energy and unblinking you-can-trust-me eye contact inspired me to do what many at Silicon Graphics would consider career suicide. I told him there might be a better role for me than product manager.
“And what is it you want to do?” Jim asked.
“Marketing with a capital ‘M,’” I said. “I think our breakout growth opportunity will come from a new market, and I’d like to focus on looking for it.”
“Okay,” he said. “Go find us a new market.”
To be continued…
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https://www.filfre.net/2023/05/the-next-generation-in-graphics-part-2-three-dimensions-in-hardware/
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» The Next Generation in Graphics, Part 2: Three Dimensions in Hardware The Digital Antiquarian
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https://www.filfre.net/2023/05/the-next-generation-in-graphics-part-2-three-dimensions-in-hardware/
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Most of the academic papers about 3D graphics that John Carmack so assiduously studied during the 1990s stemmed from, of all times and places, the Salt Lake City, Utah, of the 1970s. This state of affairs was a credit to one man by the name of Dave Evans.
Born in Salt Lake City in 1924, Evans was a physicist by training and an electrical engineer by inclination, who found his way to the highest rungs of computing research by way of the aviation industry. By the early 1960s, he was at the University of California, Berkeley, where he did important work in the field of time-sharing, taking the first step toward the democratization of computing by making it possible for multiple people to use one of the ultra-expensive big computers of the day at the same time, each of them accessing it through a separate dumb terminal. During this same period, Evans befriended one Ivan Sutherland, who deserves perhaps more than any other person the title of Father of Computer Graphics as we know them today.
For, in the course of earning his PhD at MIT, Sutherland developed a landmark software application known as Sketchpad, the first interactive computer-based drawing program of any stripe. Sketchpad did not do 3D graphics. It did, however, record its user’s drawings as points and lines on a two-dimensional plane. The potential for adding a third dimension to its Flatland-esque world — a Z coordinate to go along with X and Y — was lost on no one, least of all Sutherland himself. His 1963 thesis on Sketchpad rocketed him into the academic stratosphere.
In 1964, at the ripe old age of 26, Sutherland succeeded J.C.R. Licklider as head of the computer division of the Defense Department’s Advanced Research Projects Agency (ARPA), the most remarkable technology incubator in computing history. Alas, he proved ill-suited to the role of administrator: he was too young, too introverted — just too nerdy, as a later generation would have put it. But during the unhappy year he spent there before getting back to the pure research that was his real passion, he put the University of Utah on the computing map, largely as a favor to his friend Dave Evans.
Evans may have left Salt Lake City more than a decade ago, but he remained a devout Mormon, who found the counterculture values of the Berkeley of the 1960s rather uncongenial. So, he had decided to take his old alma mater up on an offer to come home and build a computer-science department there. Sutherland now awarded said department a small ARPA contract, one fairly insignificant in itself. What was significant was that it brought the University of Utah into the ARPA club of elite research institutions that were otherwise clustered on the coasts. An early place on the ARPANET, the predecessor to the modern Internet, was not the least of the perks which would come its way as a result.
Evans looked for a niche for his university amidst the august company it was suddenly joining. The territory of time-sharing was pretty much staked; extensive research in that field was already going full steam ahead at places like MIT and Berkeley. Ditto networking and artificial intelligence and the nuts and bolts of hardware design. Computer graphics, though… that was something else. There were smart minds here and there working on them — count Ivan Sutherland as Exhibit Number One — but no real research hubs dedicated to them. So, it was settled: computer graphics would become the University of Utah’s specialty. In what can only be described as a fantastic coup, in 1968 Evans convinced Sutherland himself to abandon the East Coast prestige of Harvard, where he had gone after leaving his post as the head of ARPA, in favor of the Mormon badlands of Utah.
Things just snowballed from there. Evans and Sutherland assembled around them an incredible constellation of bright young sparks, who over the course of the next decade defined the terms and mapped the geography of the field of 3D graphics as we still know it today, writing papers that remain as relevant today as they were half a century ago — or perchance more so, given the rise of 3D games. For example, the two most commonly used algorithms for calculating the vagaries of light and shade in 3D games stem directly from the University of Utah: Gouraud shading was invented by a Utah student named Henri Gouraud in 1971, while Phong shading was invented by another named Bui Tuong Phong in 1973.
But of course, lots of other students passed through the university without leaving so indelible a mark. One of these was Jim Clark, who would still be semi-anonymous today if he hadn’t gone on to become an entrepreneur who co-founded two of the most important tech companies of the late twentieth century.
When you’ve written as many capsule biographies as I have, you come to realize that the idea of the truly self-made person is for the most part a myth. Certainly almost all of the famous names in computing history were, long before any of their other qualities entered into the equation, lucky: lucky in their time and place of birth, in their familial circumstances, perhaps in (sad as it is to say) their race and gender, definitely in the opportunities that were offered to them. This isn’t to disparage their accomplishments; they did, after all, still need to have the vision to grasp the brass ring of opportunity and the talent to make the most of it. Suffice to say, then, that luck is a prerequisite but the farthest thing from a guarantee.
Every once in a while, however, I come across someone who really did almost literally make something out of nothing. One of these folks is Jim Clark. If today as a soon-to-be octogenarian he indulges as enthusiastically as any of his Old White Guy peers in the clichéd trappings of obscene wealth, from the mansions, yachts, cars, and wine to the Victoria’s Secret model he has taken for a fourth wife, he can at least credibly claim to have pulled himself up to his current station in life entirely by his own bootstraps.
Clark was born in 1944, in a place that made Salt Lake City seem like a cosmopolitan metropolis by comparison: the small Texas Panhandle town of Plainview. He grew up dirt poor, the son of a single mother living well below the poverty line. Nobody expected much of anything from him, and he obliged their lack of expectations. “I thought the whole world was shit and I was living in the middle of it,” he recalls.
An indifferent student at best, he was expelled from high school his junior year for telling a teacher to go to hell. At loose ends, he opted for the classic gambit of running away to sea: he joined the Navy at age seventeen. It was only when the Navy gave him a standardized math test, and he scored the highest in his group of recruits on it, that it began to dawn on him that he might actually be good at something. Encouraged by a few instructors to pursue his aptitude, he enrolled in correspondence courses to fill his free time when out plying the world’s oceans as a crewman on a destroyer.
Ten years later, in 1971, the high-school dropout, now six years out of the Navy and married with children, found himself working on a physics PhD at Louisiana State University. Clark:
I noticed in Physics Today an article that observed that physicists getting PhDs from places like Harvard, MIT, Yale, and so on didn’t like the jobs they were getting. And I thought, well, what am I doing — I’m getting a PhD in physics from Louisiana State University! And I kept thinking, well, I’m married, and I’ve got these obligations. By this time, I had a second child, so I was real eager to get a good job, and I just got discouraged about physics. And a friend of mine pointed to the University of Utah as having a computer-graphics specialty. I didn’t know much about it, but I was good with geometry and physics, which involves a lot of geometry.
So, Clark applied for a spot at the University of Utah and was accepted.
But, as I already implied, he didn’t become a star there. His 1974 thesis was entitled “3D Design of Free-Form B-Spline Surfaces”; it was a solid piece of work addressing a practical problem, but not anything to really get the juices flowing. Afterward, he spent half a decade bouncing around from campus to campus as an adjunct professor: the Universities of California at Santa Cruz and Berkeley, the New York Institute of Technology, Stanford. He was fairly miserable throughout. As an academic of no special note, he was hired primarily as an instructor rather than a researcher, and he wasn’t at all cut out for the job, being too impatient, too irascible. Proving the old adage that the child is the father of the man, he was fired from at least one post for insubordination, just like that angry teenager who had once told off his high-school teacher. Meanwhile he went through not one but two wives. “I was in this kind of downbeat funk,” he says. “Dark, dark, dark.”
It was now early 1979. At Stanford, Clark was working right next door to Xerox’s famed Palo Alto Research Center (PARC), which was inventing much of the modern paradigm of computing, from mice and menus to laser printers and local-area networking. Some of the colleagues Clark had known at the University of Utah were happily ensconced over there. But he was still on the outside looking in. It was infuriating — and yet he was about to find a way to make his mark at last.
Hardware engineering at the time was in the throes of a revolution and its backlash, over a technology that went by the mild-mannered name of “Very Large Scale Integration” (VLSI). The integrated circuit, which packed multiple transistors onto a single microchip, had been invented at Texas Instruments at the end of the 1950s, and had become a staple of computer design already during the following decade. Yet those early implementations often put only a relative handful of transistors on a chip, meaning that they still required lots of chips to accomplish anything useful. A turning point came in 1971 with the Intel 4004, the world’s first microprocessor — i.e., the first time that anyone put the entire brain of a computer on a single chip. Barely remarked at the time, that leap would result in the first kit computers being made available for home users in 1975, followed by the Trinity of 1977, the first three plug-em-in-and-go personal computers suitable for the home. Even then, though, there were many in the academic establishment who scoffed at the idea of VLSI, which required a new, in some ways uglier approach to designing circuitry. In a vivid illustration that being a visionary in some areas doesn’t preclude one from being a reactionary in others, many of the folks at PARC were among the scoffers. Look how far we’ve come doing things one way, they said. Why change?
A PARC researcher named Lynn Conway was enraged by such hidebound thinking. A rare female hardware engineer, she had made scant progress to date getting her point of view through to the old boy’s club that surrounded her at PARC. So, broadening her line of attack, she wrote a paper about the basic techniques of modern chip design, and sent it out to a dozen or so universities along with a tempting offer: if any students or faculty wished to draw up schematics for a chip of their own and send them to her, she would arrange to have the chip fabricated in real silicon and sent back to its proud parent. The point of it all was just to get people to see the potential of VLSI, not to push forward the state of the art. And indeed, just as she had expected, almost all of the designs she received were trivially simple by the standards of even the microchip industry of 1979: digital time keepers, adding machines, and the like. But one was unexpectedly, even crazily complex. Alone among the submissions, it bore a precautionary notice of copyright, from one James Clark. He called his creation the Geometry Engine.
The Geometry Engine was the first and, it seems likely, only microchip that Jim Clark ever personally attempted to design in his life. It was created in response to a fundamental problem that had been vexing 3D modelers since the very beginning: that 3D graphics required shocking quantities of mathematical calculations to bring to life, scaling almost exponentially with the complexity of the scene to be depicted. And worse, the type of math they required was not the type that the researchers’ computers were especially good at.
Wait a moment, some of you might be saying. Isn’t math the very thing that computers do? It’s right there in the name: they compute things. Well, yes, but not all types of math are created equal. Modern computers are also digital devices, meaning they are naturally equipped to deal only with discrete things. Like the game of DOOM, theirs is a universe of stair steps rather than smooth slopes. They like integer numbers, not decimals. Even in the 1960s and 1970s, they could approximate the latter through a storage format known as floating point, but they dealt with these floating-point numbers at least an order of magnitude slower than they did whole numbers, as well as requiring a lot more memory to store them. For this reason, programmers avoided them whenever possible.
And it actually was possible to do so a surprisingly large amount of the time. Most of what computers were commonly used for could be accomplished using only whole numbers — for example, by using Euclidean division that yields a quotient and a remainder in place of decimal division. Even financial software could be built using integers only to count the total number of cents rather than floating-point values to represent dollars and cents. 3D-graphics software, however, was one place where you just couldn’t get around them. Creating a reasonably accurate mathematical representation of an analog 3D space forced you to use floating-point numbers. And this in turn made 3D graphics slow.
Jim Clark certainly wasn’t the first person to think about designing a specialized piece of hardware to lift some of the burden from general-purpose computer designs, an add-on optimized for doing the sorts of mathematical operations that 3D graphics required and nothing else. Various gadgets along these lines had been built already, starting a decade or more before his Geometry Engine. Clark was the first, however, to think of packing it all onto a single chip — or at worst a small collection of them — that could live on a microcomputer’s motherboard or on a card mounted in a slot, that could be mass-produced and sold in the thousands or millions. His description of his “slave processor” sounded disarmingly modest (not, it must be said, a quality for which Clark is typically noted): “It is a four-component vector, floating-point processor for accomplishing three basic operations in computer graphics: matrix transformations, clipping, and mapping to output-device coordinates [i.e., going from an analog world space to pixels in a digital raster].” Yet it was a truly revolutionary idea, the genesis of the graphical processing units (GPUs) of today, which are in some ways more technically complex than the CPUs they serve. The Geometry Engine still needed to use floating-point numbers — it was, after all, still a digital device — but the old engineering doctrine that specialization yields efficiency came into play: it was optimized to do only floating-point calculations, and only a tiny subset of all the ones possible at that, just as quickly as it could.
The Geometry Engine changed Clark’s life. At last, he had something exciting and uniquely his. “All of these people started coming up and wanting to be part of my project,” he remembers. Always an awkward fit in academia, he turned his thinking in a different direction, adopting the mindset of an entrepreneur. “He reinvented his relationship to the world in a way that is considered normal only in California,” writes journalist Michael Lewis in a book about Clark. “No one who had been in his life to that point would be in it ten years later. His wife, his friends, his colleagues, even his casual acquaintances — they’d all be new.” Clark himself wouldn’t hesitate to blast his former profession in later years with all the fury of a professor scorned.
I love the metric of business. It’s money. It’s real simple. You either make money or you don’t. The metric of the university is politics. Does that person like you? Do all these people like you enough to say, “Yeah, he’s worthy?”
But by whatever metric, success didn’t come easy. The Geometry Engine and all it entailed proved a harder sell with the movers and shakers in commercial computing than it had with his colleagues at Stanford. It wasn’t until 1982 that he was able to scrape together the funding to found a company called Silicon Graphics, Incorporated (SGI), and even then he was forced to give 85 percent of his company’s shares to others in order to make it a reality. Then it took another two years after that to actually ship the first hardware.
The market segment SGI was targeting is one that no longer really exists. The machines it made were technically microcomputers, being built around microprocessors, but they were not intended for the homes of ordinary consumers, nor even for the cubicles of ordinary office workers. These were much higher-end, more expensive machines than those, even if they could fit under a desk like one of them. They were called workstation computers. The typical customer spent tens or hundreds of thousands of dollars on them in the service of some highly demanding task or another.
In the case of the SGI machines, of course, that task was almost always related to graphics, usually 3D graphics. Their expense wasn’t bound up with their CPUs; in the beginning, these were fairly plebeian chips from the Motorola 68000 series, the same line used in such consumer-grade personal computers as the Apple Macintosh and the Commodore Amiga. No, the justification of their high price tags rather lay with their custom GPUs, which even in 1984 already went far beyond the likes of Clark’s old Geometry Engine. An SGI GPU was a sort of black box for 3D graphics: feed it all of the data that constituted a scene on one side, and watch a glorious visual representation emerge at the other, thanks to an array of specialized circuitry designed for that purpose and no other.
Now that it had finally gotten off the ground, SGI became very successful very quickly. Its machines were widely used in staple 3D applications like computer-aided industrial design (CAD) and flight simulation, whilst also opening up new vistas in video and film production. They drove the shift in Hollywood from special effects made using miniature models and stop-motion techniques dating back to the era of King Kong to the extensive use of computer-generated imagery (CGI) that we see even in the purportedly live-action films of today. (Steven Spielberg and George Lucas were among SGI’s first and best customers.) “When a moviegoer rubbed his eyes and said, ‘What’ll they think of next?’,” writes Michael Lewis, “it was usually because SGI had upgraded its machines.”
The company peaked in the early 1990s, when its graphics workstations were the key to CGI-driven blockbusters like Terminator 2 and Jurassic Park. Never mind the names that flashed by in the opening credits; everyone could agree that the computer-generated dinosaurs were the real stars of Jurassic Park. SGI was bringing in over $3 billion in annual revenue and had close to 15,000 employees by 1993, the year that movie was released. That same year, President Bill Clinton and Vice President Al Gore came out personally to SGI’s offices in Silicon Valley to celebrate this American success story.
SGI’s hardware subsystem for graphics, the beating heart of its business model, was known in 1993 as the RealityEngine2. This latest GPU was, wrote Byte magazine in a contemporary article, “richly parallel,” meaning that it could do many calculations simultaneously, in contrast to a traditional CPU, which could only execute one instruction at a time. (Such parallelism is the reason that modern GPUs are so often used for some math-intensive non-graphical applications, such as crypto-currency mining and machine learning.) To support this black box and deliver to its well-heeled customers a complete turnkey solution for all their graphics needs, SGI had also spearheaded an open-source software library for 3D applications, known as the Open Graphics Library, or OpenGL. Even the CPUs in its latest machines were SGI’s own; it had purchased a maker of same called MIPS Technologies in 1990.
But all of this success did not imply a harmonious corporation. Jim Clark was convinced that he had been hard done by back in 1982, when he was forced to give up 85 percent of his brainchild in order to secure the funding he needed, then screwed over again when he was compelled by his board to give up the CEO post to a former Hewlett Packard executive named Ed McCracken in 1984. The two men had been at vicious loggerheads for years; Clark, who could be downright mean when the mood struck him, reduced McCracken to public tears on at least one occasion. At one memorable corporate retreat intended to repair the toxic atmosphere in the board room, recalls Clark, “the psychologist determined that everyone else on the executive committee was passive aggressive. I was just aggressive.”
Clark claims that the most substantive bone of contention was McCracken’s blasé indifference to the so-called low-end market, meaning all of those non-workstation-class personal computers that were proliferating in the millions during the 1980s and early 1990s. If SGI’s machines were advancing by leaps and bounds, these consumer-grade computers were hopscotching on a rocket. “You could see a time when the PC would be able to do the sort of graphics that [our] machines did,” says Clark. But McCracken, for one, couldn’t see it, was content to live fat and happy off of the high prices and high profit margins of SGI’s current machines.
He did authorize some experiments at the lower end, but his heart was never in it. In 1990, SGI deigned to put a limited subset of the RealityEngine smorgasbord onto an add-on card for Intel-based personal computers. Calling it IrisVision, it hopefully talked up its price of “under $5000,” which really was absurdly low by the company’s usual standards. What with its complete lack of software support and its way-too-high price for this marketplace, IrisVision went nowhere, whereupon McCracken took the failure as a vindication of his position. “This is a low-margin business, and we’re a high-margin company, so we’re going to stop doing that,” he said.
Despite McCracken’s indifference, Clark eventually managed to broker a deal with Nintendo to make a MIPS microprocessor and an SGI GPU the heart of the latter’s Nintendo 64 videogame console. But he quit after yet another shouting match with McCracken in 1994, two years before it hit the street.
He had been right all along about the inevitable course of the industry, however undiplomatically he may have stated his case over the years. Personal computers did indeed start to swallow the workstation market almost at the exact point in time that Clark bailed. The profits from the Nintendo deal were rich, but they were largely erased by another of McCracken’s pet projects, an ill-advised acquisition of the struggling supercomputer maker Cray. Meanwhile, with McCracken so obviously more interested in selling a handful of supercomputers for millions of dollars each than millions upon millions of consoles for a few hundred dollars each, a group of frustrated SGI employees left the company to help Nintendo make the GameCube, the followup to the Nintendo 64, on their own. It was all downhill for SGI after that, bottoming out in a 2009 bankruptcy and liquidation.
As for Clark, he would go on to a second entrepreneurial act as remarkable as his first, abandoning 3D graphics to make a World Wide Web browser with Marc Andreessen. We will say farewell to him here, but you can read the story of his second company Netscape’s meteoric rise and fall elsewhere on this site.
Now, though, I’d like to return to the scene of SGI’s glory days, introducing in the process three new starring players. Gary Tarolli and Scott Sellers were talented young engineers who were recruited to SGI in the 1980s; Ross Smith was a marketing and business-development type who initially worked for MIPS Technologies, then ended up at SGI when it acquired that company in 1990. The three became fast friends. Being of a younger generation, they didn’t share the contempt for everyday personal computers that dominated among their company’s upper management. Whereas the latter laughed at the primitiveness of games like Wolfenstein 3D and Ultima Underworld, if they bothered to notice them at all, our trio saw a brewing revolution in gaming, and thought about how much it could be helped along by hardware-accelerated 3D graphics.
Convinced that there was a huge opportunity here, they begged their managers to get into the gaming space. But, still smarting from the recent failure of IrisVision, McCracken and his cronies rejected their pleas out of hand. (One of the small mysteries in this story is why their efforts never came to the attention of Jim Clark, why an alliance was never formed. The likely answer is that Clark had, by his own admission, largely removed himself from the day-to-day running of SGI by this time, being more commonly seen on his boat than in his office.) At last, Tarolli, Sellers, Smith, and some like-minded colleagues ran another offer up the flagpole. You aren’t doing anything with IrisVision, they said. Let us form a spinoff company of our own to try to sell it. And much to their own astonishment, this time management agreed.
They decided to call their new company Pellucid — not the best name in the world, sounding as it did rather like a medicine of some sort, but then they were still green at all this. The technology they had to peddle was a couple of years old, but it still blew just about anything else in the MS-DOS/Windows space out of the water, being able to display 16 million colors at a resolution of 1024 X 768, with 3D acceleration built-in. (Contrast this with the SVGA card found in the typical home computer of the time, which could do 256 colors at 640 X 480, with no 3D affordances). Pellucid rebranded the old IrisVision the ProGraphics 1024. Thanks to the relentless march of chip-fabrication technology, they found that they could now manufacture it cheaply enough to be able to sell it for as little as $1000 — still pricey, to be sure, but a price that some hardcore gamers, as well as others with a strong interest in having the best graphics possible, might just be willing to pay.
The problem, the folks at Pellucid soon came to realize, was a well-nigh intractable deadlock between the chicken and the egg. Without software written to take advantage of its more advanced capabilities, the ProGraphics 1024 was just another SVGA graphics card, selling for a ridiculously high price. So, consumers waited for said software to arrive. Meanwhile software developers, seeing the as-yet non-existent installed base, saw no reason to begin supporting the card. Breaking this logjam must require a concentrated public-relations and developer-outreach effort, the likes of which the shoestring spinoff couldn’t possibly afford.
They thought they had done an end-run around the problem in May of 1993, when they agreed, with the blessing of SGI, to sell Pellucid kit and caboodle to a major up-and-comer in consumer computing known as Media Vision, which currently sold “multimedia upgrade kits” consisting of CD-ROM drives and sound cards. But Media Vision’s ambitions knew no bounds: they intended to branch out into many other kinds of hardware and software. With proven people like Stan Cornyn, a legendary hit-maker from the music industry, on their management rolls and with millions and millions of dollars on hand to fund their efforts, Media Vision looked poised to dominate.
It seemed the perfect landing place for Pellucid; Media Vision had all the enthusiasm for the consumer market that SGI had lacked. The new parent company’s management said, correctly, that the ProGraphics 1024 was too old by now and too expensive to ever become a volume product, but that 3D acceleration’s time would come as soon as the current wave of excitement over CD-ROM and multimedia began to ebb and people started looking for the next big thing. When that happened, Media Vision would be there with a newer, more reasonably priced 3D card, thanks to the people who had once called themselves Pellucid. It sounded pretty good, even if in the here and now it did seem to entail more waiting around than anything else.
There was just one stumbling block: “Media Vision was run by crooks,” as Scott Sellers puts it. In April of 1994, a scandal erupted in the business pages of the nation’s newspapers. It turned out that Media Vision had been an experiment in “fake it until you make it” on a gigantic scale. Its founders had engaged in just about every form of malfeasance imaginable, creating a financial house of cards whose honest revenues were a minuscule fraction of what everyone had assumed them to be. By mid-summer, the company had blown away like so much dust in the wind, still providing income only for the lawyers who were left to pick over the corpse. (At least two people would eventually be sent to prison for their roles in the conspiracy.) The former Pellucid folks were left as high and dry as everyone else who had gotten into bed with Media Vision. All of their efforts to date had led to the sale of no more than 2000 graphics cards.
That same summer of 1994, a prominent Silicon Valley figure named Gordon Campbell was looking for interesting projects in which to invest. Campbell had earned his reputation as one of the Valley’s wise men through a company called Chips and Technologies (C&T), which he had co-founded in 1984. One of those hidden movers in the computer industry, C&T had largely invented the concept of the chipset: chips or small collections of them that could be integrated directly into a computer’s motherboard to perform functions that used to be placed on add-on cards. C&T had first made a name for itself by reducing IBM’s bulky nineteen-chip EGA graphics card to just four chips that were cheaper to make and consumed less power. Campbell’s firm thrived alongside the cost-conscious PC clone industry, which by the beginning of the 1990s was rendering IBM itself, the very company whose products it had once so unabashedly copied, all but irrelevant. Onboard video, onboard sound, disk controllers, basic firmware… you name it, C&T had a cheap, good-enough-for-the-average-consumer chipset to handle it.
But now Campbell had left C&T “in pursuit of new opportunities,” as they say in Valley speak. Looking for a marketing person for one of the startups in which he had invested a stake, he interviewed a young man named Ross Smith who had SGI on his résumé — always a plus. But the interview didn’t go well. Campbell:
It was the worst interview I think I’ve ever had. And so finally, I just turned to him and I said, “Okay, your heart’s not in this interview. What do you really want to do?”
And he kind of looks surprised and says, well, there are these two other guys, and we want to start a 3D-graphics company. And the next thing I know, we had set up a meeting. And we had, over a lot of beers, a discussion which led these guys to all come and work at my office. And that set up the start of 3Dfx.
It seemed to all of them that, after all of the delays and blind alleys, it truly was now or never to make a mark. For hardware-accelerated 3D graphics were already beginning to trickle down into the consumer space. In standup arcades, games like Daytona USA and Virtua Fighter were using rudimentary GPUs. Ditto the Sega Saturn and the Sony PlayStation, the latest in home-videogame consoles, both which were on the verge of release in Japan, with American debuts expected in 1995. Meanwhile the software-only, 2.5D graphics of DOOM were taking the world of hardcore computer gamers by storm. The men behind 3Dfx felt that the next move must surely seem obvious to many other people besides themselves. The only reason the masses of computer-game players and developers weren’t clamoring for 3D graphics cards already was that they didn’t yet realize what such gadgets could do for them.
Still, they were all wary of getting back into the add-on board market, where they had been burned so badly before. Selling products directly to consumers required retail access and marketing muscle that they still lacked. Instead, following in the footsteps of C&T, they decided to sell a 3D chipset only to other companies, who could then build it into add-on boards for personal computers, standup-arcade machines, whatever they wished.
At the same time, though, they wanted their technology to be known, in exactly the way that the anonymous chipsets made by C&T were not. In the pursuit of this aspiration, Gordon Campbell found inspiration from another company that had become a household name despite selling very little directly to consumers. Intel had launched the “Intel Inside” campaign in 1990, just as the era of the PC clone was giving way to a more amorphous commodity architecture. The company introduced a requirement that the makers of computers which used its CPUs include the Intel Inside logo on their packaging and on the cases of the computers themselves, even as it made the same logo the centerpiece of a standalone advertising campaign in print and on television. The effort paid off; Intel became almost as identified with the Second Home Computer Revolution in the minds of consumers as was Microsoft, whose own logo showed up on their screens every time they booted into Windows. People took to calling the emerging duopoly the “Wintel” juggernaut, a name which has stuck around to this day.
So, it was decided: a requirement to display a similarly snazzy 3Dfx logo would be written into that company’s contracts as well. The 3Dfx name itself was a vast improvement over Pellucid. As time went on, 3Dfx would continue to display a near-genius for catchy branding: “Voodoo” for the chipset itself, “GLide” for the software library that controlled it. All of this reflected a business savvy the likes of which hadn’t been seen from Pellucid, that was a credit both to Campbell’s steady hand and the accumulating experience of the other three partners.
But none of it would have mattered without the right product. Campbell told his trio of protégés in no uncertain terms that they were never going to make a dent in computer gaming with a $1000 video card; they needed to get the price down to a third of that at the most, which meant the chipset itself could cost the manufacturers who used it in their products not much more than $100 a pop. That was a tall order, especially considering that gamers’ expectations of graphical fidelity weren’t diminishing. On the contrary: the old Pellucid card hadn’t even been able to do 3D texture mapping, a failing that gamers would never accept post-DOOM.
It was left to Gary Tarolli and Scott Sellers to figure out what absolutely had to be in there, such as the aforementioned texture mapping, and what they could get away with tossing overboard. Driven by the remorseless logic of chip-fabrication costs, they wound up going much farther with the tossing than they ever could have imagined when they started out. There could be no talk of 24-bit color or unusually high resolutions: 16-bit color (offering a little over 65,000 onscreen shades) at a resolution of 640 X 480 would be the limit. Likewise, they threw out the capability of handling any polygons except for the simplest of them all, the humble triangle. For, they realized, you could make almost any solid you liked by combining triangular surfaces together. With enough triangles in your world — and their chipset would let you have up to 1 million of them — you needn’t lament the absence of the other polygons all that much.
Sellers had another epiphany soon after. Intel’s latest CPU, to which gamers were quickly migrating, was the Pentium. It had a built-in floating-point co-processor which was… not too shabby, actually. It should therefore be possible to take the first phase of the 3D-graphics pipeline — the modeling phase — out of the GPU entirely and just let the CPU handle it. And so another crucial decision was made: they would concern themselves only with the rendering or rasterization phase, which was a much greater challenge to tackle in software alone, even with a Pentium. Another huge piece of the puzzle was thus neatly excised — or rather outsourced back to the place where it was already being done in current games. This would have been heresy at SGI, whose ethic had always been to do it all in the GPU. But then, they were no longer at SGI, were they?
Undoubtedly their bravest decision of all was to throw out any and all 2D-graphics capabilities — i.e., the neat rasters of pixels used to display Windows desktops and word processors and all of those earlier, less exciting games. Makers of Voodoo boards would have to include a cable to connect the existing, everyday graphics cards inside their customers’ machines to their new 3D ones. When you ran non-3D applications, the Voodoo card would simply pass the video signal on to the monitor unchanged. But when you fired up a 3D game, it would take over from the other board. A relay inside made a distinctly audible click when this happened. Far from a bug, gamers would soon come to consider the noise a feature.”Because you knew it was time to have fun,” as Ross Smith puts it.
It was a radical plan, to be sure. These new cards would be useful only for games, would have no other purpose whatsoever; there would be no justifying this hardware purchase to the parents or the spouse with talk of productivity or educational applications. Nevertheless, the cost savings seemed worth it. After all, almost everyone who initially went out to buy the new cards would already have a perfectly good 2D video card in their computer. Why make them pay extra to duplicate those functions?
The final design used just two custom chips. One of them, internally known as the T-Rex (Jurassic Park was still in the air), was dedicated exclusively to the texture mapping that had been so conspicuously missing from the Pellucid board. Another, called the FBI (“Frame Buffer Interface”), did everything else required in the rendering phase. Add to this pair a few less exciting off-the-shelf chips and four megabytes worth of RAM chips, put it on a board with the appropriate connectors, and you had yourself a 3Dfx Voodoo GPU.
Needless to say, getting this far took some time. Tarolli, Sellers, and Smith spent the last half of 1994 camped out in Campbell’s office, deciding what they wanted to do and how they wanted to do it and securing the funding they needed to make it happen. Then they spent all of 1995 in offices of their own, hiring about a dozen people to help them, praying all the time that no other killer product would emerge to make all of their efforts moot. While they worked, the Sega Saturn and Sony PlayStation did indeed arrive on American shores, becoming the first gaming devices equpped with 3D GPUs to reach American homes in quantity. The 3Dfx crew were not overly impressed by either console — and yet they found the public’s warm reception of the PlayStation in particular oddly encouraging. “That showed, at a very rudimentary level, what could be done with 3D graphics with very crude texture mapping,” says Scott Sellers. “And it was pretty abysmal quality. But the consumers were just eating it up.”
They got their first finished chipsets back from their Taiwanese fabricator at the end of January 1996, then spent Super Bowl weekend soldering them into place and testing them. There were a few teething problems, but in the end everything came together as expected. They had their 3D chipset, at the beginning of a year destined to be dominated by the likes of Duke Nukem 3D and Quake. It seemed the perfect product for a time when gamers couldn’t get enough 3D mayhem. “If it had been a couple of years earlier,” says Gary Tarolli, “it would have been too early. If it had been a couple of years later, it would have been too late.” As it was, they were ready to go at the Goldilocks moment. Now they just had to sell their chipset to gamers — which meant they first had to sell it to game developers and board makers.
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SGI, former American manufacturer of high-performance computer workstations, supercomputers, and advanced graphics software with headquarters in Mountain View, California. Silicon Graphics, Inc., was founded in 1982 by Stanford professor James Clark.
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SGI, former American manufacturer of high-performance computer workstations, supercomputers, and advanced graphics software with headquarters in Mountain View, California.
Founding of SGI
Silicon Graphics, Inc., was founded in 1982 by James Clark, an electrical engineering professor at Stanford University who had identified a need for desktop computers to be able to display graphic images quickly and in three-dimensional detail—something previously possible only on multimillion-dollar supercomputers. The primary users of these computers were expected to be scientists and engineers developing elaborate 3D software for corporate and military research and development. Although both these markets did indeed embrace SGI’s products, the biggest opportunity turned out to be a surprise.
Hollywood animation
The first prototype of SGI’s computer workstation was given free of charge in 1984 to George Lucas, the creator of the Star Wars series of movies. From this small step, SGI emerged as Hollywood’s favourite computer supplier. In traditional animation, realistic effects were achieved by the painstaking alteration of drawings or models for each frame of film—a very labour-intensive process. Today most animation and special effects are created inside “virtual worlds,” where computers automate much of the work. SGI’s computers have been instrumental in this transition, producing special effects for some of Hollywood’s biggest blockbusters, as well as for music videos and television advertisements. In 1995 the first feature-length animated movie to be entirely computer-generated, the Disney Company’s Toy Story, was created with SGI’s computers.
High-end computer graphics consolidation
In 1986 SGI became a public company. The following year it introduced its first UNIX workstation using reduced-instruction-set computing (RISC) microprocessors, the most-advanced computer chips available. In the 1990s it began a series of acquisitions to strengthen its position as the leading provider of high-performance computer graphics systems. In 1992 it purchased MIPS Computer Systems, which designed SGI’s RISC microprocessors. In 1995 it merged with the two leading software companies in its market, Alias Research and Wavefront Technologies. The following year it paid $767 million to acquire Cray Research, Inc., a Minneapolis-based supercomputer maker. As the owner of Cray, SGI found itself operating in a rapidly declining market as defense contractors and petrochemical companies, two of Cray’s major customers, slashed their research and development budgets. The media and entertainment industries, which claimed approximately half of SGI’s business, showed little interest in expensive supercomputers.
Company reorganization
Meanwhile, SGI experienced difficulties in retaining its top executives. Clark left in 1994 to found Mosaic (now Netscape) Communications Corp., an Internet software company (which itself was purchased in 1999 by America Online), and SGI president Thomas Jermoluk resigned to help found Home Network, another Internet-related company. Distracted by such turnover at the top, SGI missed the initial business boom of selling servers in the fast-growing Internet market. Unable to sell servers running their proprietary IRIX operating system or compete with more general-purpose UNIX computer companies such as Digital Equipment Corp., the Hewlett-Packard Company, and Sun Microsystems, Inc., SGI began to lose money in 1997.
In response, SGI’s management radically altered the company’s business strategy to appeal to large organizations running more traditional software, especially large databases and Internet applications, by signing deals with Microsoft Corporation and Intel Corporation to market workstations running Windows NT, a competing operating system to UNIX, on Intel microprocessors. Moreover, in 1998 SGI reorganized its chip division, MIPS Technologies, Inc.—primarily known for manufacturing the Nintendo Co.’s N64 processor—as an independent business.
SGI filed for bankruptcy in 2009 and was acquired by the computer hardware manufacturer Rackable Systems, which then changed its name to Silicon Graphics International. Hewlett Packard Enterprise acquired Silicon Graphics International in 2016.
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SGI Announces OEM Partnership With Scality for Scale-Out Storage Solution
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https://www.eqs-news.com/news/corporate/sgi-announces-oem-partnership-with-scality-for-scale-out-storage-solution/745391
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SGI 22.01.2013 22:22 --------------------------------------------------------------------------- New Object- and File-Based Storage Solution Leads the Industry in Density and Performance FREMONT, Calif., 2013-01-22 22:22 CET (GLOBE NEWSWIRE) -- SGI (Nasdaq:SGI), the trusted leader in technical computing, today announced a strategic OEM agreement with Scality, a leader in software-defined storage, to provide a unified scale-out storage solution that offers both extreme scale and high performance allowing customers to manage massive unstructured data sprawl. Bundled together with the extreme density of the SGI(r) Modular InfiniteStorage(tm) (SGI MIS(tm)) platform, Scality's RING Organic Storage software enables enterprises to take advantage of a converged multi-petabyte storage architecture that scales to billions of files with maximum data security in the minimum of datacenter real estate. A single 19' rack can house nearly three petabytes of scale-out storage with total data security and no single point of failure, to enable a self-healing infrastructure that can grow as needed with no data migration or downtime required. 'Scale-out object-based solutions are designed to address this particular set of problems by minimizing manual intervention for storage expansions, migrations, and recoveries from storage system failure,' said Ashish Nadkarni, research director, Storage Systems at IDC. 'Such a dispersed, fault-tolerant architecture enables IT organizations to more efficiently absorb data growth in a manner that is predicable for the long term.' Deployed for a wide range of application needs, Scality RING is perfectly suited for tier one environments with very demanding applications in term of IOPS and latency, but also for storage capacity oriented applications with millions of users, such as online storage services or long-term archives. From an application standpoint, the appliance presents a unified data interface capable of delivering local and remote, object and file access. The platform is self-healing, affording very high levels of data durability, provided by replication and erasure coding techniques. Optional configurations offer geo-redundancy and auto-tiering. Designed as a massively parallel system, Scality can scale to accommodate a wide variety of different capacity and performance profiles. This means data administrators no longer need to worry about data silos filling up or manually managing load balancing from one tier or platform to another. This solution enables a unified, efficient and cost-effective approach to long-term data management. The SGI MIS storage server platform is a perfect match for Scality software, offering two high-performance dual socket servers powered by Intel(r) Xeon(r) processors, and up to 72 3.5' hard disk drives in a single 4U chassis. This represents up to 280 TB of storage, reserving two disks for system tasks, in just a 4U chassis. Expanding the system is easy- simply add more SGI MIS units and the Scality software will automatically detect and load balance across the entire infrastructure. 'The combination of Scality RING and SGI MIS storage server represents an important step for the storage industry coupling together the densest storage server and our very comprehensive storage software offering,' said Jerome Lecat, CEO, Scality. 'SGI's selection of Scality software validates our technology leadership and commitment to address enterprise challenges, as illustrated by deployments at a leading online storage provider.' SGI has long been a leader in high-performance and active archive storage solutions, with customers purchasing nearly 600 petabytes of disk-based storage in 2012 alone. SGI's industry-leading storage software ecosystem and best-of-breed hardware have resulted in the company being at the forefront of solving some of the world's largest data management challenges in media archives, life sciences, manufacturing and other data-intensive industries. 'One of the key challenges of scale-out storage solutions is to deliver the self-healing advantages of object-based storage while also maintaining the performance requirements needed at the application layer,' said Jose Reinoso, vice president of storage engineering, SGI. 'Scality's RING architecture allows us to offer our customers cost-efficient petabyte-scale storage with independent scaling of throughput. It is the best of both worlds.' Availability With an initial deployment already underway at a large cloud-based solution provider, the SGI solution powered by Scality is available today for early access customers. About Scality Scality is the developer of RING, a software platform enabling cloud storage to easily scale up to exabytes using commodity server hardware with direct attached storage. Scality delivers the performance and reliability of a SAN- or NAS-based architecture without the hassles of volume management at one third to half of the cost. Scality is used by Service Providers to deploy Storage-as-a-Service offerings, by Email Providers to store emails for millions of users, and by web services managing billions of files with very high performance expectations, either for Web 2.0 or business applications. Scality RING is based on a patented object storage technology, which delivers high availability, ease of operations and total control of your data. For more information, visit: www.scality.com or follow @Scality on Twitter. About SGI SGI, the trusted leader in technical computing, is focused on helping customers solve their most demanding business and technology challenges. Visit sgi.com for more information. Connect with SGI on Twitter (@sgi_corp), YouTube (youtube.com/sgicorp), Facebook (facebook.com/sgiglobal) and LinkedIn. The Silicon Graphics, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=14848 Contact Information: Ogilvy Public Relations: Meghan Fintland 415-677-2704 SGImedia@ogilvy.com Scality Press Contact: Monique Shefer 415-720-9691 monique.shefer@scality.com (c) 2013 Silicon Graphics International Corp. SGI, InfiniteStorage, MIS and the SGI logo are trademarks or registered trademarks of Silicon Graphics International Corp. or its subsidiaries in the United States and/or other countries. Intel and Xeon are registered trademarks of Intel Corporation. All other trademarks are property of their respective holders. News Source: NASDAQ OMX 22.01.2013 Dissemination of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: SGI United States Phone: Fax: E-mail: Internet: ISIN: US82706L1089 WKN: End of Announcement DGAP News-Service ---------------------------------------------------------------------------
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https://www.edge.org/digerati/parent/parent_chapter.html
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DIGERATI: The Webmaster [Kip Parent]
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Chapter 23
THE WEBMASTER
Kip Parent
THE FORCE (John McCrea): Kip Parent is one of the original drivers of Silicon Graphics' adoption of the Web. He developed and managed Silicon Surf, which is about taking the message of the company externally via the Internet.
Kip Parent is founder of Pantheon Interactive and is former electronic sales manager of Silicon Graphics.
On a business trip to Europe in early March of 1993, Kip Parent was looking at technologies based on CDs and SGML publishing. He happened to visit Tim Berners-Lee at CERN in Switzerland, who said to him, "Look at this. Here's what I think the future is. It's called the World Wide Web.ö Berners-Lee had invented the Web as a text-based system that enabled particle physicists to share information. That very month, Marc Andreessen had released his first alpha copy of the Mosaic browser, which he developed on a Silicon Graphics Indigo computer. Berners-Lee showed it to Kip, who said, "Wow, this is what I need. I'm going to use the World Wide Web!ö
Kip had recently moved to Silicon Graphics from Hewlett-Packard, where he worked as an R&D manager, because he wanted to become more involved in leading-edge technology. Silicon Graphics at that time was trying to figure out how to establish what it called an "electronic channel" with customers.
"From the first time I saw the Web in March '93," he says, "I believed that it was going to be the information superhighway and that proprietary services were going to die. Outside of Bert Fornaciari, the VP I worked for, nobody else believed it. Bert would go off to a meeting with Jim Clark, chairman [and founder] of Silicon Graphics, and he'd come back and tell me that some of the senior people were OK about it but that Clark was sitting in the back of the room giving him raspberries, saying interactive TV is where it's at and this Internet stuff isn't going to fly. That's funny, because when you think of the Internet today, who do you think of? Jim Clark! A billion dollar's worth of Netscape stock. Back then, he was 'Mr. Interactive TV.'"
According to Kip, SGI was considering a proprietary service that didn't make sense. "I spent my first eight months there trying to convince the management that it was not a good idea," he says. "I spent eight months telling executive after executive that we should use the Internet. The response was, "You can't use the Internet!" Or, "What's the Internet?" "The typical response in early 1993 was that the Internet was the CB radio craze of the '90s."
Today, Silicon Graphics is on the leading edge of the Internet and Kip is responsible for all aspects of SGI's activities on the Web. This includes managing creative, technical, production, and electronic sales staff; developing new Internet-based services; and evangelizing Internet products on behalf of Silicon Graphics at trade shows and industry conferences. He originated and launched Silicon Surf, SGI's award-winning Web site. It is the ninth most accessed site on the Web, according to Interactive Age magazine, has been featured in dozens of books and magazine articles, and is the recipient of many widely respected Internet and Web awards, including "best site" by Interactive Age in 1995.
Kip Parent is "The Webmaster." David Bunnell and I have been working with him as part of a technology collaboration between Content.Com Inc. and SGI. It's been an interesting experience for me to check out his creative environment, having produced in 1965 what I called "Intermedia Kinetic Environmentsö with artists such as Andy Warhol, Robert Rauschenberg, Claes Oldenburg, and Nam June Paik. On the Web, which I consider to be the canvas of the '90s, creativity is being driven not by people from the art world but by engineers such as Kip Parent.
THE WEBMASTER (Kip Parent): A lot of corporate guys are saying that the Web is going to implode and that 40 percent of the companies on the Web today will be gone in six months. I think they are wrong. Interactive TV is what has imploded. We may very well see a merging of the ideas of interactive TV and the Web as we get broadband TCP/IP broadcasts via TV cables. We'll see a natural merging of the technology, but it'll be far better and far more powerful than people were thinking interactive TV would be in 1993. You're really going to have the opportunity to interact with it.
So where will Netscape be in this? The real question is, How effective will Bill Gates be in scuttling it? Bill Gates is probably the biggest obstacle Netscape has. But Jim Clark is smart. One of his big talents is pulling together sets of people who can make things happen. Jim Clark came up with the idea of visual computing back in 1982. He tried to sell it to the big companies - HP, IBM, DEC - and they all pushed him off. So he started his own company and got Ed McCracken out of HP to run it. If Jim Clark has a great idea, he gets it going; he doesn't need to be the president of the company. I give him a better-than-even chance of being bigger than Microsoft in a decade. Netscape has played its cards right at this point. Gates is going to try to give away software as part of his operating systems and cut Netscape out of the market. Guerrilla tactics. That's a hard thing to do. He couldn't manage to scuttle Intuit, which had a good foothold and better software than Microsoft. I don't think Netscape is Bill's to take.
We started Silicon Surf in April 1994. At that time, there were only about five sites, and there weren't any models to follow. I read somewhere that on the first round-the-world airplane trip, the people flying the plane were mechanics. It couldn't be done any other way. From that point of view, the very first people creating the Web sites had to be very technical. There were a lot of things we had to figure out from a technical standpoint for the first six or seven months we were in business. Fortunately, we were able to draw from SGI's vast archive of high-quality graphics. We begged, hustled, and cajoled most of the content that we put online. We thought that because we were Silicon Graphics, we had to have good graphics from the start. That really paid off for us. We quickly became the de facto place to go if you wanted to see good integration of media on a Web site.
The idea behind our Web site is to bring people in to see things they can't see other places. Then we want them to ask us how it's done. We can then say to them, "It's done on Silicon Graphics, using a certain kind of software. By the way, here is how you can get it." All the way down the line we draw them in. In other areas on the Web site, we tell how our customers are using our equipment. If we are going to attract the people who really buy these $30,000 or $40,000 super desktop computers, we have to show them what their competition is doing, why their competition is going to win by going with Silicon Graphics, and why they'd better go with us, too, if they want to be competitive.
We are not just throwing print online. I look at this medium as much more akin to television than any other medium. The typical cable system has thirty to forty channels, and if viewers find one thing boring, they can switch to another channel. On the Web, there are a hundred thousand channels, and a year from now there are going to be a million. If we put unimaginative material out there, someone's going to change the channel.
The pundits who say it's going to take a long time to make money on the Internet just don't get it. We have a lead-generation form that people can fill out on Silicon Surf. They tell us who they are, what products they're interested in, what their budget is, what their purchase time frame is, what their role in the purchase process is - all the questions a sales rep would ask. This is valuable information. The Web is the single highest source of high-quality leads that we get at Silicon Graphics. Transactions are starting to come in. We are actually selling desktop systems via the Internet. For some people, the Web is the preferred vehicle. If they know what they want and feel they can get a fair price without having to go with a salesperson, they will buy online.
The catalog business is going to make the transition online much faster than any of the prognosticators are saying. I just read that the direct-mail business was worth $57.4 billion dollars in 1995 in this country. One out of every two Americans bought something via the mail last year. People are saying that the Internet might generate $1 billion by 2000. They're wrong. By 2000, it's going to be a $10 billion business. Ten years after that, catalog publishers are going to find they just can't compete. The economics are so obviously in favor of the Internet.
For example: In 1994, when Silicon Graphics was a $1 billion company, we printed 11,000 three-inch-thick paper catalogs advertising our products. In 1995, we made $2.2 billion dollars and more than doubled our profits but printed only 10,000 catalogs. Why? A year ago we put our applications catalog on Silicon Surf. Customers can go to the catalog and ask to see something about wind flow analysis. Bam, right up on the screen, within a second or two, are the thirty applications that address wind flow analysis. It's very powerful and compelling, and it's reflected in our profits.
It is the old question of push versus pull: By sending out a catalog every two weeks, you invade the consumer's space. That's powerful, but at Silicon Surf, we depend on our potential customers to think about us and come in of their own accord. I've tried combinations of active marketing. I started a publication called Iris Online, an email-based publication received by tens of thousands of subscribers every month. Like a catalog, it shows up in their mailboxes, but the big difference is that the mailing hyperlinks back into my Web site. Customers can look at what I've got, click, and get to the site. I want to get people to subscribe to my list so I can entice them. Since I'm not spending any money on distribution and printing, I can put more money into enticements.
I'm not sure we coined the term intranet at Silicon Graphics, but we started using it, and it's become the buzzword today. It came about because the only way we could maintain the culture at Silicon Graphics was to improve the communications vehicles within the company. Intranets have given us that capability. Every department in the company has a Web server. Intranets give us a competitive advantage because the Web inside Silicon Graphics makes it easier for people to publish their information or communicate within the company.
Intranets will dramatically cut paper use. At Silicon Graphics, we've cut out 90 percent of the internal administrative paperwork. When I joined the company three years ago, every employee went through a four-hour orientation, about an hour and a half of which was spent filling out forms. Every one of those forms is now online. The process is faster for everybody, the information is immediately useful, and we have zero scrap cost. Today's environment changes so fast that brochures are often obsolete by the time you get them back from the printer. Scrap costs are huge when you print your sales material. Our product line is new every eighteen months. If our sales reps have to hand out old brochures, our competitors can say, "You know, their brochure says that their top of the line is 175 MHz, and the sales rep says something else. Who're you going to believe?" Casting doubt on your competitor is half of sales. When your data is online, you can update it instantaneously and make it available immediately. Intranets make sense for all kinds of companies. It's just better economics.
THE SEER (David Bunnell): Not too many people know Kip, but millions know his work. He doesn't need to be out front, because he is the one who is really making things happen. He is quiet, but driven, and even though he is very young, he understands how to motivate people. This guy is going places.
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| 31
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https://www.wired.com/1994/01/sgi/
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en
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Fire in the Valley
|
https://media.wired.com/photos/66bd1e74cf6232ff4521bd73/1:1/w_350%2Ch_350%2Cc_limit/undefined
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[
"magazine-2.01"
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[
"Michael Goldberg",
"Andy Greenberg",
"Matt Burgess",
"Vittoria Elliott",
"David Gilbert",
"Condé Nast"
] |
1994-01-01T12:00:00-05:00
|
Silicon Graphics is the hottest computer company in Silicon Valley, but founder Jim Clark has a bigger vision:to make it a dominant player in consumer electronics. Will he succeed, or will SGI melt down, consumed by its own ambition?
|
en
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https://www.wired.com/verso/static/wired/assets/favicon.ico
|
WIRED
|
https://www.wired.com/1994/01/sgi/
|
Silicon Graphics is the hottest computer company in Silicon Valley, but founder Jim Clark has a bigger vision:to make it a dominant player in consumer electronics. Will he succeed, or will SGI melt down, consumed by its own ambition?
- Silicon Graphics is the hottest computer company in Silicon Valley. - It owns the 3-D computing market, having sold $1 billion of workstations in 1993. - Its boxes helped make Jurassic Park the biggest grossing movie of all time. - And it has just launched Indy, a $5,000 computer that threatens to eat Apple's and Sun's lunch. - Founder Jim Clark has a bigger vision, however: to make SGI a dominant player in consumer electronics. - SGI will supply the server-to-set-top system for Time Warner's Orlando interactive test. - And its chip will power Nintendo's 1995 64-bit games boxes. - Will Clark succeed in turning SGI into a $10 billion business? Or will SGI melt down, consumed by its own ambition?
Four years ago, Jim Clark almost left Silicon Graphics.
When SGI's founder began telling his executives that the future lay in things like cable-TV boxes and digital game players, he got a rather icy reception. "I was kind of a lone voice," he says. "I was babbling about cable television - and into the wind for a lot of the time. The reaction I got was, 'Well we're not a consumer electronics company. Why do we care about cable-TV boxes? Who cares?' "
Clark, who is SGI's chairman, is sitting at his desk in a cozy upstairs corner office at SGI corporate headquarters; from his window he can view a few of the seventeen modern brick and glass buildings that comprise the company's sprawling Mountain View, California campus. He is wearing a light blue striped shirt unbuttoned at the neck, charcoal gray slacks, and black loafers. He is tall and thin, has a head of blond hair, and the brainy look of a college professor, which he once was, in a past life, before he became a Mercedes-driving multimillionaire.
When Clark says something he finds amusing, he throws his head back and laughs. He grins a lot. At 49, he has a surprisingly young, inquisitive, almost boyish face.
At the moment, though, he's neither laughing nor grinning. "Most people here couldn't see it," he says. "Three years ago, it was even said, 'You're nuts. If you want to do that, you maybe ought to do that on your own.' "
It wasn't the first time Clark's ideas had met with skepticism. It was the same kind of resistance he came up against in 1981, when he tried to interest IBM, DEC, and others in the original interactive 3-D graphics technology that had motivated him to form SGI.
"I think that Jim, to use that horribly overused word, is a visionary," says Robert Herwick, a technology analyst at Hambrecht & Quist. "He's probably the only one who really believed ten years ago that that technology would end up in the home."
Ironically, SGI became so successful making high-end graphics workstations that many executives at the company lost sight of Clark's broader vision. "I've come to conclude that at companies, as they get large, management simply cannot and will not look at new opportunities," he says.
For Clark, SGI is a 3-D interactive graphics company, not a box maker. In the beginning, SGI was going to make graphics terminals hooked up to mainframes; but Clark steered it into the workstation business when he realized early on that terminals were going the way of silent movies and record players. But whether it's terminals, stand-alone workstations, or television sets is really beside the point.
"SGI always came at it from the point of view of the graphics, that's what's important," says Denise Caruso, editorial director of Friday Holdings in New York.
"Jim Clark is always looking for every opportunity to offer higher quality visualization, whether over a cable in a home, in a 3-D game, or in the creation of multimedia," says Herwick. "They take a very broad view of the markets they serve."
The workstation business became a gold mine for SGI, whose earnings ballooned from $167 million in 1988 to just over a billion for the fiscal year ending June 30, 1993.
By the end of the '80s Clark was looking beyond high-end workstations, gazing into the future, setting his sights on entering the still nascent world of "convergence" that will fuse computers and television. His only ally was SGI chief scientist Mark Hannah, one of a small group of Stanford University students who started SGI with Clark in 1981. (Hannah helped develop the original architectures - the Geometry Engine ASICs - that handle most of the graphics processing in SGI's machine.)
"If not for Mark I think I probably wouldn't be here today," Clark says. "I had an interest that I felt was important for the company, and if the company did not share that feeling I was going to go someplace else."
He leans forward in his chair and says with intense conviction, " 'Cause I thought it was vital to what I perceived to be the right future for the company. With any given company, there are always several possible futures. I have to think I've done SGI a big service - pulling it by the hair into these new markets."
Digital Dinos
Jim Clark is arrogant, driven, cunning, and - as one industry analyst puts it - "very persuasive." He possesses a keen intellect, and is one of a new breed of '90s Silicon Valley entrepreneurs who refuse to let themselves be seduced by their own success.
Clark is not afraid to publicly dis a company like Apple, much as Steve Jobs once mocked IBM.
"Apple," Jim Clark will sigh, as if he were talking about a horse on its way to the glue factory. "They're not doing anything... Apple blew it."
Then, with a dismissive wave of his hand, and just the hint of a grin: "I think they're in serious trouble."
Earlier this year, Silicon Graphics placed an ad in Cinefex, a special- effects magazine. The ad depicted people in the foreground sitting at computer terminals while in the background a Tyrannosaurus rex rose out of scaffolding. The text read: "Helping build a better dinosaur."
These days, when most people think of Silicon Graphics, they think dinosaurs. The company's revolutionary workstations, as you might have heard (unless you've been vacationing on Mars), were used to create the mind-boggling dinos that scared the pants off millions and millions of moviegoers who saw Jurassic Park.
Those digital dinos symbolize SGI's preeminence as the platform for creating state-of-the-art 3-D special effects. But the entertainment business currently accounts for less than 10 percent of SGI's sales.
From the introduction of the first $80,000 SGI workstation in 1984 (with a computing speed of one third MIPS), engineers, architects, doctors, automobile designers, defense contractors, and scientists - not to mention animators - have embraced SGI's standard of 3-D visualization.
Until recently, Clark has been able to avoid head-to-head competition with HP, Sun, DEC, and others because those companies underestimated the importance of 3-D graphics. "HP and all the other workstation vendors kind of left the door open in one particular segment of the market," says Robert Weinberger, marketing manager for HP's workstation group. "SGI was smart enough to recognize that and rush through."
Executives at HP and Sun concede that Clark created a niche for his company, refining and improving on his proprietary technology, quietly finding a market among an elite group of accounts. Through the later half of the '80s and into the '90s, SGI engineers successfully created ever more powerful high-end boxes, while also introducing less and less expensive workstations, all of which network together easily and can run the same programs.
Surprisingly, only very recently have SGI's competitors started seriously chasing after SGI's market share. "I think they'll be up against competition like they've never seen before," says Mike Gero, a product manager at SoftImage Inc., whose products were developed for the SGI platform. "It seems like in the past six months to a year, other vendors have really looked to address this particular market."
"Visual computing has been a niche and SGI has flourished in that niche," says Bob Pearson, Sun's director of advanced desktop systems marketing. "But now it's becoming mainstream and the rules of a mainstream game are different than they are for a niche game. It's volume, price points, distribution. It's easier for Sun or HP to duplicate what SGI has done at higher volume and lower price points."
The entire workstation market is a $10 billion to $15 billion dollar business, of which SGI currently has about 8.6 percent, according to International Data Corp. (Sun is the major player, with 33 percent of the market.) But Clark wants to helm a $10 billion company by the end of the decade. He's known for years that SGI can't afford to live or die by the workstation.
"You can't afford to get too comfortable," says Mark Hannah. "Look what happened to IBM. Things change; the world changes. There's always a threat out there."
Or as Clark succinctly says, "I don't want to be the Cray computer of the '90s."
The Jim and Mario Show
A 3-D image of Mario the Plumber's head dominates a movie screen located at one end of the Peacock Room in San Francisco's ritzy Mark Hopkins hotel.
Mario is talking. An exaggerated Italian accent fills the room. "Jeeeemy," he says, "I may be a big star, but I don't let it go to my head."
"Mario, I'd like to be the first to welcome you to your new home at Silicon Graphics," says Clark in a bemused, fatherly way, as he stands at a podium to the right of the screen. "I think you're really going to have a nice, happy time here."
"Oh thank you so much Jeeemy," answers the animated version of Nintendo's leading man.
It's mid-August, and dozens of business reporters are sitting through this embarrassingly silly presentation, most of them diligently taking notes.
They have to come to be briefed on some surprising news from two companies that have, in very different ways, profoundly influenced the modern world. Nintendo, known for making billions of dollars selling the modern-day equivalent of the pinball machine, is joining forces with Silicon Graphics.
Today's announcement makes public another piece of a complex puzzle that Clark has been painstakingly assembling for the past two years. Until this year, Silicon Graphics wasn't exactly on the tip of everyone's tongue. Those aware of SGI viewed it as the company whose powerful workstations were used for mechanical engineering, computational chemistry, molecular modeling, and movie special-effects work.
Those computers - with intriguing, some say sexy, names like Indigo, Crimson, Onyx, and now Indy - don't even look like the competition. In place of the boring beige plastic boxes that house most CPUs, SGI has used a deep blue-violet for the original Indigo, teal for the Indigo2, reddish- orange for the Crimson - colors that seem to give off a luminous, almost magical glow as they sit on a desk.
Their latest model, Indy, even comes with a "gray granite" monitor that would fit into a trendy underground nightclub. "They come up with hip names and hip appearances," says Jim Morris, who is vice president and general manager at Industrial Light and Magic (ILM), George Lucas's special effects laboratory. "That makes people feel like they're with the current exciting product."
Yet it's not hype that SGI has been selling. The internal architecture of SGI's high-end boxes - the ones used by the likes of ILM and NASA - was a breakthrough when introduced in the early '80s, and advances in the architecture's design have kept them at the cutting edge.
Clark's machines were built with one overriding goal: to allow the 158,720 pixels that form a color image on a high-end monitor to re-form at least 30 times per second. Achieving that goal allowed for realistic 3-D visualization. His breakthrough was to build graphics processing into the machine's custom chips, or ASICs, allowing them to generate fast enough processing speeds to create 3-D interactive graphics.
And what are the key components that comprise an SGI high-end workstation? A MIPS chip (SGI purchased MIPS in 1992), SGI proprietary ASICs (the "Geometry Engine"), and SGI's Graphics Library (GL), some of which is built into the hardware.
The newer, less expensive boxes - Indy and lower end Indigo2 Extreme workstations - are cleverly designed so that some of the graphics processing can be done by the MIPS chip without the need for ASICs.
The company's flashy packaging makes sense for computers that are dominating Hollywood special-effects houses. (And Indy is fast becoming an important development platform for the next generation of video games.) In addition to Jurassic Park, SGI supercomputers were used to do the Terminator 2 special effects, in which the metallic archvillain transformed itself into various human forms and inanimate objects.
Other films that relied on SGI technology include The Abyss, Beauty and the Beast, Total Recall, In the Line of Fire, and Cliffhanger. It was SGI hardware that allowed Michael Jackson to morph himself into a black panther at the end of his "Black or White" video. Lucas plans to use SGI computers "to the nth degree" for the production of his Star Wars prequel trilogy, slated to begin within the next four years.
At ILM in Marin County, California, three temperature-controlled rooms bear silent witness to the importance of SGI in the contemporary worlds of film and television.
The rooms hold $15 million worth of networked SGI CPUs; that's nearly 100 computers. "Anybody that's doing effects now in the film business is using SGIs or is about to," says Morris. "In the entertainment business SGI machines are the digital production cornerstone."
In fact, Morris says, SGI computers have become a status symbol. "There's nothing cooler that you can say than, 'Yeah we've just ordered $4 million of SGI equipment.'"
All Hell Broke Loose
Silicon Graphics has been phenomenally successful. And even as it has dominated the 3-D workstation market, SGI has been widening its reach.
The company has taken a number of risks during the past two years. Last year it acquired MIPS Computer Systems Inc., which designs (but doesn't manufacture) the microprocessors used in SGI computers; MIPS chips are also used by such hardware manufacturers as AT&T Federal Systems Computer Division, Control Data Systems, NEC, Olivetti, Siemens, Nixdorf, and Sony Microsystems.
Although Wall Street initially questioned the wisdom of acquiring MIPS, the consensus these days is that it was a smart move, one that has given the company more control over its destiny. "From a long-term strategic point of view, it has given them total control over the MIPS architecture," says Hurwick, "and as a result, the MIPS architecture is being evolved in ways that are directly supportive of SGI's strategy."
In January of 1993 SGI also introduced a line of supercomputers that is already biting into a market once owned by such old-line supercomputer and mainframe manufacturers as Cray Research and IBM.
As it turns out, these shiny new SGI Power Challenge computers can double as super-fast multimedia servers to store and deliver on demand various digital media - movies, TV shows, games, and much more - to digital cable- converter boxes that will be making their appearance in some US homes beginning next year.
Additionally, this past summer the company unveiled Indy, which is less expensive, faster, and provides more for the money than anything currently available from competitors such as Apple. For example, Indy comes with a built-in camcorder for video conferencing.
Analysts, software developers, and SGI's competitors question this recent diversification. "They are juggling a hell of a lot of balls," says HP's Weinberger. "Too many balls for a company their size."
But such developments were dwarfed by a string of recent high profile events. 1993 was the year, says SGI president and CEO Jim McCracken, that "all hell broke loose."
It began last February, when President Clinton and Vice President Al Gore arrived at the company's Mountain View headquarters - with several hundred reporters in tow - to announce the administration's new technology policy. Commenting on SGI's management approach, Clinton said, "I think government ought to work like you do."
Two months later, in April, ILM and SGI announced they had teamed up to form the Joint Environment for Digital Imaging, or JEDI, with a goal of creating entirely digital movies. Other companies, such as James Cameron's Digital Domain and Kodak, are in the digital filmmaking business too. Still, Lucas has described the alliance as "the beginning of the revolution in the film business."
In June, it was announced that Time Warner had picked SGI to provide hardware and software for an experiment in interactive TV that the media giant will make in Orlando, Florida in April.
And then Jurassic Park was released.
By the late fall the company seemed to be in the news every week. On September 28, The Wall Street Journal reported that an interactive shopping channel to be tested as part of Time Warner's Orlando experiment (it will make use of SGI servers and cable-converter boxes) will "allow cable viewers to enter catalog 'stores,' to view merchandise in full-motion video, and to make purchases on demand."
SGI Targets America's Living Rooms
In the Peacock Room, Clark, McCracken, and a Nintendo executive explain that the two companies are joining forces to work on Project Reality. Together they will create the next generation of Nintendo 3-D video games. The 64-bit machines, built by Nintendo using SGI chips, are expected in 1995 and will sell for about $250.
After the presentation is over, reporters fire questions at the executives. Most focus on the new video-game player. When will it be finished? What about compatibility with older Nintendo products? That kind of thing.
No one bothers to ask why Clark is aligning Silicon Graphics with a video- game company. McCracken says simply, "We're not doing this because we want to get into the video-game business."
What then?
During the past ten years, Nintendo sold a hundred million video game players and three quarters of a billion video game cartridges. The company's products are, it claims, in 40 percent of all American homes. SGI would like to get into what McCracken calls "a vast new market."
Certainly there is much money to be made. SGI will get a royalty from every Nintendo player and piece of software resulting from the collaboration; Clark believes SGI will net hundreds of millions of dollars (more than the company's current annual profit) from the deal.
But there's more to this than bags of cash. Four years ago Clark saw the future; the future, he concluded, would belong to computer companies whose core technology becomes a standard in the consumer electronics market. (He was not alone. Companies ranging from Apple to HP have also been moving in that direction.)
Clark also understood that SGI had neither the marketing savvy nor the financial resources to compete with consumer electronic giants like Sony and Phillips.
Therein lies the shrewdness of the Time Warner and Nintendo deals, deals Clark boasts he deserves sole credit for both instigating and closing. Rather than battling it out in the relatively small PC market - some five million PCs were sold in the US during 1993 - Clark is going straight for the masses. If all goes as planned, Time Warner and Nintendo will place millions upon millions of Clark's computers into homes all over the world.
"It's like extending our product line down to $250," says Clark, "without having to be in that market ourselves."
As with the game players it's working on with Nintendo, SGI will provide the guts of the Time Warner set-top cable converter box, but they will be manufactured by Scientific Atlanta. While it might seem surprising that SGI, known for its stylish packaging, would let other companies box its hardware, it makes sense if you remember that Clark sees himself in the graphics business.
SGI's past experience in the rather esoteric graphic workstation market provides no assurance that it can design products simplistic enough for the average couch potato to grok.
"I'm not convinced that they can pull off the set-top box," says Friday Holdings' Caruso. "Part of what they're doing for that is the user interface. They don't know anything about user interface for consumers. Nobody in the computer business does. The fact that these people are kidding themselves into thinking they know how to do this is terrifying to me.
"It's not like you're walking into a proven market," Caruso continues, "where you know there are 50 million people who are just waking up every morning saying, 'I've got to have interactive TV today.' They don't know what it is. They don't know to want it."
HP's Weinberger thinks SGI's high-profile move into new areas could prove disastrous. "Now what does that say to one of their mechanical design customers, say a major automobile manufacturer, who sees all of this and starts saying to himself or herself, 'Oh, geez, sounds like that's their future, that's what they're betting on, that's where they're gonna put their investment.'
"Well, they're going to drop Silicon Graphics like a hot rock long before Silicon Graphics realizes one penny of revenue from the (new 64-bit game machine) - that's well off in the future," continues Weinberger. "And that's the challenge. Big worldwide Fortune 1000 companies want to make sure that the things they're buying today are mainstream strategies for that vendor. And the noise I hear from Silicon Graphics is, 'Gee it isn't. It's something we've been doing, but now we're doing something else."
All of which Clark seems to understand; none of which has deterred him. You don't have to talk to Clark for long to discover just how important he thinks these two deals are for SGI. They are, he says, his obsession. Clark believes that the very future of his company rests on his new partners' abilities to bring SGI technology successfully into America's living rooms.
"If SGI doesn't create more volume," he says quietly, "then it will die."
The Virtual Shopping Mall
"Interactive home shopping," says Mark Hannah. His brown eyes light up. A big smile appears on his face.
While the President of the United States talks about creating high-tech "information superhighways" that will revolutionize America, Hannah has a more pragmatic idea of how those superhighways will be used by most Americans - at least in the short run.
Hannah ticks off his fingers as he sits on a couch in his office in Building 2 on the SGI campus, counting: "Interactive home shopping, video on demand, and games."
"I think the biggest application of the superhighways will be entertainment," agrees Ed McCracken.
Conventional wisdom now has it that the money - the really, really big money - lies in successfully wedding computer technology and entertainment. As The New York Times reported in late September, it is now estimated that a $3.5 trillion business is "beckoning on the horizon."
Sure, some egghead kids may use the superhighway to "plug into an electronic library," as Vice President Al Gore put it while visiting SGI. But recent activity to stake claim to a piece of that superhighway, such as the recent $21 billion plus Bell Atlantic acquisition of Tele- Communications is about less lofty bits.
"It's just a lot easier leap to think that people will want to watch movies on demand," says Hannah. He rubs his neatly trimmed beard and adjusts oval- frame glasses.
"No real training involved there," chuckles the scientist. "Instead of going down to the video store, you select a movie on the screen. And so that seems to me like the path of least resistance to really establishing a large market for these technologies."
Volume, Volume, Volume
By 1989, Clark was imagining two possible scenarios for SGI. Basically, if the company didn't get its technology into consumer markets, it would eventually be relegated to the fringes, profits would shrink, and survival would be difficult.
On the other hand, what if he could make deals that would place SGI computer architecture and the company's MIPS chips in mass-marketed consumer items? This would create a demand in the tens of millions for those chips, a gigantic leap above current sales of half a million per year.
Clark would have volume, and volume, and well, let Clark himself explain it. "Why is volume important?" he asks rhetorically. "Because if you don't get volume, the guy who does get volume is going to end up setting the standard and, to a lesser and lesser degree, people will want to use your microprocessor."
He leans back in his chair. "Instead, they're going to want to use the one that has the most software on it," he says.
The repercussions of this scenario would be profound for SGI. The company could become a major player in the new digital media marketplace; it could grow into the very profitable company Clark envisions by the end of the century.
Of course there are those - certainly SGI's competitors - who think all of this is just a pipe dream. "The odds against SGI doing that are quite high," says Bob Pearson, director of advanced desktop systems marketing for Sun. Pearson worked at SGI from 1984 until 1988.
"The MIPS chip doesn't necessarily lend itself to very high-volume, low- cost production," he continues. "Most chips don't. It's very complicated to get a chip that now costs $400 down to, say, a $20 price point."
But if Clark has doubts about where he is taking SGI, he isn't showing them. "I feel there's a certain inevitability to everything that I talk about," he says.
"It's not as if I'm pointing the way in some grand visionary sense. I think it's inevitable. Okay, so I happen to see that it's going to happen better than somebody else, perhaps. I feel like I do. But it's going to happen whether I'm here or not. So why not help it happen a little quicker, and help the company make money out of it."
Now he's grinning: "And I wouldn't mind if I made a little in the process."
The End of the PC?
"This deal says we're coming up from underneath - squeeze play," says Clark.
The SGI-Nintendo press conference is over. Clark has left the stage and is now standing in the middle of an adjacent room where a half dozen of his computers are being used to demonstrate some of their amazing graphics capabilities.
At one workstation, a boy who looks about 12 is mesmerized by a 3-D flight simulator. In a rear corner of the room, a man whoops it up as he rides a virtual reality pterodactyl through simulated 3-D images of a prehistoric landscape.
Above the noise of jungle sounds and the hum of supercomputers, Clark is on a roll. "Eventually people will ask, 'Can I get my word processor and my spreadsheet and a few other applications on this other platform?' As soon as they can, they'll stop buying PCs. I don't know how long that will take. It may take five years, may take seven years.
"But the PC doesn't have an indefinite life," he continues. "Just like the Model T didn't. Or the Model A. They produced the Model A for eleven years. No change. Eleven years! And I view the PC as the Model A of computers. It's been a terrific product. Made some people a lot of wealth."
Through his wire-frame glasses, Clark's eyes gleam. And then, like someone who is simply stating the inevitable, he adds, "But it isn't forever."
The New Paradigm
"The first day I went to speak to Jim, he pointed to a picture of an airplane he had up on the wall," says Kurt Akeley, who was a Stanford University student at the time. "And Jim said, 'I'm going to make this move.'"
The year was 1979. Jim Clark, who had recently taken a job at Stanford as an assistant professor of computer science, had a plan to build a better mousetrap. He'd come up with what SGI president Ed McCracken now calls "a new paradigm."
While developers at other computer companies were "using the paradigm of the desktop," Clark imagined something else. Using his hands to draw a rectangle in the air, McCracken says, "Jim Clark's idea was that the screen would be a window into a three-dimensional, virtual reality world."
That was Jim Clark's vision. And his motivation?
"I was 35 and poor," he says frankly. And, he hastens to add, he had no interest in spending the rest of his life dealing with the politics of academia.
"I love the metric of business," says Clark. "It's money. It's real simple. You either make money or you don't. The metric of the university is politics. Does that person like you? Do all those people like you enough to say, 'Yeah, he's worthy'?"
Clark raises both arms and then, like Saturday Night Live's Wayne and Garth, makes bowing motions as he says, laughing, "We're not worthy, we're not worthy."
Born in 1944, Clark grew up in the small west Texas town of Plainview. He was good at math, "played around with ham radios," and even built one, but found school a bore. He dropped out of high school when he was a junior and in 1961 joined the Navy. It was there that he discovered his aptitude for technology. That inspired him to go back to school.
"I became excited by the challenge of understanding how things work, understanding the world," says Clark. "It struck me as fascinating, that you could actually write down some equations that would predict how the world was going to behave."
By the early '70s he had landed at the University of Utah to pursue a PhD in computer science. It was there that he studied with Ivan Sutherland, considered to be the father of interactive computer graphics.
When he reached Stanford, Clark knew he wanted to do more than just teach. With financing from the Defense Advance Research Projects Agency, Clark and a team of students in graduate programs at the university, including Mark Hannah and Kurt Akeley, spent three years working with a "maniacal" intensity on the ASICs they named the "Geometry Engine."
After a halfhearted attempt at selling this breakthrough technology to an established computer company, Clark raised $500,000 himself (he eventually secured $20 million in funding) and SGI was born.
"I concluded after talking to DEC and IBM and all these companies that they didn't understand how to use what we had in the first place, so they would surely screw it up," says Clark. "Since they didn't feel the passion for getting these kinds of graphics into computers, what was I going to do? Try to convince them for three years while I died?"
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https://www.wired.com/1994/01/sgi/
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1994-01-01T12:00:00-05:00
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Silicon Graphics is the hottest computer company in Silicon Valley, but founder Jim Clark has a bigger vision:to make it a dominant player in consumer electronics. Will he succeed, or will SGI melt down, consumed by its own ambition?
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WIRED
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https://www.wired.com/1994/01/sgi/
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Silicon Graphics is the hottest computer company in Silicon Valley, but founder Jim Clark has a bigger vision:to make it a dominant player in consumer electronics. Will he succeed, or will SGI melt down, consumed by its own ambition?
- Silicon Graphics is the hottest computer company in Silicon Valley. - It owns the 3-D computing market, having sold $1 billion of workstations in 1993. - Its boxes helped make Jurassic Park the biggest grossing movie of all time. - And it has just launched Indy, a $5,000 computer that threatens to eat Apple's and Sun's lunch. - Founder Jim Clark has a bigger vision, however: to make SGI a dominant player in consumer electronics. - SGI will supply the server-to-set-top system for Time Warner's Orlando interactive test. - And its chip will power Nintendo's 1995 64-bit games boxes. - Will Clark succeed in turning SGI into a $10 billion business? Or will SGI melt down, consumed by its own ambition?
Four years ago, Jim Clark almost left Silicon Graphics.
When SGI's founder began telling his executives that the future lay in things like cable-TV boxes and digital game players, he got a rather icy reception. "I was kind of a lone voice," he says. "I was babbling about cable television - and into the wind for a lot of the time. The reaction I got was, 'Well we're not a consumer electronics company. Why do we care about cable-TV boxes? Who cares?' "
Clark, who is SGI's chairman, is sitting at his desk in a cozy upstairs corner office at SGI corporate headquarters; from his window he can view a few of the seventeen modern brick and glass buildings that comprise the company's sprawling Mountain View, California campus. He is wearing a light blue striped shirt unbuttoned at the neck, charcoal gray slacks, and black loafers. He is tall and thin, has a head of blond hair, and the brainy look of a college professor, which he once was, in a past life, before he became a Mercedes-driving multimillionaire.
When Clark says something he finds amusing, he throws his head back and laughs. He grins a lot. At 49, he has a surprisingly young, inquisitive, almost boyish face.
At the moment, though, he's neither laughing nor grinning. "Most people here couldn't see it," he says. "Three years ago, it was even said, 'You're nuts. If you want to do that, you maybe ought to do that on your own.' "
It wasn't the first time Clark's ideas had met with skepticism. It was the same kind of resistance he came up against in 1981, when he tried to interest IBM, DEC, and others in the original interactive 3-D graphics technology that had motivated him to form SGI.
"I think that Jim, to use that horribly overused word, is a visionary," says Robert Herwick, a technology analyst at Hambrecht & Quist. "He's probably the only one who really believed ten years ago that that technology would end up in the home."
Ironically, SGI became so successful making high-end graphics workstations that many executives at the company lost sight of Clark's broader vision. "I've come to conclude that at companies, as they get large, management simply cannot and will not look at new opportunities," he says.
For Clark, SGI is a 3-D interactive graphics company, not a box maker. In the beginning, SGI was going to make graphics terminals hooked up to mainframes; but Clark steered it into the workstation business when he realized early on that terminals were going the way of silent movies and record players. But whether it's terminals, stand-alone workstations, or television sets is really beside the point.
"SGI always came at it from the point of view of the graphics, that's what's important," says Denise Caruso, editorial director of Friday Holdings in New York.
"Jim Clark is always looking for every opportunity to offer higher quality visualization, whether over a cable in a home, in a 3-D game, or in the creation of multimedia," says Herwick. "They take a very broad view of the markets they serve."
The workstation business became a gold mine for SGI, whose earnings ballooned from $167 million in 1988 to just over a billion for the fiscal year ending June 30, 1993.
By the end of the '80s Clark was looking beyond high-end workstations, gazing into the future, setting his sights on entering the still nascent world of "convergence" that will fuse computers and television. His only ally was SGI chief scientist Mark Hannah, one of a small group of Stanford University students who started SGI with Clark in 1981. (Hannah helped develop the original architectures - the Geometry Engine ASICs - that handle most of the graphics processing in SGI's machine.)
"If not for Mark I think I probably wouldn't be here today," Clark says. "I had an interest that I felt was important for the company, and if the company did not share that feeling I was going to go someplace else."
He leans forward in his chair and says with intense conviction, " 'Cause I thought it was vital to what I perceived to be the right future for the company. With any given company, there are always several possible futures. I have to think I've done SGI a big service - pulling it by the hair into these new markets."
Digital Dinos
Jim Clark is arrogant, driven, cunning, and - as one industry analyst puts it - "very persuasive." He possesses a keen intellect, and is one of a new breed of '90s Silicon Valley entrepreneurs who refuse to let themselves be seduced by their own success.
Clark is not afraid to publicly dis a company like Apple, much as Steve Jobs once mocked IBM.
"Apple," Jim Clark will sigh, as if he were talking about a horse on its way to the glue factory. "They're not doing anything... Apple blew it."
Then, with a dismissive wave of his hand, and just the hint of a grin: "I think they're in serious trouble."
Earlier this year, Silicon Graphics placed an ad in Cinefex, a special- effects magazine. The ad depicted people in the foreground sitting at computer terminals while in the background a Tyrannosaurus rex rose out of scaffolding. The text read: "Helping build a better dinosaur."
These days, when most people think of Silicon Graphics, they think dinosaurs. The company's revolutionary workstations, as you might have heard (unless you've been vacationing on Mars), were used to create the mind-boggling dinos that scared the pants off millions and millions of moviegoers who saw Jurassic Park.
Those digital dinos symbolize SGI's preeminence as the platform for creating state-of-the-art 3-D special effects. But the entertainment business currently accounts for less than 10 percent of SGI's sales.
From the introduction of the first $80,000 SGI workstation in 1984 (with a computing speed of one third MIPS), engineers, architects, doctors, automobile designers, defense contractors, and scientists - not to mention animators - have embraced SGI's standard of 3-D visualization.
Until recently, Clark has been able to avoid head-to-head competition with HP, Sun, DEC, and others because those companies underestimated the importance of 3-D graphics. "HP and all the other workstation vendors kind of left the door open in one particular segment of the market," says Robert Weinberger, marketing manager for HP's workstation group. "SGI was smart enough to recognize that and rush through."
Executives at HP and Sun concede that Clark created a niche for his company, refining and improving on his proprietary technology, quietly finding a market among an elite group of accounts. Through the later half of the '80s and into the '90s, SGI engineers successfully created ever more powerful high-end boxes, while also introducing less and less expensive workstations, all of which network together easily and can run the same programs.
Surprisingly, only very recently have SGI's competitors started seriously chasing after SGI's market share. "I think they'll be up against competition like they've never seen before," says Mike Gero, a product manager at SoftImage Inc., whose products were developed for the SGI platform. "It seems like in the past six months to a year, other vendors have really looked to address this particular market."
"Visual computing has been a niche and SGI has flourished in that niche," says Bob Pearson, Sun's director of advanced desktop systems marketing. "But now it's becoming mainstream and the rules of a mainstream game are different than they are for a niche game. It's volume, price points, distribution. It's easier for Sun or HP to duplicate what SGI has done at higher volume and lower price points."
The entire workstation market is a $10 billion to $15 billion dollar business, of which SGI currently has about 8.6 percent, according to International Data Corp. (Sun is the major player, with 33 percent of the market.) But Clark wants to helm a $10 billion company by the end of the decade. He's known for years that SGI can't afford to live or die by the workstation.
"You can't afford to get too comfortable," says Mark Hannah. "Look what happened to IBM. Things change; the world changes. There's always a threat out there."
Or as Clark succinctly says, "I don't want to be the Cray computer of the '90s."
The Jim and Mario Show
A 3-D image of Mario the Plumber's head dominates a movie screen located at one end of the Peacock Room in San Francisco's ritzy Mark Hopkins hotel.
Mario is talking. An exaggerated Italian accent fills the room. "Jeeeemy," he says, "I may be a big star, but I don't let it go to my head."
"Mario, I'd like to be the first to welcome you to your new home at Silicon Graphics," says Clark in a bemused, fatherly way, as he stands at a podium to the right of the screen. "I think you're really going to have a nice, happy time here."
"Oh thank you so much Jeeemy," answers the animated version of Nintendo's leading man.
It's mid-August, and dozens of business reporters are sitting through this embarrassingly silly presentation, most of them diligently taking notes.
They have to come to be briefed on some surprising news from two companies that have, in very different ways, profoundly influenced the modern world. Nintendo, known for making billions of dollars selling the modern-day equivalent of the pinball machine, is joining forces with Silicon Graphics.
Today's announcement makes public another piece of a complex puzzle that Clark has been painstakingly assembling for the past two years. Until this year, Silicon Graphics wasn't exactly on the tip of everyone's tongue. Those aware of SGI viewed it as the company whose powerful workstations were used for mechanical engineering, computational chemistry, molecular modeling, and movie special-effects work.
Those computers - with intriguing, some say sexy, names like Indigo, Crimson, Onyx, and now Indy - don't even look like the competition. In place of the boring beige plastic boxes that house most CPUs, SGI has used a deep blue-violet for the original Indigo, teal for the Indigo2, reddish- orange for the Crimson - colors that seem to give off a luminous, almost magical glow as they sit on a desk.
Their latest model, Indy, even comes with a "gray granite" monitor that would fit into a trendy underground nightclub. "They come up with hip names and hip appearances," says Jim Morris, who is vice president and general manager at Industrial Light and Magic (ILM), George Lucas's special effects laboratory. "That makes people feel like they're with the current exciting product."
Yet it's not hype that SGI has been selling. The internal architecture of SGI's high-end boxes - the ones used by the likes of ILM and NASA - was a breakthrough when introduced in the early '80s, and advances in the architecture's design have kept them at the cutting edge.
Clark's machines were built with one overriding goal: to allow the 158,720 pixels that form a color image on a high-end monitor to re-form at least 30 times per second. Achieving that goal allowed for realistic 3-D visualization. His breakthrough was to build graphics processing into the machine's custom chips, or ASICs, allowing them to generate fast enough processing speeds to create 3-D interactive graphics.
And what are the key components that comprise an SGI high-end workstation? A MIPS chip (SGI purchased MIPS in 1992), SGI proprietary ASICs (the "Geometry Engine"), and SGI's Graphics Library (GL), some of which is built into the hardware.
The newer, less expensive boxes - Indy and lower end Indigo2 Extreme workstations - are cleverly designed so that some of the graphics processing can be done by the MIPS chip without the need for ASICs.
The company's flashy packaging makes sense for computers that are dominating Hollywood special-effects houses. (And Indy is fast becoming an important development platform for the next generation of video games.) In addition to Jurassic Park, SGI supercomputers were used to do the Terminator 2 special effects, in which the metallic archvillain transformed itself into various human forms and inanimate objects.
Other films that relied on SGI technology include The Abyss, Beauty and the Beast, Total Recall, In the Line of Fire, and Cliffhanger. It was SGI hardware that allowed Michael Jackson to morph himself into a black panther at the end of his "Black or White" video. Lucas plans to use SGI computers "to the nth degree" for the production of his Star Wars prequel trilogy, slated to begin within the next four years.
At ILM in Marin County, California, three temperature-controlled rooms bear silent witness to the importance of SGI in the contemporary worlds of film and television.
The rooms hold $15 million worth of networked SGI CPUs; that's nearly 100 computers. "Anybody that's doing effects now in the film business is using SGIs or is about to," says Morris. "In the entertainment business SGI machines are the digital production cornerstone."
In fact, Morris says, SGI computers have become a status symbol. "There's nothing cooler that you can say than, 'Yeah we've just ordered $4 million of SGI equipment.'"
All Hell Broke Loose
Silicon Graphics has been phenomenally successful. And even as it has dominated the 3-D workstation market, SGI has been widening its reach.
The company has taken a number of risks during the past two years. Last year it acquired MIPS Computer Systems Inc., which designs (but doesn't manufacture) the microprocessors used in SGI computers; MIPS chips are also used by such hardware manufacturers as AT&T Federal Systems Computer Division, Control Data Systems, NEC, Olivetti, Siemens, Nixdorf, and Sony Microsystems.
Although Wall Street initially questioned the wisdom of acquiring MIPS, the consensus these days is that it was a smart move, one that has given the company more control over its destiny. "From a long-term strategic point of view, it has given them total control over the MIPS architecture," says Hurwick, "and as a result, the MIPS architecture is being evolved in ways that are directly supportive of SGI's strategy."
In January of 1993 SGI also introduced a line of supercomputers that is already biting into a market once owned by such old-line supercomputer and mainframe manufacturers as Cray Research and IBM.
As it turns out, these shiny new SGI Power Challenge computers can double as super-fast multimedia servers to store and deliver on demand various digital media - movies, TV shows, games, and much more - to digital cable- converter boxes that will be making their appearance in some US homes beginning next year.
Additionally, this past summer the company unveiled Indy, which is less expensive, faster, and provides more for the money than anything currently available from competitors such as Apple. For example, Indy comes with a built-in camcorder for video conferencing.
Analysts, software developers, and SGI's competitors question this recent diversification. "They are juggling a hell of a lot of balls," says HP's Weinberger. "Too many balls for a company their size."
But such developments were dwarfed by a string of recent high profile events. 1993 was the year, says SGI president and CEO Jim McCracken, that "all hell broke loose."
It began last February, when President Clinton and Vice President Al Gore arrived at the company's Mountain View headquarters - with several hundred reporters in tow - to announce the administration's new technology policy. Commenting on SGI's management approach, Clinton said, "I think government ought to work like you do."
Two months later, in April, ILM and SGI announced they had teamed up to form the Joint Environment for Digital Imaging, or JEDI, with a goal of creating entirely digital movies. Other companies, such as James Cameron's Digital Domain and Kodak, are in the digital filmmaking business too. Still, Lucas has described the alliance as "the beginning of the revolution in the film business."
In June, it was announced that Time Warner had picked SGI to provide hardware and software for an experiment in interactive TV that the media giant will make in Orlando, Florida in April.
And then Jurassic Park was released.
By the late fall the company seemed to be in the news every week. On September 28, The Wall Street Journal reported that an interactive shopping channel to be tested as part of Time Warner's Orlando experiment (it will make use of SGI servers and cable-converter boxes) will "allow cable viewers to enter catalog 'stores,' to view merchandise in full-motion video, and to make purchases on demand."
SGI Targets America's Living Rooms
In the Peacock Room, Clark, McCracken, and a Nintendo executive explain that the two companies are joining forces to work on Project Reality. Together they will create the next generation of Nintendo 3-D video games. The 64-bit machines, built by Nintendo using SGI chips, are expected in 1995 and will sell for about $250.
After the presentation is over, reporters fire questions at the executives. Most focus on the new video-game player. When will it be finished? What about compatibility with older Nintendo products? That kind of thing.
No one bothers to ask why Clark is aligning Silicon Graphics with a video- game company. McCracken says simply, "We're not doing this because we want to get into the video-game business."
What then?
During the past ten years, Nintendo sold a hundred million video game players and three quarters of a billion video game cartridges. The company's products are, it claims, in 40 percent of all American homes. SGI would like to get into what McCracken calls "a vast new market."
Certainly there is much money to be made. SGI will get a royalty from every Nintendo player and piece of software resulting from the collaboration; Clark believes SGI will net hundreds of millions of dollars (more than the company's current annual profit) from the deal.
But there's more to this than bags of cash. Four years ago Clark saw the future; the future, he concluded, would belong to computer companies whose core technology becomes a standard in the consumer electronics market. (He was not alone. Companies ranging from Apple to HP have also been moving in that direction.)
Clark also understood that SGI had neither the marketing savvy nor the financial resources to compete with consumer electronic giants like Sony and Phillips.
Therein lies the shrewdness of the Time Warner and Nintendo deals, deals Clark boasts he deserves sole credit for both instigating and closing. Rather than battling it out in the relatively small PC market - some five million PCs were sold in the US during 1993 - Clark is going straight for the masses. If all goes as planned, Time Warner and Nintendo will place millions upon millions of Clark's computers into homes all over the world.
"It's like extending our product line down to $250," says Clark, "without having to be in that market ourselves."
As with the game players it's working on with Nintendo, SGI will provide the guts of the Time Warner set-top cable converter box, but they will be manufactured by Scientific Atlanta. While it might seem surprising that SGI, known for its stylish packaging, would let other companies box its hardware, it makes sense if you remember that Clark sees himself in the graphics business.
SGI's past experience in the rather esoteric graphic workstation market provides no assurance that it can design products simplistic enough for the average couch potato to grok.
"I'm not convinced that they can pull off the set-top box," says Friday Holdings' Caruso. "Part of what they're doing for that is the user interface. They don't know anything about user interface for consumers. Nobody in the computer business does. The fact that these people are kidding themselves into thinking they know how to do this is terrifying to me.
"It's not like you're walking into a proven market," Caruso continues, "where you know there are 50 million people who are just waking up every morning saying, 'I've got to have interactive TV today.' They don't know what it is. They don't know to want it."
HP's Weinberger thinks SGI's high-profile move into new areas could prove disastrous. "Now what does that say to one of their mechanical design customers, say a major automobile manufacturer, who sees all of this and starts saying to himself or herself, 'Oh, geez, sounds like that's their future, that's what they're betting on, that's where they're gonna put their investment.'
"Well, they're going to drop Silicon Graphics like a hot rock long before Silicon Graphics realizes one penny of revenue from the (new 64-bit game machine) - that's well off in the future," continues Weinberger. "And that's the challenge. Big worldwide Fortune 1000 companies want to make sure that the things they're buying today are mainstream strategies for that vendor. And the noise I hear from Silicon Graphics is, 'Gee it isn't. It's something we've been doing, but now we're doing something else."
All of which Clark seems to understand; none of which has deterred him. You don't have to talk to Clark for long to discover just how important he thinks these two deals are for SGI. They are, he says, his obsession. Clark believes that the very future of his company rests on his new partners' abilities to bring SGI technology successfully into America's living rooms.
"If SGI doesn't create more volume," he says quietly, "then it will die."
The Virtual Shopping Mall
"Interactive home shopping," says Mark Hannah. His brown eyes light up. A big smile appears on his face.
While the President of the United States talks about creating high-tech "information superhighways" that will revolutionize America, Hannah has a more pragmatic idea of how those superhighways will be used by most Americans - at least in the short run.
Hannah ticks off his fingers as he sits on a couch in his office in Building 2 on the SGI campus, counting: "Interactive home shopping, video on demand, and games."
"I think the biggest application of the superhighways will be entertainment," agrees Ed McCracken.
Conventional wisdom now has it that the money - the really, really big money - lies in successfully wedding computer technology and entertainment. As The New York Times reported in late September, it is now estimated that a $3.5 trillion business is "beckoning on the horizon."
Sure, some egghead kids may use the superhighway to "plug into an electronic library," as Vice President Al Gore put it while visiting SGI. But recent activity to stake claim to a piece of that superhighway, such as the recent $21 billion plus Bell Atlantic acquisition of Tele- Communications is about less lofty bits.
"It's just a lot easier leap to think that people will want to watch movies on demand," says Hannah. He rubs his neatly trimmed beard and adjusts oval- frame glasses.
"No real training involved there," chuckles the scientist. "Instead of going down to the video store, you select a movie on the screen. And so that seems to me like the path of least resistance to really establishing a large market for these technologies."
Volume, Volume, Volume
By 1989, Clark was imagining two possible scenarios for SGI. Basically, if the company didn't get its technology into consumer markets, it would eventually be relegated to the fringes, profits would shrink, and survival would be difficult.
On the other hand, what if he could make deals that would place SGI computer architecture and the company's MIPS chips in mass-marketed consumer items? This would create a demand in the tens of millions for those chips, a gigantic leap above current sales of half a million per year.
Clark would have volume, and volume, and well, let Clark himself explain it. "Why is volume important?" he asks rhetorically. "Because if you don't get volume, the guy who does get volume is going to end up setting the standard and, to a lesser and lesser degree, people will want to use your microprocessor."
He leans back in his chair. "Instead, they're going to want to use the one that has the most software on it," he says.
The repercussions of this scenario would be profound for SGI. The company could become a major player in the new digital media marketplace; it could grow into the very profitable company Clark envisions by the end of the century.
Of course there are those - certainly SGI's competitors - who think all of this is just a pipe dream. "The odds against SGI doing that are quite high," says Bob Pearson, director of advanced desktop systems marketing for Sun. Pearson worked at SGI from 1984 until 1988.
"The MIPS chip doesn't necessarily lend itself to very high-volume, low- cost production," he continues. "Most chips don't. It's very complicated to get a chip that now costs $400 down to, say, a $20 price point."
But if Clark has doubts about where he is taking SGI, he isn't showing them. "I feel there's a certain inevitability to everything that I talk about," he says.
"It's not as if I'm pointing the way in some grand visionary sense. I think it's inevitable. Okay, so I happen to see that it's going to happen better than somebody else, perhaps. I feel like I do. But it's going to happen whether I'm here or not. So why not help it happen a little quicker, and help the company make money out of it."
Now he's grinning: "And I wouldn't mind if I made a little in the process."
The End of the PC?
"This deal says we're coming up from underneath - squeeze play," says Clark.
The SGI-Nintendo press conference is over. Clark has left the stage and is now standing in the middle of an adjacent room where a half dozen of his computers are being used to demonstrate some of their amazing graphics capabilities.
At one workstation, a boy who looks about 12 is mesmerized by a 3-D flight simulator. In a rear corner of the room, a man whoops it up as he rides a virtual reality pterodactyl through simulated 3-D images of a prehistoric landscape.
Above the noise of jungle sounds and the hum of supercomputers, Clark is on a roll. "Eventually people will ask, 'Can I get my word processor and my spreadsheet and a few other applications on this other platform?' As soon as they can, they'll stop buying PCs. I don't know how long that will take. It may take five years, may take seven years.
"But the PC doesn't have an indefinite life," he continues. "Just like the Model T didn't. Or the Model A. They produced the Model A for eleven years. No change. Eleven years! And I view the PC as the Model A of computers. It's been a terrific product. Made some people a lot of wealth."
Through his wire-frame glasses, Clark's eyes gleam. And then, like someone who is simply stating the inevitable, he adds, "But it isn't forever."
The New Paradigm
"The first day I went to speak to Jim, he pointed to a picture of an airplane he had up on the wall," says Kurt Akeley, who was a Stanford University student at the time. "And Jim said, 'I'm going to make this move.'"
The year was 1979. Jim Clark, who had recently taken a job at Stanford as an assistant professor of computer science, had a plan to build a better mousetrap. He'd come up with what SGI president Ed McCracken now calls "a new paradigm."
While developers at other computer companies were "using the paradigm of the desktop," Clark imagined something else. Using his hands to draw a rectangle in the air, McCracken says, "Jim Clark's idea was that the screen would be a window into a three-dimensional, virtual reality world."
That was Jim Clark's vision. And his motivation?
"I was 35 and poor," he says frankly. And, he hastens to add, he had no interest in spending the rest of his life dealing with the politics of academia.
"I love the metric of business," says Clark. "It's money. It's real simple. You either make money or you don't. The metric of the university is politics. Does that person like you? Do all those people like you enough to say, 'Yeah, he's worthy'?"
Clark raises both arms and then, like Saturday Night Live's Wayne and Garth, makes bowing motions as he says, laughing, "We're not worthy, we're not worthy."
Born in 1944, Clark grew up in the small west Texas town of Plainview. He was good at math, "played around with ham radios," and even built one, but found school a bore. He dropped out of high school when he was a junior and in 1961 joined the Navy. It was there that he discovered his aptitude for technology. That inspired him to go back to school.
"I became excited by the challenge of understanding how things work, understanding the world," says Clark. "It struck me as fascinating, that you could actually write down some equations that would predict how the world was going to behave."
By the early '70s he had landed at the University of Utah to pursue a PhD in computer science. It was there that he studied with Ivan Sutherland, considered to be the father of interactive computer graphics.
When he reached Stanford, Clark knew he wanted to do more than just teach. With financing from the Defense Advance Research Projects Agency, Clark and a team of students in graduate programs at the university, including Mark Hannah and Kurt Akeley, spent three years working with a "maniacal" intensity on the ASICs they named the "Geometry Engine."
After a halfhearted attempt at selling this breakthrough technology to an established computer company, Clark raised $500,000 himself (he eventually secured $20 million in funding) and SGI was born.
"I concluded after talking to DEC and IBM and all these companies that they didn't understand how to use what we had in the first place, so they would surely screw it up," says Clark. "Since they didn't feel the passion for getting these kinds of graphics into computers, what was I going to do? Try to convince them for three years while I died?"
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Silicon Graphics | ٣٬٣٥٤ من المتابعين على LinkedIn. Your Technology Partner | Silicon Graphics is a leading mobile app development company in Dubai, known for developing responsive websites for businesses that improve the business’ credibility and are customer-centered, and drive client engagement.
At Silicon Graphics, we started assisting UAE-based brands in expanding their revenues with hi-tech app solutions back in 2008. We identify the solutions your company needs to survive in an ever-changing technology-based world with the help of high-performing Android and iOS applications that set you apart from the competition and play a pivotal role in generating more sales.
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Ayati is proud to announce that ☀️Bertina Ceccarelli and Neil G. McGowan will be honored as our People of The Year at the Annual Ayati Gala 2024 in New York on Thursday, September 12, 2024. Bertina and Neil embody the values of Ayati, educating underprivileged youth and empowering them to become independent and continuing members of society. Bertina Ceccarelli, the Chief Executive Officer of NPower, a national technology training organization serving young adults in #underservedcommunities and #militaryconnected individuals, has made a significant impact on the lives of many through her #missiondriven work. With a background in leadership roles at Procter & Gamble and NBC News, Bertina's transition to the #nonprofit sector has allowed her to make a tangible difference in the lives of those in need. She has been a valuable source of guidance and support for Ayati, helping to shape the organization's path and strategy to reach more girls than ever before. Neil McGowan, the Chief Revenue Officer of Hitachi Vantara, brings over 25 years of experience in #globalsales, #marketing, and operations in the technology industry. With leadership roles at companies such as NetApp, VERISIGN, Openwave, Silicon Graphics, and Tandem (now Hewlett Packard Enterprise), Neil has been instrumental in driving strategy and growth across the industry. As a member of the Board of Directors for NPower, Neil has demonstrated a strong commitment to #empowering individuals in underprivileged regions. His support, wisdom, and dedication to girl empowerment have been a source of inspiration for Ayati. Ayati is dedicated to recognizing individuals who have shown exceptional commitment to serving their professional communities. We are honored to celebrate Bertina and Neil as our inaugural honorees! Come join us in honoring Bertina Ceccarelli and Neil McGowan at the Ayati Gala 2024 in New York on Thursday, September 12, 2024, at the Edison Ballroom in midtown Manhattan. With love, AYATI Board of Directors Jigisha Patel Sneha Desai Sneha Patel Sheila Rohra Piyush Mehta Attend our gala here: https://lnkd.in/gDXJ9ZEc
There was a time when we did not think there would be enough jobs for 30 electronic game design students per year, let alone the 260 currently being trained at Nanyang Polytechnic(NYP) each year... Super thrilled to take this picture with Low Wei Fann Francois and Jiu Len Wong who are both studying game development at NYP, in front of a green screen. I managed the electronic games portfolio at Singapore Economic Development Board (EDB) in 1997-8 and worked closely with the NYP team to build out their state of the art Silicon Graphics animation lab then. At the time, game development in Singapore was still in its infancy. Together with the NYP leaders, we fretted if the 30 students in each cohort would have jobs upon graduation. Fast forward to today. Companies like Ubisoft, Bandai Namco Mobile, and XII Braves Pte Ltd call Singapore their home, and hundreds of games have been developed here. Each year NYP graduates 260 talented developers and content creatives, with many securing jobs before graduation. So thankful to Chairman of NYP, Tong Hai Tan, for the chance to catch up with old friends at NYP. NYP has grown from strength to strength under his leadership. 💪🏿 #IndustryDevelopment #Games #Talent
A massive alliance has formed to promote Open Source as a counterbalance to OpenAI , Microsoft, Google & Anthropic While IBM & Meta are leading the charge, NVIDIA, AMD , Hugging Face & many other #AI leaders are a part of the new alliance. So are professional open source server OS pioneers #RedHat & The Linux Foundation, major research universities like Harvard University, Yale University, University of California, Berkeley, Cornell University, Dartmouth College, University of Illinois Urbana-Champaign as well as NASA - National Aeronautics and Space Administration & CERN It’s a classic battle we’ve seen numerous times in the rapidly evolving tech industry since Sun Microsystems went up against proprietary engineering workstations , servers & operating systems from companies like Hewlett Packard Enterprise, & Silicon Graphics, & when Microsoft Server went up against & #Linux. Historically, open source comes out on top over time. Open source LLMs are advancing at a faster rate than proprietary models but still have a way to go to catch OpenAI Game on. #OpenSource #AI William Allison Utkarsh Pandey Adam Cutler Ashley L. Darren Cooke IKHLAQ SIDHU Guillermo de Haro Rodríguez Geoffroy Gérard
Attention Dubai-based businesses! Are you ready to take your business to the next level with a custom mobile app? Look no further! Our team at Silicon Graphics is here to bring your vision to life with our top-notch mobile app development services. Why Choose Silicon Graphics AE? Expertise: With years of experience and a proven track record, we are among the top mobile app development companies in Dubai, known for delivering high-quality iOS and Android apps. Client Satisfaction: Our detailed client reviews speak for themselves. We prioritize client satisfaction and ensure that our apps meet and exceed expectations. Innovative Solutions: We offer businesses the opportunity to deliver functional access to products, information, processes, and services in real-time, enhancing accessibility and engagement. Let's work together to bring your app idea to life! Reach out to Silicon Graphics AE today for reliable and expert mobile app development services in Dubai.
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Quantum Computing Companies: A Full 2024 List
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] |
[] |
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[
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] | null |
[
"James Dargan"
] |
2023-12-29T00:00:00
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Explore the leading Quantum Computing Companies of 2024. Uncover key players shaping innovation in hardware and software domains.
|
en
|
The Quantum Insider
|
https://thequantuminsider.com/2023/12/29/quantum-computing-companies/
|
An increasing number of quantum computing companies are emerging globally with the goal of creating operational processors and the hardware and software that enable them. This article looks to provide a high-level overview of the landscape of quantum computing companies for now, and into 2024.
If you’re looking for more information on these companies, enriched by our analysts and updated regularly, you may be interested in exploring our intelligence platform:
Nonetheless, if you would like to offer an edit or suggestion, you can get in touch at our Contact Us page
Quantum Computing in Modern Industries
In sectors like healthcare, cybersecurity, and finance, quantum computing (QC) is poised to present novel avenues for tackling computational challenges. In contrast to other intricate tech fields like artificial intelligence (AI) or virtual reality (VR), quantum computing often appears as an enigma to most individuals, save for its practitioners. There exists limited comprehension regarding the potential of a quantum computer or the factors setting it apart from a classical computer.
Harnessing specialized hardware and software, quantum computers are expected to have the capacity to execute tasks that presently lie beyond the reach of conventional computers. Furthermore, quantum computing companies are actively crafting technologies to enhance the accessibility and usability of this state-of-the-art technology.
As fresh innovations continue to emerge, the realm of quantum computing is experiencing rapid expansion. Let’s delve into the proliferation of quantum computing companies over the past two decades.
See also: What is Quantum Computing? [Everything You Need to Know]
The Rise of Quantum Computing Companies
The taxonomy that we have used to classify quantum computing companies has the following sections: “Quantum Computing Giants”, “Hardware-focused Quantum Computing Companies” and “Software-focused Quantum Computing Companies”, as well as a section for key enablers, which is non-exhaustive. In our review, we include circa one hundred quantum computing companies based on data from our Quantum Intelligence Platform.
It was inevitable that we would have to omit many of the players in the supply chain; our Quantum Intelligence Platform has many more organizations within its database than we could include here. The purpose of this article is to highlight both the leaders in hardware and software quantum computing, as well as the important startups in the industry with promising research, products, or services.
Just to give you a heads up, we have also published a few in-depth articles in the past that explore some of the best quantum computing startups, available to read here and here.
The ecosystem of suppliers, hardware companies, and software companies will grow more complex as quantum computing becomes more mainstream. As always, The Quantum Insider will cover them in news stories and include them in our platform. Several quantum security-related players have also been excluded from this analysis, though some of them have been highlighted when appropriate in both the hardware and software sections.
The list of quantum computing companies is current as of mid-December 2023.
Top Quantum Computing Companies
The Corporate Giants in Quantum Computing
Among the prominent entities in the quantum computing (QC) arena originating from the United States – Google, IBM, Microsoft, and AWS (Amazon) – only IBM boasts a legacy of over a century in technological innovation. The remaining trio, comprising Google, Microsoft, and AWS, has a (comparatively) shorter computing history.
Notably, other significant contenders, which we’ve encompassed in our consideration, are cognizant of the substantial ramifications that quantum computing and quantum computing enterprises are destined to exert across various domains in the medium and long run. These contenders are initiating their own quantum computing research and development initiatives, driven by the ambition to remain relevant as the industry transcends the era of noisy intermediate-scale quantum (NISQ), advances to fault-tolerant capabilities, and ultimately attains the coveted state of quantum advantage, marking a new era in computation.
1. IBM
Established in 1911 in Endicott, New York, under the stewardship of entrepreneur Charles Ranlett Flint, IBM stands as one of the world’s global technology behemoths. Within the realm of quantum exploration, the IBM Quantum Composer and the IBM Quantum Lab (formerly recognized as the IBM Quantum Experience) jointly compose an online platform. This platform offers both public and premium access to cloud-based quantum computing services facilitated by IBM Quantum. The spectrum of offerings encompasses entry to a range of IBM’s experimental quantum processors, a collection of tutorials elucidating quantum computation, and a gateway to an interactive textbook. As of 2023, this service encompasses dozens of devices, with several devices being available to the public without charge. Through this conduit, users are empowered to execute algorithms and experiments, immerse themselves in instructional materials, and engage with simulations that probe the potentials of quantum computing.
In 2024, it should be noted, IBM Quantum is set to finish constructing a new quantum data center in Ehningen, Germany, thereby introducing local quantum computing resources to Europe.
“Our goal is to achieve quantum advantage as soon as possible. I don’t like to focus so much on dates for specific items without considering instead an entire roadmap to make it possible. To achieve quantum advantage, we need to both increase the performance of the processors and develop a better understanding of how to deal with errors and program a quantum computer.”
— Jay Gambetta, Vice President, IBM Quantum Lab
Guiding the IBM Quantum Lab’s initiatives is Vice President Jay Gambetta, an esteemed IBM Fellow. For a more in-depth exploration of IBM’s trajectory, you can delve into our article spotlighting the evolution of IBM’s commitment to the field of quantum, available here.
Update for 2023:
In June 2023, IBM unveiled a significant milestone, featured in the scientific journal Nature, establishing for the initial time that quantum computers can generate precise outcomes at a magnitude of 100+ qubits surpassing top classical methods.
In December, IBM unveiled the IBM Condor, a groundbreaking quantum processor with 1,121 superconducting qubits, at the IBM Quantum Summit. Alongside this, it introduced the Quantum Heron processor, featuring 133 fixed-frequency qubits and tunable couplers, boasting a 3-5 times performance enhancement over previous models. The summit highlighted these and many other advancements in IBM’s quantum computing technology.
2. GOOGLE QUANTUM AI
Google Quantum AI is actively pushing the boundaries of quantum computing’s capabilities. The focal hub for Google’s quantum efforts is The Quantum Artificial Intelligence Lab, an initiative collaboratively undertaken by Google, NASA, and the Universities Space Research Association. Established in 2013, this lab took the pivotal role in the momentous announcement of claiming quantum supremacy in October 2019.
Google’s software and hardware offerings are tailored for the development of innovative quantum algorithms aimed at addressing immediate practical problems. Among these efforts is Cirq, a Python software library facilitating the creation, manipulation, and optimization of quantum circuits, subsequently executable on quantum computers and simulators. Further, OpenFermion, a library dedicated to compiling and analyzing quantum algorithms for simulating fermionic systems, notably in quantum chemistry, is part of the suite. Additionally, TensorFlow Quantum (TFQ) serves as a quantum machine library, expediting the prototyping of hybrid quantum-classical machine learning models.
Under the guidance of Engineering Director Hartmut Neven, Google Quantum AI has a clear mission to spearhead research into how quantum computing can intersect with machine learning and address complex challenges in computer science. An integral component of Google’s strategy is its meticulously planned quantum roadmap.
Update for 2023:
Google’s Quantum AI researchers achieved a notable milestone by reducing quantum computing errors through the increase of qubits, shifting to treating multiple physical qubits as one logical qubit, and enhancing performance, as highlighted in a company blog post authored by the company’s CEO in February of this year.
3. MICROSOFT
Microsoft, another major contender in the field, stands as the pioneer behind the public cloud quantum computing ecosystem. This ecosystem encompasses an array of solutions, software, and hardware, all accessible through the Azure platform.
Although Microsoft’s origins trace back to its establishment in 1975, the initiation of its quantum research stems from two distinct teams intrigued by quantum computing. The QuArC team, stationed in Redmond, Washington, and overseen by Krysta Svore, delved into the intricacies of constructing quantum circuitry.
In September 2017, during a Microsoft Ignite Keynote, the company unveiled its forthcoming quantum computing programming language, Q#. This innovative language was subsequently introduced in December of the same year as part of the Quantum Development Kit, an offering from Microsoft.
“Microsoft has taken this very risky but high reward approach in trying to make a qubit which on the theory side looks like the very best qubit you can get. But the challenge was that nobody has really seen these Majorana zero modes in real life. But we have done that now, and that’s super exciting. We have to continue to evolve our engineering capabilities, but it really looks like there is a path towards scalable quantum computing now.”
— Peter Krogstrup, Scientific Director, Microsoft’s Quantum Materials Lab in Lyngby, Denmark
Microsoft’s journey in quantum pursuits has encountered its share of contention. In 2018, a team of scientists led by physicist Leo Kouwenhoven at the Delft University of Technology in the Netherlands, under Microsoft’s banner, retracted a significant paper that had been highlighted as a pivotal advancement in practical quantum computing. This paper claimed the discovery of Majorana particles, a long-theorized yet elusive phenomenon. In a bid for transparency, Microsoft announced at Build 2019 that it would open-source the Quantum Development Kit, encompassing the Q# compilers and simulators.
Guiding Microsoft’s quantum project is Julie Love, Partner and Product Leader for Quantum Computing.
Update for 2023:
The company announced several updates earlier this year, including In a Azure Quantum Elements, a new system, that seeks to expedite advancements in chemical and materials science by leveraging the scale of Azure High-Performance Computing (HPC) and the swiftness of AI. Along with this, there was the launch of Copilot in Azure Quantum to assist scientists in utilizing natural language to navigate through complex problems in chemistry and materials science. Finally, Microsoft announced the roadmap for Microsoft’s quantum supercomputer, marking the first milestone made public with corresponding peer-reviewed research, as well as a strategic acquisition into Photonic Inc.
4. AWS Braket
Amazon Braket is a fully managed quantum computing service, crafted to expedite the pace of scientific research and software development within the quantum computing domain. Amazon Braket serves as a conduit granting users access to diverse quantum computer variants through the cloud.
Introduced in 2020, the AWS Braket service offers access for individuals to create accounts, log in, and engage in a pay-as-you-go model, capitalizing on the quantum cloud service. This service provides access to quantum annealers from D-Wave, ion-trap processors from IonQ, superconducting processors from Rigetti Computing, Oxford Quantum Circuits, Quera, as well as photonic quantum computers from Xanadu.
Amazon Braket also offers a developer framework that transcends hardware dependencies, streamlining the intricate process of conceiving and executing quantum algorithms. It provides fully managed Jupyter notebooks, a repository of pre-designed algorithms and instructive tutorials, a range of simulation tools, and a plethora of intriguing possibilities for exploration.
“We felt there was enough of a community to really get the most out of a quantum platform, so that’s why we launched Braket. It’s designed to get people up and running quickly, removing the barriers to playing with this technology and fundamentally trying to be a catalyst for innovation.
Fundamentally, AWS all about enabling third parties to build other services and build applications on top of the platform — and that’s exactly the same with quantum computers.”
— Richard Moulds, General Manager, Amazon Braket (AWS Quantum Computing Service)
Update for 2023:
September 2023 saw an article published on the company’s blog written by Jernej Rudi Finžgar et al who shares the latest findings from his research conducted as part of his BMW Ph.D. program. The study was carried out in partnership with the BMW Group, Amazon Quantum Solutions Lab, Technical University of Munich, and Tokyo Institute of Technology, exploring efficient Bayesian optimization protocols for quantum optimization issues utilizing QuEra’s Rydberg quantum computer on Amazon Braket.
In November, AWS announced the launch of an innovative quantum computer chip, designed in-house, that significantly advances error correction capabilities. This new chip is capable of reducing bit flip errors by a factor of 100 through a passive error correction method. Additionally, when combining passive with active error correction techniques, the chip has the potential to perform quantum error correction six times more effectively compared to conventional methods.
5. ALIBABA GROUP
Collaborating with the Chinese Academy of Sciences, Alibaba Group’s cloud computing subsidiary has inaugurated the Alibaba Quantum Computing Laboratory in Shanghai, China. As a prominent participant in the global quantum computing sphere, Alibaba Group is committed to fostering the concept of open-source initiatives within this realm.
Leading these is Yaoyun Shi, serving as the Head of Quantum Lab. In this capacity, he spearheads various initiatives, including the Alibaba Cloud Quantum Development Platform (ACQDP). This platform functions as a simulator-driven development tool tailored for quantum algorithms and quantum computers.
Update for 2023:
In June of this year on the company’s blog, Alibaba Cloud Technology published a post on the developments in Alibaba’s Cloud Computing infrastructure. The company notes a sustained emphasis on research and development underscores its strategy for continuous growth and transformation.
November saw Alibaba’s quantum laboratory shut down, leading to the dismissal of over two dozen employees. This development has sparked widespread speculation among experts, with some questioning whether this closure reflects Alibaba’s financial challenges or indicates broader issues within the quantum technology industry.
6. BAIDU
Baidu hails from China. Its quantum initiative encompasses the establishment of an institute dedicated to quantum computing, focused on the practical application of quantum computing software and information technology. Named the Baidu Quantum Computing Institute, this initiative is under the guidance of Professor Duan Runyao. Professor Duan previously held the position of director at the Centre for Quantum Software and Information at the University of Technology Sydney (UTS). Baidu’s vision encompasses the widespread integration of quantum technology across diverse sectors, including artificial intelligence (AI) and machine learning (ML).
In alignment with this ambition, Baidu has developed a quantum hardware-software integration solution called Liang Xi. This innovation is designed to seamlessly interface with Qian Shi and other third-party quantum computers. This encompasses a 10-qubit superconducting quantum device and a trapped ion quantum device, both developed by the Chinese Academy of Sciences. Furthermore, in 2022 Baidu finalized the design of a 36-qubit superconducting quantum chip equipped with couplers, showcasing encouraging simulation outcomes in various critical measurements.
“With Qian Shi and Liang Xi, users can create quantum algorithms and use quantum computing power without developing their own quantum hardware, control systems, or programming languages. Baidu’s innovations make it possible to access quantum computing anytime and anywhere, even via smartphone. Baidu’s platform is also instantly compatible with a wide range of quantum chips, meaning ‘plug-and-play’ access is now a reality.”
— Runyao Duan, Director of the Institute for Quantum Computing, Baidu
Update for 2023:
During its annual flagship developer conference Baidu Create in late 2022, Baidu unveiled its quantum computing strategy, QIAN, aiming to bridge the gap between quantum hardware and practical applications. QIAN stands for quantum basic research, infrastructure construction, application of quantum technology, and network ecosystem. Through this strategy, Baidu aims to incorporate quantum computing across various industries, working towards a scenario where quantum technology is more accessible.
7. EVIDEN (Atos Computing)
Within the framework of the French multinational company Atos, there is EVIDEN, a specialized company within Atos that concentrates on quantum technology. This group has introduced the Atos Quantum Learning Machine, a classical computing system capable of simulating quantum systems encompassing 30 to 40 qubits, depending on the specific configuration. Complementing this product, Atos Quantum furnishes a universal quantum assembly programming language known as AQASM, accompanied by additional software resources. These tools empower researchers, engineers, and students to delve into quantum software development and experimentation.
In the domain of quantum hybridization, Atos Quantum occupies a unique position by already enabling various applications, ranging from catalysis design for nitrogen fixation to optimizing smart grids. Moreover, Atos is engaged in two ongoing quantum hybridization projects that are currently underway.
“EVIDEN launched the Atos Quantum Learning Machine (QLM) in 2017, a quantum appliance emulating almost all target quantum processing units with abstractions to connect to real quantum computing hardware when available. We have been very successful with the QLM in large academics or research centers on all continents. In 2021, there was a shift of many commercial companies starting to work on real use cases, and the QLM is the best platform to start these projects without waiting for hardware to be available at scale.
— Eric Eppe, EVIDEN Group Vice President – Portfolio & Strategy – HPC/AI/Quantum & EVIDEN Board Member
Pioneering a hardware-agnostic approach, Atos is among the early quantum computing companies in the development of quantum-powered supercomputers and end-user applications. The company’s aspirations extend to major contributions across numerous domains, encompassing quantum programming and simulation, next-generation quantum-powered supercomputers, consultancy services, and quantum-safe cybersecurity. Atos holds a pivotal role in European-funded quantum computing initiatives. It collaborates with NISC QPU manufacturers to advance new technologies and enhance their efficacy in hybrid computing contexts. This spans domains like hybrid frameworks, containerization, parallelization, VQE, GPU utilization, and more.
Update for 2023:
In April, Atos announced that it had launched “Eviden”, a services-oriented spinoff focused on digital transformation, big data, and cybersecurity.
8. INTEL
Like IBM, Intel boasts a rich heritage in the semiconductor sector, tracing its origins to its establishment in Mountain View, California, in 1968. The company was co-founded by Gordon Moore, renowned for his association with “Moore’s law,” and Robert Noyce, a physicist and co-inventor of the integrated circuit.
“Another big differentiator between Google, IBM and Intel is the type of qubit we are studying. Our qubit looks a lot like a conventional transistor, and conventional transistors are extremely smaller than a superconducting qubit (used by Google and IBM) — our spin qubit technology is roughly a million times smaller than a superconducting qubit. So the hope is that we could scale this technology a lot better than the competition.”
— James Clarke, Director of Quantum Hardware, Intel
Guiding these efforts is James Clarke, who serves as Intel’s Director of Quantum Hardware. Within Intel Labs, the company’s research and development division, they are capitalizing on their extensive expertise in high-volume transistor manufacturing to develop ‘hot’ silicon spin-qubits. These miniature computing units operate at elevated temperatures versus the ultra-low temperatures typically required. Intel’s innovation encompasses three core elements. First, they’re designing ‘hot’ silicon spin-qubits, significantly smaller computing components that function at higher temperatures. Second, the Horse Ridge II cryogenic quantum control chip enables more seamless integration. Lastly, the cryoprober facilitates high-volume testing, contributing to the acceleration of commercialization efforts.
Intel is engaged in both superconducting and spin qubit research. Their superconducting research appears to be primarily affiliated with academic collaborations at Qutech (Delft University). Spin qubits constitute the central focus, with activities spanning Qutech as well as in-house initiatives.
Update for 2023:
In June, Intel unveiled its latest quantum research chip, Tunnel Falls, a 12-qubit silicon chip, extending its availability to the quantum research community. Furthermore, Intel is partnering with the Laboratory for Physical Sciences (LPS) at the University of Maryland, College Park’s Qubit Collaboratory (LQC), a distinguished national Quantum Information Sciences (QIS) Research Center, to propel the advancement of quantum computing research.
9. NVIDIA
Founded in 1993 by Jensen Huang, Chris Malachowsky, and Curtis Priem, NVIDIA now stands out as a prominent player in the technology sector, focusing on the creation and production of advanced computing hardware and software, along with innovative solutions in artificial intelligence.
In March 2023, NVIDIA launched the DGX Quantum, the first-ever GPU-accelerated quantum computing system, integrating the NVIDIA Grace Hopper Superchip with Quantum Machines’ OPX quantum control platform. This system marries advanced classical and quantum computing, supporting functions like calibration, control, and quantum error correction. With the NVIDIA Grace Hopper GPU connected to Quantum Machines’ OPX+ via PCIe, it offers markedly low latency and powers large-scale AI and HPC workloads efficiently, promising up to tenfold performance improvements for quantum-classical research applications.
Top Hardware-Focused Quantum Computing Companies
10. ALICE & BOB
Alice & Bob, a French quantum computing firm, is pursuing the creation of an error-corrected, fault-tolerant quantum computer. Their research revolves around self-correcting superconducting quantum bits, called cat qubits.
“In order to fully realize the promise of quantum computing, we have to get a grip on handling quantum errors. Surface codes drive the field toward a scaling bottleneck. Cat qubits enable a roadmap using linear code, with dramatically reduced overhead. […]”
— Théau Peronnin, CEO Alice & Bob
The core of Alice & Bob’s technological advancement involves the evolution of self-correcting superconducting quantum bits, thereby enabling robust and fault-tolerant quantum computing capabilities. In March 2022, the company unveiled an important breakthrough concerning error correction challenges related to qubits, specifically bit flips. This milestone marked the successful compatibility of their cat-qubit stabilization approach with macroscopic bit-flip times. By extending the resilience against bit-flip errors from a previous benchmark of a few milliseconds to an impressive 2 minutes, they exhibited substantial progress. Headquartered in Paris, this quantum computing startup was established in 2020 by Raphaël Lescanne and Théau Péronnin.
Update for 2023:
In July, Eviden, a branch of Atos, and Alice & Bob revealed a collaboration to integrate Alice & Bob’s patented cat qubit technology into QaptivaTM, Eviden’s platform for quantum application development, making it accessible to end users.
11. ALPINE QUANTUM TECHNOLOGIES
Headquartered in Innsbruck, Austria, Alpine Quantum Technologies (AQT) is dedicated to the advancement of trapped ion quantum devices, aiming to construct a complete quantum computer utilizing trapped ion technology and was founded in 2017 by Professor Rainer Blatt, Dr. Thomas Monz, and Professor Peter Zoller, has secured around $34 million in funding.
“If you’ve ever done a tour of a lab with a superconducting quantum computer, you’ll have noticed these sort of ‘oil barrel’ hanging from the ceiling making a ‘tchk, tchk, tchk’ sound. That’s the compressor, running with helium, because it needs to be cold. Our trapped ion project is room temperature. So, besides the vacuum can which is closed, the entire device is standing in a normal office and you can touch all the components and nothing is going to freeze or do anything to you. We are still working on the prototype, but it seems like we can run the entire quantum computer from a normal power plug in the wall. And the next thing is: because the power consumption is low and it works at room temperature, it’s easy to envision our device as being mobile.”
— Thomas Monz, CEO, AQT
AQT’s ion-trap technologies present a potential pathway towards realizing extensive-scale quantum computers, encompassing scalable ion-trap processors and photonic networks that interconnect quantum computing systems.
Update for 2023:
April of this year saw AQT partner with the European flagship project Millenion. The emphasis of the project on modular scalability and accessibility is key to tackling the challenges encountered by quantum computers as they transition from laboratory experiments to industrial-grade technologies.
12. ANYON SYSTEMS
Anyon Systems specializes in the development and deployment of on-premise quantum computers utilizing superconducting qubits. Their solution encompasses exclusive cryogenic technology, quantum electronics, and a sophisticated software stack.
June in the year 2022, Anyon Systems unveiled its latest achievement – the successful transaction of their second quantum computer, which was procured by a prominent high-performance computing center.
Founded in 2014, Anyon Systems holds the distinction of being Canada’s pioneer enterprise dedicated to crafting gate-based quantum computing platforms engineered for achieving universal quantum computation. The company’s headquarters are stationed in Montreal, Canada.
13. ATLANTIC QUANTUM
Atlantic Quantum is developing scalable quantum computers with their approach to noise-protected qubits. This, coupled with adaptable control strategies, lays the foundation for expanding the quantum processor to dimensions requisite for practical real-world applications. Their efforts encompass not only the development of devices but also the provision of control electronics that ensure exceptional accuracy in high quantum gate operations, facilitated by a control system designed for seamless scalability.
Founded in 2022, Atlantic Quantum is the result of a consortium of scientists and researchers hailing from the esteemed Engineering Quantum Systems (EQuS) group at MIT, under the leadership of Prof. William D. Oliver and Principal Research Scientist Simon Gustavsson.
“We believe fault-tolerant quantum hardware is the key to making significant progress in quantum computing. While the market is still maturing, overcoming current hardware limitations is critical — we are focused on removing today’s technical obstacles and accelerating real-world applications of quantum computing.”
— Bharath Kannan, CEO, Atlantic Quantum
Update for 2023:
September saw research reviewed by peers, indicating that Atlantic Quantum’s Fluxonium Qubit Design achieves unprecedented quantum operation fidelities.
14. ATOM COMPUTING
Hailing from Berkeley, California, Atom Computing, established in 2018 by Benjamin Bloom and Jonathan King, pioneers a distinctive approach by utilizing individual atoms as the building blocks for creating scalable quantum computers.
“Atom Computing designed and built our first-generation machine, Phoenix, in less than two years and our team was the fastest to deliver a 100-qubit system. We gained valuable learnings from the system and have proven the technology. […]”
— Rob Hays, CEO & President, Atom Computing
The essence of Atom Computing’s quantum computers lies in their utilization of meticulously controlled atoms, which can be manipulated optically, eliminating the need for conventional wiring. This methodology paves the way for a scalable quantum computing framework.
Update for 2023:
Atom Computing and the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) revealed a partnership in July to investigate the potential of quantum computing in enhancing electric grid operations.
In October, Atom Computing announced its pioneering next-generation quantum computing platform, boasting a 1,225-site atomic array populated with 1,180 qubits, marking the first instance a company has surpassed the 1,000-qubit milestone for a universal gate-based system.
15. BLEXIMO
Bleximo, another company situated in Berkeley, is a quantum company that is developing application-specific quantum computers using superconducting technology. Their approach encompasses the co-design of both algorithms and hardware, with the ultimate goal of achieving the coveted quantum advantage. Founded in 2017 by Alexei Marchenkov, Bleximo’s groundbreaking quantum accelerators, known as qASIC, are rooted in superconducting qubits. These accelerators collaborate seamlessly with traditional high-powered computers to tackle challenges that are either infeasible or outright impossible to address using standard digital computers alone.
“On the hardware and software side, our strength lies in having a talented mix of engineers — focused on operational execution and issues like scalability, manufacturability and reproducibility — working alongside scientists geared up for ground-breaking applied research.”
— Fabio Sanches, former Head of Quantum Engineering, Bleximo
16. C12 QUANTUM ELECTRONICS
Founded in 2020 and headquartered in Paris, France, C12 Quantum Electronics is on a mission to forge dependable quantum processors through a foundational element: the carbon nanotube. The focus of their technology lies in significantly diminishing error rates, positioning their platform as a contender for noisy intermediate-scale quantum applications.
The bedrock of this innovation has been forged over more than a decade, dedicated to leveraging carbon nanotubes for quantum electronics and is spearheaded by twin brothers Matthieu and Pierre Desjardins.
17. D-WAVE
D-Wave, a pioneering quantum computing enterprise, stands as one of the earliest proponents in this field. The company is dedicated to the design and production of quantum computing systems and superconducting electronics. Established in 1999, D-Wave emerged from the collective vision of Haig Farris, Geordie Rose, Bob Wiens, and Alexandre Zagoskin. Operating from its headquarters in Burnaby, Canada, the company offers quantum annealers and gate-based quantum computers. They are a market leader in the former technology which is being used to solve optimization problems by uncovering optimal solutions.
Notably, August of 2022 witnessed a significant stride for D-Wave as the company stepped into the public realm through a dedicated special purpose acquisition (SPAC) entity.
“From its inception more than 20 years ago, D-Wave has focused on delivering quantum computing products and services that provide the fastest path to practical, real-world applications with customer value. […]”
— Alan Baratz, CEO, D-Wave Systems
Update for 2023:
In July, D-Wave announced that it had achieved listing compliance with the New York Stock Exchange (NYSE). The company, which went public through a SPAC (special purpose acquisition company) merger with DPCM Capital about a year ago, is among a group of fewer than 10 independent quantum firms that have taken this route to public trading.
18. DIRAQ
Diraq’s mission focuses on the development of fault-tolerant quantum computers. A hallmark of their innovation lies in the incorporation of patented CMOS qubits, mirroring the dimensions of contemporary transistors and harnessing identical manufacturing processes. Diraq commands an impressive portfolio encompassing 28 patents and patent applications. The company has shared a roadmap spanning from prototype chips to nanoscale silicon quantum processor chips. This evolution, underpinned by cutting-edge technology, is projected to mark a significant stride in the quantum computing landscape.
“Diraq aims to redefine scalable quantum computing and bring practical commercial applications to the world via billions of qubits on single chip, compared to the hundreds of qubits that exist today. The company is configuring as an end-to-end quantum computing provider — to provide quantum hardware and software as a full stack, cloud accessible service.”
— Andrew Dzurak, CEO, Diraq
Emerging from the shadows in May 2022, Diraq hails from the bustling landscape of Sydney, Australia. At its helm stands CEO Andrew Dzurak, a distinguished professor at UNSW Sydney.
Update for 2023:
September saw Diraq and quantum control infrastructure software developer Q-CTRL collaborating on three government-sponsored projects in quantum computing, funded by the NSW Office of the Chief Scientist and Engineer’s Quantum Computing Commercialisation Fund (QCCF) and the U.S. Army Research Office.
19. EEROQ
EeroQ is designing a chip that harnesses the unique potential of electrons within a superfluid helium medium. This technology uses electrons on helium quantum computers, offering a potential array of advantages. Situated in Chicago, EeroQ was founded in 2016. The enterprise is a testament to the collaborative vision of Nick Farina, Faye Wattleton, Professor Johannes Pollanen, Dr. David Rees, David Ferguson, and Hannah Parnes.
“Electrons on helium is a novel technology and very different from other qubit platforms, and it’s quite fun to describe. In our approach to building a quantum computer, the qubit is an electron trapped in vacuum above the surface of superfluid helium, using microwaves for quantum logic gates. This is one of the cleanest systems known to exist, so while it’s challenging to work with it offers a somewhat natural “home” for quantum computation.”
— Nick Farina, CEO, EeroQ
Update for 2023:
In July 2023, EeroQ successfully reached tape-out for its new chip at a US semiconductor foundry, signifying that the design is complete and the chip is ready to proceed to fabrication and production. EeroQ emphasizes that this development marks a substantial step towards achieving a quantum computer design that is not only powerful but also compact and scalable, addressing some of the critical challenges in the field.
20. INFLEQTION (formerly ColdQuanta)
Hailing from Boulder, Colorado, Infleqtion (formerly ColdQuanta) has carved a niche by offering quantum technologies leveraging laser-cooled and ultra-cold atoms. Their expertise spans the gamut from developing and crafting instruments, components, and systems for a diverse spectrum of scientific and industrial quantum applications. These applications encompass cold atom experimentation, quantum simulation, quantum information processing, atomic clocks, and inertial sensing. Moreover, the company’s achievements encompass the creation of a cloud-based quantum computer named Hilbert.
“To me, what’s really attractive about ColdQuanta [Infleqtion] is the modality that we’re using, the fundamental toolkit, as I say, is something I’ve been working with my entire life, it’s lasers and scanners and receivers. And, as I like to say, we’re gonna lasso some atoms and put them in some cool configurations and watch what they do under certain conditions. And from that vast information comes out of it.”
— Scott Faris, CEO, Infleqtion
ColdQuanta’s inception in 2007 was the brainchild of Dr. Dana Anderson and a cohort of visionaries. The company’s dedication to expanding in quantum was underscored in May of this year when they successfully acquired the quantum software company Super.Tech.
Update for 2023:
The University of Texas at Austin and Infleqtion agreed to create a quantum manufacturing center of excellence in October 2023. Following Infleqtion’s recent Austin office opening, they’ll partner with UT’s Texas Institute for Electronics (TIE).
21. IQM
Shifting our attention to Europe, we have IQM Finland. This enterprise was established in 2018 by a group including Jan Goetz, Juha Vartiainen, Kuan Yen Tan, and Mikko Möttönen.
The company’s primary focus is crafting scalable hardware tailored for universal quantum computers, with a specific emphasis on superconducting technology. IQM is actively working on its next-generation quantum processors, utilizing in-house technology that enables a significant enhancement in the clock speed of these processors.
Its current objective is to showcase unparalleled speed in qubit reset and readout within the industry. What sets IQM apart is its distinctive strategy of progressively integrating higher levels of specialization into the process, leading to the construction of robust, application-specific quantum computers. Unlike numerous competitors opting for the ‘cloud’ approach, IQM concentrates on developing computers tailored for research and supercomputing centers.
“Today’s chips shortage has exposed just how dependent the world is on semiconductor manufacturers in Asia. Quantum processors give us an opportunity to learn from this and become self-reliant first, and a global provider for quantum chips in the future.”
— Jan Goetz, CEO, IQM
Update for 2023:
In October 2023 VTT Technical Research Centre of Finland and IQM Quantum Computers announced the completion of Finland’s second quantum computer, boasting a capacity of 20 qubits. This development not only reinforces Finland’s commitment to investing in quantum computing technology but also enhances its standing in the global quantum community. This follows the country’s initial foray into the quantum realm in 2021, with the completion of its first 5-qubit quantum computer, demonstrating a significant advancement in capability and investment in just two years.
The company also aims to launch a 54-qubit system in 2024, providing early users the opportunity to incorporate this technology into their processes and discover its potential. Following this, the goal is to create a 150-qubit quantum system by 2025, ultimately striving to attain quantum advantage.
22. IONQ
IonQ specializes in trapped ion quantum computing which is available on-premise, on IonQ’s Cloud, and through the Amazon Braket platform. IonQ, headquartered in College Park, Maryland, was funded in 2015, through the collaborative efforts of Chris Monroe and Jungsang Kim and went public through a SPAC in 2021.
In a significant development unveiled in May 2022, IonQ introduced its latest quantum iteration, IonQ Aria. This advanced quantum system is slated for initial availability to a select group of developers, partners, and researchers in 2022, with broader customer access available this year. At the core of Forte’s innovation lies the incorporation of acousto-optic deflector (AOD) technology. This revolutionary addition empowers IonQ to dynamically steer laser beams, steering the course of quantum gates towards individual ions. The AOD’s ingenious design aims to mitigate noise and surmount variations in ion positioning, effectively enhancing fidelity in lengthy chains of trapped ions – a pivotal factor in the scalability of quantum computing. Moreover, the system affords the flexibility to tailor key parameters such as qubit and gate configuration according to user requirements, resulting in a profoundly dynamic and adaptable quantum setup.
“IonQ Forte is further proof that high-performance quantum computers can be designed and built so both qubit count and gate fidelity improve simultaneously. We expect that this will lead to quantum computers with increasing algorithmic qubit numbers that will enable the search for solutions to the most complex problems of our time. IonQ’s quantum systems, including Aria and Forte, are at the forefront of achieving practical utility. The most impactful quantum computing applications will come to light when leading innovators seeking new ways to tackle their formidable problems get to work with the best systems, and customize them for their unique needs. We can’t wait to get these systems in people’s hands.”
— Jungsang Kim, CTO, IonQ
Update for 2023:
September was notably active for IonQ. During the Quantum World Congress, the company unveiled two innovative systems named Forte Enterprise and Tempo, both designed with rack-mountability in mind, allowing them to be seamlessly integrated into conventional data centers. Furthermore, just a day prior at the HPC and AI on Wall Street conference, IonQ confidently projected the attainment of quantum advantage within the next 2–3 years, leveraging the capabilities of these newly introduced systems.
We understand IonQ is the highest-funded pure-play quantum computing in the world.
23. NORD QUANTIQUE
Nord Quantique is at the forefront of advancing superconducting circuitry tailored to effectively counteract errors on individual qubits. Based in Sherbrooke, Canada, Nord Quantique entered the market in 2020, founded by Julien Camirand Lemyre and Philippe St-Jean.
The essence of Nord Quantique’s innovation lies in its pursuit of bosonic codes, strategically implemented through superconducting circuits. The utilization of bosonic systems inherently opens up a more expansive encoding arena, notably simplifying the safeguarding of quantum information against disruptive interactions and errors. This process is integral in preserving the integrity of quantum data. Superconducting circuits play a pivotal role in orchestrating high-performance bosonic codes, equipping researchers with a versatile toolkit for precision engineering.
“We embrace the great technological challenges that high-performance quantum computing demands — and we’re on the path to develop ground-breaking innovations.”
— Julien Camirand Lemyre, President & CTO, Nord Quantique
24. ORCA COMPUTING
Based in London, UK, ORCA Computing was founded in 2019 through the collaborative efforts of Richard Murray, Cristina Escoda, Josh Nunn, and Ian Walmsley. At the heart of its mission lies the development of a modular quantum computing platform harnessed by photonic technology.
ORCA Computing is anchored by its unique offering with the capacity to retain photons within its distinctive quantum memory. This quantum memory acts as a strategic buffer, effectively surmounting a fundamental challenge inherent to photonic quantum computing: the intrinsically probabilistic nature of qubit generation. AIn June 2022, ORCA Computing unveiled a partnership with the UK’s Ministry of Defence. This collaborative venture is geared towards the creation of a quantum computer specifically tailored to delve into defense applications, marking a significant stride in the fusion of quantum technology and defense innovation.
“One of the most interesting properties of photonic qubits is that they are ‘in flight’. You can pulse a source so that it produces multiple photons in a chain within a single length of optical fibre”. A highly efficient source could produce a chain of a million photons, although it would not be error corrected, our early results show that this could be an attractive method to scale the quantum system.”
— Richard Murray, CEO, ORCA Computing
Update for 2023:
In May of this year, ORCA Computing started collaborating with NVIDIA to integrate and execute algorithms that combine quantum and classical computing capabilities.
November saw ORCA Computing chosen by the Poznań Supercomputing and Networking Center (PSNC) to supply two PT-1 quantum photonics systems. As part of the Polish program, these systems will be set up at PSNC’s advanced computing data center in Poznań, Poland, enhancing their quantum computing efforts in various fields such as biology, chemistry, and machine learning.
See also: ORCA Computing to Provide Poznań Supercomputing And Networking Center With First Quantum Computers
25. ORIGIN QUANTUM
Origin Quantum offers an array of Quantum Computing solutions. Its portfolio encompasses full-stack QC solutions including the development of cutting-edge quantum dot-based chips and superconducting technology-reliant six-qubit chips. Expanding its offerings, the company has introduced Qpanda 2.0, an advanced development kit tailored for conducting experiments and crafting quantum circuits on quantum computers. Additionally, Origin Quantum has rolled out a suite of tools including VQNet, a Machine Learning framework, QRunes, a quantum programming language, and Qurator, an integrated development environment. The company’s forward-thinking initiatives traverse the entirety of the quantum computing stack, encompassing control systems, precision instruments, cryogenic equipment, as well as room-temperature hardware such as amplifiers. In a bold step forward, they delve into diverse applications, including quantum chemistry with ChemiQ, fluid dynamics through OriginQ QCFD, and the intricacies of option strategy and portfolio optimization.
Established in Hefei, China, Origin Quantum’s dates back to 2017, initiated by the collaborative vision of Guang-can Guo and Guo-ping Guo.
Update for 2023:
We reported earlier this year that the company had successfully sold its inaugural device, positioning China as the third nation to boast a commercial enterprise in the quantum computer sector. Origin Quantum launched its first quantum computer, marking China as the third country, after Canada and the U.S., to develop a full quantum computer system.
Its 24-qubit Wuyuan quantum computer, based on superconducting chip technology, has been operational and was supplied to a user over a year ago. The company’s founder, Guo Guoping, predicts this technology will significantly affect daily life in the next three to five years.
26. OXFORD IONICS
Established in 2019, Oxford Ionics is dedicated to building quantum computers with trapped ion qubits combined with noiseless electronic qubit control technology.
“The great challenge in quantum computing is scaling whilst improving performance. There are technologies that can be fabricated at scale but don’t perform, and there are technologies that perform but don’t scale. Our electronic control is uniquely placed to do both. Working with Infineon and its mature and flexible semiconductor process, allows us to speed up the accessibility of a commercial QPU. Due to our market-leading error rates, these processors need up to 10,000 times fewer qubits to solve useful problems than other technologies.”
— Chris Ballance, Co-Founder, Oxford Ionics.
Co-founded by Chris Ballance and Tom Harty, Oxford Ionics’ technology aims to mitigate quantum noise, which encompasses errors and disturbances arising from fluctuations in photon patterns and electromagnetic fields within the device. The convergence of Oxford Ionics’ electronic qubit control (EQC) technology with Infineon’s engineering and manufacturing capabilities, coupled with their quantum technology expertise, aims to establish the framework for producing quantum processing units (QPUs) with capacities of hundreds of qubits within the upcoming five years. The overarching objective is to transition quantum computing from a theoretical effort in research laboratories to practical solutions in various industries.
Update for 2023:
September saw Oxford Ionics obtain £2 million in funding from the UK’s National Security Strategic Investment Fund (NSSIF) to bolster its approach of amalgamating trapped ions with electronics seamlessly integrated into silicon chips, promising advancements in quantum computing technology.
27. OXFORD QUANTUM CIRCUITS
Oxford Quantum Circuits (OQC), based in Oxfordshire, UK, distinguishes itself as another notable enterprise in the region. OQC’s quantum computer is a self-contained operational entity, encompassing the control system, hardware, and software within its framework. The foundational intellectual property centers around the Coaxmon, a distinct qubit variant, characterized by its three-dimensional design. This architectural approach strategically relocates essential components off the primary chip, fostering enhanced scalability.
“Our vision is to build a truly scalable, flexible quantum computer. We’re building the quantum computer itself, as well as the qubits, based on technology that was developed by Dr. (Peter) Leek at the University of Oxford, where the company started. And that’s really the core of what we do.”
— Ilana Wisby, CEO, OQC
Update for 2023:
In April, OQC (along with Fujitsu) was chosen by the Spanish supercomputing center, CESGA, to lead in the delivery of cutting-edge computing solutions.
In November at the Global Investment Summit, OQC announced a significant milestone with Japan’s leading venture capital fund, SBI Investment, spearheading their $100 million funding round. Concurrently, OQC unveiled the public availability of their enterprise-ready quantum computing platform, OQC Toshiko. This infusion of funds is set to accelerate OQC’s research and development efforts, aiming to bring enterprise-ready quantum computing solutions to businesses worldwide.
28. PASQAL
PASQAL uses arrays of neutral atoms to construct its quantum computer. The origins of this achievement trace back to the foundational research carried out by Antoine Browaeys and Thierry Lahaye at Institut d’Optique (IOGS, CNRS). Their work has showcased the simulation of intricate many-body problems that are beyond the capabilities of classical High-Performance Computers.
“Running algorithms on Pasqal’s neutral-atom hardware opens the door to unique capabilities no other quantum system offers.”
— Georges-Olivier Reymond, CEO, PASQAL.
The Fresnel analogue quantum computer has been specifically adopted within the scope of the pan-European HPCQS project. This strategic move aligns with their overarching objective of establishing and coordinating a cloud-based, federated European infrastructure. The infrastructure entails the seamless integration of two quantum computers, each steering over 100 qubits. Moreover, the project aims to develop quantum HPC hybrid applications tailored for end-users.
Headquartered in Palaiseau, France, PASQAL was established in 2019 by Georges-Olivier Reymond, Christophe Jurczak, Professor Alain Aspect (renowned as the “father of the second quantum revolution” and Nobel Prize winner), Dr. Antoine Browaeys, and Dr. Thierry Lahaye.
Update for 2023:
In January, PASQAL raised €100 million in a Series B equity funding round. Temasek spearheaded this round as a new investor, with participation from other new financial backers including the European Innovation Council (EIC) Fund, Wa’ed Ventures, and Bpifrance. Existing investors Quantonation, the Defense Innovation Fund, Daphni, and Eni Next also contributed.
29. PHOTONIC INC
Like D-Wave, Photonic Inc is situated in Burnaby, Canada, and directs its efforts toward the creation and production of top-tier quantum technologies rooted in silicon. Notably, Photonic employs electron spins as its qubits, employing photonics to interconnect them seamlessly.
Emerging from the Silicon Quantum Technology Lab at Simon Fraser University, Photonic was established in 2019 by the collaborative efforts of Paul Terry and Stephanie Simmons.
Update for 2023:
In November, Photonic’s announcement of securing $100 million in a funding round from Microsoft. This funding round, spearheaded by Microsoft and BCI, along with contributions from various other investors, represents a significant stride towards the practical application of quantum computers. This collaboration is particularly noteworthy for its focus on Photonic’s innovative method, which involves photonically linked silicon spin qubits.
30. PLANQC
Debuting from stealth mode in June 2022, planqc is a quantum computing venture specializing in neutral atoms. It is the inaugural early-stage enterprise to emerge from the Munich Quantum Valley. The founding ensemble of planqc, comprising Alexander Glätzle, Sebastian Blatt, Johannes Zeiher, Lukas Reichsöllner, Ann-Kristin Achleitner, and Markus Wagner, unites extensive international research expertise in the domain of neutral-atom quantum technologies.
The company is poised to advance its quantum technology. This technology foundation rests upon the precision harnessed by atomic clocks, the capabilities of quantum gas microscopes, and the high-speed potential of Rydberg gates.
“Our atoms are more than a million times colder than deep space and over a thousand times colder than superconducting qubits used by IBM or Google, and yet we can run our computers in a room-temperature environment due to the near-perfect isolation of our qubits from the surrounding. We already routinely trap and control more than 2000 atoms in our optical lattice simulators at MPQ.”
— Johannes Zeiher, Co-founder, planqc
Update for 2023:
In May the German Aerospace Center (DLR) chose planqc to create a scalable digital quantum computing platform utilizing neutral atoms, aiming to showcase practical applications of quantum algorithms in solving real-world issues. This project is valued at 29 million EUR. Collaborating with Menlo Systems and ParityQC, planqc will receive essential support in laser systems, software, and architecture development. This marks a significant milestone as the first European sale of a digital quantum computer based on neutral atoms.
31. PSIQUANTUM
PsiQuantum, headquartered in Palo Alto, California, was established in 2016 by its founding members Jeremy O’Brien, Terry Rudolph, Peter Shadbolt, and Mark Thompson. The company is engaged in the development of qubits using photons, which are individual particles of light. These photons are channeled along pathways integrated into a silicon chip. Through the use of mirrors, the photons are manipulated into a state of entanglement. Fusion measurements are employed as gates in this quantum computing process. PsiQuantum asserts that this approach represents the most practical near-term solution for constructing a commercially viable quantum computer with a sufficient number of qubits.
“We use a superconducting single-photon detector, which can achieve the necessary efficiencies without a ton of development. It’s worth noting those detectors run in the ballpark of 4 Kelvin. So liquid helium temperature, which is still very cold, but it’s nowhere near as cold as milli-Kelvin temperatures required for superconducting qubits or some of the competing technologies.”
— Peter Shadbolt, CSO, PsiQuantum
Update for 2023:
In March, PsiQuantum inaugurated its cutting-edge research and development center at the STFC’s Daresbury Laboratory in the UK. The establishment of this facility was made possible with a £9 million investment from the UK government’s Department for Science, Innovation and Technology (DSIT).
32. QUANTUM COMPUTING INCORPORATED
Quantum Computing Inc (QCi) was founded in 2018 and is headquartered in Leesburg, Virginia. QCi is advancing quantum computing technology for practical business solutions. The company’s accessible, affordable quantum hardware and software operate at room temperature with minimal power requirements, offering speed, accuracy and security at a lower cost. QCi’s unique nanophotonic-based technology applies to both quantum computing and quantum sensing. Its Dirac series addresses binary and integer optimization problems using over 11,000 and 1,000 qubits respectively, leading in variable count and problem size in today’s quantum computing. QCi also develops quantum applications in AI, cybersecurity, and remote sensing, including its reprogrammable Quantum Random Number Generator and LiDAR products.
In May 2022, QCi successfully acquired QPhoton. This acquisition has resulted in QPhoton becoming a wholly-owned subsidiary of QCi, thus equipping QCi with both a hardware (QPU) and software offering.
“It is central to QCi’s mission to deliver practical and sustainable value to the quantum computing industry. QCi’s innovative software solutions deliver expansive compute capabilities for today’s state-of-the-art QPU systems and offer great future scalability as those technologies continually advance. […]”
— William McGann, Chief Operating & Technology Officer, QCi
33. QILIMANJARO
Qilimanjaro, headquartered in Barcelona, Spain, was established in 2019 by its co-founders Artur García-Sáez, Jordi Blasco, José Ignacio Latorre, Pol Forn-Díaz, and Victor Canivell. The company’s integrated hardware and software team is currently dedicated to developing coherent quantum annealing architectures with high-quality qubits. Its primary focus is on delivering scalable application-specific quantum processors and services, along with user-friendly cloud access, to effectively tackle complex optimization and machine learning challenges.
In the short term, Qilimanjaro offers services to help businesses prepare for the quantum era, particularly by providing expertise in quantum algorithms, quantum simulation, and classical/quantum computing approaches. Remarkably, within its first year of operation, the company has already secured significant customer contracts and has emerged as a crucial contributor to the European Commission’s AVaQus FET-Open H2020 project on quantum annealing. Qilimanjaro originated as a spin-off of the Barcelona Supercomputer Center (BSC), the University of Barcelona (UB), and the Institute of High-Energy Physics (IFAE).
Update for 2023:
In July, the Qilimanjaro-GMV joint venture successfully reached its first major milestone in constructing a quantum computer at BSC, enabling remote access to a 5-qubit quantum chip. This groundbreaking chip is fully operational at the Qilimanjaro Quantum Computing Technology laboratory within the Institut de Fisica d’Altes Energies (IFAE) in Barcelona, marking the establishment of the first quantum computer on Spanish soil.
34. QUERA
QuEra Computing, headquartered in the Boston metropolitan area, was established in 2019 by its co-founders Mikhail Lukin, Markus Grenier, Vladan Vuletic, Dirk Englund, and Nathan Gemelke. The company leverages groundbreaking research on neutral atoms, originally developed at Harvard University and the Massachusetts Institute of Technology, as the foundation for its world-leading scalable, programmable quantum computing solution. QuEra is recognized as a full-stack provider, encompassing not only hardware but also algorithm development.
“There is an enormous opportunity to make headway on some of today’s most critical –and presently impossible — problems that impact nearly every one of us. With our first machine, we are excited to begin to demonstrate what quantum computers can do for humanity.”
— Alex Keesling, CEO, QuEra
Update for 2023:
August saw QuEra Computing unveil flexible access options for AWS to meet diverse customer needs in computing, compliance, and security.
35. QUANDELA
Quandela, established in 2017 by Niccolo Somaschi, Pascale Senellart, and Valerian Giesz, originated as a spinoff from the Centre for Nanoscience and Nanotechnology at the French National Center for Scientific Research (CNRS). The company’s headquarters are situated in Palaiseau, a southern suburb of Paris, where it specializes in the development of solid-state sources of quantum light tailored for various quantum applications.
“Given the recent technological advances in the development of solid-state quantum light emitters, it is time to explore the full potential of this technology for large–scale quantum computing. Quandela is one of the international leaders in the technology, with all the resources to boost further developments and integrate the blocks needed to build computing platforms in a modular way.”
— Niccolo Somaschi, CTO, Quandela
Quandela is the creator of Prometheus, a single photon source with a wide range of applications, spanning quantum cryptography, quantum computation, and quantum sensors. Furthermore, the company offers a cybersecurity enhancement solution featuring a two-qubit quantum processor.
In addition to its hardware offerings, Quandela recently introduced Perceval, a photonic quantum computing software platform.
Update for 2023:
In October, Quandela delivered its inaugural quantum computer, MosaiQ, to a data center owned by OVHcloud, marking OVHcloud as the first European cloud services provider to possess a quantum system that operates on photonic processors.
36. QUANTWARE
QuantWare, headquartered in Delft, the Netherlands, specializes in the development and sale of quantum hardware, including Quantum Processing Units (QPUs) and attenuators.
This year, QuantWare was chosen to supply quantum processing units for Israel’s inaugural fully operational quantum computer. Its 64-qubit processor, named ‘Tenor’, offers over double the qubits of its prior largest QPU, while also being more cost-effective.
QuantWare was founded in 2021 by Alessandro Bruno and Matthijs Rijlaarsdam.
Update for 2023:
In March, QuantWare raised €6 million in a seed funding round, led by Forward.One.
37. QUANTINUUM
Quantinuum is the result of a collaboration between two prominent entities: Cambridge Quantum Computing (CQC), a British company specializing in quantum software and operating systems, and Honeywell Quantum Solutions (HQS), a subsidiary of the U.S.-based Honeywell corporation with expertise in building Ion Trap quantum computers.
This venture brings together trapped-ion quantum hardware and software, effectively establishing a comprehensive full-stack quantum computing company. In a noteworthy development announced in June 2022, Quantinuum unveiled a significant upgrade to its System Model H1 technology. This upgrade included the expansion to a robust twenty fully connected qubits, along with an augmentation in the capacity for concurrent quantum operations. Furthermore, the number of gate zones was increased from three to five, enhancing the capabilities of the H1-1 system to perform more quantum operations simultaneously and allowing for greater parallelization in circuit execution.
This year, however, researchers from Quantinuum, in collaboration with partners, successfully demonstrated the initial fault-tolerant technique utilizing three logically encoded qubits. This was achieved on the Quantinuum H1 quantum computer, which is powered by Honeywell, to execute a mathematical operation.
Cambridge Quantum Computing (CQC), a key player in this collaboration, boasts expertise in quantum software, notably offering a quantum development platform (t|ket / TKET) and enterprise applications spanning quantum chemistry (EUMEN), quantum machine learning (QML), and quantum-augmented cybersecurity (IronBridge/Origin). CQC also introduced an open-source software toolkit for Natural Language Processing on Quantum Computers called Lambeq. The company has released InQuanto, a Python-based quantum chemical software platform tailored for executing chemistry algorithms on current quantum hardware. Notably, the research for InQuanto was initiated under the EUMEN project and was built upon the TKET platform.
Quantinuum, established in 2021, is led by CEO Ilyas Khan, who founded Cambridge Quantum in 2014, and President and Chief Operations Officer Rajeeb Hazra, who replaced Tony Uttley this year, the founder of Honeywell Quantum Solutions, where he served as President. This collaboration marks a significant stride in advancing the field of quantum computing through the fusion of hardware and software expertise from two renowned entities.
“Quantinuum’s trapped–ion quantum computing roadmap is designed around continuous upgrades, enabled our flexible architecture and our precision control capabilities. This combination provides for outstanding, first–of–its–kind achievements that help accelerate the entire industry.”
— Tony Uttley, former President & COO, Quantinuum
Update for 2023:
October saw researchers from Quantinuum, QuTech (Delft University of Technology), and the University of Stuttgart achieve a breakthrough in quantum computing by demonstrating the first fault-tolerant method utilizing three logically encoded qubits on the Quantinuum H1 quantum computer.
38. QUANTUM BRILLIANCE
Quantum Brilliance (QB) specializes in the development of a quantum computing platform that operates seamlessly at room temperature, eliminating the necessity for intricate cooling systems. The company has successfully engineered a cutting-edge two-qubit diamond quantum “accelerator” employing synthetic diamonds, and it functions efficiently at room temperature in any environmental setting.
Headquartered in Canberra, Australia, Quantum Brilliance was established in 2019.
Update for 2023:
In February, the company announced an $18 million USD fundraise, using the cash injection to expand international operations, deliver hardware and software products to customers, and improve manufacturing and fabrication techniques for its quantum computing technology.
39. QUANTUM CIRCUITS
Quantum Circuits (QCI) is advancing full-stack quantum computing through the utilization of superconducting devices and an adaptable, expandable architecture. Headquartered in Madison, Wisconsin, QCI has secured $18 million in funding.
Founded in 2015, the company is the brainchild of three distinguished experts in quantum devices and information processing: Michel Devoret, Luigi Frunzio, and Robert Schoelkopf. These luminaries in their respective fields originate from the Department of Applied Physics at Yale University.
40. QUANTUM MOTION
Quantum Motion, a quantum computing firm, is pioneering the development of a scalable array of qubits using widely available silicon technology. The company harnesses CMOS processing to achieve a high-density qubit architecture that can be scaled up significantly to address real-world quantum computing challenges.
“We’re hacking the process of creating qubits, so the same kind of technology that makes the chip in a smartphone can be used to build quantum computers. It has taken 70 years for transistor development to reach where we are today in computing and we can’t spend another 70 years trying to invent new manufacturing processes to build quantum computers. We need millions of qubits and an ultra-scalable architecture for building them, our discovery gives us the blueprint to shortcut our way to industrial scale quantum chip production.”
— John Morton, Founding Director, Quantum Motion
Quantum Motion has its headquarters in London and was established in 2017 by Professor Simon Benjamin of Oxford University and Professor John Morton from UCL.
Update for 2023:
In February, Quantum Motion raised over £42 million in an equity funding round. The funding allowed the company to realize its vision of building a quantum computer using standard foundry processes, supported by a world-leading team.
41. QUANTUM SOURCE
Headquartered in Rehovot, Israel, Quantum Source is dedicated to advancing the scalability of quantum computers to encompass millions of qubits. They achieve this ambitious goal through pioneering developments in photonic technology, specifically by crafting a quantum processor that intertwines photons. Quantum Source is the first Israeli company to secure funding for their pioneering work in the realm of qubits, offering a promising alternative path to practical quantum computing. Their distinctive approach involves the creation of chips that can be manufactured without the need for specialized facilities and operate without the requirement for cooling, a critical differentiator from many other qubit modalities.
Founded in 2021 by a team consisting of Oded Melamed, Gil Semo, Dan Charash, and Professor Barak Dayan from the Weizmann Institute of Science, Quantum Source emerged from stealth mode in July of 2022.
Update for 2023:
May saw Quantum Source announce the appointment of former Israeli Prime Minister Naftali Bennett to its board of directors.
42. QUIX QUANTUM
QuiX Quantum, founded in 2019 by Hans van den Vlekkert and headquartered in Enschede, Netherlands, has emerged as Europe’s foremost quantum computing firm specializing in photonics. With strategic office expansions to Amsterdam in the Netherlands and Ulm and Stuttgart in Germany by 2022, the company reinforces its presence in the quantum computing sector.
QuiX Quantum operates as a fabless and horizontally integrated organization, dedicating its expertise to the development of quantum computing through integrated photonics. As of late 2023, QuiX Quantum continues to advance in this field, focusing on enhancing quantum computing technologies and solutions based on photonics, while also expanding its influence and operations in the European quantum computing market.
43. RIGETTI COMPUTING
Based in Berkeley, California, Rigetti Computing is a company specializing in both hardware and software development for quantum computers. They are recognized for their work in creating superconducting qubit computers and the corresponding software infrastructure. The Rigetti Forest Software Development Kit encompasses essential components such as pyQuil, the Rigetti Quil Compiler (quilc), and the Quantum Virtual Machine (qvm).
“[…] we’ve reached a critical milestone in the emerging quantum advantage era. Our machines are now at a scale and speed where they can process the real-world data sets that underpin high-impact applications. We believe these systems give researchers and enterprises the best platform to pursue quantum advantage on real problems.”
— Chad Rigetti, former CEO, Rigetti Computing
Furthermore, Rigetti provides access to its quantum computers through the cloud via the Quantum Cloud Services platform. Notably, they offer an 80-qubit Rigetti processor, which is accessible through Rigetti Quantum Cloud Services and AWS, representing the world’s pioneering multi-chip quantum processor. In June 2022, Rigetti introduced the 32-qubit Aspen-series quantum computer in the UK, marking the company’s inaugural quantum computer offering in the UK market. This system will be made available to their UK partners via cloud access through Rigetti QCS.
Founded by Chad Rigetti in 2013, Rigetti Computing has successfully secured approximately $300 million in funding up to the present. In March of 2022, the company underwent a public listing through a merger with a Special Purpose Acquisition Company (SPAC).
Update for 2023:
Late in 2022, Chad Rigetti, founder, President, and CEO of Rigetti Computing, stepped down from the chief executive role to focus on advancing the company’s products and technology and officially left the business in early 2023.
44. SEEQC
SEEQC, headquartered in Elmsford, New York, was established in 2019 by John Levy, Oleg Mukhanov, Matthew Hutchings, and Shu-Jen Han.
SEEQC is pioneering a revolutionary approach to harness the potential of quantum computing. They are developing a comprehensive Digital Quantum Computing solution that integrates classical and quantum computing into an all-digital architecture through a system-on-a-chip design. This innovative approach leverages superconductive classical co-processing to effectively address the efficiency, stability, and cost challenges inherent in traditional quantum computing systems. SEEQC’s mission is to redefine the landscape of quantum computing and make it more practical and accessible for all.
“Our multi-layer superconductive electronics chip fabrication facility is among the most advanced in the world. This facility powers the development and manufacturing of superconductors for customers today and is an important research and development facility for the commercially viable quantum computing systems of tomorrow.”
— John Levy, CEO, SEEQC
Update for 2023:
In September, SEEQC started a collaboration with NVIDIA on a chip-to-chip link between quantum computers and GPUs.
45. SILICON QUANTUM COMPUTING
Silicon Quantum Computing (SQC) is a company based in Sydney, Australia, with a mission to commercialize the cutting-edge research generated by the Australia Centre of Excellence for Quantum Computation and Communication Technology. SQC has a bold vision of unveiling a 10-qubit quantum integrated circuit prototype in silicon by the year 2023. In a significant milestone, in June 2022, Silicon Quantum Computing proudly introduced its inaugural quantum integrated circuit. This remarkable achievement represents an atomic-scale integrated circuit functioning as an analog quantum processor. It is worth noting that this achievement was realized in less than a decade after the team’s landmark declaration in 2012 when they fabricated the world’s first single-atom transistor, surpassing their goal by two years.
“We spent about five to ten years optimizing the manufacture of our qubits out of atoms in silicon, and realized the quality of the qubits was really outstanding.”
— Michelle Simmons, CEO, Silicon Quantum Computing
Originating as a spinout from the University of New South Wales (UNSW), SQC was founded in 2017 under the visionary leadership of Michelle Simmons.
Update for 2023:
July saw Silicon Quantum Computing successfully secure a substantial amount of AUD 50.4 million in its Series A funding round, despite initially aiming for a grand target of around $130 million as stated by company executives last year.
46. TURINGQ
TuringQ is developing optical quantum computer chip technology, with a primary focus on the development of large-scale photonic circuits. It achieves this through the utilization of lithium niobate on insulator (LNOI) photonic chips and cutting-edge femtosecond laser direct writing technology. Established in February 2021, TuringQ has wasted no time in making a significant impact on the field.
Despite its youth, this company has already introduced a range of products to the market. Notable among them are TuringQ Gen 1, an optical quantum computer designed for scientific research and commercial applications, a 3D optical quantum chip, an ultra-high-speed programmable optical quantum chip, and various other innovative offerings. Additionally, TuringQ has developed FeynmanPAQS, a groundbreaking optical quantum computing simulation software tailored for commercial use.
TuringQ is headquartered in Shanghai, China, and was founded in 2021 by Xianmin Jin.
47. UNIVERSAL QUANTUM
Universal Quantum is pioneering the field of scalable trapped ion quantum computers. Distinguishing itself among quantum computing companies, Universal Quantum has harnessed trapped ions and leveraged well-established microwave technology to perform calculations, eliminating the need for an excessive array of laser beams. This breakthrough significantly reduces the demanding cooling prerequisites, enabling operation at a more accessible temperature of (-200°C), a pivotal advancement in enhancing the practicality and capability of quantum computers.
Founded in 2018 by Professor Winfried Hensinger and Dr. Sebastian Weidt, Universal Quantum is headquartered in Brighton, United Kingdom.
“At Universal Quantum, we are focused on six technology pillars to reach the million-qubit scale. These are mild cooling technology, trapped ion qubits, electronic quantum gates, silicon microchip modules, electric field link modularity and a practical engineering focus.
Of course, the race is far from over as we try to reach the million-qubit scale — and it may not be a two-horse race between superconducting and trapped-ion qubits. Other companies are investigating alternative approaches — and they are all at different levels of maturity.”
— Unmesh Sahasrabuddhe, VP of Engineering & Product, Universal Quantum
48. XANADU
Founded in 2016 by Christian Weedbrook, Xanadu is a quantum innovation company based in Toronto. Xanadu specializes in developing full-stack quantum photonic processors and offers an open-source quantum software platform known as Strawberry Fields.
The company has also developed Borealis, a programmable photonic quantum computer with 216 squeezed-state qubits that outperforms the best classical supercomputers at a specific task, available to people everywhere via Xanadu Cloud and Amazon Braket. In June of this year, Xanadu demonstrated quantum “computational advantage” using Borealis:
“We are thrilled to have deployed quantum computational advantage on the cloud publicly for the very first time for users around the world. This is another big milestone for quantum computing. And it shows the exceptional talent we have here at Xanadu as well as the ability for photonic quantum computers to scale up.”
— Christian Weedbrook, CEO, Xanadu
Update for 2023:
In September, researchers at Brookhaven National Laboratory started utilizing the Perlmutter supercomputer to perform simulations in the realm of quantum computing, harnessing the capabilities of PennyLane — a Xanadu-developed, open-source quantum programming framework. This collaboration also integrates the NVIDIA cuQuantum software development kit, aiming to optimize the process.
Top Software-Focused Quantum Computing Companies
49. 1QBIT
Established in 2012 by Andrew Fursman and Landon Downs, 1QBit specializes in the development of general-purpose algorithms tailored for quantum computing hardware. Initially concentrating on NISQ-era applications, the company has progressively shifted its focus towards providing essential software solutions throughout the quantum technology stack. Today, 1QBit operates as an incubation hub, nurturing other companies in the quantum technology sector.
Notably, it has spawned Synthesise, a company dedicated to medical technology solutions and the operation of distributed radiology, medical imaging, and laboratory clinics, as well as Good Chemistry, which focuses on harnessing quantum computing for computational chemistry.
50. AGNOSTIQ
Agnostiq, headquartered in Toronto, is a pioneering quantum software company hailing from Canada. Established in 2018 by founders Edwin Tham, Elliot MacGowan, and Oktay Goktas, the company is at the forefront of quantum computing, dedicated to crafting software tools that enhance accessibility to quantum and high-performance computing resources for both enterprises and developers.
“When it comes to classical HPC, one of the things that we’re interested in [and] that’s in our roadmap is understanding how people can better provision and manage and schedule tasks on compute in general. We view quantum as part of this broader landscape of compute, but one of the things that we’re interested in, both with Covalent and beyond, is understanding how to appropriately map software to hardware and that hardware can be high compute and supercomputers or it could be general compute or low compute.”
— Will Cunningham, Head of Software, Agnostiq
In addition to its algorithmic research, Agnostiq is actively developing Covalent, an open-source workflow orchestration platform engineered to assist users in efficiently managing and executing tasks across diverse compute resources.
Update for 2023:
In April, Agnostiq secured an additional $6.1 million in seed extension funding, adding to the $2 million it had previously raised. Company officials stated at the time that this influx of capital would be instrumental in hastening the development and commercialization of its robust enterprise-grade platform, which specializes in quantum and high-performance computing (HPC).
51. ALIRO QUANTUM
Aliro Quantum, headquartered in Boston, Massachusetts, is a quantum networking company dedicated to providing Entanglement as a Service (EaaS). Their mission is to empower the creation of 100% secure networks in the present and pave the way for the quantum internet of the future.
“Powerful quantum systems such as those we are pioneering at Aliro will enable breakthroughs in energy, medicine, materials science and other novel applications we have yet to imagine.”
— Jim Ricotta, CEO & Chairman, Aliro Quantum
In collaboration with industry and academic partners through initiatives such as the Quantum Economic Development Consortium (QED-C), the NSF Center for Quantum Networks (CQN), and the NSF Quantum Leap Challenge Institute Hybrid Quantum Architectures and Networks (HQAN), Aliro also forms strategic alliances with leading quantum hardware providers, including IBM, Honeywell Quantum Solutions (now Quantinuum), and Rigetti Computing. Established in 2019, Aliro emerged as a spinoff from Harvard University’s NarangLab and was co-founded by Michael Cubeddu, Prineha Narang, and Will Finigan.
Update for 2023:
In October, Aliro received new investment from leading venture capital entities, with Accenture Ventures participating and Leaders Fund taking the lead. The company plans to allocate these newly acquired resources toward enhancing its proficiency in the creation and implementation of versatile, entanglement-based secure networks, solidifying its position in the quantum computing landscape.
52. ALGORITHMIQ
Algorithmiq, headquartered in Helsinki, Finland, is a company specializing in the development of quantum algorithms. Its primary focus lies in the domains of molecular structure prediction, drug development, and materials design, all with a keen eye on gaining a competitive edge during the NISQ era.
Founded in 2020 by a team of visionary individuals, including Sabrina Maniscalco, Guillermo García-Pérez, Matteo Rossi, Boris Sokolov, and Jussi Westergren, Algorithmiq distinguishes itself with a strong emphasis on research. As of May 2022, the company boasts an impressive track record of over 300 published papers.
“Quantum computing is uniquely interesting and threatening to players in the biotech and pharmaceutical domain because new discoveries only need to be made once.”
— Guillermo García-Pérez, Co-Founder & CSO, Algorithmiq
Update for 2023:
June saw Algorithmiq secure $15 million in a Series A funding round. These financial resources will empower Algorithmiq to extend its proof-of-concept collaborations with global pharmaceutical companies, aiming to substantially cut down both the time and financial requirements associated with drug discovery and development.
53. A STAR QUANTUM
Founded in 2018 by Hidetoshi Nishimori and Koji Funabashi, A Star Quantum, headquartered in Tokyo, Japan, is a quantum computing software provider with a specific focus on logistics and advertising. Its software development approach encompasses both annealing and gate-based quantum computing techniques, and they actively collaborate with universities to foster developer talent and facilitate cooperation among companies. A Star Quantum also specializes in user interface (UI) development to broaden its user base.
54. BEIT
Headquartered in Krakow, Poland, BEIT is an organization that specializes in crafting advanced algorithms tailored for tackling NP-complete problems on state-of-the-art quantum computing platforms. Established in the year 2016, this innovative venture was brought to life through the vision and determination of its co-founders: Paulina Mazurek, Witek Jarnicki, and Wojtek Burkot. Over the years, BEIT has secured $1.4 million in funding.
55. BOSONQ PSI
BosonQ Psi (BQP) provides enterprise software, harnessing the potential of quantum computing to accelerate virtual simulations within the domains of Multiphysics and Computer-Aided Engineering (CAE).
At the forefront of their offerings lies the BQPhy product, a quantum-powered cloud simulation software designed for enterprise clients. This software offers CAE solvers, crafted from the ground up by domain experts..
Situated in Buffalo, New York, BosonQ Psi has secured $500,000 since its inception in the year 2020. “We are building BQPhy, a simulation software, which has quantum algorithms embedded in it. It’s able to access the quantum hardware to give these simulations much faster, with much better accuracy and lowering the cost of the customer. I would say that the technology that we are working on is not just cutting edge — it’s bleeding edge.”
— Abhishek Chopra, CEO, BosonQ Psi
Update for 2023:
In June, BosonQ Psi joined forces with Tech Mahindra Makers Lab to expedite the application of quantum technology in diverse industries. As part of this collaboration, BQP will incorporate its quantum-powered simulation suite into Tech Mahindra’s system, aiming to fortify the global quantum ecosystem by generating use cases that span multiple verticals.
56. ENTROPICA LABS
Entropica Labs is a company specializing in the creation of software tools and variational quantum algorithms for the realms of optimization and statistical learning.
Nestled within the quantum epicenter of Singapore, Entropica Labs was founded in 2018, courtesy of the visionary collaboration between its founders, Ewan Munro and Tommaso Demarie.
Update for 2023:
In June, Entropica Labs entered into a strategic partnership with Atom Computing to foster joint efforts in research, experimentation, and the merging of quantum software with hardware technologies.
57. HORIZON QUANTUM COMPUTING
Horizon Quantum Computing, established in 2018 by Joe Fitzsimons and headquartered in Singapore, is dedicated to advancing the field of quantum software applications. The company is actively working on tools designed to streamline and accelerate the development of quantum software. Its comprehensive system includes a complete compiler stack that spans from algorithm construction to practical implementation at the physical level.
“As a company focused on enabling users to create and deploy quantum applications, ensuring this can be done without compromising the privacy or integrity of those applications is a key concern for Horizon.”
— Joe Fitzsimons, CEO, Horizon Quantum Computing
Update for 2023:
In March, Horizon Quantum Computing raised $18.1 million in a Series A funding round, bringing its total funding to over $21 million.
58. HQS QUANTUM SIMULATIONS
HQS Quantum Simulations, headquartered in Karlsruhe, Germany, specializes in the development of quantum algorithms tailored to predict molecular properties. These algorithms find applications in industries such as performance materials, specialty chemicals, and pharmaceuticals. The company was founded in 2017 by Iris Schwenk, Sebastian Zanker, Jan Reiner, and Michael Marthaler, following nearly five years of intensive research at the Karlsruhe Institute of Technology (KIT) in Germany.
“We focus on using quantum computers to solve quantum mechanical problems.”
— Michael Marthaler, CEO, HQS Quantum Simulations
59. JIJ
JiJ, headquartered in Tokyo, Japan, specializes in software designed to facilitate quantum annealing. Its primary focus centers on the advancement of applications and algorithms tailored for the practical utilization of annealing machines. Additionally, JiJ extends its services to include consulting in the realm of annealing machines and optimization technology.
60. KUANO
Kuano, headquartered in Hauxton, the UK, specializes in offering Quantum and AI Solutions for Molecular Design. A prevalent method of action in both pharmaceuticals and crop protection agents involves enzyme inhibition. Kuano takes a distinctive approach to designing novel inhibitors by integrating quantum simulation and machine learning methodologies. This approach enables the creation of highly effective inhibitors that align with the mechanisms of the target enzyme.
The company was established in 2020 by a team comprising David Wright, Jarryl D’Oyley, Parminder Ruprah, and Vid Stojevic.
61. KVANTIFY
Copenhagen-based Kvantify, founded in 2022 by Hans Henrik Knudsen, Nikolaj Zinner, and Allan Grønlund, intends to democratize the availability of advanced computing technology and aid businesses in making a positive impact on the world.
The team — with expertise in physics, mathematics, chemistry, and drug discovery — is dedicated to developing software that simplifies access to quantum computing and High-Performance Computing (HPC). This initiative is aimed at empowering businesses to harness the transformative capabilities of these technologies without the necessity for substantial internal investments.
62. MULTIVERSE COMPUTING
Multiverse Computing, headquartered in San Sebastian, Spain, was established in 2019 by Alfonso Rubio Manzanares, Enrique Lizaso, Mehdi Bozzo-Rey, Román Orús, and Samuel Mugel. The company offers highly efficient software solutions tailored to meet the quantum computing and artificial intelligence needs of financial industry companies. It operates as a hybrid entity, blending consultancy services with software provision, offering a Software as a Service (SaaS) platform that identifies the most suitable algorithms for specific use cases.
Update for 2023:
In November, Multiverse Computing, in collaboration with Moody’s Analytics and Oxford Quantum Circuits, was awarded funding by Innovate UK to pioneer the development of large-scale flood prediction models utilizing quantum methods.
63. PHASECRAFT
Phasecraft has created quantum computing algorithms that demonstrate substantially higher efficiency than existing alternatives. The company aims to use these algorithms for the discovery of novel materials critical for the shift to clean energy, asserting that quantum computing could greatly hasten this process, outpacing both traditional computing and experimental methods.
The company was founded in 2019 by Toby Cubitt, Ashley Montanaro, and John Morton, with offices in both Bristol and London in the UK.
64. POLARISQB
Founded in 2020 in Durham, North Carolina, PolarisQb was established by Bill Shipman and Shahar Keinan with a vision of harnessing the power of quantum computing, artificial intelligence, and precision medicine to explore the vast realm of chemical space. Their mission is to develop groundbreaking molecular drugs tailored for specific proteins and diseases.
“Quantum Computing technology is coming of age, allowing us to revolutionize drug discovery timelines, while improving the overall profile of the designed drugs. The application of Quantum Computers to solving these complex questions is extraordinary.”
— Shahar Keinan, CEO, Polarisqb
Update for 2023:
May saw POLARISqb launch a new subscription-based Software as a Service (SaaS) platform designed to expedite the identification of optimal candidate molecules for drug targets by transforming the process of building a molecule library into an optimization challenge solvable through quantum annealing computing.
65. PROTEINQURE
ProteinQure, headquartered in Toronto, Canada, was established in 2017 by Christopher Ing, Lucas Siow, Mark Fingerhuth, and Tomas Babej. The company is dedicated to developing a cutting-edge computational platform tailored for the creation of protein therapeutics. Leveraging a combination of computational biophysical models and advanced statistical and machine learning techniques, ProteinQure possesses the capability to explore extensive landscapes of protein therapeutics.
66. QC WARE
Headquartered in Mountain View, California, QC Ware, founded in 2014 by Matt Johnson and Randy Correll, specializes in delivering enterprise applications tailored for quantum computers. Their flagship product, Forge, provides developers with access to quantum hardware and simulators from various vendors.
Update for 2023:
In April, QCWare introduced Promethium, a new software-as-a-service (SaaS) quantum chemistry platform that promises to significantly speed up discovery processes in the pharmaceutical, chemical, and material sectors.
67. QUANTASTICA
Headquartered in Helsinki, Finland, Quantastica was established in 2019 by Petar Korponaić and specializes in offering software tools and solutions designed to facilitate the transition to hybrid quantum-classical computing for its customers.
Its Quantum Programming Studio, a web-based graphical user interface for crafting quantum algorithms and running them on simulators or actual quantum computers, has been developed in collaboration with Rigetti.
68. QUANTUM GENERATIVE MATERIALS
Quantum Generative Materials (GenMat) has a versatile range of offerings that transcend industry boundaries. Notably, Comstock Mining, holding a substantial ownership stake of between 45 to 50 percent in GenMat, directs its focus towards applications that expedite the advancement of innovative clean technologies. These technologies aim to combat resource scarcity by fostering climate-conscious mining, electrification, and decarbonization through the utilization of quantum-classical algorithms for optimizing material design.
“Among other applications, we plan to use GenMat’s platform to enhance our extraction and refining of lithium and other scarce electrification metals, and then to design and produce dramatically improved battery components with those and other metals. Even then, we would be barely scratching the surface of the potential that quantum computing technologies offer. We’re looking forward to supporting GenMat’s development, and using our license rights to systemically maximize financial, natural and social impact for all of our stakeholders.”
— Corrado De Gasperis, Executive Chairman & CEO, Comstock
Headquartered in Wyoming, United States, GenMat has successfully secured a substantial funding pool totaling $50 million. A pivotal contribution of $15 million was injected into the venture in July 2021 by Comstock Mining, further fortifying GenMat’s position in the industry.
69. QUBIT PHARMACEUTICALS
Headquartered in Paris, France, Qubit Pharmaceuticals stands out as a pioneering quantum computing firm that’s actively shaping a platform for expediting the drug discovery process. Its approach harnesses a synergy between high-performance computing (HPC) and early-stage quantum computers, culminating in the development of ATLAS, a sophisticated software suite designed for the identification and evaluation of potential drug candidates. ATLAS operates seamlessly on supercomputers, facilitating collaborative efforts with pharmaceutical and biotech companies in the co-design of innovative pharmaceuticals. This groundbreaking initiative capitalizes on over three decades of extensive research.
Qubit Pharmaceuticals’ journey commenced in 2020, courtesy of the visionaries Jay Ponder, Pengyu Ren, Jean-Philip Piquemal, Louis Lagardere, and Matthieu Montes.
“Qubit Pharmaceuticals is a bridge between the world of mathematicians and physicists who are developing high-speed computational tools based on quantum research, and the pharmaceutical and biotech industries in search of new drugs. By creating digital twins of molecules and simulating their behaviour, we are confident in our ability to become a globally recognized player in the development of new drugs in areas where unmet needs remain significant.”
— Robert Marino, CEO, Qubit Pharmaceuticals
70. QUNASYS
Founded in 2018, QunaSys is a Tokyo-based company that is an authority in quantum algorithms, dedicated to assisting clients in discovering practical applications for quantum computing. The company has engineered Qulacs, an advanced quantum circuit simulator tailored for high-speed quantum computational research. This powerful tool is coded in C++ and features a user-friendly Python interface. QunaSys is renowned as a trailblazer in the field, evidenced by its establishment of QPARC, a consortium comprising numerous global enterprises committed to exploring real-world applications of quantum computing. Numerical simulations of quantum computers have emerged as a critical avenue for investigating the performance of quantum circuits, especially since genuine quantum hardware is not yet equipped to provide comprehensive support.
71. RIVERLANE
Riverlane states that their mission is to make quantum computing useful far sooner than previously imaginable. To achieve this, they are building the quantum error correction stack to enable fault-tolerant quantum computing. Riverlane’s ‘Quantum Error Correction Stack’ named ‘Deltaflow’, creates error-free logical qubits from many unstable physical qubits enabling large-scale applications to be built. It currently consists of two layers a control system ‘Deltaflow.Control’ and a powerful decoder technology ‘Deltaflow.Decode.
— Steve Brierley, Founder, CEO, Riverlane
Riverlane has achieved significant milestones in the realm of multi-qubit entanglement and algorithms on a programmable neutral atom quantum computer. Situated in Cambridge, UK, Riverlane was established by Steve Brierley, a distinguished quantum physicist who also holds the position of Senior Research Fellow at the University of Cambridge and serves as an expert advisor to the UK government.
Update for 2023:
In September, Riverlane revealed the development of a dedicated decoder chip along with the publication of its decoder intellectual property (IP). This chip represents a critical component in their technological stack and distinguishes itself as the first of its kind to undergo fabrication. Complementing this breakthrough, Riverlane has also unveiled its roadmap aimed at achieving early error-corrected quantum computing, marking a substantial stride in the field of quantum technology.
72. SANDBOXAQ
SandboxAQ, headquartered in Palo Alto, is an enterprise Software as a Service (SaaS) company specializing in the convergence of quantum technology and AI. The company places a strong emphasis on addressing critical challenges in sensing, security, and optimization by leveraging the synergy of AI and quantum technology. Among its solutions are advanced cybersecurity modules designed to transition enterprises towards heightened security levels, facilitating the adoption of post-quantum cryptography (PQC) in accordance with emerging industry standards.
“The value-add we [SandboxAQ] offer is the following: The discovery tool and the encryption modules all have our machine learning modules in them. Why machine learning? Is it just pixie dust we have to add to everything? No. The reason is that, coming out of the NIST process, we don’t have just one protocol: We have multiple valid post-RSA protocols.
For a large enterprise architecture, we need a control plane and a data plane, and we need to separate the control plane from the data plane. The data plane is the encryption plane. That’s where the encryption happens using the post-RSA protocols. The control plane is where the machine learning sits, to choose in real time the parameters and which protocol to use. Some protocols are faster,
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https://www.abortretry.fail/p/the-rise-and-fall-of-silicon-graphics
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The Rise and Fall of Silicon Graphics
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[
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[
"Bradford Morgan White"
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2024-04-04T00:02:09+00:00
|
or How a Rebellious Youth Briefly Conquered the World
|
en
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https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F8421cfb8-5a60-4304-8b12-47afc58be862%2Ffavicon.ico
|
https://www.abortretry.fail/p/the-rise-and-fall-of-silicon-graphics
|
James Henry Clark was born on the 23rd of March in 1944 in Plainview, Texas. Clark’s family was far from wealthy. His father was fond of drinking and couldn’t keep a job. His mother worked at a local doctor’s office making about $225 per month (around $2605 in 2024). Clark’s parents divorced while Clark was still young, and while that salary may seem fine if low adjusted for inflation, Clark’s mother would only have received $175.50 ($2032) after income tax and social security tax, and it was the sole income for a woman and her three children. For himself, Clark was a bit rowdy. His high school highlights include setting off a smoke bomb on the band bus, smuggling a skunk into a school dance, telling his English teacher to go to Hell, drinking, and drag racing. Given the era, I imagine that the drinking was accompanied by chain smoking.
That times were different is… inadequate verbiage. For all the unruly behavior, Clark was only suspended from school twice. On his second suspension, young Clark decided he’d not be returning to school. He chose to join the US Navy and convinced his mother to sign the permission forms. Of course, this is Jim Clark, and the initial days of his naval career didn’t exactly go well. Clark had never taken a multiple choice test. He thought that for many questions more than one of the answers were at least partially true and therefore selected them. The officers in charge of test administration thought that Clark was attempting to fool the computer that checked the answers, and he was immediately sent out to sea with other delinquent recruits where he was given poor treatment, and rough and disgusting chores. The experience of Naval life lit a fire in Clark, and he chose to advance his station in life. He began learning about electronics, taking some general educational courses, and offering loans to other sailors at up to forty percent interest.
His first step was to get his General Education Diploma, which he did. He then enrolled at Tulane. Clark did well at Tulane but transferred to the University of New Orleans from which he received his BS and MA in Physics. He then attended the University of Utah where he earned his Ph.D. in computer science in 1974. From 1974 through 1978, Clark was employed as an assistant professor at UC Santa Cruz, but he left to become an associate professor at Stanford in 1979.
Early in his time at Stanford, Clark worked on a project with Xerox PARC with support from ARPA to develop three dimensional graphics. This led to the creation of the Geometry Engine. In “The Geometry Engine: A VLSI Geometry System for Graphics,” Clark also makes specific reference to Marc Hannah and Lynn Conway as being valuable contributors to the effort. What was the Geometry Engine? It was a special purpose microprocessor that handled matrix math along with point mapping. It featured an instruction set suitable both to 2D and 3D graphics, could generate quadratic/cubic curves and conic sections, worked with both vector and raster based systems, and operated in either integer or floating point systems as needed. In fewer words, Jim Clark and his team at Stanford along with the folks of PARC invented the GPU.
Clark founded Silicon Graphics Inc on the 9th of November in 1981, and he left Stanford early in 1982 to pursue building the company full time with just $25000 in funding (around $85000 in 2024) from a friend and the contents of his own accounts. Accompanying Clark in this adventure were Kurt Akeley, Dave Brown, Tom Davis, Mark Grossman, Marc Hannah, Herb Kuta, Rocky Rhodes, and Abbey Silverstone. While SGI knew they would deal in computers outfitted with a powerful GPU, they did not know precisely what else those computers should feature. As a result, Clark asked potential customers what they’d like to see in a workstation. While at least one potential customer was interested in VMS, NASA’s new Advanced Supercomputing division was very interested in UNIX and they were willing to pay. The division’s director at the time spoke with Clark, and (verbally) committed to purchasing at least eighteen workstations in their first order.
As things began to come together around a product plan, Mayfield invested in the young company. As the development and production of workstations is rather expensive, Clark and SGI’s other founders were forced to sell more and more of the company’s ownership to keep operating. The first product to ship was the IRIS 1000, where IRIS meant Integrated Raster Imaging System, in November of 1983. This machine was intended for use as a terminal for a VAX-11 and featured a Motorola 68000 clocked at 8 MHz with 768K RAM, a Geometry Engine clocked at 6 MHz capable of over six million geometric floating point operations per second, and a 10 Mbps ethernet NIC. The cabinet of the IRIS 1000 was ten inches wide, twenty one inches tall, twenty seven inches deep, and when fully assembled weighed in at one hundred pounds with a ten slot backplane. This machine was followed by the IRIS 1200 which was the same machine but with a twenty slot backplane. These were followed by workstation models 1400 and 1500 in April of 1984 which upgraded the CPU to the Motorola 68010 clocked at 10 MHz with 1.5M of RAM. These machines were differentiated from one another in the size of HDD they featured with the 1500 having been larger. The 1400 featured a 72MB winchester disk, while the 1500 featured 474MB of SMD. Both of these ran a UNIX SVR4 variant with BSD enhancements called GL2, and they featured twenty slot backplanes. The main system boards in these four machines were licensed from Andy Bechtolsheim just before he founded Sun Microsystems. The 1000 and 1200 used the PM1 and the 1400 and 1500 used the PM2. These were not cheap systems with the IRIS 1000 having a price of $22500 (around $67200 in 2024) and the 1400 having a price of $35700 in 1984 (around $106600 in 2024). These twenty slot machines were eighteen inches wide, twenty nine inches tall, and twenty seven inches deep, and fully assembled weighed in at two hundred pounds. By the time the first of these machines sold to Carnegie-Mellon University’s Electronic Imaging Lab, the founders of SGI owned very little of their company.
From nearly the first day that SGI’s hardware was on the market, software developers began trying to exploit the machines’ graphics capabilities. A rather prominent example of this was Wavefront Technologies in Santa Barbara led by Bill Kovacs, Larry Barels, and Mark Sylvester. Their first product was called Preview and launched in 1984 on SGI’s hardware. Their customer list included Universal Studios, NBC, NASA, and Electronic Arts. Naturally, this also informs us that these companies were using SGI hardware.
Given the outline of his youth, it isn’t very surprising that Clark was a hands-off kind of manager. He would hire the brightest minds he could, set a general target, and then let people go after it however they saw fit. There are two narratives for what follows. The first and most common that I’ve read was that Mayfield didn’t much care for Clark’s management style and they brought Ed McCracken formerly of HP in as CEO. The second narrative states that Clark didn’t care for running the company and brought McCracken in on his own accord. Whatever the case, McCracken stated of Clark:
Jim's not a day-to-day person. He works in his own time frame. He takes complex things and makes it simple. It might take a month, a day, or a year. He gets in these moods for a while where he's almost unavailable. He's most effective when he's in that mood.
In August of 1985, the company introduced the IRIS 2000 series of workstations. These machines were all based upon the the PM2 system board featuring the Motorola 68010 clocked at 10 MHz with a floating point coprocessor (SKYFPM-M-03). Naturally, these all featured the graphics engine as well. The IRIS 2000 and 2200 were ten slot backplane, shipped without a disk, and were intended for use as terminals. The 2300 and 2400 were twenty slot backplane and shipped with winchester disks. The IRIS 2500 was rackmount and used SMD disks. The 2000 series used a Geometry Engine clocked at 8 MHz. A few months after the initial launch of these upgraded machines, SGI launched the turbo line. This included the 2300T, 2400T, and 2500T which featured the IP2 system board with a Motorola 68020 clocked at 16 MHz, an FP1 floating point unit, and 2MB to 16MB of RAM. The RAM of the turbo units used a newer, faster, local bus. As a result, the RAM between turbo and non-turbo systems could not be mixed. This was an important bit of information as SGI did offer turbo upgrades for non-turbo systems that would then require the purchase of expensive proprietary memory.
In January of 1986, SGI made their initial public offering raising $17.2 million (nearly $49 million in 2024) with trading having started at $3 per share and topping $30 on the day. The following month, the company introduced the IRIS 3000 line. These are very similar to the IRIS 2000 turbo machines but with Enhanced IRIS Graphics. These featured either ten or twelve Graphics Engines clocked at 10 MHz with either eight or thirty two bitplanes depending upon configuration. The 3000 line could be ordered with either winchester disk drives, ESDI drives, or SMD.
Also in 1986, Control Data Corporation and Silicon Graphics signed a deal under which CDC would resell IRIS machines under CDC’s own branding. As far as I know, no complete listing of which models sold under what naming survives today, but it is known that the IRIS 3130 was resold as the CDC Cyber 910. This would make it a machine with twelve GEs at 10 MHz and ESDI drives.
In March of 1987, Silicon Graphics announced a new machine that marked a major transition for the company. The Professional Iris was a RISC machine built around the R2000 from MIPS Computer Systems (another project started at Stanford and spun out as its own company) clocked at 8 MHz. The company’s press release read:
The first member of the Iris line is the 4D/60, a RISC superworkstation with a 32-bit 8 MHz CPU from MIPS Computer Systems. It offer performance three times that of the Silicon Graphics Iris 3100 series. The graphics performance has been enhanced with 38 custom and semicustom graphic chips. It performs 140,000 32 bit three dimensional floating point transformations per second and renders over 4,500 100-pixel polygons per second with smooth shading and hidden surface removal. It offers 24 colour bit-planes for more than 16 million colours; four user-accessible system planes for overlay or underlay, menu and windowing functions; a 24-bit Z-buffer enabling hidden surface removal with greater accuracy and realism; high-level primitives such as splines and surfaces for more accurate renderings; and a multi-mode graphics windowing environment.
Standard configuration includes 4Mb CPU, eight colour bit-planes for 256 colours); four system planes, a Weitek-based floating point accelerator board; a 170Mb ESDI disk and controller; a 19″ 1,280 by 1,024 60Hz non-interlaced colour monitor; keyboard and mouse; and a floor-standing chassis with 12 VME slots and a 1,000-watt power supply.
Software compatible with the previous generation, it runs Unix System V.3 with a base price of $74,000.
The Professional Iris line included the 4D/60 mentioned in the press release followed by the 4D/50, 4D/70, 4D/80, and 4D/85. All of these featured the R2000 CPU with a floating point coprocessor. The 50 and 60 had an R2000 clocked at 8 MHz, while the 70 was at 12.5 MHz, and the 80 and 85 were clocked at 16.7 MHz. For comparison to other architectures, the 4D/50 was capable of seven million instructions per second, the 70 was capable of ten million, and the 80 was capable of thirteen million. The 50 and 60 had memory configurations starting at 4MB and upgradeable to 12MB. The rest of the lineup started at 8MB and could be upgraded to a maximum of 144MB. The first of the 4D/60, 50, and 70 systems to ship utilized the Clover 1 graphics system. Later models shipped with Clover 2 branded as IRIS GT. IRIS GT brought hardware support for lighting, smooth shading, antialiasing, pan/zoom of images, arbitrarily shaped windows, and other rather modern capabilities. Importantly, the bus for this system was a proprietary 64 bit bus. The actual chips powering all of the graphics capabilities were still the Graphics Engines, but these were updated some and they were capable of twenty million floating point operations per second. The Professional Iris series brought an end to the disk anarchy of the previous lineup and all systems utilized SCSI hard disks, and QIC-120 tape drives were also available. These systems were resold by both Control Data Corporation and Prime Computers. The UNIX version mentioned in the press release was SGI’s 4D1 which would later be renamed IRIX.
On the 29th of March in 1988, Control Data Corporation announced that it would be acquiring twenty percent of Silicon Graphics for $68.9 million (nearly $181 million in 2024) and extending its licensing deal for reselling SGI’s machines with an agreement to purchase $150 million (around $393 million in 2024) in hardware over the next three years.
On the 16th of September in 1988, SGI announced that IBM would be purchasing graphics cards and licensing IRIS GL, the software library for SGI’s graphics, for use in the IBM RS/6000 POWERStation. McCracken commented:
We are pleased to establish a relationship with IBM and look forward to working with them. The agreement reinforces our long-time conviction that three-dimensional graphics will become a mainstream technology in the computer industry. As real-time 3D graphics is made more affordable, the rapid growth that the 3D workstation industry is experiencing will continue to escalate.
The card in question was the IrisVision, and while I refer to it as a card, it was really two cards. The primary card held the Graphics Engine and daughter cards held the framebuffer and z-buffer memories totaling 5MB for the framebuffer and 3.75MB for the z-buffer. The primary card connected to the computer via its MCA bus edge connector, and it provided a DE-15 connector for display attachment. Overall, the IrisVision MCA card’s hardware was extremely similar to the graphics system in the SGI Personal Iris series introduced in 1987. It featured SGI’s fifth generation geometry processing pipeline (referred to as GE5, or Graphics Engine five), either an eight or twenty four bit per pixel frame buffer, and twenty four bits per pixel z-buffer. Also, just as the workstations’ hardware did, the IrisVision implemented the entire IrisGL API in hardware. The primary difference in IrisVision was the presence of a VGA (DE-15) passthrough for 2D graphics. In the course of the IrisVision’s development, an IBM PS/2 running OS/2 was used for testing and development. This resulted not only in a minimal OS/2 driver, but also in an ISA version of the IrisVision being developed. Ultimately, the only major customer SGI had managed to obtain was IBM for the MCA card for the RS/6000 UNIX workstations. Their struggle may have been that the card was priced at $4995 (just over $13000 in 2024). The company ultimately spun off the entire project as a separate company, Pellucid, which didn’t fare well. The former SGI employees who started Pellucid still managed to change the world when they founded 3dfx which used similar technology as well as the passthrough for 2D graphics.
SGI held a rather firm grasp on high-end graphics workstations, but hadn’t yet made a push into the entry level market. This changed with the introduction of the Personal Iris lineup. The line started with the 4D/20 which made use of a R2000 CPU from MIPS clocked at 12.5 MHz achieving ten million instructions per second. The other three machines made use of the R3000. In the 4D/25 the R3000 was clocked at 20 MHz achieving sixteen million instructions per second. In the 4D/30, the clock speed was pushed to 30 MHz and the performance was bumped to twenty seven million instructions per second. The highest performance model was the 4D/35 at 36 MHz and thirty three million instructions per second. Maximum memory supported on these systems was 128MB. Personal Iris systems were sold by both SGI and Control Data as expected, but these systems were also offered rebadged by the somewhat newly reconstituted Groupe Bull. From what I can find, Bull’s sales of rebadged SGI machines weren’t great; they had better luck with NEC hardware. For the naming “Personal Iris” and the thought that SGI would be attacking the “low-end” of the workstation market… the pricing wasn’t all that reflective unless one were to compare to “high-end” SGI machines which could reach lofty prices of about $100000 (about $262000 in 2024). The Personal Iris line started at $20000 (roughly $52000 in 2024).
The other, much higher end and far more expensive, SGI lineup introduced at this time was the PowerSeries which were multi-processor systems (up to eight CPUs) and could be deskside or rackmount. These systems could also support higher clocks at up to 40 MHz which in combination with up to eight processors could mean performance over two hundred thirty million instructions per second. The power of these systems was put to use in the movies The Abyss, Terminator 2, and Jurassic Park among many more.
In March of 1991, Compaq acquired thirteen percent of SGI for $135 million (around $307 million in 2024) along with an agreement to invest another $50 million (about $114 million in 2024) in the development of a new workstation that would be priced at around $7500 (roughly $17100 in 2024).
The most famous and beloved SGI systems were introduced from 1991 to 1995. These models were the Indigo, Indigo 2, and the Indy. The corresponding high-end systems were the Crimson, and Challenge series. The first Indigo system released in 1991 featured a MIPS R3000 CPU clocked at 30 MHz. The Indigo (and Crimson) moved SGI’s systems to 64 bit MIPS CPUs starting with the R4000 at 100 MHz and the R4400 at 150 MHz in 1992. The 150 MHz part in an Indigo could achieve one hundred twenty million instructions per second. The Indigo 2 was first introduced in 1993 with the MIPS R4400 CPU and “Extreme” graphics. The Indy was lowest end SKU of the three, and it was introduced in July of 1993 with a 100 MHz R4000PC CPU, 24 bit graphics system, 16MB of RAM, the IRIX operating system, a fifteen inch monitor, and a price of $4995 (about $10700 in 2024).
On the 13th of March in 1992 announced that it was acquiring MIPS Computer Systems via a stock swap worth about $333 million (around $737 million in 2024). This followed MIPS having had financial problems, high employee turnover, and the exit of the company’s president, Charles Boesenberg, one month earlier. For SGI, the acquisition ensured their part supply. MIPS Computer Systems became MIPS Technologies. The combined company had revenues at around $1 billion (about $2.21 billion in 2024). However, the large acquisition did mean that SGI posted a loss on the year of about $118 million (or $261 million in 2024). This move also briefly brought SGI into the ACE alliance that aimed to build a workstation standard on the MIPS CPU and the UNIX operating system as well as the 80386/486 and NT. This group was built of Compaq, MIPS, Microsoft, DEC, SCO, Acer, CDC, Kubota, Olivetti, NKK, Prime Computer, Pyramid Technology, Siemens, Sony, Sumitomo, Tandem, Zenith, and Wang. SGI and Compaq left the alliance rather promptly. This could be due to their own arrangement not long before, but ACE fell apart completely not much later anyway. I suspect that no strong alliance of fierce competitors would last long in a market that was shrinking due to low-cost commodity hardware and software consistently improving year over year in the PC compatible market. Yet, the SGI Indigo 2, Indy, Challenge and a few more were mildly compliant with the ACE ARC (Advanced RISC Computing) standard.
On the 30th of June in 1992, Silicon Graphics released OpenGL. This was a cross-platform API for both 2D and 3D graphics allowing hardware acceleration of rendering via one or more GPUs descended directly from IRIS GL. Unlike its predecessor, OpenGL did not have windowing, and it didn’t offer a mouse or keyboard API. IRIS GL had been developed before X and other graphical environments were available, and therefore had needed those features, but OpenGL had no such requirements. Another major change in the transition to OpenGL regarded feature availability. IRIS GL presupposed the use of SGI’s hardware. OpenGL could not make such an assumption, and as a result it allowed features not supported by a GPU to be rendered in software by the CPU. One customer this would positively affect was Microsoft who’d licensed IRIS GL for inclusion in NT in 1991.
At the end of 1992, Jim Clark met with Nintendo CEO Hiroshi Yamauchi to discuss bringing 3D graphics to Nintendo’s next game console. In many ways, the Nintendo 64 was an SGI workstation in miniature with a MIPS R4300 CPU clocked at 93.75 MHz offering one hundred twenty five million instructions per second, 4MB of Rambus DRAM at 250 MHz (actually 4.5MB but 512K is visible only to the GPU) which could be doubled with a RAM expansion pack, and the Reality coprocessor clocked at 62.5 MHz which offered the SGI GraphicsEngine (though a more modest version). The system supported 16.8 million colors, a maximum resolution of 640x480, and audio sampled at up to 44.1 KHz. Unfortunately, the design of the system meant that the full capabilities would almost never be fully realized. For example, there was no dedicated sound chip, so high sample rates would tax the CPU, and while the R4300 is 64 bit, the Nintendo 64 had a 32 bit data bus. Yet, showing the nature of the hardware packed into the Nintendo 64 is the Nintendo 64DD. This offered 64MB read/write magnetic disks (similar to Zip), a real time clock, internet connectivity via a 28.8 kbps modem, keyboard, mouse, and audio/video capture effectively transforming the Nintendo 64 into a small workstation. The expansion, after significant delays and a one year two and a half month life on the market, was a commercial failure. The Nintendo 64 itself, however, was a huge success following its release in 1996.
Industrial Light and Magic had been using SGI hardware since 1987, and on the 8th of April in 1993, they announced a partnership with SGI to create the Joint Environment for Digital Imaging, or JEDI. This allowed the two companies to gain insight from each other’s work. SGI got access to much of ILM’s software expertise while ILM got access to the latest and greatest hardware at a discount.
In 1994, Jim Clark left SGI, sold his shares in the company, and went on to partner with Marc Andreessen and start Netscape.
In 1995, SGI spent about $500 million (or $1 billion in 2024) acquiring Alias Research, Kroyer Films, and Wavefront technologies. At roughly the same time, SGI worked with DreamWorks SKG to form DreamWorks Digital Studio where these newly acquired companies’ products could be put to good use.
On the 26th of February in 1996, Silicon Graphics acquired Cray Research for $740 million (or $1.47 billion in 2024). This gave SGI control of around forty percent of the high performance computing market at the time. While many industry analysts speculated about SGI’s motives, Cray was struggling to survive and they had multiple installations at NASA. While SGI had been successful in entertainment, that sector accounted only for something around ten percent of SGI’s annual revenues. The bulk of SGI’s customers were governmental, so much so that SGI created the wholly owned subsidiary Silicon Graphics Federal Inc to hold those contracts and provide service and support for governmental organizations. In this way, SGI was essentially making sure they couldn’t lose one of their largest and most valuable customers, NASA, as they’d be the provider of not only workstations but also the support and service of NASA’s supercomputers. The supercomputer relationship benefited SGI all the way to 2008 with Pleiades.
The new SGI workstations of 1996 were the O2 and O2+ series. These systems were very different from both their predecessors and successors in that they utilized a unified memory architecture via the Memory & Rendering ASIC (MRE). The MRE had direct paths to all parts of the O2 such as the CPU, memory, I/O, compression, display, and imaging. Due to this structure, graphics hardware wasn’t optional but rather integral to the system’s design. The O2 could come equipped with an R5000, RM5200SC, RM7000A, R10000, or R12000 CPU. Frequencies ranged from 180 MHz to 400 MHz, all options had on-board floating point support, and could support up to 1GB of unified memory via eight 128MB DIMMs of one hundred thirty nine pin SDRAM.
The high-end deskside and rackmount options made available at this time were the Origin 2000, Origin 200, and Onyx 2 series. These were multiple CPU systems with distributed, shared-memory architecture called S2MP. The Origin 200 was the entry level system, the Onyx 2 was a step up, and the Origin 2000 was the premium SGI branded system and was rackmount. This series also had Cray Origin at the super-premium level with up to one hundred twenty eight R10000 CPUs. The IRIX operating system shipped with these models supported SMP.
On the 14th of May in 1997, SGI announced the acquisition of ParaGraph International Inc. ParaGraph was a vendor of VRML and web graphics software, and after the acquisition the company and its assets were moved to Mountain View with the new name of Cosmo Software. McCracken commented:
One of the most important long-term growth opportunities for Silicon Graphics is to empower the designers, developers, and service providers of the Second Web. With the acquisition of the leading PC 3D Internet company and the formation of Cosmo Software, we are increasing our investment and reinforcing our leadership in the market for the software and services that will bring about this new interactive medium.
Bringing the technologies of Onyx 2 series to the midrange workstation was the Octane, released in January of 1997. This was the a desktop machine instead of deskside, but it supported dual CPUs. This line featured the crossbar switch that debuted in the high-end and server machines of the prior year. The concept was that instead of a traditional shared bus, each subsystem could communicate with any other without interference. The crossbar switch had seven ports: HEART ASIC (CPU and memory), graphics (Impact [first or second generation] or VPro), XIO B, XIO C, XIO D, built-in I/O, PCI bridge. The Octane did have a higher-end version, the Octane 2, which featured more powerful CPUs and GPUs, higher density memory support, and a beefier PSU. CPUs in the Octane ranged from the R10000 at 175 MHz to the R14000A at 600 MHz, and RAM ranged from 64MB to 2GB.
Silicon Graphics didn’t do too well in 1997 overall. For revenues of $3.6 billion (or $7 billion in 2024) the company posted a loss of $78.6 million (roughly $152 million in 2024). On the 29th of October in 1997, Ed McCracken resigned as did the executive vice president of sales and marketing, Gary Lauer. The company then laid off around nine percent of its employees (about seven hundred people). Richard Belluzzo (formerly at HP) took over as CEO and Robert H. Ewald who was already the executive vice president of computer systems (formerly president of Cray) took over Lauer’s job duties. Some sources claim that McCracken was forced out, but this isn’t accurate. At the annual shareholder meeting in Palo Alto, McCracken announced his resignation stating: “after a great deal of thought, the time is right for me and the company to make a change.” He then proceeded to find and to hire his replacement himself.
Around this time, Silicon Graphics filed a lawsuit against a startup called ArtX. ArtX was founded by Dr. Wei Yen and around nineteen other SGI employees who’d worked on the Nintendo 64. The company’s original goal was to develop a PC graphics chip that would rival 3dfx. Then, in May of 1998, the company gained a contract to develop a graphics processor for Nintendo’s next generation game console, the GameCube. At COMDEX in the autumn of 1999, the company unveiled the Aladdin 7 chipset which shipped as integrated GPUs on K6-2 and K6-3 motherboards made by Acer Labs. ArtX was bought by ATI in February of 2000. ArtX’s technology was incorporated into ATI’s GPUs from 2002 until roughly 2005. SGI’s lawsuit against ArtX was quietly dropped in 1998 without any settlement having been reached.
On the 1st of January in 1998, shortly after taking over as CEO, Belluzzo sold two of SGI’s PCB factories and restructured the company from twenty six groups to just five. SGI then setup MIPS Technologies as its own legal entity (though SGI maintained a majority ownership), terminated the Cosmo software business, and proceeded to make customers hesitant to continue investments into the MIPS architecture by announcing SGI’s intent to migrate to Itanium (and collaborating on projects Monterey and Trillian) while simultaneously launching an IA-32 series of machines running NT known as the Visual Workstation. Additionally, the company began outsourcing the manufacturing of their computers, and cut the operating budget by about $200 million (or $381 million in 2024). In Spring of 1998, the company announced a lawsuit against NVIDIA for patent infringement.
None of this helped to change the overall direction of the company. Revenues fell to $3.1 billion and the company posted a loss of $460 million for 1998. On the 20th of July in 1999, without adequate funding to continue the lawsuit against NVIDIA, SGI and NVIDIA agreed to license one another their respective patent portfolios. The company continued to lose money, and Belluzzo left on the 22nd of August in 1999 to lead Microsoft’s MSN division.
As Bob Bishop took the reigns of SGI, things looked dark. AMD announced their 64 bit architecture in October, PC graphics had made massive strides while remaining significantly less expensive than SGI’s offerings, NT was proving to be a solid and less expensive competitor to UNIX, Linux was eating away at traditional UNIX market segments, and Itanium still hadn’t launched. By this point, the company had no fall back as they’d mostly stopped investment into new MIPS CPUs.
On the 2nd of March in 2000, SGI sold Cray to Tera Computer for $22 million (or $40 million in 2024). Tera promptly renamed itself to Cray Inc as it took on an installed base of six hundred supercomputers and two hundred customers across thirty different countries.
SGI’s final MIPS workstations were the Fuel and Tezro lines. Fuel was introduced in 2002 with the R14000 clocked at 500 MHz, up to 4GB of DDR SDRAM, and SGI’s VPro graphics. Models were available with up to an R16000 CPU clocked at 900 MHz. The Tezro was launched in 2003 starting at $20500 (or $34574 in 2024). This model featured only the R16000 and could be configured at clock speeds from 600 MHz to 1 GHz with 512MB to 8GB of DDR SDRAM and SGI’s VPro graphics. Fuel workstations were single CPU, but Tezro was offered with one to four CPUs. While SGI’s IA-32, Itanium, and Xeon workstations and servers sold, they didn’t make much money. On the 10th of July in 2003, SGI vacated and leased their headquarters to Google.
As SGI’s fortunes continued to decline, the company sold Alias Systems (formerly Alias|Wavefront) for $58 million on the 16th of April in 2004 to Accel-KKR (roughly $95 million in 2024). Then, in November of 2005, SGI was delisted from the NYSE due its stock price sinking below the minimum required. In January of 2006, Dennis McKenna was hired as president and CEO, and named chairman of the board. Bishop remained on the board of directors and served as vice chairman. On the 8th of May, the company filed for bankruptcy protections. The campus leased to Google was sold to Google in June of 2006 for $319 million (or $491 million in 2024). It’s prior home in Mountain View had been sold to the Computer History Museum in 2002. The company emerged from bankruptcy and was relisted in October. The official end of SGI’s MIPS and IRIX came on the 29th of December in 2006 with the final orders being fulfilled in March of 2007. Bob Ewald replaced McKenna as CEO on the 9th of April in 2007. In December of 2008, SGI was again delisted. On the 1st of April in 2009, the company filed for bankruptcy, and was subsequently purchased by Rackable Systems for around $42 million on the 11th of May in 2009 (roughly $65 million in 2024). Rackable renamed itself Silicon Graphics International following the acquisition, and it was later bought by Hewlett Packard Enterprise.
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SGI, former American manufacturer of high-performance computer workstations, supercomputers, and advanced graphics software with headquarters in Mountain View, California. Silicon Graphics, Inc., was founded in 1982 by Stanford professor James Clark.
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SGI, former American manufacturer of high-performance computer workstations, supercomputers, and advanced graphics software with headquarters in Mountain View, California.
Founding of SGI
Silicon Graphics, Inc., was founded in 1982 by James Clark, an electrical engineering professor at Stanford University who had identified a need for desktop computers to be able to display graphic images quickly and in three-dimensional detail—something previously possible only on multimillion-dollar supercomputers. The primary users of these computers were expected to be scientists and engineers developing elaborate 3D software for corporate and military research and development. Although both these markets did indeed embrace SGI’s products, the biggest opportunity turned out to be a surprise.
Hollywood animation
The first prototype of SGI’s computer workstation was given free of charge in 1984 to George Lucas, the creator of the Star Wars series of movies. From this small step, SGI emerged as Hollywood’s favourite computer supplier. In traditional animation, realistic effects were achieved by the painstaking alteration of drawings or models for each frame of film—a very labour-intensive process. Today most animation and special effects are created inside “virtual worlds,” where computers automate much of the work. SGI’s computers have been instrumental in this transition, producing special effects for some of Hollywood’s biggest blockbusters, as well as for music videos and television advertisements. In 1995 the first feature-length animated movie to be entirely computer-generated, the Disney Company’s Toy Story, was created with SGI’s computers.
High-end computer graphics consolidation
In 1986 SGI became a public company. The following year it introduced its first UNIX workstation using reduced-instruction-set computing (RISC) microprocessors, the most-advanced computer chips available. In the 1990s it began a series of acquisitions to strengthen its position as the leading provider of high-performance computer graphics systems. In 1992 it purchased MIPS Computer Systems, which designed SGI’s RISC microprocessors. In 1995 it merged with the two leading software companies in its market, Alias Research and Wavefront Technologies. The following year it paid $767 million to acquire Cray Research, Inc., a Minneapolis-based supercomputer maker. As the owner of Cray, SGI found itself operating in a rapidly declining market as defense contractors and petrochemical companies, two of Cray’s major customers, slashed their research and development budgets. The media and entertainment industries, which claimed approximately half of SGI’s business, showed little interest in expensive supercomputers.
Company reorganization
Meanwhile, SGI experienced difficulties in retaining its top executives. Clark left in 1994 to found Mosaic (now Netscape) Communications Corp., an Internet software company (which itself was purchased in 1999 by America Online), and SGI president Thomas Jermoluk resigned to help found Home Network, another Internet-related company. Distracted by such turnover at the top, SGI missed the initial business boom of selling servers in the fast-growing Internet market. Unable to sell servers running their proprietary IRIX operating system or compete with more general-purpose UNIX computer companies such as Digital Equipment Corp., the Hewlett-Packard Company, and Sun Microsystems, Inc., SGI began to lose money in 1997.
In response, SGI’s management radically altered the company’s business strategy to appeal to large organizations running more traditional software, especially large databases and Internet applications, by signing deals with Microsoft Corporation and Intel Corporation to market workstations running Windows NT, a competing operating system to UNIX, on Intel microprocessors. Moreover, in 1998 SGI reorganized its chip division, MIPS Technologies, Inc.—primarily known for manufacturing the Nintendo Co.’s N64 processor—as an independent business.
SGI filed for bankruptcy in 2009 and was acquired by the computer hardware manufacturer Rackable Systems, which then changed its name to Silicon Graphics International. Hewlett Packard Enterprise acquired Silicon Graphics International in 2016.
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This short article is in need of work. You can help Sega Retro by adding to it.
Silicon Graphics, Inc., generally known as SGI (though historically known as Silicon Graphics Computer Systems or SGCS) was an American manufacturer of high performance computing solutions, usually for rendering computer graphics.
SGI's products and solutions were widely used by the video game industry during the 1990s, most notably as the component of the Nintendo 64. For the first half of the 1990s, they were also widely used by Sega, at one point working on the graphics hardware for the Sega Saturn, before Sega of Japan stepped in and cancelled the contract.
Primarily SGI workstations were used across the video game industry to generate 3D renders, usually for promotional material, in-game video or in some cases, to create sprites with a pseudo 3D look.
Sega games utilising SGI technology
Mega Drive
Sonic 3D: Flickies' Island (1996)
Mega-CD
Ecco: The Tides of Time (1994) (cutscenes)
32X
Spider-Man: Web of Fire (1996)
Saturn
Clockwork Knight (1994)
Panzer Dragoon (1994)
Bug Too! (1996)
Sonic 3D: Flickies' Island (1997)
Dreamcast
Shenmue (1998)
Third-party games utilising SGI technology
Mega Drive
Batman Forever (1995)[1]
Mickey Mania: The Timeless Adventures of Mickey Mouse (1994)
Shaq Fu (1994)[2]
Spot Goes to Hollywood (1995)[3]
Mega-CD
Mickey Mania: The Timeless Adventures of Mickey Mouse (1994)
Loadstar: The Legend of Tully Bodine (1994)
32X
FIFA Soccer 96 (1995)
Spot Goes to Hollywood (unreleased)[3]
Saturn
Shellshock (1996)[4]
Blam! Machinehead (1996)
Hyper 3D Pinball (1996)
Spot Goes to Hollywood (1997)[3]
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What Happened to the Silicon Graphics Company?
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The fascinating tale of Silicon Graphics Incorporated (SGI), a pioneer in the realm of computer-aided design, visualization, and high-performance computing.
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This is the fascinating tale of Silicon Graphics Incorporated (SGI), a pioneer in computer-aided design, visualization, and high-performance computing.
In the early 1980s, SGI revolutionized the industry with its innovative graphics workstations, which enabled designers and engineers to create complex 3D models with unprecedented speed and accuracy. The company’s flagship product, the IRIS workstation, was a game-changer, powering the Graphics Library software that provided a standardized API for developers.
SGI’s influence extended beyond CAD users, as its technology found applications in film production, aerospace, and automotive industries. Who can forget the iconic visual effects in movies like “Young Sherlock,” “Terminator 2: Judgment Day,” and “Jurassic Park”? These cinematic marvels were made possible by SGI’s cutting-edge technology.
However, despite its early successes, SGI struggled to adapt to changing market trends and increasing competition from lower-cost PC-based solutions. The company’s failure to innovate and diversify its product line led to declining sales and financial struggles.
The acquisition of Alias Research by SGI is often cited as an example of the importance of strategic mergers and acquisitions in the technology industry. The deal enabled SGI to expand its product offerings, increase its market share, and stay competitive in a rapidly evolving industry landscape.
Unfortunately, SGI’s experiences also serve as a cautionary tale for companies undergoing mergers and acquisitions, highlighting the need for careful planning, integration, and adaptation to changing market conditions to ensure long-term success.
In 2006, SGI filed for Chapter 11 bankruptcy protection and underwent significant restructuring efforts. The company emerged from bankruptcy in 2007 but eventually ceased to exist as an independent entity, with its remnants acquired by Hewlett-Packard in 2016.
Despite its demise, SGI’s legacy lives on in modern computing through its influence on graphics processing units, computer-aided engineering, and high-performance computing. The OpenGL API, developed by SGI in collaboration with other industry partners, remains a widely-used standard for 3D graphics rendering.
As we reflect on the rise and fall of Silicon Graphics Incorporated, we’re reminded that innovation and adaptability are essential for survival in the rapidly evolving technology landscape.
Back to the 1980s
In the annals of computer history, few companies have left as indelible a mark as Silicon Graphics Inc., or SGI for short. Founded in 1981 by a group of visionaries, SGI was instrumental in revolutionizing the field of computer graphics, bringing to life breathtaking visuals that captivated audiences worldwide. From the earliest days of CGI in films like “Tron” and “The Last Starfighter”, to the iconic workstations that powered the creative industries, SGI’s innovative spirit and technological prowess earned it a revered status among professionals and enthusiasts alike.
However, behind the scenes, a complex tale of innovation, hubris, and ultimately, decline, unfolded. At its peak in the mid-1990s, SGI was riding high on the success of its high-performance workstations, which had become the de facto standard for industries such as film, architecture, and engineering. But beneath the surface, warning signs were beginning to emerge. The company’s attempts to expand into new markets, including consumer-level graphics cards and even a foray into video game consoles, would ultimately prove disastrous. Meanwhile, the rise of commodity hardware and software alternatives began to erode SGI’s market share, leaving the once-mighty company struggling to stay relevant.
One of the key players in SGI’s founding was James Clark, a renowned computer scientist who had previously worked at the National Center for Supercomputing Applications. Alongside Ed McCracken, another co-founder, Clark brought a wealth of expertise in high-performance computing and graphics processing. The duo’s vision for SGI was to create machines that could tackle the most demanding tasks in fields like scientific visualization, computer-aided design, and digital video production.
As the company grew, other luminaries joined the ranks, including Cray Research founder Seymour Cray, whose eponymous supercomputer company would eventually merge with SGI in 1996. The confluence of these brilliant minds helped shape the course of SGI’s history, but ultimately, even their collective genius could not stem the tide of change that was sweeping through the industry.
SGI founders’ early innovations in computer graphics
Silicon Graphics Incorporated (SGI) founders Jim Clark and Ed McCracken pioneered innovations in computer graphics in the late 1970s and early 1980s. One of their earliest achievements was the development of the Geometry Engine, a high-performance graphics processing unit that enabled fast rendering of 3D graphics. This innovation led to the creation of the IRIS 1000, SGI’s first commercial graphics workstation, which was released in 1983.
The IRIS 1000 was a significant improvement over existing graphics systems, offering unparalleled performance and capabilities for its time. It was powered by the Geometry Engine, which provided a 10-fold increase in graphics performance compared to other systems available at that time. The IRIS 1000’s advanced features included support for 3D transformations, hidden surface removal, and Gouraud shading.
In the mid-1980s, SGI continued to push the boundaries of computer graphics with the introduction of the IRIS 2400, which further increased performance and added new features such as texture mapping. This innovation enabled the creation of more realistic and detailed 3D models, revolutionizing fields such as computer-aided design (CAD), scientific visualization, and video game development.
SGI’s innovations in computer graphics also had a significant impact on the film industry. In 1985, SGI systems were used to create the groundbreaking special effects for the movie “Young Sherlock Holmes,” which was one of the first films to extensively use computer-generated imagery (CGI). This marked the beginning of a new era in visual effects, with SGI’s technology playing a key role in shaping the industry.
Throughout the 1980s and 1990s, SGI continued to innovate and expand its product line, releasing new workstations such as the IRIS Indigo and the O2. These systems further increased performance, added new features, and enabled the creation of even more complex and realistic 3D models.
In the late 1990s and early 2000s, SGI faced significant challenges, including increased competition from other graphics companies and a decline in demand for its high-end workstations. Despite these challenges, SGI’s legacy as a pioneer in computer graphics continues to be felt today, with its innovations influencing generations of graphics professionals and shaping the course of the industry.
Silicon Graphics Incorporated’s founding and early success
In the early 1980s, SGI introduced its first product, the IRIS 1000, which was a 3D graphics terminal that could be connected to a host computer. This product was followed by the IRIS 1400 and IRIS 2000, which were more powerful and feature-rich versions of the original. These early products helped establish SGI as a major player in the emerging market for 3D graphics workstations.
SGI’s big break came in 1985 when it introduced the IRIS 3000 series, which was the first family of workstations to integrate 3D graphics, CPU, and memory into a single unit. This innovation led to widespread adoption of SGI’s products across various industries, including film and television production, where they were used to create visual effects for movies such as “Terminator 2: Judgment Day” and “Jurassic Park”.
Throughout the late 1980s and early 1990s, SGI continued to innovate and expand its product line. In 1988, the company introduced the IRIS Indigo, a lower-cost workstation that brought 3D graphics capabilities to a wider range of users. This was followed by the introduction of the Indy workstation in 1993, which was designed for entry-level users.
SGI’s success during this period was fueled by its focus on innovation and its ability to deliver high-performance products that met the needs of demanding industries such as computer-aided design (CAD), video production, and scientific visualization. The company’s commitment to research and development helped it stay ahead of competitors and maintain its market leadership.
In 1995, SGI went public with an initial public offering (IPO) that raised $340 million, further solidifying the company’s position as a leading provider of high-performance computing solutions.
Company’s pioneering role in the CGI film industry
Silicon Graphics Inc played a pivotal role in the development of Computer-Generated Imagery in the film industry. In the late 1980s, SGI’s high-performance workstations and servers enabled filmmakers to create complex CGI sequences that were previously unimaginable. The company’s technology was instrumental in the production of several groundbreaking films, including James Cameron’s Terminator 2: Judgment Day and Steven Spielberg’s Jurassic Park.
SGI’s hardware and software solutions allowed visual effects artists to work more efficiently and effectively, enabling them to create more sophisticated and realistic CGI elements. The company’s systems were capable of handling massive amounts of data and performing complex calculations at high speeds, making them ideal for the demanding task of generating CGI imagery.
In the early 1990s, SGI formed strategic partnerships with several leading visual effects companies, including Industrial Light & Magic and Digital Domain. These collaborations enabled SGI to tailor its technology to meet the specific needs of the film industry, further solidifying its position as a leader in the field.
Despite its pioneering role in the CGI film industry, SGI faced significant financial challenges in the early 2000s. The company’s high-end workstations and servers were increasingly being replaced by more affordable and capable commodity hardware, leading to a decline in sales and revenue. In 2006, SGI filed for bankruptcy and underwent a series of mergers and acquisitions, ultimately becoming part of Hewlett-Packard in 2016.
The legacy of SGI’s contributions to the CGI film industry continues to be felt today, with many of its innovations and technologies remaining essential components of modern visual effects pipelines. The company’s pioneering work in this field has enabled filmmakers to push the boundaries of what is possible on screen, creating immersive and engaging cinematic experiences for audiences worldwide.
SGI’s impact on the film industry extends beyond its technical contributions, as it also played a key role in shaping the aesthetic and creative direction of CGI-heavy films. The company’s technology empowered filmmakers to experiment with new visual styles and storytelling approaches, leading to the development of innovative genres such as sci-fi and fantasy.
SGI’s workstation market dominance in the 1990s
Silicon Graphics Inc dominated the workstation market with its high-performance computers designed for demanding applications such as computer-aided design, video editing, and scientific visualization. SGI’s workstations were renowned for their exceptional graphics capabilities, processing power, and reliability.
The company’s success can be attributed to its innovative hardware and software technologies, including its proprietary Graphics Language and the InfiniteReality graphics subsystem. These technologies enabled SGI’s workstations to deliver unparalleled performance in graphics-intensive applications, making them the go-to choice for professionals in fields such as engineering, video production, and scientific research.
SGI’s market dominance was further solidified by its strategic partnerships with leading software vendors, including Autodesk, Adobe, and IBM. These partnerships ensured that SGI’s workstations were optimized to run popular CAD, video editing, and other applications, thereby expanding their appeal to a broader user base.
However, despite its market leadership, SGI faced significant challenges in the late 1990s, including increased competition from low-cost PC vendors and the rise of commodity graphics cards. The company’s high-end focus and premium pricing strategy made it vulnerable to disruption by more affordable alternatives.
In an effort to revitalize its business, SGI underwent a series of restructuring efforts, including layoffs, divestitures, and a shift towards lower-cost, more standardized products. However, these measures ultimately failed to stem the decline, and in 2006, SGI filed for bankruptcy protection.
The remnants of SGI were subsequently acquired by Rackable Systems, which continued to develop and market SGI-branded products until 2009, when the brand was phased out in favor of the parent company’s own branding.
Cray Research acquisition and its impact on SGI
Cray Research, a leading supercomputer manufacturer, was acquired by Silicon Graphics Incorporated in 1996 for approximately $740 million. This acquisition marked a significant shift in the high-performance computing landscape.
The acquisition of Cray Research provided Silicon Graphics with access to Cray’s expertise in designing and building high-end supercomputers, which complemented Silicon Graphics’ strengths in visualization and graphics processing. The combined entity aimed to create a comprehensive platform for scientific simulations, data analysis, and visualization.
Before the acquisition, Cray Research had established itself as a pioneer in the supercomputer industry, with its first system, the Cray-1, released in 1976. Throughout the 1980s and early 1990s, Cray continued to innovate, introducing new architectures and systems that pushed the boundaries of computational performance.
The acquisition also led to significant changes within Silicon Graphics’ organizational structure. The company established a new subsidiary, SGI/Cray Research, which focused on developing high-performance computing solutions. This move enabled Silicon Graphics to expand its product portfolio and tap into the growing demand for supercomputing capabilities in fields such as weather forecasting, genomics, and materials science.
However, the acquisition ultimately failed to yield the expected synergies, and Silicon Graphics struggled to integrate Cray’s technology and personnel into its operations. The company faced significant financial challenges, including declining sales and increased competition from other high-performance computing vendors.
In 2000, Silicon Graphics sold the Cray Research subsidiary to TPG Capital, a private equity firm, for approximately $100 million, marking the end of Silicon Graphics’ foray into the supercomputer market.
Shift to low-cost, high-performance computing solutions
The shift towards low-cost high-performance computing solutions has been driven by the increasing demand for efficient and affordable processing power in various industries, including scientific research, data analytics, and artificial intelligence. This trend is evident in the rise of cloud-based services, such as Amazon Web Services and Microsoft Azure, which offer scalable and cost-effective computing resources.
The decline of Silicon Graphics Inc., a pioneer in high-performance computing, serves as a cautionary tale in this context. Founded in 1981, SGI was renowned for its innovative graphics workstations and servers, which powered various fields, including computer-aided design, video production, and scientific visualization. However, the company’s failure to adapt to changing market trends and its reliance on proprietary hardware led to its downfall.
In the early 2000s, SGI’s business model was disrupted by the emergence of commodity-based computing solutions, such as Linux clusters and grid computing. These alternatives offered comparable performance at a fraction of the cost, rendering SGI’s high-end systems less competitive. The company’s attempts to transition to more affordable products were unsuccessful, ultimately leading to its acquisition by Hewlett-Packard in 2006.
The shift towards low-cost high-performance computing solutions has been facilitated by advancements in processor architecture, memory technologies, and software frameworks. For instance, the development of graphics processing units has enabled the acceleration of compute-intensive tasks, such as machine learning and data analytics, at a lower cost than traditional central processing units.
The proliferation of open-source software frameworks has further democratized access to high-performance computing. These frameworks enable developers to harness the processing power of heterogeneous architectures, comprising CPUs, GPUs, and field-programmable gate arrays, without being tied to proprietary hardware or software ecosystems.
The convergence of these trends has given rise to innovative startups and initiatives, which aim to develop affordable and efficient computing solutions for various industries. These developments are poised to transform the landscape of high-performance computing, making it more accessible and cost-effective for a broader range of users.
Increased competition from commodity hardware vendors
Silicon Graphics Inc, a pioneer in high-performance computing and visualization, faced significant challenges in the late 1990s and early 2000s due to increased competition from commodity hardware vendors. The company’s proprietary hardware and software solutions, which were once considered premium products, became less competitive as PC-based systems improved in performance and affordability.
One major factor contributing to SGI’s decline was the rise of Linux clusters, which offered a cost-effective alternative to SGI’s high-end systems. As Linux distributions matured and cluster management tools improved, researchers and scientists began to adopt these solutions for their computational needs, reducing their reliance on SGI’s proprietary platforms. This shift was driven in part by the availability of low-cost, high-performance CPUs from vendors like Intel and AMD.
Another key factor was the increasing power and affordability of commodity graphics processing units (GPUs). As GPUs became more capable of handling general-purpose computing tasks, they began to encroach on SGI’s traditional territory. The introduction of NVIDIA’s CUDA platform in 2007 further accelerated this trend, enabling developers to harness the parallel processing capabilities of GPUs for a wide range of applications.
SGI’s struggles were also exacerbated by its own internal issues, including a complex and fragmented product line, high research and development expenses, and a failure to adapt quickly enough to changing market conditions. The company’s attempts to restructure and refocus its business ultimately proved unsuccessful, leading to its eventual acquisition by Hewlett-Packard in 2016.
The rise of cloud computing and the increasing adoption of hybrid and heterogeneous architectures have further eroded the demand for traditional high-performance computing systems like those offered by SGI. Today, researchers and scientists can access scalable, on-demand computing resources through cloud providers like Amazon Web Services and Microsoft Azure, reducing their need for expensive, proprietary hardware solutions.
The legacy of Silicon Graphics Inc serves as a cautionary tale for companies operating in the rapidly evolving landscape of high-performance computing and visualization. As commodity hardware vendors continue to drive innovation and reduce costs, traditional players must adapt quickly to remain competitive.
Failed attempts at diversification into consumer markets
Silicon Graphics Inc (SGI) was a pioneer in the field of computer-aided design (CAD) and visualization, known for its high-performance workstations and servers. In the 1990s, SGI attempted to diversify into consumer markets with its Indy and Indigo2 computers, which were designed to be more affordable and user-friendly than its traditional workstation products.
However, these attempts ultimately failed due to a combination of factors, including poor marketing, inadequate distribution channels, and intense competition from established players in the consumer market. The Indy computer, for example, was launched in 1993 with a price tag of around $1,000, which was still relatively expensive for a consumer-oriented product.
Another factor that contributed to SGI’s failure in the consumer market was its inability to adapt its business model to the lower margins and higher volumes characteristic of consumer electronics. As a company accustomed to selling high-end workstations to professionals, SGI struggled to adjust to the more competitive pricing and distribution dynamics of the consumer market.
SGI’s foray into consumer markets also coincided with significant changes in the computer industry as a whole. The rise of PC clones and the increasing power of Intel-based processors eroded the performance advantage that SGI’s proprietary MIPS-based processors had once enjoyed. This shift in the technological landscape further undermined SGI’s attempts to establish itself as a major player in the consumer market.
In addition, SGI’s focus on diversification into consumer markets may have distracted the company from its core business of serving professional users. As a result, SGI lost ground to competitors such as Sun Microsystems and Hewlett-Packard in the workstation market, which had traditionally been its bread and butter.
Ultimately, SGI’s failed attempts at diversification into consumer markets contributed to its decline as an independent company. In 2006, SGI filed for bankruptcy and was subsequently acquired by Rackable Systems, a server manufacturer.
Mergers and acquisitions, including Alias Research
The merger with Alias Research was strategic, as it allowed SGI to tap into the growing demand for 3D graphics and animation in industries such as film, television, and video games. The combined entity leveraged Alias’ expertise in 3D modeling and SGI’s strengths in high-performance computing and visualization. This synergy enabled the development of innovative products, including Maya, a 3D computer animation, modeling, simulation, and rendering software that became an industry standard.
However, despite its initial success, SGI struggled to maintain its market position due to increased competition from lower-cost PC-based solutions and changing customer preferences. In 2006, SGI filed for Chapter 11 bankruptcy protection and underwent a significant restructuring process. The company emerged from bankruptcy in 2007 but continued to face financial challenges.
In 2008, Rackable Systems, a provider of data center infrastructure, acquired SGI’s assets for approximately $42.5 million. The merged entity was rebranded as Silicon Graphics International Corp, with a focus on providing high-performance computing and storage solutions for data centers and cloud environments.
The acquisition of Alias Research by SGI is often cited as an example of the importance of strategic mergers and acquisitions in the technology industry. The deal enabled SGI to expand its product offerings, increase its market share, and stay competitive in a rapidly evolving industry landscape.
SGI’s experiences serve as a cautionary tale for companies undergoing mergers and acquisitions, highlighting the need for careful planning, integration, and adaptation to changing market conditions to ensure long-term success.
Financial struggles and decline of SGI’s fortunes
Silicon Graphics Inc was once a leading manufacturer of high-performance computing systems, but it faced significant financial struggles in the early 2000s. In 2001, SGI reported a net loss of $115 million on revenue of $647 million, citing declining sales and increased competition from lower-cost PC-based workstations. This marked a significant decline from its peak in the mid-1990s when it was valued at over $7 billion.
One major factor contributing to SGI’s financial struggles was its failure to adapt to changing market trends. The company had traditionally focused on producing high-end, proprietary systems, but the industry was shifting towards more affordable and standardized PC-based solutions. As a result, SGI’s sales declined as customers turned to lower-cost alternatives.
Another significant factor was SGI’s high research and development expenses. In 2001, the company spent $143 million on R&D, which accounted for approximately 22% of its revenue. While this investment was intended to drive innovation and stay ahead of competitors, it put a significant strain on SGI’s finances.
SGI also faced challenges related to its business model. The company had traditionally relied on selling high-margin systems to a small number of large customers, but this approach became less viable as the market shifted towards more standardized and lower-cost solutions.
In an effort to address its financial struggles, SGI underwent significant restructuring efforts, including layoffs and divestitures. In 2002, the company sold its Alias Research subsidiary, which developed 3D graphics software, to Accel-KKR for $57 million. This move was intended to help SGI focus on its core business and reduce costs.
Despite these efforts, SGI continued to struggle financially. In 2006, the company filed for Chapter 11 bankruptcy protection and underwent a debt-for-equity swap, which reduced its debt by approximately $250 million. However, this restructuring effort ultimately failed to restore the company’s financial health, and SGI was acquired by Rackable Systems in 2008.
Bankruptcy filing and subsequent asset sales
Silicon Graphics Inc, filed for Chapter 11 bankruptcy protection on May 8, 2006. At its peak in the mid-1990s, SGI’s market capitalization reached $7 billion, but the company struggled to adapt to changing market conditions and increased competition.
The bankruptcy filing was a result of SGI’s inability to restructure its debt and reduce operating costs. The company had accumulated significant debt due to declining sales and failed investments in new technologies. In 2005, SGI reported a net loss of $147 million on revenue of $343 million, further exacerbating its financial woes.
Following the bankruptcy filing, SGI’s assets were sold off to various companies. Rackable Systems Inc, a server manufacturer, acquired SGI’s product lines and intellectual property for approximately $42 million. The deal included SGI’s high-performance computing products, such as servers and storage systems, as well as its visualization software.
In addition to the asset sale, SGI also sold off its Alias research division to private equity firm Accel-KKR for around $57 million. The Alias division was a leading developer of 3D graphics and animation software, with clients including major film studios and video game developers.
SGI’s demise was attributed to a combination of factors, including increased competition from low-cost PC manufacturers, failure to adapt to changing market conditions, and poor strategic investments. The company’s struggles served as a cautionary tale for the technology industry, highlighting the importance of innovation and adaptability in rapidly evolving markets.
Legacy of Silicon Graphics Incorporated in modern computing
The legacy of SGI can be seen in modern computing through its influence on graphics processing units, computer-aided engineering, and high-performance computing. The OpenGL API, developed by SGI in collaboration with other industry partners, remains a widely-used standard for 3D graphics rendering. Furthermore, the company’s pioneering work in scalable multiprocessing has had a lasting impact on the development of modern server architectures.
The demise of SGI serves as a cautionary tale for technology companies, highlighting the importance of adaptability and innovation in the face of rapidly changing market conditions.
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SGI asset sale completes unraveling of Silicon Valley icon
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The deal earlier this month to sell the assets of Silicon Graphics to Rackable Systems for just $25 million leaves SGI customers — including the Department of Defense — in limbo.
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The assets of Silicon Graphics Inc. are being sold to Rackable Systems Inc. for $25 million, which is pocket change by Silicon Valley standards. The deal, announced April 1, is a difficult turn for a company that was founded the same year as Sun Microsystems Inc., in 1982.
That year, Apple Computer Inc. (as Apple was known at the time) was only six years old, and Oracle Corp. just five. It was a time when the Valley was really taking off as a high-tech hotbed, and SGI had as much potential — and early success — as vendors like Sun did. The company’s revenue peaked at $3.66 billion in its 1997 fiscal year, and the maker of high-performance computing (HPC) systems acquired some 700 patents as well as many large customers.
And even as SGI unraveled this year, continuing to lose money, laying off workers and facing a delisting of its stock by Nasdaq, some of those big users continued to buy its products. For instance, two months before the Rackable buyout announcement, SGI said it had received a $40 million, multiyear contract to provide HPC systems and storage equipment to the U.S. Department of Defense.
But now, such customers are in limbo.
One longtime user is the University of Minnesota Supercomputing Institute, which has been using SGI systems since the late 1980s. Gabe Turner, a system administrator in the HPC group at the Minneapolis-based institute, said he doesn’t know how the sale of SGI to Rackable will affect him.
“My biggest concern is the support, and specifically what will happen to the support contracts,” Turner said. “We’ve got support contracts that are just a little over a year old, and what is the state of SGI going to be two years from now? I just have no idea.”
SGI never really regained its footing after a bankruptcy filing in 2006. The company tried to adapt by shifting its focus to x86-based systems running Linux and Windows, in hopes of expanding its market reach. But its losses continued; SGI finished the fiscal year that ended last June with a $153 million net loss on revenue of $354 million, and it lost $82.9 million in the first half of the current fiscal year.
In a new bankruptcy filing earlier this month in U.S. Bankruptcy Court in New York, SGI said its business model was based on direct sales. “The shift to standardization in the computing industry, however, has favored companies with high-volume sales through resellers and channel partners,” it added.
As the company’s financial performance continued to deteriorate, it cut costs. As of last June, SGI had 1,632 employees. But in the bankruptcy filing, the vendor said that over the last 12 months, it had reduced its workforce by one-third.
SGI officials didn’t respond to requests for comment, and Fremont, Calif.-based Rackable said that it won’t comment about the situation at SGI until the buyout deal is completed. Rackable said previously that it expected to complete the purchase of SGI’s assets by the end of May, subject to the bankruptcy court’s approval of the deal.
Turner said SGI makes quality products that are well supported and are a good fit for technical and scientific applications. “SGI is actually really great on that,” he said. “They have scientists on staff that know how all these scientific applications work.”
As for the DOD, Christopher Willard, an analyst at Tabor Research in San Diego, said that even if the Pentagon had concerns about SGI’s financial condition, the contracting process may have obligated it to pick the struggling vendor based on best-price rules. He added that the DOD likely has protections built into the contract that don’t require it to pay any money until products are delivered.
Willard said SGI has some valuable assets, especially within its services business. And there’s always the possibility that another vendor could step in and try to outbid Rackable for those assets during the bankruptcy process. “There is nothing exclusive about the deal” between SGI and Rackable, he said.
Addison Snell, another Tabor analyst and a former SGI employee, recalled when the HPC vendor was known as “The Gee-Whiz Company” for its innovation. He drew a parallel between Sun and SGI in a blog post, writing: “Silicon Graphics’ technology leadership in workstations and servers was widely acknowledged, but our executive leadership suffered from a collective inferiority complex when compared to Sun, Silicon Graphics’ twin sister.”
Ironically, Sun may soon find itself with a new owner as well. Sun, which like SGI has been hit by revenue declines, losses and layoffs, reportedly discussed a possible acquisition with IBM before the talks broke down this month. And Bloomberg News reported today, in a story citing anonymous sources, that Sun officials would be willing to revive those talks if IBM sweetens its offer.
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Template:Infobox Company
Silicon Graphics, Inc., commonly called SGI, began as a maker of graphics display terminals in 1982. It was founded by Jim Clark based on his work with geometry pipelines, specialized software or hardware that accelerates the display of three-dimensional images. SGI was originally incorporated as a California corporation in November 1981, and reincorporated as a Delaware corporation in January 1990.
Contents
1.1 First generation of products
1.2 RISC era
1.3 Entertainment industry
1.4 Name and logo changes
1.5 Alias, Wavefront and Cray acquisitions
1.6 Late 1990s and recent developments
4.1 Current SGI products
4.2 Past SGI products
History
The products produced by SGI, as well as the strategies and market positions pursued by the company, have varied since SGI was founded. However, the graphical computing workstation industry has remained a focus and core business of SGI throughout its history.
First generation of products
The first machines were designed to be connected to a DEC VAX computer as a terminal, handling only the actual display. After that, SGI began using Motorola 68000 microprocessors running the UNIX operating system to power the machine. Their height was reached with the SGI 3130, a complete UNIX workstation using the 68030 microprocessor with an attached Weitek math coprocessor.
The 3X30 was powerful enough to support a complete 3D animation and rendering package on its own without mainframe support. With large capacity hard drives (300MB X 2), streaming tape and 10baseT ethernet it could be the centerpiece of an animation operation.
RISC era
With the introduction of the 4D series, SGI switched over to using the MIPS RISC microprocessors. These machines were correspondingly more powerful, able to address more memory and came with powerful on board math capability. These machines made much of the SGI name as 3D graphics became more popular on television and film.
SGI expanded these machines up to the massive Onyx supercomputers, the size of refrigerators and capable of supporting up to 64 processors while managing up to three streams of high resolution, fully realized 3D graphics.
In 1992, SGI released the first 64-bit MIPS microprocessor, the R4000, which was one of the first 64-bit microprocessors along with Digital's Alpha chip.
Entertainment industry
An SGI computer with the FSN (http://www.sgi.com/fun/freeware/3d_navigator.html) three-dimensional file system navigator appeared in the 1993 movie Jurassic Park. One trademark of this scene is Lex's line, "This is a Unix system. I know this."
Once inexpensive PCs began to catch up with SGI's bread-and-butter—the higher-priced specialized graphical workstations—in terms of graphics performance, SGI concentrated on its high performance server capabilities, offering servers for digital video and the Web. Many SGI graphics engineers have left to work at newer companies, contributing to the PC 3D graphics revolution.
Name and logo changes
In response to these market changes, Silicon Graphics Inc. changed its corporate identity to "SGI" in an attempt to clarify their current market position as a more than simply a graphics company, although the legal name of the company remained unchanged. At the same time SGI announced a new logo—simply the letters "sgi" in a stylized lowercase font—which drew criticism for wasting the professional goodwill associated with the previous box-outline logo.
Alias, Wavefront and Cray acquisitions
In 1995, SGI purchased Alias Research and Wavefront Technologies and merged the companies into Alias|Wavefront, now known as Alias Systems Corporation. Later, in June 2004, SGI sold Alias to the private equity investment firm Accel-KKR for $57.1 million.
In February 1996, SGI purchased Cray Research, and began to use marketing names such as "CrayLink" for (SGI developed) technology integrated into the SGI server line. SGI later sold part of the Cray product line to Tera Computer Company on March 31, 2000. SGI also distributed its remaining interest in MIPS Technologies, Inc. through a spin-off effective June 20, 2000.
Late 1990s and recent developments
SGI has also been a big booster for the Linux operating system, supporting several projects (such as Samba) and providing some previously proprietary code (such as XFS) to the free software world.
The company has been drifting in recent years, since its high cost structure makes it tough to compete with cheaper alternatives. An attempt to introduce workstations running Windows NT (see also SGI Visual Workstation) was interpreted by some SGI loyalists as a breach of SGI's commitment to its own MIPS-based line.
SGI user base and core market
Those who use SGI computers tend to be fiercely loyal, but the companies that spend tens of thousands of dollars on them are rapidly losing patience. The porting of Maya to GNU/Linux and the Apple Macintosh is looking like a watershed in this development; there will soon be little reason to buy a $40,000 SGI machine when a $3,500 Macintosh or a generic x86 machine would do.
Conventional wisdom holds that SGI's core market has traditionally been Hollywood special effects studios. In fact, SGI's largest markets in terms of dollars of revenue generated have always been government and defense applications, energy, and scientific and technical computing.
SGI created the proprietary 3D graphics API Iris GL, from which the cross-platform OpenGL was developed by a consortium of companies.
Server market
In recent years, SGI has continued to enhance its line of servers (some go so far as to call them supercomputers) based around the SN architecture. SN, for Scalable Node, is a technology developed by SGI in the mid-1990s. SN is an example of NUMA: non-uniform memory access. In an SN system, processors, memory, and a memory and bus controller are coupled together into an entity known as a node. A node is usually a single circuit board. Nodes are connected via a high-speed interconnect originally called CrayLink, since renamed NUMAlink. The result is a system that has no internal bus whatsoever. Rather, access between processors, memory, and I/O devices is facilitated through a switched fabric of links and routers. SN systems scale along several axes at once: as CPU count increases, so does memory capacity, I/O capacity, and system bisection bandwidth.
The first SN system, known as SN-0, was released in 1996 as the Origin family. Based on the MIPS R10000 processor, the Origin 200 scaled from one to four processors, and the Origin 2000 scaled from two to 128 processors. Later enhancements to the Origin 2000 line enabled systems of as large as 512 processors.
The second generation system, originally called SN-1 but later redubbed SN-MIPS, was released in July, 2000, under the product name Origin 3000. The Origin 3000 scaled from 4 to 512 processors, with 1,024-processor configurations delivered by special order to some customers. A smaller, less scalable implementation of the technology followed later under the name Origin 300.
In November, 2002, SGI announced a repackaging of their SN system, under the name Origin 3900. The Origin 3900 quadrupled the processor area density of the SN-MIPS system, from 32 processors per rack up to 128 processors per rack whilst moving to a FAT tree interconnect topology.
In January, 2003, SGI announced a variant of the SN-MIPS platform to be sold under the name Altix 3000. Known internally as SN-IA, the Altix 3000 used Intel Itanium 2 processors in place of the MIPS R1x000 processors in the SN-0 and SN-MIPS families. The Altix 3000 ran the Linux operating system. At the time it was released (and remains so to date), the Altix 3000 was the world's most scalable Linux-based computer, supporting up to 64 processors in a single system node. Multiple nodes could be connected together using the same NUMAlink technology to form what SGI predictably termed "superclusters."
In February of 2004, SGI announced general support for 128 processor nodes to be followed by 256 and 512 processor versions available later that year.
In April, 2004, SGI announced the selling of Alias for approx $57 million. Press release (http://www.sgi.com/newsroom/press_releases/2004/april/alias.html).
In October, 2004, SGI with NASA confirmed that NASA's new Intel® Itanium® 2 processor-based Columbia supercomputer is the most powerful computer in the world. The new supercomputer achieved sustained performance of 42.7 trillion calculations per second (teraflops). Built from SGI® Altix® systems and driven by 10,240 Intel Itanium 2 processors, Columbia's 16-system result easily tops Japan's famed Earth Simulator, rated at 35.86 teraflops.
SGI product line
Current SGI products
Prism family
Fuel workstation
Tezro workstation
Origin 350 mid-range server
Origin 3000 MIPS-based high-end server
Altix 3000 Itanium-based high-end server
Altix 350 Itanium-based mid-range server
Onyx4 visualization system
Past SGI products
SGI 230 Workstation (IA32 Linux/WindowsNT)
SGI 320 Visual Workstation (IA32 Windows NT)
SGI 340 Workstation
SGI 540 Visual Workstation (IA32 Windows NT)
IRIS series (Motorola 680x0 based workstations and terminals)
4D series workstations
Indigo workstation
Indy workstation
Indigo2 workstation
O2 Workstation
Octane workstation
Octane2 workstation
Crimson (deskside server)
Challenge S (desktop server)
Challenge M (desktop server)
Challenge DM (deskside server)
Challenge L (deskside server)
Challenge XL (bigger version of Challenge L)
Onyx (deskside and larger workstations)
Onyx2 (deskside and larger workstations)
Onyx 3000 (Origin 3000 with graphics hardware)
Origin 200 mid-range server
Origin 2000 high-end server
See also
IRIX
Columbia
SCO and SGI
External links
The SGI Buyer's Guide (Excellent!) (http://hardware.majix.org/computers/sgi/buyers-guide.shtml)
SGI Technical Advice and Information by Ian Mapleson (http://www.futuretech.vuurwerk.nl/sgi.html)
Pictures of SGI systems at www.schrotthal.de (http://www.schrotthal.de/sgi/)de:Silicon Graphics
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1981–2009 American computing company
This article is about Silicon Graphics, Inc. For the company that acquired its assets, see Silicon Graphics International.
Silicon Graphics, Inc. (stylized as SiliconGraphics before 1999, later rebranded SGI, historically known as Silicon Graphics Computer Systems or SGCS) was an American high-performance computing manufacturer, producing computer hardware and software. Founded in Mountain View, California, in November 1981 by James Clark, its initial market was 3D graphics computer workstations, but its products, strategies and market positions developed significantly over time.
Early systems were based on the Geometry Engine that Clark and Marc Hannah had developed at Stanford University, and were derived from Clark's broader background in computer graphics. The Geometry Engine was the first very-large-scale integration (VLSI) implementation of a geometry pipeline, specialized hardware that accelerated the "inner-loop" geometric computations needed to display three-dimensional images. For much of its history, the company focused on 3D imaging and was a major supplier of both hardware and software in this market.
Silicon Graphics reincorporated as a Delaware corporation in January 1990. Through the mid to late-1990s, the rapidly improving performance of commodity Wintel machines began to erode SGI's stronghold in the 3D market. The porting of Maya to other platforms was a major event in this process. SGI made several attempts to address this, including a disastrous move from their existing MIPS platforms to the Intel Itanium, as well as introducing their own Linux-based Intel IA-32 based workstations and servers that failed in the market. In the mid-2000s the company repositioned itself as a supercomputer vendor, a move that also failed.
On April 1, 2009, SGI filed for Chapter 11 bankruptcy protection and announced that it would sell substantially all of its assets to Rackable Systems, a deal finalized on May 11, 2009, with Rackable assuming the name Silicon Graphics International. The remnants of Silicon Graphics, Inc. became Graphics Properties Holdings, Inc.
History
[edit]
Early years
[edit]
James H. Clark left his position as an electrical engineering associate professor at Stanford University to found SGI in 1982 along with a group of seven graduate students and research staff from Stanford University: Kurt Akeley, David J. Brown, Tom Davis, Rocky Rhodes, Marc Hannah, Herb Kuta, and Mark Grossman;[2] along with Abbey Silverstone[3] and a few others.
Growth
[edit]
Ed McCracken was CEO of Silicon Graphics from 1984 to 1997.[4] During those years, SGI grew from annual revenues of $5.4 million to $3.7 billion.[4]
Decline
[edit]
The addition of 3D graphic capabilities to PCs, and the ability of clusters of Linux- and BSD-based PCs to take on many of the tasks of larger SGI servers, ate into SGI's core markets. The porting of Maya to Linux, Mac OS and Microsoft Windows further eroded the low end of SGI's product line.
In response to challenges faced in the marketplace and a falling share price Ed McCracken was fired and SGI brought in Richard Belluzzo to replace him. Under Belluzzo's leadership a number of initiatives were taken which are considered to have accelerated the corporate decline.[5]
One such initiative was trying to sell workstations running Windows NT called Visual Workstations in addition to workstations running IRIX, the company's version of UNIX. This put the company in even more direct competition with the likes of Dell, making it more difficult to justify a price premium. The product line was unsuccessful and abandoned a few years later.
SGI's premature announcement of its migration from MIPS to Itanium and its abortive ventures into IA-32 architecture systems (the Visual Workstation line, the ex-Intergraph Zx10 range and the SGI 1000-series Linux servers) damaged SGI's credibility in the market.
In 1999, in an attempt to clarify their current market position as more than a graphics company, Silicon Graphics Inc. changed its corporate identity to "SGI", although its legal name was unchanged.
At the same time, SGI announced a new logo consisting of only the letters "sgi" in a proprietary font called "SGI", created by branding and design consulting firm Landor Associates, in collaboration with designer Joe Stitzlein. SGI continued to use the "Silicon Graphics" name for its workstation product line, and later re-adopted the cube logo for some workstation models.
In November 2005, SGI announced that it had been delisted from the New York Stock Exchange because its common stock had fallen below the minimum share price for listing on the exchange. SGI's market capitalization dwindled from a peak of over seven billion dollars in 1995 to just $120 million at the time of delisting. In February 2006, SGI noted that it could run out of cash by the end of the year.[6]
Re-emergence
[edit]
In mid-2005, SGI hired Alix Partners to advise it on returning to profitability and received a new line of credit. SGI announced it was postponing its scheduled annual December stockholders meeting until March 2006. It proposed a reverse stock split to deal with the de-listing from the New York Stock Exchange.
In January 2006, SGI hired Dennis McKenna as its new CEO and chairman of the board of directors. Mr. McKenna succeeded Robert Bishop, who remained vice chairman of the board of directors.
On May 8, 2006, SGI announced that it had filed for Chapter 11 bankruptcy protection for itself and U.S. subsidiaries as part of a plan to reduce debt by $250 million.[7][8] Two days later, the U.S. Bankruptcy Court approved its first day motions and its use of a $70 million financing facility provided by a group of its bondholders. Foreign subsidiaries were unaffected.
On September 6, 2006, SGI announced the end of development for the MIPS/IRIX line and the IRIX operating system.[9] Production would end on December 29 and the last orders would be fulfilled by March 2007. Support for these products would end after December 2013.
SGI emerged from bankruptcy protection on October 17, 2006.[10] Its stock symbol at that point, SGID, was canceled, and new stock was issued on the NASDAQ exchange under the symbol SGIC.[11] This new stock was distributed to the company's creditors, and the SGID common stockholders were left with worthless shares.[12] At the end of that year, the company moved its headquarters from Mountain View to Sunnyvale.[13] Its earlier North Shoreline headquarters is now occupied by the Computer History Museum; the newer Amphitheatre Parkway headquarters was sold to Google (which had already subleased and moved into the facility in 2003). Both of these locations were award-winning designs by Studios Architecture.[14][15]
In April 2008, SGI re-entered the visualization market with the SGI Virtu range of visualization servers and workstations, which were re-badged systems from BOXX Technologies based on Intel Xeon or AMD Opteron processors and Nvidia Quadro graphics chipsets, running Red Hat Enterprise Linux, SUSE Linux Enterprise Server or Windows Compute Cluster Server.[16]
Final bankruptcy and acquisition by Rackable Systems
[edit]
In December 2008, SGI received a delisting notification from NASDAQ, as its market value had been below the minimum $35 million requirement for 10 consecutive trading days, and also did not meet NASDAQ's alternative requirements of a minimum stockholders' equity of $2.5 million or annual net income from continuing operations of $500,000 or more.[17]
On April 1, 2009, SGI filed for Chapter 11 again, and announced that it would sell substantially all of its assets to Rackable Systems for $25 million.[18] The sale, ultimately for $42.5 million, was finalized on May 11, 2009; at the same time, Rackable announced their adoption of "Silicon Graphics International" as their global name and brand.[19][20] The Bankruptcy Court scheduled continuing proceedings and hearings for June 3 and 24, 2009, and July 22, 2009.[21][22][needs update]
After the Rackable acquisition, Vizworld magazine published a series of six articles that chronicle the downfall of SGI.
Hewlett Packard Enterprise acquired Silicon Graphics International in November 2016, which allowed HPE to place the SGI Pleiades, a TOP500 supercomputer at NASA Ames Research Center, in its portfolio.
Graphics Properties Holdings, Inc. era
[edit]
During Silicon Graphics Inc.'s second bankruptcy phase, it was renamed to Graphics Properties Holdings, Inc.(GPHI) in June 2009.[23][24]
In 2010, GPHI announced it had won a significant favorable ruling in its litigation with ATI Technologies and AMD in June 2010,[25][26] following the patent lawsuit originally filed during the Silicon Graphics, Inc. era.[27] Following the 2008 appeal by ATI over the validity of U.S. patent 6,650,327 ('327) and Silicon Graphics Inc's voluntary dismissal of the U.S. patent 6,885,376 ('376) patent from the lawsuit,[28] the Federal Circuit upheld the jury verdict on the validity of GPHI's U.S. Patent No. 6,650,327, and furthermore found that AMD had lost its right to challenge patent validity in future proceedings.[29] On January 31, 2011, the District Court entered an order that permits AMD to pursue its invalidity affirmative defense at trial and does not permit SGI to accuse AMD's Radeon R700 series of graphics products of infringement in this case.[30] On April 18, 2011, GPHI and AMD had entered into a confidential Settlement and License Agreement that resolved this litigation matter for an immaterial amount and that provides immunity under all GPHI patents for alleged infringement by AMD products, including components, software and designs. On April 26, 2011, the Court entered an order granting the parties' agreed motion for dismissal and final judgment.[31]
In November 2011, GPHI filed another patent infringement lawsuit against Apple Inc. in Delaware involving more patents than their original patent infringement case against Apple last November, for alleged violation of U.S. patents 6,650,327 ('327), U.S. patent 6,816,145 ('145) and U.S. patent 5,717,881 ('881).[32]
In 2012, GPHI filed lawsuit against Apple, Sony, HTC Corp, LG Electronics Inc. and Samsung Electronics Co., Research in Motion Ltd. for allegedly violating patent relating to a computer graphics process that turns text and images into pixels to be displayed on screens. Affected devices include Apple iPhone, HTC EVO4G, LG Thrill, Research in Motion Torch, Samsung Galaxy S and Galaxy S II, and Sony Xperia Play smartphones.[33][34][35]
U.S. patent 6,650,327 - 1998 Display system having floating point rasterization and floating point ..
U.S. patent 6,885,376 - 2002 System, method, and computer program product for near-real time load ..
U.S. patent 6,816,145 - 1998 Large area wide aspect ratio flat panel monitor having high resolution for ..
U.S. patent 5,717,881 - 1995 Data processing system for processing one and two parcel instructions
Technology
[edit]
Motorola 680x0-based systems
[edit]
SGI's first generation products, starting with the IRIS (Integrated Raster Imaging System) 1000 series of high-performance graphics terminals, were based on the Motorola 68000 family of microprocessors. The later IRIS 2000 and 3000 models developed into full UNIX workstations.
IRIS 1000 series
[edit]
The first entries in the 1000 series (models 1000 and 1200, introduced in 1984) were graphics terminals, peripherals to be connected to a general-purpose computer such as a Digital Equipment Corporation VAX, to provide graphical raster display abilities. They used 8 MHz Motorola 68000 CPUs with 768 kB of RAM and had no disk drives. They booted over the network (via an Excelan EXOS/101 Ethernet card) from their controlling computer. They used the "PM1" CPU board, which was a variant of the board that was used in Stanford University's SUN workstation and later in the Sun-1 workstation from Sun Microsystems. The graphics system was composed of the GF1 frame buffer, the UC3 "Update Controller", DC3 "Display Controller", and the BP2 bitplane. The 1000-series machines were designed around the Multibus standard.
Later 1000-series machines, the 1400 and 1500, ran at 10 MHz and had 1.5 MB of RAM. The 1400 had a 72 MB ST-506 disk drive, while the 1500 had a 474 MB SMD-based disk drive with a Xylogics 450 disk controller. They may have used the PM2 CPU and PM2M1 RAM board from the 2000 series. The usual monitor for the 1000 series ran at 30 Hz interlaced. Six beta-test units of the 1400 workstation were produced, and the first production unit (SGI's first commercial computer) was shipped to Carnegie-Mellon University's Electronic Imaging Laboratory in 1984.
IRIS 2000 and 3000 series
[edit]
SGI rapidly developed its machines into workstations with its second product line — the IRIS 2000 series, first released in August 1985.[36] SGI began using the UNIX System V operating system. There were five models in two product ranges, the 2000/2200/2300/2400/2500 range which used 68010 CPUs (the PM2 CPU module), and the later "Turbo" systems, the 2300T, 2400T and 2500T, which had 68020s (the IP2 CPU module). All used the Excelan EXOS/201 Ethernet card, the same graphics hardware (GF2 Frame Buffer, UC4 Update Controller, DC4 Display Controller, BP3 Bitplane). Their main differences were the CPU, RAM, and Weitek Floating Point Accelerator boards, disk controllers and disk drives (both ST-506 and SMD were available). These could be upgraded, for example from a 2400 to a 2400T. The 2500 and 2500T had a larger chassis, a standard 6' 19" EIA rack with space at the bottom for two SMD disk drives weighing approximately 68 kg each.[37] The non-Turbo models used the Multibus for the CPU to communicate with the floating point accelerator, while the Turbos added a ribbon cable dedicated for this. 60 Hz monitors were used for the 2000 series.
The height of the machines using Motorola CPUs was reached with the IRIS 3000 series (models 3010/3020/3030 and 3110/3115/3120/3130, the 30s both being full-size rack machines). They used the same graphics subsystem and Ethernet as the 2000s, but could also use up to 12 "geometry engines", the first widespread use of hardware graphics accelerators. The standard monitor was a 19" 60 Hz non-interlaced unit with a tilt/swivel base; 19" 30 Hz interlaced and a 15" 60 Hz non-interlaced (with tilt/swivel base) were also available.
The IRIS 3130 and its smaller siblings were impressive for the time, being complete UNIX workstations. The 3130 was powerful enough to support a complete 3D animation and rendering package without mainframe support. With large capacity hard drives by standards of the day (two 300 MB drives), streaming tape and Ethernet, it could be the centerpiece of an animation operation.
The line was formally discontinued in November 1989, with about 3500 systems shipped of all 2000 and 3000 models combined.[38]
RISC era
[edit]
With the introduction of the IRIS 4D series, SGI switched to MIPS microprocessors. These machines were more powerful and came with powerful on-board floating-point capability. As 3D graphics became more popular in television and film during this time, these systems were responsible for establishing much of SGI's reputation.
SGI produced a broad range of MIPS-based workstations and servers during the 1990s, running SGI's version of UNIX System V, now called IRIX. These included the massive Onyx visualization systems, the size of refrigerators and capable of supporting up to 64 processors while managing up to three streams of high resolution, fully realized 3D graphics.
In October 1991, MIPS announced the first commercially available 64-bit microprocessor, the R4000. SGI used the R4000 in its Crimson workstation. IRIX 6.2 was the first fully 64-bit IRIX release, including 64-bit pointers.
To secure the supply of future generations of MIPS microprocessors (the 64-bit R4000), SGI acquired the company in 1992[39] for $333 million[40][41] and renamed it as MIPS Technologies Inc., a wholly owned subsidiary of SGI.[42]
In 1993, Silicon Graphics (SGI) signed a deal with Nintendo to develop the Reality Coprocessor (RCP) GPU used in the Nintendo 64 (N64) video game console. The deal was signed in early 1993, and it was later made public in August of that year.[43] The console itself was later released in 1996. The RCP was developed by SGI's Nintendo Operations department, led by engineer Dr. Wei Yen. In 1997, twenty SGI employees, led by Yen, left SGI and founded ArtX (later acquired by ATI Technologies in 2000).[44]
In 1998, SGI relinquished some ownership of MIPS Technologies, Inc in a Re-IPO, and fully divested itself in 2000.[45]
In the late 1990s, when much of the industry expected the Itanium to replace both CISC and RISC architectures in non-embedded computers, SGI announced their intent to phase out MIPS in their systems. Development of new MIPS microprocessors stopped, and the existing R12000 design was extended multiple times until 2003 to provide existing customers more time to migrate to Itanium.
In August 2006, SGI announced the end of production for MIPS/IRIX systems,[46] and by the end of the year MIPS/IRIX products were no longer generally available from SGI.
IRIS GL and OpenGL
[edit]
Until the second generation Onyx Reality Engine machines, SGI offered access to its high performance 3D graphics subsystems through a proprietary API known as IRIS Graphics Library (IRIS GL). As more features were added over the years, IRIS GL became harder to maintain and more cumbersome to use. In 1992, SGI decided to clean up and reform IRIS GL and made the bold move of allowing the resulting OpenGL API to be cheaply licensed by SGI's competitors, and set up an industry-wide consortium to maintain the OpenGL standard (the OpenGL Architecture Review Board).
This meant that for the first time, fast, efficient, cross-platform graphics programs could be written. For over 20 years – until the introduction of the Vulkan API – OpenGL remained the only real-time 3D graphics standard to be portable across a variety of operating systems.
ACE Consortium
[edit]
Main article: Advanced Computing Environment
SGI was part of the Advanced Computing Environment initiative, formed in the early 1990s with 20 other companies, including Compaq, Digital Equipment Corporation, MIPS Computer Systems, Groupe Bull, Siemens, NEC, NeTpower, Microsoft and Santa Cruz Operation. Its intent was to introduce workstations based on the MIPS architecture and able to run Windows NT and SCO UNIX. The group produced the Advanced RISC Computing (ARC) specification, but began to unravel little more than a year after its formation.
Entertainment industry
[edit]
For eight consecutive years (1995–2002), all films nominated for an Academy Award for Distinguished Achievement in Visual Effects were created on Silicon Graphics computer systems.[47] The technology was also used in commercials for a host of companies.
An SGI Crimson system with the fsn[48] three-dimensional file system navigator appeared in the 1993 movie Jurassic Park.[49]
In the movie Twister, protagonists can be seen using an SGI laptop computer; however, the unit shown was not an actual working computer, but rather a fake laptop shell built around an SGI Corona LCD flat screen display.[50]
The 1995 film Congo also features an SGI laptop computer being used by Dr. Ross (Laura Linney) to communicate via satellite to TraviCom HQ.[51]
The purple, lowercased "sgi" logo can be seen at the beginning of the opening credits of the HBO series Silicon Valley, before being taken down and replaced by the Google logo as the intro graphics progress. Google leased the former SGI buildings in 2003 for their headquarters in Mountain View, CA until they purchased the buildings outright in 2006.
Once inexpensive PCs began to have graphics performance close to the more expensive specialized graphical workstations which were SGI's core business, SGI shifted its focus to high performance servers for digital video and the Web. Many SGI graphics engineers left to work at other computer graphics companies such as ATI and Nvidia, contributing to the PC 3D graphics revolution.
Free software
[edit]
SGI was a promoter of free software,[citation needed] supporting several projects such as Linux and Samba, and opening some of its own previously proprietary code such as the XFS filesystem and the Open64 compiler.
SGI was also important in its contribution to the C++ Standard Template Library (STL) with many useful extensions in the MIT-like licensed SGI STL implementation. The extension keeps being carried by the direct descendant STLport and GNU's libstdc++.[52]
Acquisition of Alias, Wavefront, Cray and Intergraph
[edit]
In 1995, SGI purchased Alias Research, Kroyer Films, and Wavefront Technologies in a deal totaling approximately $500 million and merged the companies into Alias|Wavefront. In June 2004 SGI sold the business, later renamed to Alias/Wavefront, to the private equity investment firm Accel-KKR for $57.5 million.[53] In October 2005, Autodesk announced that it signed a definitive agreement to acquire Alias for $182 million in cash.
In February 1996, SGI purchased the well-known supercomputer manufacturer Cray Research for $740 million,[54] and began to use marketing names such as "CrayLink" for (SGI-developed) technology integrated into the SGI server line. Three months later, it sold the Cray Business Systems Division, responsible for the CS6400 SPARC/Solaris server, to Sun Microsystems for an undisclosed amount (acknowledged later by a Sun executive to be "significantly less than $100 million").[55][56] Many of the Cray T3E engineers designed and developed the SGI Altix and NUMAlink technology. SGI sold the Cray brand and product lines to Tera Computer Company on March 31, 2000, for $35 million plus one million shares.[57] SGI also distributed its remaining interest in MIPS Technologies through a spin-off effective June 20, 2000.
In September 2000, SGI acquired the Zx10 series of Windows workstations and servers from Intergraph Computer Systems (for a rumored $100 million), and rebadged them as SGI systems. The product line was discontinued in June 2001.
SGI Visual Workstations
[edit]
Another attempt by SGI in the late 1990s to introduce its own family of Intel-based workstations running Windows NT or Red Hat Linux (see also SGI Visual Workstation) proved to be a financial disaster, and shook customer confidence in SGI's commitment to its own MIPS-based line.
Switch to Itanium
[edit]
In 1998, SGI announced that future generations of its machines would be based not on their own MIPS processors, but the upcoming "super-chip" from Intel, code-named "Merced" and later called Itanium. Funding for its own high-end processors was reduced, and it was planned that the R10000 would be the last MIPS mainstream processor. MIPS Technologies would focus entirely on the embedded market, where it was having some success, and SGI would no longer have to fund development of a CPU that, since the failure of ARC, found use only in their own machines. This plan quickly went awry. As early as 1999 it was clear the Itanium was going to be delivered very late and would have nowhere near the performance originally expected. As the production delays increased, MIPS' existing R10000-based machines grew increasingly uncompetitive. Eventually it was forced to introduce faster MIPS processors, the R12000, R14000 and R16000, which were used in a series of models from 1999 through 2006.[58]
SGI's first Itanium-based system was the short-lived SGI 750 workstation, launched in 2001. SGI's MIPS-based systems were not to be superseded until the launch of the Itanium 2-based Altix servers and Prism workstations some time later. Unlike the MIPS systems, which ran IRIX, the Itanium systems used SuSE Linux Enterprise Server with SGI enhancements as their operating system. SGI used Transitive Corporation's QuickTransit software to allow their old MIPS/IRIX applications to run (in emulation) on the new Itanium/Linux platform.
In the server market the Itanium 2-based Altix eventually replaced the MIPS-based Origin product line. In the workstation market, the switch to Itanium was not completed before SGI exited the market.
The Altix was the most powerful computer in the world in 2006, assuming that a "computer" is defined as a collection of hardware running under a single instance of an operating system. The Altix had 512 Itanium processors running under a single instance of Linux. A cluster of 20 machines was then the eighth-fastest supercomputer. All faster supercomputers were clusters, but none have as many FLOPS per machine. However, more recent supercomputers are very large clusters of machines that are individually less capable. SGI acknowledged this and in 2007 moved away from the "massive NUMA" model to clusters.
Switch to Xeon
[edit]
Although SGI continued to market Itanium-based machines, its more recent machines were based on the Intel Xeon processor. The first Altix XE systems were relatively low-end machines, but by December 2006 the XE systems were more capable than the Itanium machines by some measures (e.g., power consumption in FLOPS/W, density in FLOPS/m3, cost/FLOPS). The XE1200 and XE1300 servers used a cluster architecture. This was a departure from the pure NUMA architectures of the earlier Itanium and MIPS servers.
In June 2007, SGI announced the Altix ICE 8200, a blade-based Xeon system with up to 512 Xeon cores per rack.[59] An Altix ICE 8200 installed at New Mexico Computing Applications Center (with 14336 processors) ranked at number 3 on the TOP500 list of November 2007.
User base and core market
[edit]
Conventional wisdom holds that SGI's core market has traditionally been Hollywood visual effects studios. In fact, SGI's largest revenue has always been generated by government and defense applications, energy, and scientific and technical computing.[60] In one case Silicon Graphics' largest single sale ever was to the United States Postal Service. SGI's servers powered an artificial intelligence program to mechanically read, tag and sort the mail (hand-written and block) at a number of USPS's key mail centers. The rise of cheap yet powerful commodity workstations running Linux, Windows and Mac OS X, and the availability of diverse professional software for them, effectively pushed SGI out of the visual effects industry in all but the most niche markets.
High-end server market
[edit]
SGI continued to enhance its line of servers (including some supercomputers) based on the SN architecture. SN, for Scalable Node, is a technology developed by SGI in the mid-1990s that uses cache-coherent non-uniform memory access (cc-NUMA). In an SN system, processors, memory, and a bus- and memory-controller are coupled together into an entity called a node, usually on a single circuit board. Nodes are connected by a high-speed interconnect called NUMAlink (originally marketed as CrayLink). There is no internal bus, and instead access between processors, memory, and I/O devices is done through a switched fabric of links and routers.
Thanks to the cache coherence of the distributed shared memory, SN systems scale along several axes at once: as CPU count increases, so does memory capacity, I/O capacity, and system bisection bandwidth. This allows the combined memory of all the nodes to be accessed under a single OS image using standard shared-memory synchronization methods. This makes an SN system far easier to program and able to achieve higher sustained-to-peak performance than non-cache-coherent systems like conventional clusters or massively parallel computers which require applications code to be written (or re-written) to do explicit message-passing communication between their nodes.
The first SN system, known as SN-0, was released in 1996 under the product name Origin 2000. Based on the MIPS R10000 processor, it scaled from 2 to 128 processors and a smaller version, the Origin 200 (SN-00), scaled from 1 to 4. Later enhancements enabled systems of as large as 512 processors.
The second generation system, originally called SN-1 but later SN-MIPS, was released in July 2000, as the Origin 3000. It scaled from 4 to 512 processors, and 1,024-processor configurations were delivered by special order to some customers. A smaller, less scalable implementation followed, called Origin 300.
In November 2002, SGI announced a repackaging of its SN system, under the name Origin 3900. It quadrupled the processor area density of the SN-MIPS system, from 32 up to 128 processors per rack while moving to a "fat tree" interconnect topology.
In January 2003, SGI announced a variant of the SN platform called the Altix 3000 (internally called SN-IA). It used Intel Itanium 2 processors and ran the Linux operating system kernel. At the time it was released, it was the world's most scalable Linux-based computer, supporting up to 64 processors in a single system node.[61] Nodes could be connected using the same NUMAlink technology to form what SGI predictably termed "superclusters".
In February 2004, SGI announced general support for 128 processor nodes to be followed by 256 and 512 processor versions that year.
In April 2004, SGI announced the sale of its Alias software business for approximately $57 million.[62]
In October 2004, SGI built the supercomputer Columbia, which broke the world record for computer speed, for the NASA Ames Research Center. It was a cluster of 20 Altix supercomputers each with 512 Intel Itanium 2 processors running Linux, and achieved sustained speed of 42.7 trillion floating-point operations per second (teraflops), easily topping Japan's famed Earth Simulator's record of 35.86 teraflops. (A week later, IBM's upgraded Blue Gene/L clocked in at 70.7 teraflops.)
In July 2006, SGI announced an SGI Altix 4700 system with 1,024 processors and 4 TB of memory running a single Linux system image.[63]
Hardware products
[edit]
Some 68k- and MIPS-based models were also rebadged by other vendors, including CDC, Tandem Computers, Prime Computer and Siemens-Nixdorf. SGI Onyx and SGI Indy series systems were used for video game development for the Nintendo 64.
Motorola 68k-based systems
[edit]
IRIS 1000 series graphics terminals (diskless 1000/1200, 1400/1500 with disks)
IRIS 2000 series workstations (2000/2200/2300/2400/2500 non-Turbo and 2300T/2400T/2500T "Turbo" models)
IRIS 3000 series workstations (3010/3020/3030 and 3110/3115/3120/3130)
MIPS-based systems
[edit]
Intel IA-32-based systems
[edit]
Itanium-based systems
[edit]
SGI 750 workstation
Altix 330 entry-level server
Altix 350 mid-range server
Altix 3000 high-end server
Altix 450 mid-range server
Altix 4000 high-end server, capable of up to 2048 CPUs
Prism (deskside and rackmount systems)
Intel/AMD x86-64 systems
[edit]
Altix XE210 server
Altix XE240 server
Altix XE310 server
Altix XE1200 cluster
Altix XE1300 cluster
Altix ICE 8200
Altix ICE 8400
Virtu VN200 visualization node
Virtu VS100 workstation
Virtu VS200 workstation
Virtu VS300 workstation
Virtu VS350 workstation
FPGA-based accelerators
[edit]
RASC Application Acceleration
Storage systems
[edit]
InfiniteStorage 10000
InfiniteStorage 6700
InfiniteStorage 4600
InfiniteStorage 4500
InfiniteStorage 4000
InfiniteStorage 350
InfiniteStorage 220
InfiniteStorage 120
SGI Infinite Data Cluster[clarification needed]
Storage solutions
[edit]
InfiniteStorage NEXIS 500
InfiniteStorage NEXIS 2000
InfiniteStorage NEXIS 7000
InfiniteStorage NEXIS 7000-HA
InfiniteStorage NEXIS 9000
InfiniteStorage Server 3500
Displays
[edit]
1600SW, a multi-award-winning wide screen video monitor
Accelerator cards
[edit]
IrisVision, one of the first 3D graphics accelerators for high-end PCs
Other
[edit]
Espressigo, Espresso maker in collaboration with Gaggia
SGI timeline
[edit]
See also
[edit]
SCO and SGI
Rick Belluzzo, SGI CEO from January 1998 to August 1999
Silicon Graphics Image
References
[edit]
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https://www.eeoc.gov/special-report/diversity-high-tech
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DIVERSITY IN HIGH TECH
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Diversity in High Tech
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US EEOC
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https://www.eeoc.gov/special-report/diversity-high-tech
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The high tech sector has become a major source of economic growth fueling the U.S. economy. As an innovation leader, the high tech sector has impacted how we communicate and access information, distribute products and services, and address critical societal problems. Because this sector is the source of an increasing number of jobs, it is particularly important that the U.S. Equal Employment Opportunity Commission (EEOC) and its stakeholders understand the emerging trends in this industry. Ensuring a sufficient supply of workers with the appropriate skills and credentials and addressing the lack of diversity among high tech workers have become central public policy concerns. This report seeks to shed more light on employment patterns in the high tech industry by providing an overview of literature as a backdrop to understanding high tech employment, and analyzing corresponding summary data from the Employer Information EEO-1 Report (EEO-1)[1] collected in 2014.
Employment in computer science and engineering is growing at twice the rate of the national average.[2] These jobs tend to provide higher pay and better benefits, and they have been more resilient to economic downturns than other private sector industries over the past decade. In addition, jobs in the high tech industry have a strong potential for growth. These jobs are important to companies in all industries that require workers with technology skills. Employment trends in the high tech sector are therefore important to the national economic and employment outlook.
The industries and occupations associated with "high tech" are rapidly evolving. There is no single high tech industry-rather, new technology has transformed industries like telecommunications and manufacturing and the functions of numerous occupations. Sections I and II of this report define the high tech industry, or the "high tech sector," as industries that employ a high concentration of employees in science, technology, engineering and mathematics (STEM) occupations and the production of goods and services advancing the use of electronic and computer-based production methods. This sector requires a substantial professional labor force and employs about a quarter of U.S. professionals and about 5-6 percent of the total labor force. Section III of this report examines the top 75 high tech firms in the Silicon Valley area based on a ranking by the San Jose Mercury News that looked at revenue, profitability and other criteria to identify leading "Silicon Valley tech firms."
This report aims to add to the public policy discussion by exploring employment trends in the high tech sector in three ways: Section I provides a brief overview of some of the literature addressing high tech employment; Section II analyzes EEO-1 data from the high tech sector both nationwide and in the geographic area generally referred to as Silicon Valley; and Section III reviews employment statistics derived from a group of leading Silicon Valley firms. Although growth in the high-tech sector has increasingly occurred in a wide range of geographic areas, this analysis provides a national picture along with a more focused examination on the well-established tech industry in Silicon Valley. The report also identifies geographic areas with high concentrations of high tech jobs that may benefit from future study. Additionally, important areas for further study include employment for older workers and individuals with disabilities.
Section I briefly reviews the literature addressing high tech employment, which has tended to focus on two issues: 1) the supply of labor with appropriate skills and 2) the reasons behind the underrepresentation of women and minority workers in the relevant labor force. One body of literature emphasizes the challenges for the U.S. education system to produce appropriately skilled workers and the factors that influence the prevalence of women and minorities in particular career paths and occupations. Another body of literature focuses on the attrition of women and minorities as students and as employees. This literature cites research and personal experience indicating that bias impedes the full and equal participation of women and minorities in STEM fields.
Section II examines employment trends in the high tech sector through an analysis of the available 2014 EEO-1 data. By using nationwide 2014 EEO-1 data to examine the participation of women and minorities in overall private sector employment compared to that of the high tech sector, we identified several concerning trends:
Compared to overall private industry, the high tech sector employed a larger share of whites (63.5 percent to 68.5 percent), Asian Americans (5.8 percent to 14 percent) and men (52 percent to 64 percent), and a smaller share of African Americans (14.4 percent to 7.4 percent), Hispanics (13.9 percent to 8 percent), and women (48 percent to 36 percent).
In the tech sector nationwide, whites are represented at a higher rate in the Executives category (83.3 percent), which typically encompasses the highest level jobs in the organization. This is roughly over 15 percentage points higher than their representation in the Professionals category (68 percent), which includes jobs such as computer programming. However, other groups are represented at significantly lower rates in the Executives category than in the Professionals category; African Americans (2 percent to 5.3 percent), Hispanics (3.1 percent to 5.3 percent), and Asian Americans (10.6 percent to 19.5 percent).
Of those in the Executives category in high tech, about 80 percent are men and 20 percent are women. Within the overall private sector, 71 percent of Executive positions are men and about 29 percent are women.
Additionally, we examined 2014 EEO-1 data from a geographic area associated with Silicon Valley. This includes the San Francisco-Oakland-Fremont core-based statistical area (CBSA) and Santa Clara County. The labor force in these areas has notably different demographics from that of the U.S. as a whole. By using EEO-1 data specific to the Silicon Valley area, we can see how its tech workforce differs demographically from the tech workforce nationwide.
Finally, Section III, as the third avenue to examine the nature of employment in high tech industries, uses 2014 EEO-1 data to examine the labor force participation rate at select leading "Silicon Valley tech firms," identified by a San Jose Mercury News analysis. Below are some observations:
Among Executives, 57 percent of employees were white, 36 percent were Asian American, 1.6 percent were Hispanic and less than 1 percent were African American.
These firms had a notable contrast in the demographics of professional as compared to management jobs (executives and managers combined). Asian Americans make up 50 percent of professional jobs among these firms while comprising 36 percent of management positions. This is roughly a negative gap of 14 percentage points. White employees make up 41 percent of professional jobs and 57 percent of management jobs. This is roughly a positive difference of about 16 percentage points.
In Silicon Valley, employment of women and men in non-technology firms is at about parity with 49 percent women and 51 percent men. This compares to the 30 percent participation rate for women at 75 select leading Silicon Valley tech firms.
When the Executives and Managers job categories are combined, African American workers are less than 1 percent of this group at these select leading Silicon Valley firms, and Hispanic workers are 1.6 percent.
DIVERSITY IN HIGH TECH
This report examines demographic diversity in the "high tech" sector. This is a timely and relevant topic for the Commission due to the growth of this sector, the quality of the jobs it provides, and the influence that this work has on other industries and on society in general.
This report is divided into three major sections. The first section provides a brief, introductory literature review to introduce the relevant issues and provide a backdrop for the data points that follow. The second section examines employment trends in the high tech sector using 2014 EEO-1 data[3] by comparing tech and overall private industry nationwide and within the Silicon Valley geographic area. The final section uses 2014 EEO-1 data to focus on the leading "Silicon Valley tech firms" as recently identified by a popular news source local to the area.
I. LITERATURE REVIEW
HIGH TECH: EVOLUTION OF THE INDUSTRY
Development of a high tech workforce has long been a source of concern; it is a major growth sector that requires workers with specific skills often perceived to be in relatively short supply among U.S. workers. The available work in this industry is considered to be highly sought after, as the jobs tend to pay well and offer attractive benefits. At the same time, lack of diversity in employment has led to under-utilization of available talent and under-recruitment of potentially valuable employees. When examining the pipeline for high tech jobs, a mixed story develops. The literature indicates some increase in employment of women and non-white workers in these occupations, accompanied by a steady exodus of these same workers, particularly women, from tech jobs.
The industries and occupations associated with "high tech" are rapidly evolving. There is no single high tech industry; rather, new technology has transformed industries like telecommunications and manufacturing and the functions of numerous occupations, from clerical work to scientific research. Occupations unknown a decade earlier have become common (Baldwin and Gellatly, 1998; DeSilver, 2014). Classification schemes that rely on a single-measure of technological expertise, as many do, may incorrectly rank industries and/or classify sectors.
Companies utilizing advanced technological processes, requiring a labor force with cutting-edge technical competencies to develop innovative products, are found in many industries, not only high tech. Industries perceived as low-tech are not devoid of high tech firms, nor are high tech industries comprised exclusively of high tech firms. Consequently, broad generalizations at the industry-level are imprecise. On average, industries that may be classified as low-tech by some indices contain half as many high tech firms as can be found in high tech industries. Consequently, it should not be claimed that high-knowledge, high tech firms are confined exclusively to these more visible high tech industries (Baldwin and Gellatly (1998). Research on this project revealed that "typical," well-known high tech companies were in such industries as auto manufacturing (NAICS 3361), retail stores (NAICS 4539), information services (NAICS 5191), consumer goods rental (NAICS 5322) and office administrative services (NAICS 5611).
Baldwin and Gellatly (1998) classify high tech firms as those producing innovative technology; they introduce new products and processes; they place great emphasis on technology; they appreciate the importance of a skilled workforce, and they train their workers.[4] This competency-based approach represented a considerable advance over previous efforts: it formally recognized the multidimensional nature of technological expertise.
DeSilver (2014) notes that based on data collected from November 2009 to May 2012, about 3.9 million workers - roughly 3 percent of the nation's payroll workforce (Occupational Employment Statistics, Bureau of Labor Statistics (BLS)) - work in what we might think of as "core" tech occupations - not people who simply use computing technology in their jobs, but whose jobs involve making that technology work for the rest of us. Occupations involving the installation and repair of telecommunications lines and equipment, as well as computer repairers were excluded.
Figure 1 shows just how different the structure of the technology industry was in 2012 compared to 15 years earlier.
Image
Figure 1
Some 2012 occupations, such as web developers and information security analysts, simply did not exist in 1997, while others have dramatically grown (programmers and software developers, computer and network support specialists) or shrunk (computer operators). Computers have become ubiquitous in the workplace; their use is no longer confined to a specialist. Use of computers is a general skill expected of most office, technical, and professional employees.
HIGH TECH GEOGRAPHY: DISPERSING
The location of high tech industries has also changed substantially. From its early establishment in large compounds in suburban office parks of Silicon Valley, CA and Route 128 in Boston, the industries dispersed to urban areas across the US and around the world (Florida, 2012). High tech companies, like their products, have become an integral part of the production of goods and services. They have moved from a niche economic product dependent on highly specialized expertise to become a major source of economic vitality.
The remarkable growth and dispersion of high tech products and companies has been accompanied by anxiety over the ability of the US educational system to supply an adequate workforce to support its rapid expansion and development of new products. Appendix Table I-A shows employment growth in selected science, technology, engineering and mathematics (STEM) occupations. It has been noted that there are almost twice as many job postings in STEM fields as there are qualified applicants to fill them. Further, when ranked against other developed countries in the area of problem solving with technology the U.S. came in absolute last. Groups such as the STEM Education Coalition urge that additional resources be allocated to the computer sciences, and higher educational standards for math and science education starting in elementary school to prepare the future workforce. Modern manufacturing requires a computer literate worker capable of dealing with highly specialized machines and tools that require advanced skills (STEM Education Coalition).
However, other sources note that stereotyping and bias, often implicit and unconscious, has led to underutilization of the available workforce. The result is an overwhelming dominance of white men and scant participation of African Americans and other racial minorities, Hispanics, and women in STEM and high tech related occupations. The Athena Factor: Reversing the Brain Drain in Science, Engineering, and Technology, published data in 2008 showing that while the female talent pipeline in SET[5] was surprisingly robust, women were dropping out of the field large numbers. Other accounts emphasize the importance of stereotypes and implicit bias in limiting the perceived labor pool (see discussion below).
Moughari et al., 2012 noted that men comprise at least 70 percent of graduates in engineering, mathematics, and computer science, while women dominate in the lower paying fields. Others point out that in this is not uniformly the case in all science and math occupations and that, while underrepresented among those educated for the industry, women and minorities are more underrepresented among those actually employed in the industry. It has been shown, for example, that men are twice as likely as women to be hired for a job in mathematics when the only difference between candidates is gender (Ernesto Reubena et al. 2014).
LABOR DIVERSITY: SUPPLY vs. DEMAND
Attributing lack of employment diversity in high tech industries to lack of applicant diversity and self-selection of minorities and women away from STEM fields focuses on only part of the industries' hiring and retention situation. While there is some truth to the "pipeline" theory and anxiety over the ability of the US educational system to provide a sufficiently large, well trained, and diverse labor pool, there are additional factors at play. For example, about nine percent of graduates from the nation's top computer science programs are from under-represented minority groups. However, only five percent of the large tech firm employees are from one of these groups.[6] This presents the unlikely scenarios that either major employers in the field are unable to attract four out of nine under-represented minority graduates from top schools or almost half of the minority graduates of top schools do not qualify for the positions for which they were educated.
Citing The Urban Institute[7], "labor market indicators do not demonstrate a supply shortage. The United States' education system produces a supply of qualified [science and engineering] graduates in much greater numbers than the jobs available." Estimates indicate that close to 50 percent of STEM graduates in the U.S. are not hired in STEM-related fields (Lindsay & Salzman, 2007).
Sources are largely consistent that the number of people receiving undergraduate degrees in science and engineering has increased markedly over the past decade. According to the U.S. Census Bureau, the percentage of U.S. college graduates with bachelor's degrees in science and engineering (S&E) was 36.4 percent in 2009 (approximately 20 million people). National Science Foundation[8] estimates are similar: the percentage of bachelor's degrees in S&E fields has been approximately 30 to 35 percent of all bachelor's degrees for the past four decades. However, because the U.S. college-age population grew during these years, the total number of science and engineering (S&E) bachelor's degrees awarded annually more than doubled between 1966 and 2008 (from 184,313 to 494,627).
Women account for relatively small percentages of degree recipients in certain STEM fields: only 18.5 percent of bachelor's degrees in engineering went to women in 2008. (Williams, 2015) Women accounted for 77.1 percent of the psychology degrees and 58.3 percent of the biological and agricultural sciences degrees in 2008 (Data from the National Science Foundation, National Center for Science and Engineering Statistics[9]).
Gonzalez and Kuenzi, 2012 make the following observations:
Graduate enrollments in science and engineering grew 35 percent over the last decade. Notably, science and engineering enrollments grew more for racial and ethnic groups generally under-represented in science and engineering.
Hispanic/Latino enrollment increased by 65 percent
American Indian/Alaska Native enrollment increased by 55 percent
African American enrollment increased by 50 percent
Since 1966, the percentage of doctorates in S&E fields has ranged between approximately 56 percent and 67 percent of all graduate degrees (where a field of study has been reported). The total number of doctoral degrees in S&E fields has nearly tripled, growing from 11,570 in 1966 to 32,827 in 2008 (Peck, 2015). Graduate enrollments show similar upward trends.
The AFL-CIO reported that, based on Bureau of Labor Statistics data, the median weekly earnings for women (2012) were 11 to 25 percent lower than they were for men in every STEM occupation for which there is available data. But this may be less of a difference than in other professional fields, as in 2013, on average, men employed in professional and related occupations earned 27 percent more than women.[10]
Additionally, black professionals represented 9.3 percent of the professional workforce and Hispanic professionals 8.2 percent.
In computer and mathematical occupations, 8.3 percent of workers were black or African American, 6.3 were Hispanic or Latino.
In the life, physical, and social sciences, black professionals were under-represented, making up 5.6 percent of the workforce, and in architecture and engineering occupations, Black professionals were just 5.5 percent of the workforce in 2013.
Workers of Hispanic origin comprised 7.5 percent of the architecture and engineering field and 7.9 percent of life, physical, and social scientists.[11]
Based on data from the American Community Survey, there is a racial and ethnic pay gap as well: Asian Americans reported the highest average earnings in STEM occupations, while non-Hispanic whites also had above average earnings; black and Hispanic professionals earned below average wages in 2012.[12]
EXITING TECH & RELATED FIELDS
Over time, over half of highly qualified women working in science, engineering and technology companies quit their jobs (Hewlett et al., 2008). In 2013, just 26 percent of computing jobs in the U.S. were held by women, down from 35 percent in 1990, according to a study by the American Association of University Women. Although 80 percent of U.S. women working in STEM fields say they love their work, 32 percent also say they feel stalled and are likely to quit within a year. Research by The Center for Work-Life Policy shows that 41 percent of qualified scientists, engineers and technologists are women at the lower rungs of corporate ladders but more than half quit their jobs.
This loss appears attributable to the following: 1) inhospitable work cultures; 2) isolation; 3) conflict between women's preferred work rhythms and the "firefighting" work style generally rewarded; 4) long hours and travel schedules conflict with women's heavy household management workload; and 5) women's lack of advancement in the professions and corporate ladders. If corporate initiatives to stem the brain drain reduced attrition by just 25 percent, there would be 220,000 additional highly qualified female STEM workers (Hewlett et al., 2008).
Williams (2015) posits that it is bias that pushes women out of STEM jobs, rather than pipeline issues or personal choice accounting for their absence. Based on a survey and in-depth interviews of female scientists[13] (557 survey participants and 60 interviewees), Williams makes the following observations:
Two-thirds of women report having to prove themselves over and over; their success discounted and their expertise questioned.
Three-fourths of Black women reported this phenomenon.
Thirty-four percent reported pressure to play a traditionally feminine role, including 41 percent of Asian women.
Fifty-three percent reported backlash from speaking their minds directly or being outspoken or decisive.
Women, particularly Black and Latina women, are seen as angry when they fail to conform to female stereotypes
Almost two thirds of women with children say their commitment and competence were questioned and opportunities decreased after having children.
Three fourths of women surveyed said that women in their workplace supported each other; one fifth said they felt as if they were competing with women colleagues for "the woman spot."
Bias functions differently depending on race and ethnicity. Isolation is a problem: 42 percent of Black women, 38 percent of Latinas, 37 percent of Asian women and 32 percent of white women agreed that socializing with colleagues negatively affect perceptions of their competence.
Image
Source: Joan C Williams, Katherine W. Phillips, and Erika V. Hall from HBR.ORG
Figure 2
Source: Center for Talent Innovation from HBR.ORG
Figure 3 [14]
Source: Center for Talent Innovation from HBR.ORG
Figure 4
Exit from the Educational Pipeline
The impact of the "exits" discussed above is perhaps most problematic in the educational pipeline. Women are no longer a minority within higher education-in fact, women's enrollment in graduate education in the United States has been greater than men's for the past three decades. As of 2012, there were 13 women enrolled for every 10 men. However, a greater number of male students seem to graduate with science degrees, as compared to their female classmates. In the physical sciences for example, seven B.S. degrees are granted to women for every 10 granted to men; three M.S. degrees are granted to women for every five granted to men; one Ph.D. degree granted to a woman for every two granted to men (Jahren, 2016).
Women who leave science report both isolation and intimidation as barriers to their success. While 23 percent of freshmen reported not having experienced these barriers, only three percent of seniors did, suggesting that this reaction to women in science education is a lesson learned by female students over time (Jahren, 2016). In a survey of 191 female fellowship recipients, 12 percent indicated that they had been sexually harassed as a student or early professional (Jahren, 2016).
SUMMARY AND CONCLUSION
Despite rapid transformation in the field, the overwhelming dominance of white men in the industries and occupations associated with technology has remained. This tendency includes occupations requiring less education than a four-year bachelor's degree (Fortune, 2014).
Discussion of the lack of gender, racial and ethnic diversity in the high tech industries generally divides into two themes: the "pipeline" problem-STEM occupations attracting white men-and the inhospitable culture in relevant industries and occupations forcing women and minorities to tolerate the environment or leave the field.
The literature summarized below represents both themes. The "pipeline problem" is represented by Moughari et al. (2012) and Gonzalez and Kuenzi (2012). The second theme is documented through numerous published analyses, mostly addressing the challenges faced by women (D'Anastasio, 2015; Hewlett et al., 2014; Peck, 2015; Reubena et al., 2014; Lien, 2015; Hewlett et al., 2008). Evidence of dissatisfaction among minority groups is more likely to be found in the comments sections following "pipeline" articles. Attrition of women mid-career is described as a substantial contributor to the paucity of women in STEM professions and high tech industries (Jahren, 2016).
The reluctance of high tech companies to train new employees could be contributing to the lack of diversity. Williams (2015) provides a technological argument for this trend. The Harvard Business Review (2015) addresses the issue of "guest workers" on H-1B visas; immigration and jobs in high tech (Knowledge 2005). A high tech recruiter points to the mystique of elite colleges and advocates job candidate anonymity to increase diversity in hiring (The Economist, 2013). There are notable alternative efforts to spread high tech skills and introduce women and minorities to the joys of technology based work. A few of the many available examples are Black Girls Code, Hack the Hood, Lesbians Who Tech, Code 2040, #YesWeCode, and the Center for Talent Innovation.
The fast-changing nature of the high tech industry may contribute to the exit of new employees such as women and non-whites. A study by the Wharton School reports research findings and recommendations. They note that Human Resources strategy complements technology strategy; in a fast-paced industry, product life cycles are growing shorter. Firms are facing more opportunities for change, requiring more adjustments to the workforce. When skills need to be adjusted, firms may find that it pays to buy the skills instead of developing them.
The opposite is true for slower moving industries operating in marketplaces with less change -these findings could be significant for human resource management strategies. As the pace of technological change has quickened, and as global competition has shortened product life cycles, firms have had to rethink their technology investment strategies and their human resource management practices in order to remain competitive.
See the Annotated Bibliography for supplemental tables and graphs.
II. EXAMINATION OF NATIONWIDE AND SILICON VALLEY EEO-1 DATA
EMPLOYMENT DIVERSITY IN THE HIGH TECH SECTOR
Explanation of Data
This section focuses on sex, race, and ethnicity diversity in the U.S. high tech sector. The definition of "high tech sector" that we use is the group of industries, based on the four-digit code of North American Industry Classification System (NAICS), listed in Table 1. An industry is considered high tech if "technology-oriented workers" within an industry, as identified by occupations of the staff, account for at least 25 percent of the total jobs within the listed industries.
TABLE 1: INDUSTRIES USED TO DEFINE HIGH TECH
4-Digit Code
INDUSTRY LABEL
3254
Pharmaceutical and Medicine Manufacturing
3333
Commercial and Service Industry Machinery Manufacturing
3341
Computer and Peripheral Equipment Manufacturing
3342
Communications Equipment Manufacturing
3343
Audio and Video Equipment Manufacturing
3344
Semiconductor and Other Electronic Component Manufacturing
3345
Navigational, Measuring, Electrometrical, and Control Instruments Manufacturing
3346
Manufacturing and Reproducing Magnetic and Optical Media
3364
Aerospace Product and Parts Manufacturing
3391
Medical Equipment and Supplies Manufacturing
5112
Software Publishers
5179
Other Telecommunications
5191
Other Information Services
5413
Architectural, Engineering, and Related Services
5415
Computer Systems Design and Related Services
5417
Scientific Research and Development Services
5419
Other Professional, Scientific, and Technical Services
The data utilized for this section comes from the 2014 EEO-1 reports from US private sector employers.[15] The EEO-1 form collects data on ten major job categories.[16]
Because more than half of the high tech employment was made up of Professionals (44 percent) and Technicians (10.7 percent, see Figure 7), these job groups received separate analysis, along with the management job groups (Executives, Senior Level Officials & Managers, and First/Mid-Level Officials and Managers).
Image
INDUSTRY PARTICIPATION BY GENDER SEX AND RACE GROUPS
HIGH TECH VS. ALL PRIVATE INDUSTRIES
Image
High Tech Industries Only
(percent)
All Private Industries
(percent)
White
68.53
63.47
Black
7.4
14.38
Hispanic
7.97
13.86
Asian American
14.04
5.77
Am. Indian
0.42
0.56
Hawaiian (NHOPI)
0.34
0.43
Two or more races
1.3
1.53
Women
35.68
48.16
Total Employment (N)
5,341,599
57,399,178
Figure 5
Source: Equal Employment Opportunity Commission, Employer Information Numbers may not add up to totals due to rounding.
As shown in Figure 5, compared to all industries in the U.S. private sector, high tech had a relatively larger share of whites (68.5 percent vs. 63.5 percent), and a larger share of Asian Americans (14 vs. 5.8 percent). Other groups were less represented by a significant margin in the tech sector compared to all private industry, including African Americans (7.4 vs. 14.3 percent) and Hispanics (8 vs. 13.9 percent). There was a 12-percentage-point difference between female participation in high tech versus all private industries (35.7 vs. 48.2 percent).
OCCUPATIONAL DISTRIBUTION
HIGH TECH VS. ALL PRIVATE INDUSTRIES
Image
High Tech Industries Only
(percent)
All Private Industries
(percent)
Executives, Senior Officials and Managers
2.61
1.58
First/Mid Officials and Managers
14.25
9.51
Professionals
43.47
19.76
Technicians
9.22
5.66
Sale Workers
6.39
12.32
Clerical Workers
9.83
12.84
Craft Workers
4.39
5.61
Operatives
7.62
10.09
Laborers
1.48
7.07
Service Workers
0.73
15.5
Total Employment ( percent)
100.00
100.00
Figure 6
Source: Equal Employment Opportunity Commission, Employer Information Reports Numbers may not add up to totals due to rounding.
Figure 6 shows that two occupational categories-Professionals and Technicians-are represented at higher rates in the tech sector than in other industries. Together they accounted for approximately 54 percent of the total high tech employment, compared to the 25.4 percent of all industries combined nationally, meriting further examination. Technology workers in high tech industries, defined in this analysis as Professionals and Technicians, include significant numbers of engineers, software developers and programmers, life scientists and mathematicians.
PROFESSIONALS AND TECHNICIANS IN HIGH TECH BY RACE AND ETHNICITY
Image
EEO-1 Professionals
( percent)
EEO-1 Technicians
( percent)
White
68.03
68.58
Black
5.27
9.01
Hispanic
5.28
10.23
Asian American
19.49
9.68
Total Employment (N)
2,321,969
452,359
Figure 7
Source: Equal Employment Opportunity Commission, Employer Information Reports (EEO-1 Single, Headquarters, and Establishment Reports, 2014). Numbers may not add up to totals due to rounding.
Figure 7 examines employment figures in the Professional and the Technical occupational categories in the high tech sector. Examples of Professional occupations in this sector include computer programmers, software developers, web developers, and database administrators. Examples of technical occupations in this sector include electrical and electronics engineering technicians, electro-mechanical technicians, and medical records and health information technicians.
Whites made up the largest share of Professionals (68.03 percent) with Asian Americans holding the second largest share at 19.5 percent. As a contrast, African Americans made up 5.27 percent and Hispanics 5.28 percent. Whites held a dominant share of the Technicians job group as well (68.6 percent). African Americans, Hispanics, and Asian Americans each represented approximately 9-10 percent of Technicians.
TABLE 2: LEADERSHIP POSITIONS BY RACE AND ETHNICITY IN HIGH TECH
Executives
(percent)
Managers
(percent)
White
83.31
76.53
Black
1.92
4.12
Hispanic
3.11
4.91
Asian American
10.5
12.98
Totals (N)
139,575
761,380
Source: Equal Employment Opportunity Commission, Employer Information Reports (EEO-1 Single, Headquarters, and Establishment Reports, 2014). Numbers may not add up to totals due to rounding.
Table 2 shows that of leadership positions in high tech, over four-in-five, or 83.3 percent, of Executives were white compared to 10.5 percent for Asian Americans, 1.9 percent for African Americans and 3.1 percent for Hispanics. Executives in the high tech sector would likely include the chief executive officer, and the chief technology officer, as well as Executives found in other industries such as the chief human capital officer. Managers in the high tech industry would include occupations like computer and information systems managers. Note that Asian Americans make up around 19.5 percent of Professionals in the high tech industry but only 10.5 percent of its Executives, in this analysis of the data.
TABLE 3: SELECT JOB CATEGORIES BY RACE AND ETHNICITY IN HIGH TECH v. ALL PRIVATE INDUSTRY
High Tech
WHITE
BLACK
HISPANIC
ASIAN AMERICAN
Total Employment (N)
Executives, Senior Officials and Managers
83.31%
1.92%
3.11%
10.55%
139,575
First/Mid Officials & Managers
76.53%
4.12%
4.91%
12.98%
761,380
Professionals
68.03%
5.27%
5.28%
19.49%
2,321,969
Technicians
68.58%
9.01%
10.23%
9.68%
452,359
All Private Industry
WHITE
BLACK
HISPANIC
ASIAN AMERICAN
Total Employment (N)
Executives, Senior Officials & Managers
86.97%
3.13%
3.87%
4.88%
833,367
First/Mid Officials & Managers
77.53%
7.12%
7.43%
6.31%
4,766,041
Professionals
72.89%
7.64%
5.79%
11.74%
10,534,689
Technicians
67.17%
13.79%
10.09%
6.56%
2,870,353
Table 3 examines select occupational categories by race and ethnicity in high tech and overall private industry. If we assume there is a path of advancement from the ranks of Professional into the Executives, Senior Officials and Managers category, we would expect that racial groups would be similar between the two job categories.[18] However, whites are represented at a larger rate in the Executives, Senior Officials and Managers category. African Americans and Asian Americans are represented at about half the rate within Executives, Senior Officials and Managers than in the Professionals job category. Hispanics are also less represented in Executives, Senior Officials and Managers than in Professionals.
WOMEN IN LEADERSHIP POSITIONS AND TECHNOLOGY JOBS IN U.S. HIGH TECH INDUSTRIES
Image
Women
(percent)
Men
(percent)
Executives, Senior Officials & Managers
20.44
79.56
First/Mid Officials & Managers
30.10
69.90
Professionals
31.89
68.11
Technicians
23.74
76.26
Total Employment
1,846,801
3,494,798
Figure 8
Source: Equal Employment Opportunity Commission, Employer Information Reports (EEO-1 Single, Headquarters, and Establishment Reports, 2014). Numbers may not add up to totals due to rounding.
Figure 8 shows female employment in leadership positions in high tech industries. For every one female Executive, Senior Official and Manager there were four males in the same ranking position (79.6 percent vs. 20.4 percent). Female high tech workers, in contrast to their male counterparts, were also significantly outnumbered in technology jobs as Professionals (31.9 percent vs. 68.1 percent) and Technicians (23.7 percent vs. 76.3 percent).
TABLE 4: SELECT JOB CATEGORIES BY SEX IN HIGH TECH v. ALL PRIVATE INDUSTRY
High Tech
All Private Industry
Women
(percent)
Men
(percent)
Women
(percent)
Men
(percent)
Executives, Senior Officials and Managers
20.44
79.56
28.81
71.19
First/Mid Officials & Managers
30.1
69.9
38.96
61.04
Professionals
31.89
68.11
53.42
46.58
Technicians
23.74
76.26
50.12
49.88
Total Employment
1,846,801
3,494,798
24,422,889
26,728,926
Table 4 presents select occupational categories by sex comparing the high tech sector with overall private industry. As you can see above, women comprise a smaller percentage (20 percent) of Executives, Senior Officials and Managers in the high tech industry than they do in the overall workforce (29 percent). Moreover, women are represented at lower rates in all high tech job categories as compared to overall private industry. The differences in the Professional (roughly a 21 percentage point difference) and Technician categories (roughly a 26 percentage point difference) are particularly striking.
HIGH TECH PARTICIPATION OF WOMEN AND MINORITIES IN SAN FRANCISCO BAY AREA: 2014
Image
Image
San Francisco-Oakland-Fremont
Santa Clara County
White
54.86
44.11
Black
3.35
2.08
Hispanic
6.66
5.93
Asian American
32.07
45.65
Am. Indian
0.28
0.22
Hawaiian (NHOPI)
0.71
0.5
TOMR
2.07
1.5
Women
36.68
28.91
Total Employment
198,275
257,342
Figure 9
Source: Equal Employment Opportunity Commission, Employer Information Reports (EEO-1 Single, Headquarters, and Establishment Reports, 2014). Numbers may not add up to totals due to rounding.
In Figure 9 we examine demographics of employment in the high tech sector in the Silicon Valley area specifically, defined by the geographic region including San Francisco-Oakland-Fremont and one county to the south, Santa Clara. These results show that in high tech in the San Francisco-Oakland-Fremont area, over half of the high tech employment was white (54.9 percent). African Americans and Hispanics were 3.3 and 6.6 percent, respectively. Women comprised 36.7 percent of the total high tech employment.
In Santa Clara County, where many of the top high tech firms are headquartered, whites and Asian Americans each comprised around 45 percent of the total high tech workforce, totaling about 90 percent. That means, on average, of one-hundred workers, only two were African American and fewer than six were Hispanic. Women made up less than one-third of the county's high tech workforce (28.9 percent). Taken together, these results show under-representation of Black and Hispanic employees in Silicon Valley, and in the heart of Silicon Valley (Santa Clara County) in particular. The same pattern is observed for women.
WOMEN IN LEADERSHIP POSITIONS AND PROFESSIONAL JOBS IN HIGH TECH INDUSTRIES IN SAN FRANCISCO BAY AREA: 2014
Image
Image
San Francisco-Oakland-Fremont, CBSA
CA Santa Clara County
Women
(percent)
Men
( percent)
Women
(percent)
Men
(percent)
Executives, Senior Officials and Managers
21.82
78.18
17.93
82.07
First/Mid Officials and Managers
34.31
65.69
27.55
72.45
Professionals
35.95
64.05
27.4
72.6
Technicians
29.04
70.96
26.31
73.69
Total Employment (N)
72,730
125,538
74,403
182,939
Figure 10
Source: Equal Employment Opportunity Commission, Employer Information Reports (EEO-1 Single, Headquarters, and Establishment Reports, 2014). Numbers may not add up to totals due to rounding.
Figure 10 illustrates that in San Francisco-Oakland-Fremont area, women made up 21.8 percent of the total Executives, Senior Officials and Managers and 34.3 percent of the total First/Mid Officials and Managers in high tech industries. Over one-in-three, or 35.95 percent, of the total Professionals were female and about 29.2 percent of the Technicians were women, both lower than their male counterparts.
LEADERSHIP POSITIONS AND TECHNOLOGY JOBS IN HIGH TECH INDUSTRIES
BY RACE AND ETHNICITY IN SAN FRANCISCO BAY AREA: 2014
Image
Image
San Francisco-Oakland-Fremont, CBSA
WHITE
BLACK
HISPANIC
ASIAN AMERICAN
Executive, Senior Officials and Managers
76.41
1.16
2.79
17.86
First/Mid Officer and Manager
62.43
2.31
4.69
28.25
Professionals
52.59
2.45
4.99
37.2
Technicians
40.08
6.59
12.38
36.54
Total Employment (N)
108,782
6,635
13,215
63,593
Santa Clara County, CA
WHITE
BLACK
HISPANIC
ASIAN AMERICAN
Executive, Senior Officials and Managers
61.9
0.86
3.14
32.92
First/Mid Officials and Managers
53.7
1.48
4.52
38.49
Professionals
39.32
1.52
3.97
51.15
Technicians
42.03
7.82
11.91
34.69
Total Employment (N)
113,501
5,352
15,272
117,482
Figure 11
Source: Equal Employment Opportunity Commission, Employer Information Reports (EEO-1 Single, Headquarters, and Establishment Reports, 2014). Numbers may not add up to totals due to rounding.
In Santa Clara County, women were 17.9 percent of the Executive, Senior Officials and Managers and 27.6 percent of the First/Mid Officials and Managers. About 27.6 percent of the Professionals were female and about 26.3 percent of the Technicians were women in the county's high tech industries.
In high tech for San Francisco-Oakland-Fremont area, whites make up over three-quarter of the Executive, Senior Officials and Managers (76.4 percent) and Asian Americans around 17.8 percent. African Americans were 2.8 percent and Hispanics were 7.7 percent. For every hundred Professionals, there were 1.5 African Americans and fewer than four Hispanics.
A similar picture was found in high tech in Santa Clara County. The majority of the Executive, Senior Officials and Managers positions were held by either whites (61.9 percent) or Asian Americans (32.9 percent). Over half of the Professional jobs reported in the EEO-1 were staffed by Asian Americans (51.2 percent) and about 40 percent by whites (39.3 percent). African Americans and Hispanics were less represented in both Executive, Senior Officials and Managers positions (0.86 percent and 3.14 percent, respectively) and in Professional jobs (1.52 percent and 3.97 percent, respectively).
Note that while Asian Americans made up large percentages of Professional employees in the the San Francisco metro area (37.2%), and especially in Santa Clara county (51.15%), representation of this demographic group in Executive, Senior Officials and Managers was markedly lower (17.86% and 32.92%, respectively). This preliminary finding may suggest something of a 'glass ceiling' for Asian Americans working in Silicon Valley, one that seems especially pronounced in what we consider to be the heart of the region, Santa Clara County.
III. EXAMINATION OF LEADING HIGH TECH EMPLOYERS IN SILICON VALLEY
The firms analyzed in this section come from a 2015 San Jose Mercury news article, "Silicon Valley's Top 150 Companies."[19] The article produced a ranking of high tech firms in the Silicon Valley area based on revenue, profitability and other criteria.[20] To provide a more focused window on diversity in high tech employment, we examined the workforce composition of those tech companies regarded by industry insiders as leaders in the field. From the published list, we selected the first 75 rank-ordered firms that had an EEO-1 on file for 2014, which is the latest year available for EEO1 data at the time of this report.[21] In the case where a firm did not have an EEO-1 report on file, we moved to the next firm on the list.
We then created a data set containing the 2014 EEO-1 report data for the 75 firms and all of their establishments located within Silicon Valley. We defined Silicon Valley as all cites within the CBSAs of San Francisco-Oakland-Fremont and of San Jose-Sunnyvale-Santa Clara. A list of these cities included in these two CBSAs is included in Table 5.[22] We examined a total of 230 establishments belonging to the Top 75 Tech Firms.
Workforce Composition[23]
In Table 6 we show in frequency and percent the workforce composition of the top 75 ranked firms in Silicon Valley by sex and race-ethnicity. Data come from 2014 EEO-1 reports for the firms and their establishments physically located in the Silicon Valley. In 2014, total employment for these firms aggregated was 209,089.
TABLE 5: LIST OF CITY NAMES - VARIABLE IN EEO-1 DATABASE USED IN SILICON VALLEY REPORTING (CBSA 41860 and 41940)
ALAMEDA
BERKELEY
BRISBANE
BURLINGAME
CAMPBELL
CONCORD
CORTE MADERA
CUPERTINO
EMERYVILLE
FOSTER CITY
FREMONT
HAYWARD
HERCULES
LIVERMORE
LOS GATOS
MENLO PARK
MILPITAS
MOUNTAIN VIEW
NEWARK
OAKLAND
PALO ALTO
PLEASANTON
REDWOOD CITY
RICHMOND
SAN BRUNO
SAN FRANCISCO
SAN JOSE
SAN MATEO
SAN RAFAEL
SANTA CLARA
STANFORD
SUNNYVALE
WALNUT CREEK
N=33
TABLE 6: 2014 EEO-1 DATA FOR TOP RANKED 75 SILICON VALLEY TECH FIRMS AGGREGATED
Total Employed
209,089
100%
Women
62,960
30%
Men
146,129
70%
Asian American
86,340
41%
Black
5,720
3.%
Hispanic
12,824
6.%
White
99,222
47%
N=230 establishments
What is striking in this table is the degree of sex and race segregation. Women comprise just 30 percent of total employment and Asian Americans and Whites comprise 88 percent of all employment.
In Table 6, we see that composition of the select top ranked 75 Silicon Valley tech firms is strongly characterized by sex and race segregation; or, in another words, there is little diversity. But as a point of comparison, what does the workforce composition of the non-tech firms in Silicon Valley look like by sex and race?
Table 7 shows, in frequency and percent, the aggregated workforce composition for all other (non-tech) firms and their establishments also in Silicon Valley.[24] Based on 2014 EEO-1 reports for firms and their establishments, total employment for these firms was 770,290.
TABLE 7: 2014 EEO-1 DATA FOR ALL OTHER (NON-TECH) SILICON VALLEY FIRMS
AGGREGATED
Total Employed
770,290
100%
Women
375,026
49%
Men
395,264
51%
Asian American
186,493
24%
Black
62,789
8.%
Hispanic
168,873
22%
White
312,627
41%
N=9,278 establishments
For these non-high tech firms, employment of women and men is at about parity with 49 percent women and 51 percent men. Whites make up less than half of total employment at 41 percent. Of the remainder, Asian Americans comprise 24 percent, Hispanics 22 percent and African Americans 8 percent.
In Table 8, we examine the distribution of occupations. We specifically examine the ten EEO occupations employers use to report employees' job duties for EEO-1 reporting purposes.
TABLE 8: 2014 EEO-1 DATA FOR TOP RANKED 75 SILICON VALLEY TECH FIRMS AGGREGATED (EEO-1 job groups as a percent of total employment)
Total Employment
Professionals
Sales
Technicians
Executives & Managers Combined
All Other EEO-1 Occupations
100%
58%
8.%
6.%
21%
6%
Two occupational types dominate, Professionals at 58 percent and Executives, Senior Officials and Managers combined with First/Mid Officials and Managers at 21 percent. In Table 9, we take the same view but examine the distribution of women and men, whites and non-whites for the four most populous EEO occupations, Professionals, Sales, Technicians and Executives, Senior Officials and Managers combined with First/Mid Officials and Managers.
TABLE 9: 2014 EEO-1 DATA FOR SELECT TOP RANKED 75 SILICON VALLEY TECH FIRMS AGGREGATED
(Women/Men and Non-Whites/Whites in EEO occupations)
Note that Asian Americans again make up a large percentage of Professional employees working at these firms (50%), but a smaller percentage of the management teams (36%). At the same time, African Americans and Hispanics make up a very small percentage of both employment groups (Professionals and Executives and Managers combined). Contrasting again with our aggregated pool of non-high tech firms in Silicon Valley, we see in Table 10, more diversity of occupational types---which we would expect.
TABLE 10: 2014 EEO-1 DATA FOR ALL OTHER (NON-TECH) FIRMS IN SILICON VALLEY AGGREGATED
(EEO occupations as a percent of total employment)
Total
Prof
Sales
Tech
Blue Collar
Executive-Manager
Service
Clerical
100%
24%
12%
5.%
16%
13%
18%
12%
Table 11 shows the occupational composition by sex and race.
TABLE 11: 2014 EEO-1 DATA FOR ALL OTHER (NON-TECH) FIRMS IN SILICON VALLEY AGGREGATED
(Women/Men and Non-Whites/Whites in EEO occupations)
Total
Prof
Sales
Tech
Blue Collar*
Executive-Manager
Service
Clerical
Percent of Employment
24%
12%
5.%
16%
13%
18%
12%
Women
56%
54%
49%
16%
43%
50%
73%
Men
44%
46%
51%
84%
57%
50%
27%
Total
100
100
100
100
100
100
100
Asian American
32%
20%
35%
16%
20%
24%
25%
Black
5%
9%
8%
10%
5%
12%
10%
Hispanic
7.5%
25%
15%
40%
10%
34%
20%
White
52%
40%
37%
30%
62%
23%
38%
All Other
3.5%
6%
5%
4%
3%
7%
7%
Total
100
100
100
100
100
100
100
*This combines the EEO occupations Operatives, Laborers & Helpers and Craft Workers.
There is very little occupational segregation (unequal distribution among job groups) by gender within these occupations except for two: Blue-Collar and Clerical. For the remainder there is almost parity for the other EEO-1 occupations. Additionally, there is more race-ethnicity diversity than within the high tech firms examined in the previous table.
APPENDIX FIGURE 1: STEM OCCUPATIONS
APPENDIX TABLE 1: TOP HIGH TECH GEOGRAPHIC AREAS IDENTIFIED FOR POTENTIAL FUTURE RESEARCH
CBSA TITLE
REPORTING UNITS (N)
TOTAL HIGH TECH EMPLOYMENT (N)
New York-Newark-Jersey City, NY-NJ-PA
2,405
363,444
Los Angeles-Long Beach-Anaheim, CA
1,912
269,452
Washington-Arlington-Alexandria, DC-VA-MD-WV
3,561
266,378
San Jose-Sunnyvale-Santa Clara, CA
890
257,349
Boston-Cambridge-Newton, MA-NH
1,443
224,533
Seattle-Tacoma-Bellevue, WA
867
197,046
Dallas-Fort Worth-Arlington, TX
1,217
189,615
Chicago-Naperville-Elgin, IL-IN-WI
1,462
181,721
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
1,039
130,582
Atlanta-Sandy Springs-Roswell, GA
1,042
128,296
Source: Equal Employment Opportunity Commission, Employer Information Reports (EEO-1 Single, Headquarters, and Establishment Reports, 2014). Numbers may not add up to totals due to rounding.
APPENDIX TABLE 2: NAICS-CODE BASED DEFINITION OF HIGH TECH INDUSTRIES
4-DIGIT CODE
INDUSTRY LABEL
3254
Pharmaceutical and Medicine Manufacturing
3333
Commercial and Service Industry Machinery Manufacturing
3341
Computer and Peripheral Equipment Manufacturing
3342
Communications Equipment Manufacturing
3343
Audio and Video Equipment Manufacturing
3344
Semiconductor and Other Electronic Component Manufacturing
3345
Navigational, Measuring, Electrometrical, and Control Instruments Manufacturing
3346
Manufacturing and Reproducing Magnetic and Optical Media
3364
Aerospace Product and Parts Manufacturing
3391
Medical Equipment and Supplies Manufacturing
5112
Software Publishers
5179
Other Telecommunications
5191
Other Information Services
5413
Architectural, Engineering, and Related Services
5415
Computer Systems Design and Related Services
5417
Scientific Research and Development Services
5419
Other Professional, Scientific, and Technical Services
ANNOTATED BIBLIOGRAPHY
1. " Are There High-Tech Industries or Only High-Tech Firms? Evidence From New Technology-Based Firms" John R. Baldwin and Guy Gellatly. Microeconomics Division, Statistics Canada December 1998
Far from producing definitive classifications, existing measures of technological advancement are found to be wanting. Classification schemes that rely on a single-measure of technological prowess, as many do, may incorrectly rank industries and/or classify sectors. Second, firms that possess the advanced competencies that contribute to technological prowess are found in many industries, and are not as sector-specific as previous attempts at classification suggest. Simply stated, low-tech industries are not devoid of high tech firms, nor, are high tech industries comprised exclusively of high tech firms. Consequently, broad generalizations at the industry-level may prove dubious. The competency-based approach represents a considerable advance over previous efforts: it formally recognizes the multidimensional nature of technological prowess.
Firms that we identify as advanced in this study have the characteristics associated with new technology-based firms. They are innovative; they introduce new products and processes; they place great emphasis on technology; they appreciate the importance of a skilled workforce, and they train their workers. Industries that might be classified as low-tech on the basis of indices are not devoid of high tech firms-on average, they contain half as many high tech firms as can be found in high tech industries. It should not be claimed that high-knowledge, high tech firms are confined exclusively to these more visible industries.
2. "How U.S. tech-sector jobs have grown, changed in 15 years" by Drew DeSilver Pew Research Center, March 2014
Based on data collected from November 2009 to May 2012, about 3.9 million workers - roughly 3 percent of the nation's payroll workforce (Occupational Employment Statistics, BLS) - work in what we might think of as "core" tech occupations - not people who simply use computing technology in their jobs, but whose jobs involve making that technology work for the rest of us. (Occupations involving the installation and repair of telecommunications lines and equipment, as well as computer repairers were excluded.) The chart below shows just how different the structure of 2012's technology industry is from that of 15 years earlier. Some occupations, such as web developers and information security analysts, simply didn't exist back then (at least not under those names). Others have dramatically grown (programmers/software developers, support specialists) or shrunk (computer operators).
3. "The Joys of Urban Tech: Goodbye, office parks. Drawn by amenities and talent, tech firms are opting for cities" By Richard Florida Wall Street Journal, Aug. 31, 2012
A generation or so ago, high tech companies were more like factories. They developed proprietary software systems, designed and manufactured chips, built computers, they deployed big engineering teams and created the infrastructure that made the Internet possible and they needed big suburban campuses to house them.
The changing nature of technology-cloud-based applications in particular-enable new start-ups to succeed more quickly, with smaller teams and much smaller footprints. High tech products and industries are more multidisciplinary than they used to be so success often requires excellence in more than one field of technology and in other lines of business. The companies that succeed are the ones that stay in the closest contact with their end-users and first adopters. Design is central to successful new hardware products Design talent is overwhelmingly concentrated in big cities, with their leading design schools and multiple industries that draw upon such skills. Other areas of high tech are premised less on breakthrough innovations and more on the application of technology to massive new markets in retailing, advertising, media, financial services, education, publishing, communications, fashion and music. Tech companies are dispersing to areas where access to their need for diverse talent can be accommodated.
4. "STEM 101: Intro to Tomorrow's Jobs" Dennis Vilorio. Occupational Outlook Quarterly; Spring 2014 www.bls.org/ooq
There is no universally agreed-upon definition of STEM. STEM workers use their knowledge of science, technology, engineering, or math to try to understand how the world works and to solve problems. A list of 100 STEM occupations (excluding healthcare) was compiled by several federal agencies; see Appendix Figure I for this list. The BLS projects overall STEM employment to grow about 13 percent 2012-2022, somewhat faster than the 11 percent projected for all occupations. The largest numbers of professional and technical jobs (not fastest growing) are expected to be in software development and applications, computer systems analysis and user support. Software development and systems analysis jobs generally require a Bachelor's Degree while user support requires "some college, no degree (See Appendix TABLE I A for lists of 15 rapidly growing occupations and occupations with the largest number of jobs.)
5. "Want A Tech Career? LinkedIn Finds 12 Eye-Catching Paths" by George Anders. Forbes, Tech (August 25, 2015)
LinkedIn data scientist Alice Ma has crunched the numbers. In a new blog post, she highlights 12 eye-catching ways that non-technical strivers can be welcomed into the coders' lair. From 2010 to 2013, hiring of liberal-arts majors in tech companies actually grew 10 percent faster than the rate of job offers to computer-science and engineering majors.
BIBLIOGRAPHY FIGURE I
Jobs Held by Liberal Arts Majors at Tech Companies
6. "Gender Segregation in Fields of Study at Community Colleges and Implications for Future Earnings" Layla Moughari, Rhiana Gunn-Wright, and Barbara Gault, Ph.D. Institute for Women's Policy Research IPWR#C395 (May 2012)
While men out earn women regardless of occupation, occupational field contributes substantially to the pay gap. Women outnumber men in community colleges, receiving 56.8 percent of associate degrees but men comprise at least seventy percent of graduates in engineering, mathematics, and computer science while women dominate in the lower paying fields.
7. "Closing the STEM Skills Gap" by STEM Education Coalition www.stemedcoalition.org
The STEM Coalition meets with legislators, legislative staff, and community leaders to discuss STEM policy and education. The Coalition works with U.S. House STEM Education Caucus. The Coalition recommends "robust and targeted investments" preparing and training elementary and secondary school teachers in "STEM-specific pedagogical knowledge" enabling them to excite students and foster strong student learning in STEM subjects through a strong emphasis on hands-on, inquiry-based learning activities for students from an early age. We should encourage learning through working directly with STEM professionals in internships, and participating in field experiences and STEM-related competitions. Informal education such as museums, maker-spaces, or after school groups - are valuable and essential partners for STEM education improvement
There are almost twice as many job postings in STEM fields as there are qualified applicants to fill them. Half of STEM jobs do not require a traditional four-year degree and pay on average 10 per cent higher than non-STEM jobs.[25] Public/private partnerships are recommended to create a suitable workforce.
8. Science, Technology, Engineering, and Mathematics (STEM) Education: A Primer by Heather B. Gonzalez and Jeffrey J. Kuenzi. Congressional Research Service, 11-15-2012
Graduate enrollments in science and engineering (S&E) grew 35 percent over the last decade.
S&E enrollments grew for groups generally under-represented in S&E, increase by demographic group:
Hispanic/Latino, 65 percent
American Indian/Alaska Native, 55 percent
African American students 50 percent
Analysts have identified between 105 and 252 STEM education programs or activities at 13 to 15 federal agencies.
According to the U.S. Census Bureau, the percentage of U.S. bachelor's degree holders with undergraduate degrees in science and engineering (S&E) was 36.4 percent in 2009 (approximately 20 million people).
The NSF estimates that the percentage of bachelor's degrees in S&E fields has held relatively constant-at between approximately 30 percent and 35 percent of all bachelor's degrees-for the past four decades. However, because the U.S. college-age population grew during these years, the total number of S&E bachelor's degrees awarded annually more than doubled between 1966 and 2008 (from 184,313 to 494,627). Since 1966, the percentage of doctorates in S&E fields has ranged between approximately 56 percent and 67 percent of all graduate degrees (where a field of study has been reported). The total number of doctoral degrees in S&E fields has nearly tripled, growing from 11,570 in 1966 to 32,827 in 2008.33 Graduate enrollments show similar upward trends.
In the decade between 2000 and 2010, graduate enrollments in S&E fields grew by 35 percent. Further, among U.S. citizens and permanent residents, S&E graduate enrollments among Hispanic/Latino, American Indian/Alaska Native, and black/African American students grew at a higher rate than that of whites (not of Hispanic origin) and Asian Americanss.39 While women account for relatively small percentages of degree recipients in certain STEM fields (only 18.5 percent of bachelor's degrees in engineering went to women in 2008)38 they accounted for 77.1 percent of the psychology degrees and 58.3 percent of the biological and agricultural sciences degrees in 2008,[26]
Foreign students earn roughly one-third of all U.S. S&E doctoral degrees and earn half (or more) of U.S. doctoral degrees in the specific fields of engineering, physics, computer sciences, and economics. In 2009, there were 611,629 graduate students in science and engineering fields in the United States. Of these 168,850 (27.6 percent) were temporary residents.[27]
9. "How tech companies compare in employee diversity" FORTUNE August 29, 2014
At least 14 high tech companies have released data on their gender, racial, and ethnic diversity. Fortune ranked them in individual categories (leadership team, technical workers) and overall diversity. These graphs are shown in Appendix Figure II. Here's how they stacked up, overall by Fortune's measure:
LinkedIn
Apple
EBay
Indiegogo & Yahoo (tied)
Pinterest
Pandora
Facebook
Intel & Google (tied)
Twitter
Cisco
Hewlett-Packard
Microsoft
10. "Does the Tech Industry Even Deserve Women?" By Cecilia D'Anastasio
https://www.vice.com/en/article/d7a9bx/does-the-tech-industry-even-deserve-women September 6, 2015
Women and minorities in tech have a special responsibility; in addition to their jobs, minorities in tech are employed as demographic icons. In that capacity, they often must defend their identity against a culturally-sanctioned exclusivity. That job never pays. Feminists weigh being tolerant of abuse or out of a job. Harassment happens, startlingly often and unprovoked, and it can feel it comes with the territory of tech jobs.
The problem isn't necessarily that women don't care about programming, or that women in tech aren't measuring up, according to Lean Out contributors, the problem is that internalized misogyny and financially-reinforced tokenism runs through the veins of tech. Women in tech are the canary in the coal mine. When the canary starts dying you know the environment is toxic. Instead, the tech industry is looking at the canary, wondering why it can't breathe, saying 'Lean in!
11. Athena Factor 2.0: Accelerating Female Talent in Science, Engineering & Technology by Sylvia Ann Hewlett and Laura Sherbin with Fabiola Dieudonné, Christina Fargnoli, and Catherine Fredman TalentInnovation.org, 2014
In 2008, when we published The Athena Factor: Reversing the Brain Drain in Science, Engineering, and Technology, our data showed that while the female talent pipeline in SET was surprisingly robust, women were dropping out of the field in droves. Over time, fully 52 percent of highly qualified women working for SET companies quit their jobs. While 80 percent of U.S., 87 percent of Brazilian, 90 percent of Chinese and 93 percent of Indian SET women say they love their work. However, a sizable proportion say they feel stalled and say they are likely to quit their jobs within a year. Women who say they are likely to quit within a year: 32 percent U.S.; 22 percent Brazil; 30 percent China; 20 percent India.
Looking at the barriers to SET women's advancement through a lens refined by our recent we see promising levers for change. The most obvious solution: sponsorship. Sponsors help their protégés crack the unwritten code of executive presence, improving their chances of being perceived as leadership material. Most important to the companies employing them, sponsors help women get their ideas heard.
Our research shows that when SET women are fully engaged, and when leadership creates the speak-up culture wherein their ideas might be heard, companies enjoy a "diversity dividend" that translates into increased market share and entry into altogether new markets.
12. Why So Few? Women in Science, Technology, Engineering, and Math. Catherine Hill, Ph.D. Christianne Corbett Andresse St. Rose, Ed.D. AAUW 2010, updated 2015 in Solving the Equation and reported The Stats On Women In Tech Are Actually Getting Worse by Emily Peck, Executive Editor, Business and Technology Huffington Post, Updated Mar 27, 2015
In 2013, just 26 percent of computing jobs in the U.S. were held by women, down from 35 percent in 1990, according to the study released Thursday by the American Association of University Women. In 2013, more than half of the biological scientists in the U.S. were women, compared to 42 percent in 1990.
Prejudices tend to make their way into the hiring process. .Men are twice as likely as women to be hired for a job in mathematics when the only difference between candidates is gender, (Proceedings of the National Academy of Sciences March 10, 2014).
At Google, women make up 30 percent of the company's overall workforce, but hold only 17 percent of the company's tech jobs. At Facebook, 15 percent of tech roles are staffed by women. At Twitter, it's a laughable 10 percent. For non-technical jobs at Twitter (think marketing, HR, sales), the gender split is 50-50.
Diversity needs to be made a clear priority at companies. That happens only when diversity moves out of workshops and becomes factored into the hiring managers' bottom lines.
13. "How stereotypes impair women's careers in science" by Ernesto Reubena, Paola Sapienzab, and Luigi ZingalescProceedings of the National Academy of Sciences, January 31, 2014
Without provision of information about candidates other than their appearance, men are twice more likely to be hired for a mathematical task than women. If ability is self-reported, women still are discriminated against, because employers do not fully account for men's tendency to boast about performance. Providing full information about candidates' past performance reduces discrimination but does not eliminate it. Implicit stereotypes (as measured by the Implicit Association Test) predict not only the initial bias in beliefs but also the suboptimal updating of gender-related expectations when performance-related information comes from the subjects themselves.
14. "Why are women leaving the tech industry in droves?" by Tracey Lien Los Angeles Times Feb.22, 2015
Reasons include a "hostile" male culture, a sense of isolation and lack of a clear career path. The attitudes holding them back are subtle, and hence more difficult to challenge.
"The continuous pattern of all these people treating me like I didn't know what was going on, or excluding me from conversations and not trusting my assertions, all these things added up and it felt like there was an undercurrent of sexism," Tracy Chou said.
That's one difficulty in tackling the problem, said Alaina Percival of Women Who Code "They're [things that are] so small you'd never even complain about them," Percival said. "But they happen day after day. They're the kind of things that separate and exclude you from the team…". So far, no company has found a solution for retaining women.
15. "Stopping the Exodus of Women in Science" by Sylvia Ann Hewlett, Carolyn Buck Luce, Lisa J. Servon. Harvard Business Review June 2008
Fifty-two percent of female scientists, engineers, and technologists abandon their careers! Business leaders decry the shortage and lobby for more H-1B visas although the talent they seek is available. Research by The Center for Work-Life Policy shows that 41 percent of qualified scientists, engineers and technologists are women at the lower rungs of corporate ladders but more than half quit their jobs. Five reasons appear to account for the loss: workplace hostility, isolation, conflict between women's preferred work rhythms and the "firefighting" work style generally rewarded, long hours and travel schedules conflict with women's heavy household management workload, and women's lack of advancement in the professions and corporate ladders. If corporate initiatives to stem the brain drain reduce attrition by 25 percent there would be 220 thousand additional highly qualified female STEM workers.
16. "Why Women Quit Science" on line title "She Wanted to Do Her Research. He Wanted to Talk 'Feelings.'" by A. Hope Jahren. New York Times (March 4, 2016)
Women are no longer a race and ethnic within higher education; women's enrollment in graduate education in the United States has been greater than men's for each of the last 30 years; as of 2012, there were 13 women enrolled for every 10 men. Yet, in physical sciences, seven B.S. degrees are granted to women for every 10 granted to men; three M.S. degrees granted to women for every five granted to men; one Ph.D. degree granted to a woman for every two granted to men. The absence of women is progressive and persistent - despite more than 20 years of programs intended to encourage the participation of girls and women.
Women reported both isolation and intimidation as barriers blocking their scholarly path; and while 23 percent of freshmen reported not having experienced these barriers, only 3 percent of seniors did. Few studies exist, but in a survey of 191 female fellowship recipients, 12 percent indicated that they had been sexually harassed as a student or early professional. Sexual harassment is very rarely publicly punished when reported, and then only after a pattern of relatively egregious offenses. And, it never stops.
17. "The 5 Biases Pushing Women Out of STEM" by Joan C. Williams Harvard Business Review (March 24, 2015)
Bias, not pipeline issues or personal choices pushes women out of science. Bias functions differently depending on race and ethnicity. Based on a survey and in-depth interviews of female scientists (557 and 60 respectively):
Two-thirds of women report having to prove themselves over and over; their success discounted and their expertise questioned.
Three-fourths of Black women reported this phenomenon
Thirty-four percent reported pressure to play a traditionally feminine role, including 41 percent of Asian women.
Fifty-three percent reported backlash from speaking their minds directly or being outspoken or decisive.
Women, particularly Black and Latina women, are seen as angry when they fail to conform to female stereotypes
Almost two thirds of women with children say their commitment and competence were questioned and opportunities decreased after having children.
Three fourths of women surveyed said that women in their workplace supported each other; one fifth said they felt as if they were competing with women colleagues for "the woman spot".
Isolation is a problem: 42 percent of Black women, 38percent of Latinas, 37 percent of Asian women and 32 percent of White women agreed that socializing with colleagues negatively affect perceptions of their competence.
18. "What's Holding Women Back in Science and Technology Industries"Center for Talent Innovation and Hewlett Consulting Partners LLCHarvard Business Review, September 2015
New research from the Center for Talent Innovation shows that U.S. women working in SET fields are 45 percent more likely than their male peers to leave the industry within the year. Over 80 percent of U.S. women love what they do; in Brazil, China, and India, the numbers are close to 90 percent. Over three-quarters (76 percent) of U.S. women consider themselves "very ambitious," as do 92 percent of Chinese and 89 percent of Indian SET women. Yet, they feel stalled, blocked from contributing to their full potential, and stymied by bias and a double standard. They feel marginalized by the environment of "arrogant nerds" and "hard hat culture". Thirty-two percent of U.S. women say they are likely to leave within a year, as do 22 percent of Brazilian women, 30 percent of women in China, and 20 percent in India.
19. "The Hiring Dilemma for High-tech Firms: 'Make vs. Buy'" Knowledge @ Wharton http://knowledge.wharton.upenn.edu/article/the-hiring-dilemma-for-high-tech-firms-make-vs-buy/ (Nov 02, 2005)
The article reports research findings and recommendations. HR strategy complements technology strategy; in a fast-paced industry, product life cycles are growing shorter. Firms are facing more opportunities for change and more adjustments to the workforce. When skills need to be adjusted, it pays to buy the skills instead of developing them.
The opposite is true for slower moving industries operating in marketplaces with less change -these findings could be significant for human resource management strategies. As the pace of technological change has quickened, and as global competition has shortened product life cycles, firms have had to rethink their technology investment strategies and their human resource management practices in order to remain competitive.
A classic example of this phenomenon is Hewlett Packard over the last 20 years. They had such a reputation for use of internal labor markets, where they hired employees at an early stage and then developed them throughout their careers. But now they are operating more on the spot market. In order to keep pace with other technology firms, they hire on the outside.[28]
Technology firms in short product life markets, and thus with high R&D spending, must have a mix of engineers dominated by the new skills required for the new technology with a small emphasis on engineers with experience on the last generation of technology. High tech firms need to balance the two strategies; experienced workers have firm-specific knowledge that can't be replaced on the outside market, but when you are not investing a lot in developing the skills of a work force, employees will leave.
20. "Immigration and America's high tech industry: The jobs machine"The Economist April 13, 2013
A bunch of other Silicon Valley types are planning to launch a well-funded political-advocacy group to lobby for more visas for skilled immigrants. Applications for this year's quota of 65,000 "H-1B" visas for such workers began on April 1st. In less than a week they were oversubscribed. The proportion of start-ups in Silicon Valley founded by immigrants has fallen from 52 percent to 44 percent since 2005.
High tech employment growing fastest in places you might not associate with bits and bytes. Some are being created by start-ups local to the area. Other companies in tech hubs have opened faraway offices to tap new pools of skilled labor. Logistics matter, too. Bloom Energy decided to open a factory in Delaware to make it easier to get its fuel cells, which are the size of a small car, to customers on the east coast. And View, another immigrant-founded Californian start-up, has opened its only factory in Mississippi, because it is a good place from which to ship stuff to the rest of America.
High tech jobs matter not just to software engineers, scientists and the folk working in factories, estimates indicate that for every job created in the high tech sector, another 4.3 jobs emerge over time in the local economy. That is more than three times the local "multiplier" for manufacturing jobs.[29]
21. "The STEM Workforce: An Overview" Fact Sheet 2014, AFL-CIO Department for Professional Employees.
This fact sheet outlines the employment and earning trends in STEM occupations; unionization in STEM fields; the location of STEM jobs; gender, race, and ethnicity in STEM; and the challenges offshoring and U.S. guest worker visa programs pose for U.S. STEM workers. Data is drawn from the U.S. Census, American Community Survey, Bureau of Labor Statistics and other public sources.
22. "About Face: Most Companies say they want to attract a diverse workforce, but few deliver." by Claire Cain Miller. New York Times Magazine, The Work Issue, Feb. 28,2010
GapJumpers was formed to recruit tech workers in Silicon Valley based on applicant performance in challenges that mimic job tasks. The goal was to increase diversity by eliminating the effect of elite colleges in the hiring process. But, companies still received applicant names and photos in addition to test results. It wasn't until the company adopted the practice used by symphony orchestras, anonymity for all candidates and selection based on test results alone, that non-White applicants increased from 20 to 60 percent of those chosen for an interview. The tech industry is well suited to this approach as jobs require the ability to produce something that can be evaluated by peers.
There is some truth to the "pipeline" theory attributing lack of employment diversity in tech industries to lack of applicant diversity and self-selection of minorities and women away from STEM fields. Yet, nearly 9 percent of graduates from the top 25 computer science programs are Black, Latino, or Native American while only 5 percent of the large tech firms are from one of these groups. There are "a handful" of Silicon Valley start-ups like Gild and Textio working on technological fixes to increase diversity in hiring.
BIBLIOGRAPHY TABLE I A:
Selected STEM occupations with many job openings, projected 2012-22
Occupation
Job openings, projected 2012 - 22
Employment
Median annual wage, May 2013
Typical entry-level education 1
2012
Projected 2022
Software developers, applications
218,500
613,000
752,900
$92,660
Bachelor's degree
Computer systems analysts
209,600
520,600
648,400
81,190
Bachelor's degree
Computer user support specialists2
196,900
547,700
658,500
46,620
Some college, no degree
Software developers, systems software
134,700
405,000
487,800
101,410
Bachelor's degree
Civil engineers
120,100
272,900
326,600
80,770
Bachelor's degree
Computer programmers
118,100
343,700
372,100
76,140
Bachelor's degree
Sales representatives, wholesale and manufacturing, technical and scientific products2
111,800
382,300
419,500
74,520
Bachelor's degree
Network and computer systems administrators
100,500
366,400
409,400
74,000
Bachelor's degree
Mechanical engineers
99,700
258,100
269,700
82,100
Bachelor's degree
Computer and information systems managers3
97,100
332,700
383,600
123,950
Bachelor's degree
Industrial engineers
75,400
223,300
233,400
80,300
Bachelor's degree
Architectural and engineering managers3
60,600
193,800
206,900
128,170
Bachelor's degree
Web developers
50,700
141,400
169,900
63,160
Associate's degree
Electrical engineers
44,100
166,100
174,000
89,180
Bachelor's degree
Computer network architects3
43,500
143,400
164,300
95,380
Bachelor's degree
1 Unless otherwise specified, occupations typically require neither work experience in a related occupation nor on-the-job training to obtain competency.
2 In addition to the education specified, this occupation typically requires moderate-term on-the-job training for workers to obtain competency.
3 In addition to the education specified, this occupation typically requires 5 years or more of work experience in a related occupation.
Source: U.S. Bureau of Labor Statistics, Employment Projections program (employment, projections, and education data) and Occupational Employment Statistics survey (wage data).
BIBLIOGRAPHY TABLE I B:
Selected STEM occupations with fast employment growth, projected 2012-22
Occupation
Employment growth, projected 2012 - 22 (percent)
Employment
Median annual wage, May 2013
Typical entry-level education 1
2012
Projected 2022
Information security analysts2
37 percent
75,100
102,500
$88,590
Bachelor's degree
Operations research analysts
27
73,200
92,700
74,630
Bachelor's degree
Statisticians
27
27,600
34,900
79,290
Master's degree
Biomedical engineers
27
19,400
24,600
88,670
Bachelor's degree
Actuaries3
26
24,300
30,600
94,340
Bachelor's degree
Petroleum engineers
26
38,500
48,400
132,320
Bachelor's degree
Computer systems analysts
25
520,600
648,400
81,190
Bachelor's degree
Software developers, applications
23
613,000
752,900
92,660
Bachelor's degree
Mathematicians
23
3,500
4,300
102,440
Master's degree
Software developers, systems software
20
405,000
487,800
101,410
Bachelor's degree
Computer user support specialists4
20
547,700
658,500
46,620
Some college,
no degree
Web developers
20
141,400
169,900
63,160
Associate's degree
Civil engineers
20
272,900
326,600
80,770
Bachelor's degree
Biological science teachers, postsecondary
20
61,400
73,400
75,740
Doctoral or professional degree
Environmental science and protection technicians, including health
19
32,800
38,900
41,700
Associate's degree
1 Unless otherwise specified, occupations typically require neither work experience in a related occupation nor on-the-job training to obtain competency.
2 In addition to the education specified, this occupation typically requires less than 5 years of work experience in a related occupation.
3 In addition to the education specified, this occupation typically requires long-term on-the-job training for workers to obtain competency.
4 In addition to the education specified, this occupation typically requires moderate-term on-the-job training for workers to obtain competency.
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https://www.nbcnews.com/business/business-news/what-is-nvidia-what-do-they-make-ai-artificial-intelligence-rcna140171
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Why everyone is suddenly talking about Nvidia, the nearly $3 trillion-dollar company fueling the AI revolution
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2024-02-24T12:00:41+00:00
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The business world is increasingly banking on artificial intelligence to be the next big thing, and has found itself turning to one maker of computer chips in particular — Nvidia — to power the revolution.
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https://nodeassets.nbcnews.com/cdnassets/projects/ramen/favicon/nbcnews/all-other-sizes-PNG.ico/favicon.ico
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NBC News
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https://www.nbcnews.com/business/business-news/what-is-nvidia-what-do-they-make-ai-artificial-intelligence-rcna140171
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The business world is increasingly banking on artificial intelligence to be the next big thing, and has found itself turning to one maker of computer chips in particular — Nvidia — to power the revolution.
On Wednesday, Nvidia's market capitalization hit $3 trillion, making it the second-largest publicly traded U.S. company, surpassing Apple and trailing only Microsoft.
Over the past 12 months, Nvidia shares have climbed nearly 200%.
What makes Nvidia so special?
Origins
Founded in 1993 — famously, over a meal at Denny's — Nvidia designs a special kind of programmable computer chip.
For decades, Intel and Advanced Micro Devices had dominated the U.S. chip sector.
But those companies specialized in producing CPUs — central processing units, which serve as the foundation for basic computing and software processes.
Nvidia, meanwhile, specialized in graphics processing units (GPUs). As their name suggests, GPUs are better able to render images, which meant that they were first associated with video and computer games.
But it turns out GPUs are also able to perform calculations concurrently in a way that regular CPUs cannot — making them more energy efficient and better able to handle sophisticated computing demands.
Over time, the other big chip makers began manufacturing their own GPUs to compete — but Nvidia, having enjoyed a first-mover advantage in the space, was where companies began to turn to for GPU needs.
It combined its chips with a suite of accompanying software that programmers simply preferred. Plus, its supply chain allowed it to produce GPUs in larger volumes, faster, and more reliably, than its rivals.
For instance, auto companies began turning to Nvidia chips for use in driver-assistance software that must process image information from sensors.
Nvidia hardware is now found in all Tesla vehicles.
Still, until 2020, Intel was a larger company by market capitalization than Nvidia.
Pandemic surge turns into AI revolution
During the pandemic, the shift to remote work and subsequent demand for data centers that could enable cloud-based computing — plus even more interest in video games while everyone was stuck indoors — accelerated Nvidia’s revenues even further.
Then Silicon Valley, led by OpenAI, began to realize the potential of artificial intelligence to transform how all companies do business.
The Nvidia ecosystem, from its software to its sourcing of materials, allowed it to position itself as the go-to source for companies that needed massive computing power to handle their AI needs.
Nvidia's fortunes have since gone stratospheric: Today, it is worth nearly $3 trillion according to its current stock price — nearly as much as Apple.
Company co-founder and CEO Jensen Huang acknowledged in an interview with CNBC last year that a combination of luck and skill has led to the company’s success.
“We just believed that someday something new would happen, and the rest of it requires some serendipity,” Huang said. “It wasn’t foresight. The foresight was accelerated computing.”
Today, virtually every major tech company, including Amazon, Google, Meta, Microsoft and Oracle, has made use of Nvidia chips.
Bloomberg News has called Nvidia’s chips the “workhorse for training AI models,” and PNC Financial Services Group analyst Amanda Agati described Nvidia’s lead in the category last fall, based on its valuation, as a “quasi monopoly.”
For Moody’s Senior Vice President Raj Joshi, Nvidia represents the “dominant” infrastructure player behind the current rise of the AI sector.
While other chip designers continue to work to catch up to Nvidia, the company’s three decades’ worth of GPU specialization — represents a massive advantage, he said.
“This emerging field [AI] is better supported by GPUs,” Joshi said in an interview with NBC News, adding: “Nvidia is providing the foundation for it in most cases.”
Nvidia also offers solutions for other sectors, like health care, that are not specifically tech-oriented, Joshi said.
“They have a big lead in these markets,” he said.
Playing catch-up
Nvidia’s specialization means it is able to charge a premium for its products. In fact, its chips, which are manufactured in Taiwan, are so unique that companies looking to build AI capabilities are complaining that there is a shortage of them.
While the Biden administration’s 2022 CHIPS and Science Act is designed to spur development of GPUs — and do so on U.S. shores — there is already concern about keeping up with market forces.
“The volume of chips that [AI companies] project they need is mind-boggling,” U.S. Commerce Secretary Gina Raimondo said this week. She suggested even more federal subsidies would be needed if the U.S. hoped to be a meaningful player in chip manufacturing.
“I suspect there will have to be — whether you call it ‘CHIPS Two’ or something else — continued investment if we want to lead the world,” Raimondo said during a virtual appearance at an Intel event. “We fell pretty far. We took our eye off the ball.”
In the meantime, investor interest in Nvidia remains frenzied. While some have speculated that its success could be a bubble, many Wall Street analysts say its financial statements have been proof that its product is viable.
“The health of their core data center business is genuinely stunning,” Goldman Sachs’ Tony Pasquariello wrote in a note to clients Friday.
Because it is now so much more valuable, Nvidia’s financial results carry greater weight for major stock indices, acording to Agati, who is chief investment officer and managing executive for investments at PNC.
In other words as Nvidia goes, so goes the stock market.
“[Nvidia] has become critical to the market’s path forward,” Agati said in an email to NBC News, adding: “In the saying ‘data is the new oil,’ Nvidia continues to prove it is in a league of its own.”
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History of Computer Graphics (CG)
Computer Graphics (CG) was first created as a visualization tool for scientists and engineers in government and corporate research centers such as Bell Labs and Boeing in the 1950s. Later the tools would be developed at Universities in the 60s and 70s at places such as Ohio State University, MIT, University of Utah, Cornell, North Carolina and the New York Institute of Technology. The early breakthroughs that took place in academic centers continued at research centers such as the famous Xerox PARC in the 1970¹s. These efforts broke first into broadcast video graphics and then major motion pictures in the late 70¹s and early 1980¹s. Computer graphic research continues today around the world, now joined by the research and development departments of entertainment and production companies. Companies such as George Lucas¹s Industrial Light and Magic are constantly redefining the cutting edge of computer graphic technology in order to present the world with a new synthetic digital reality. 1940s The very first ³computer assisted² graphics began in many different unrelated fields around the world. There is a very blurred line that is crossed somewhere between mechanical and analog computer assisted graphics, and the first directly digital computer generated graphics that would associate with today as being true ³CG². The very first radiosity image. While at MIT in the 1940s, Professors Parry Moon and Domina Eberle Spencer were using their field of applied mathematics to calculate highly accurate global lighting models which they called ³interflection reflection². The illumination algorithms were based on those by H. H. Higbie, published in his 1934 book, Lighting Calculations. Lacking any display or output mechanism, the image itself was created by painstakingly selecting Munsel paper samples that matched the output data of their mathematical model. The paper was cut out and ironed together by hand to create the image shown here in print for the first time in over 50 years. [IMAGE OF THE RADIOSITY PIC] (The original image is still hanging in the office of Dr. Domina Spencer at the University of Connecticut.) The images were first presented at the 1946 National Technical Conference of the Illuminating Engineering Society of North America, and published two years later (in color) in the book: Lighting Design by Moon, P., and D. E. Spencer. 1948. (Addison-Wesley. Cambridge, MA) The book was used for many years to teach lighting theory at MIT in the architecture curriculum there. Dr. Spencer went on to teach at Tufts, Brown, Rhode Island School of Design, and the University of Connecticut where she remains active today. 1950s John Whitney Sr. devises his own computer assisted mechanisms to create some of his graphic artwork and short films. One of his sons John Jr. works with and learns from his father from childhood through high school.see biography Pioneering artists Stan VanderBeck, Michael Noll and others at Bell Labs in New Jersey created computer assisted graphics using analog computer devices and plotter output. Later, in the mid 1960s, digital computers and film recorders would be used to produce some of the earliest CG animated films Bill Fetter experimented with early vector graphic CAD at Boeing (Seattle) in the late l950s using an IBM 7094 computer with punch card input and a Gerber plotter. 1950 Artist Ben Laposky uses analog computers to help him create oscilloscope artwork. 1951 Vectorscope-type graphics display on the Whirlwind computer at MIT. A device similar to a light pen allowed direct input to the screen. The General Motors Research Laboratory begins to study the role of computer aided graphical design applications. (This would later result in the development of the DAC-1) 1955 SAGE system at MITs Lincoln Lab uses the first true light pen as input device. (Bert Sutherland) 1956 Lawrence Livermore National Labs connects graphics display to IBM 704; use film recorder for color images Bertram Herzog at the University of Michigan Computing Center uses analog computers to generate CRT graphic studies of military vehicle behavior. 1957 1st image-processed photo at National Bureau of Standards. (By whom? Why?) The IBM 740-780 (paired with a separate IBM 704 computer system) generated a sequence of points on a CRT in order to represent lines or shapes. Time lapse film photography was used to capture the images as they were drawn on the screen. The Defence Departments Advanced Research Project Agency (ARPA) is founded. 1958 MIT¹s Lincoln Labs: Funded in part by the Air Force; Steven Coons, Ivan Sutherland, and Timothy Johnson begin working with the TX-2 computer system to manipulate drawn pictures. Ivan Sutherland later began refining the work into his famous Sketchpad system while a student at MIT. DEC later commercialized the TX-2 as the PDP-6. 1959 The first commercial film recorder the General Dynamics Stromberg Carlson 4020. (Produced in San Diego, CA.) 1959 DAC-1 (Design Augmented by Computers): First computer aided drawing system. Created by Don Hart and Ed Jacks at General Motors Research Laboratory and IBM. (Not unveiled until the Fall Joint Computer Conference in Detroit in 1964.) The system was originally based upon a IBM 7090 computer (later upgraded to a 7094 in 1963) augmented with extra disc space and a specially designed IBM 7969 ³image processing system². Input was with punch cards, but was also capable of scanning in drawings. The final data could be output to either 35mm film (by way of a CRT), a hard copy plotter, or used to drive computer controlled machining devices. Biography: John Whitney Sr. (1917-1995) A Los Angeles native, Whitney was a pioneer in many forms of experimental and abstract art before turning to computers to aid in his graphic creations. He attended Pomona College in California in the 1940's and was the first in a wave of artists to begin new techniques of computer assisted graphics. The integration of analog computer controlled camera and artwork were at first more a pioneering use of motion control than of computer graphics. In point of fact, the devices these early artists used were not even thought of as computers, being more akin to analog music synthesizers. From his experience working in the aircraft industry during World War II, Whitney realized that components of a computerized anti-aircraft controller could be used to drive his mechanisms. One of his sons (John Jr.), recalled buying the ³state-of-the-art² M7 anti-aircraft control computer at surplus. The still unopened crate was 12 feet long, 7 feet wide and seven feet tall. These synchronized mechanisms would ultimately be used to calculate abstract shapes, and change them over time to create beautifully abstract forms and animation. In the 1950¹s Whitney worked in Hollywood as an animation director at UPA, most notably contributing graphic elements for the Saul Bass designed opening credits to Hitchcock¹s ³Vertigo². Whitney then founded Motion Graphics Inc. in 1960 and produced animation for both television and film, devising the ³slit scan² technique for his early short film ³Lapis². This technique would later be made famous when used by Con Pederson as a portion of the famous ³StarGate² ending sequence of Stanley Kubrick¹s ³2001: A Space Odyssey². In 1966 with the help of a grant from IBM and a Fortran programmer named Jack Citron(sp?), Whitney made his first digital computer short film called "Permutations". His next works: Matrix 1 and Matrix 2 were done at Cal Tech, followed by Matrix 3 at Triple-I in 1971. It was at this time that he met Larry Cuba who would later be asked by Whitney to collaborate with him in 1975 on his last 16mm film project ³Arabesque², funded in part by an NEA grant. Both Whitney and Cuba would work briefly at Robert Abel¹s effects company before digital computer graphics were begun there. Beginning in the mid 1980's, a new collaborator Jerry Reed(sp?) translated Cuba¹s Fortran code into Pascal for use on new personal computer hardware that Whitney could use at home. Whitney continued to create abstract computer animation on his own with the aid of this new PC technology that freed him from the reliance of large company owned mainframe machines and the need for sponsored grants. His work would be displayed in galleries on the same PC hardware he created it on. His last commercially available collection of works, called ³Moondrum² was released on video in the late 1980¹s. Today his son Michael Whitney is serving as archiver for his fathers work, and recently organized a retrospective showing at UCLA. 1960's ³Computer assisted graphics² were being created more widely as a new and unique art-form by people such as Charles Csuri, Ken Knowlton and John Whitley Sr. Many pioneering artistic films and artworks were created at Bell Labs from about 1962 to 1967 by artists and programmers such as E.E.Zajac, Leon D. Harmon, Ken Knowlton, A.Michael Noll, Lilian Shwartz, M.R. Schroeder and Stan Vanderbeek. An IBM 7094 computer ran a Stromberg-Calson 4020 film recorder, programmed in FORTRAN to run Ken Knowltons Beflix animation system. Much of the nation-wide university computer science research conducted at the time was due in part to funding from the government¹s "Advanced Research Project Agency" (ARPA). ARPA at the time took a very hands-off approach to funding. This allowed researchers an un-pressured environment in which to concentrate on the work, without the heavy bureaucracy, paperwork and political constraints more common today. Much to the benefit of researches was Ivan Sutherland who headed ARPA for a time. With good funding, little oversight and many brilliant young minds inspiring each other, it was a unique and special time that produced the very foundation of today¹s computer graphic tool sets. Herb Freeman had a school of CG development going on at NYU including Alvy Ray Smith in his first professor's job out of Stanford in 1969. Freeman and his students had already solved the hidden-line problem, a very big deal at the time. [Quote] ³Also on the pixel side of things, Azriel Rosenfeld at the Univ of MD, and Ron Baecker was developing some of the very first computer animation. I saw his system GENESYS at an NYU demo in the early 1970s which means Ron probably did the development (in Canada, Toronto, I think) in the late 1960s.² -Alvy Ray Smith Nicholas Negroponte teaches Computer Aided Design (CAD) at M.I.T in the mid to late 60s, and develops the URBAN5 system. A light pen allows interaction directly on the CRT, in combination with keyboard instructions. Points and symbols are added in orthographic mode with a perspective option entered after the fact in order to view structures three-dimensionally. An ³intelligent² system study, URBAN5 was abandoned by 1968 in favor of other projects. ³The Society for Information Displays² is formed in the early 60s, publishing papers dealing mostly with military applications. At this same time, practical commercial and industrial use of computer graphics begins to take hold in many areas of design and manufacturing. Throughout the decade at Boeing, William Fetter and Robert Woodruff (Computing Technology Administrator) leads many important industrial applications of vector generated CG. Architectural and urban planning programs (typically written in FORTRAN on machines like the IBM 1130 or 1800) are used at the firm ³Skidmore, Owings & Merrill² in Chicago and in the University of Texas School of Architecture. A sample workstation would consist of a Rand tablet providing input, with output to pen plotters such as the Calcomp. In the late 60s, the Electronics Laboratory of General Electric (Syracuse, NY) produces a prototype visualization system for NASA and the Office of Naval Research. The system produced real-time color raster graphics on a monitor as a training aid to astronauts going to land on the moon. This same system was used by Prof. Peter Kamnitzer of the UCLA School of Architecture and Urban Planning to simulate urban development plans. Biography: Dr. Dave C. Evans (1924-1998) MORE One of a very few who could be called a true "founding father" of computer graphics, Dave Evans is perhaps best know for being the co-founder of "Evans & Sutherland Computer Corporation". Mr. Evans was at one time chairman of the computer science departments at both the University of California Berkeley and University of Utah, where he started the venerable doctoral program that would give birth to so much of the foundation of our industry. Evans first associated with Ivan Sutherland at both Berkeley and the Pentagon's "Advanced Research Project Agency" (ARPA). Mr. Evans made many contributions to a wide range of computer technologies, and a great many of his students went on to flourish in the brand new field of computer graphics, becoming true pioneers themselves. Students of Mr. Evans include Alan Kay(Co-founder of Xerox PARC), Jim Clark (founder of both Silicon Graphics and Co-founder of Netscape Communications), John Warnock(Co-founder of Adobe Systems) and Edwin Catmull(see biography in Programming chapter). Dave Evans passed away on Oct.3rd, 1998. 1960 William Fetter of Boeing coins the term "computer graphics" for his human factors cockpit drawings. With help from Walter Bernhardt, and others, Fetter input an aircraft drawing¹s coordinates into a database and plotted out a calculated perspective on a ³Illustromat 1100² plotter. John Whitney Sr. founds Motion Graphics, Inc. in LA. 1961/62 Spacewar: The first popular computer graphic game written by students Steve Russell, Slug Russell, Shag Graetz, and Alan Kotok of MIT to run on the DEC PDP-1. (DEC's PDP-1 cost $120,000 and MIT¹s was one of only 50 ever built) The large round CRT display featured graphics controlled by primitive handmade joysticks. The object being to maneuver away from a gravitational ³sun² force at the center, and avoid the other enemy ships, while trying to blast him with your own space torpedoes! The original source code (which ran on 4k of memory!) can still be found at www.media.mit.edu/groups/el/projects/spacewar/sources or ftp://ftp.digital.com/pub/DEC/sim/sources/sim_2.3d.tar.Z There's also a copy of the PDP-1 manual at www.dbit.com/~greeng3/pdp1/pdp1.html 1962 "Sketchpad: A Man-Machine Graphical Communication System" is presented by Ivan Sutherland as his Ph.D. thesis at the M.I.T. Lincoln Laboratory. The user could input simple lines and curves by drawing directly on the screen with a light pen. The computer, the TX-2, had a whopping 320 kilobytes of memory and a 9 inch monochromatic CRT. While Sketchpad was strictly 2D, a few years later Timothy Johnson expanded its capabilities into three dimensions as ³Sketchpad 3². The display CRT was divided up into the now familiar four views, top front side and perspective. ARPA J.C.R. Licklider is put in charge of the new Information Processing Techniques Office (IPTO) at the Defense Departments Advanced Research Project Agency (APRA). The initial $14 million dollar budget supported projects at MIT, Berkeley and Carnegie-Mellon. 1963 Biography: Ivan Sutherland Born in 1938, Hastings, Nebraska; Ivan Sutherland is truly an early ³founding father² of computer graphics. After completing his Ph.D. at M.I.T.(where he developed Sketchpad) in 1963, Ivan Sutherland joined the army and was assigned to the NSA as an electrical engineer. One year later, he was transferred to the Defense Department's Advanced Research Projects Agency (ARPA, later DARPA), and given responsibility for the newly-established Information Processing Techniques office. At age 26, Lt. Sutherland was given a secretary and $15 million a year, and was told to "go sponsor computer research." Which he gladly did for the following two years until joining the faculty at Harvard late in 1966. It was here with student Bob Sproull that they developed the Head Mounted Display (HUD), for remote viewing; the first ³Virtual Reality². In 1968 Ivan formed the Evans & Sutherland company with partner Dave Evans. Ivan was now a part time tenured professor at the University of Utah, where Evans was the founding head of the Computer Science Department. Dr. Sutherland had first met Evans during a visit to U.C. Berkeley as part of his ARPA work. Ivan's last research in computer graphics was a paper titled: "A Characterization of Ten Hidden-Surface Algorithms," by Sutherland, Sproull and Schumacker. The paper solved many of the largest problems of the day in this critical area of rendering and display technology. Later, as co-founder (with Carver Mead) and head of the Department of Computer Science at California Institute of Technology from 1976 - 1980, Dr. Sutherland developed and promoted courses involving integrated circuit design, the seed of knowledge that helped create the Silicon Valley industry. In the early 1980s at Carnegie Mellon University, Ivan did some research on a six legged walking robot, large enough to carry a driver. (And controlled by a joy stick acquired by brother Bert from his contacts in the Navy as a former fighter pilot!) In 1980, Ivan and Bob Sproull had started the consulting firm ³Sutherland, Sproull & Associates². Sun bought the company in 1990, which then became the nucleus of Sun Microsystems Laboratories. Today? Charles Csuri created an analogue computer and used it to make transformations of a drawing. He completed a series of drawings based upon the paintings of old masters such as Durer, Goya, Ingres, Klee, Mondrian and Picasso Ken Knowlton's programs BEFLIX and EXPLOR are used to create early computer films at Bell Telephone Labs. The 1st computer art competition, sponsored by Computers and Automation magazine. The Spring Joint Computer Conference has several people from MIT presenting papers on graphical display technology: Steven Coons, Ivan Sutherland, Tim Johnson, Bob Stotz, Doug Ross and Jorge Rodriquez. John Lansdown pioneered the use of computers as an aid to architectural planning, making perspective drawings on an Elliott 803 computer in 1963, modelling a building's lifts and services, plotting the annual fall of daylight across its site and authoring his own Computer Aided Design applications. Edgar Horwood developed a computer graphic mapping system used by the U.S. Housing and Urban Development. HUD publishes ³Using Computer Graphics in Community Renewal² Frieder Nake at The Computer Institute of the Stuttgart Polytechnic uses the Graphomat Zuse Z 64 Drawing machine to produce 4 color plotter drawings. 1964 [QUOTE] ³I did my first computer graphic at the Physical Sciences Lab at New Mexico State University. I was asked to generate an equiangular spiral antenna for one of the early Nimbus weather satellites. The old engineers asked me, a student, to do the tedious hand-drawing. I got a computer to draw the spiral quickly, amazing the old-timers.² Alvy Ray Smith Ivan Sutherland (a recent MIT gradute) takes over at the Information Processing Techniques Office (IPTO) at ARPA. It is suggested by his predisesor J.C.R. Licklider to take on a 'deputy', Bob Taylor. (The office¹s budget would reach $30 million by 1969, when it was changed to DARPA the Defense.) Sutherland transitions out of his office by early 1966 to go to Harvard, leaving Bob Taylor in charge. (Bob Taylor would later go on to play a key role in staffing the famous Xerox PARC.) 1965 Dr. David Evans founds the Computer Science Department at the University of Utah Ohio State University CG program started by Charles Csuri. 1st computer art exhibition, at Technische Hochschule in Stuttgart Bella Julesz and A.Michael Noll exhibit for the 1st U.S. computer art exhibition, at Howard Wise Gallery in New York (April, 1965) 196? First commercially available graphics computer: IBM 2250 (When was the DEC 338??) [FACTOID COSTS] A typical graphic display CRT cost about $40,000 US. Rand input tablets are about $10,000 US, and Calcomp plotters about $4000 US. 1966 "Odyssey": The first consumer computer graphics games product by Ralph Baer of Sanders Associates. Later marketed at Magnavox. Permutations: With a grant from IBM and a Fortran programmer named Jack Citron(sp?), John Whitney Sr. made the first digital computer short film. An IBM 2250 Graphic Display Console created dot patterns which were then recorded onto black and white 35mm film. The filmed images were then further enhanced with a specially designed optical printer to add secondary motion and color. As Associate Professor at Harvard, Ivan Sutherland and his students, Bob Sproull, Jim Clark and others, took earlier "Remote Reality" vision systems of the Bell Helicopter project, and turned it into what we now call Virtual Reality by replacing the camera with computer images. The first such computer environment was no more than a wire-frame room with the cardinal directions -- North, South, East, and West initialed on the walls. The viewer could "enter" the room by way of the West door, and turn to look out windows in the other three directions. Affectionately called ³The Sword of Damocles² because of its ceiling mounted gear, what they called the "Head- Mounted Display," later became known as Virtual Reality. The International Conference on Design and Planning: ³Computers in Design and Communication² is held at the University of Waterloo (Ontario). Organized by Professors Constant and Krampen of the Design Department, it was brought together to enlighten and inform designers of emerging computer technologies. 1967 [QUOTE] ³At the same time that geometry-based computer graphics (CG) was being invented so was sampling theory-based computer graphics, often called image processing (IP) or imaging. In the early days, two conferences - one for each half of the discipline - would be held side by side. One of the earliest journals was called Journal of Computer Graphics and Image Processing. Its editors were Herb Freeman and Azriel Rosenfeld (CG and IP, respectively). The earliest paper that I actually have in possession on IP side is ³Processing of Tiros Cloud Cover Pictures on a Digital Computer² by Albert Arking, 1967, but I'm sure the literature is much older. It's easy for the geometry based guys to leave all this stuff out and vice versa.² Alvy Ray Smith Allen Bernholtz and William Warntz of the Laboratory for Computer Graphics and Spacial Analysis at Harvard University use computer graphics to study layout and sound patters for hospital floorplans. Cornell University's School of Architecture is founded by Professor Donald Greenberg. Charles Csuri creates his famous ³Hummingbird² film. A ten minute long, vector interpolated 16mm film animation that is later purchased by the Museum of Modern Art as part of their permanent collection. 2D morphing techniques used were started by Les Mezei at the University of Toronto The MIT Center for Advanced Visual Studies is founded by Gyorgy Kepes The Computer Technique Group in Tokyo Japan is funded at the IBM Scientific Data Center. Engineers and designers create many beautiful and varied computer graphic art works, using image processing and geometric transformations. Members include Koji Fujino, Junichiro Kakizaki, Masao Komura, Fujio Niwa, Makoto Ohtake, Haruki Tsuchiya, and Kunio Yamanaka. Stephen Coons is Associate Professor of Mechanical Engineering at M.I.T., where he heads the computer aided design (CAD) group. He invents a method for patch continuity 1968 Robert Mallary, Professor at the Department of Art at the University of Massachusetts developed the TRAN2 computer program for calculating three-dimensional sculpture Cybernetic Serendipity: The Computer and the Arts exhibition at London Institute of Contemporary Arts (ICA) is organized by Jasia Reichardt. The first major public computer art show, Cybernetic Serendipity is also a book published at the same name. The UK's Computer Arts Society (CAS) is founded by John Lansdown at the Royal College of Art. The EVENT ONE computer art exhibition is held at the Royal College of Art. Chaired and organized by John Lansdown. CalComp (California Computer Products) holds a competition for the best ³Computer Plotter Art², with scholarship and cash prizes. The first computer animation in the UK was the FLEXIPEDE made by Tony Pritchett. Made at the Open University. Several computer art publications are available in Europe including Bit International out of Zagreb, and Page by the London Art Society, a monthly magazine which actually lasted until the mid 80s. Ivan Sutherland joins the Computer Science Department at University of Utah The very first computer graphics company was formed by two of the leading researchers of the day, Drs. David C. Evans and Ivan E. Sutherland. Aptly named Evans & Sutherland, it provided a vector system comprised of custom designed hardware and software previously available only to one of a kind, multi million dollar military sites. Dicomed is founded as a manufacturer of hardware and software products to apply computer graphic technology to the field of medical radiology. Their systems operate by scanning x-ray films, converting the information into digital data, enhancing it and redisplaying the processed image. (See their web site at www.dicomed.com ). Still in business 30 years later, providing professional high resolution digital image capturing technologies. Bill Fetter contributed to the first (vector based) computer generated television commercial in 1968 while at Boeing. 1969 [IMAGE RAM 2/9 plotted drawing 1969] Edward Zajec begins a long career of fine art aided by the computer, creating plotter output works using an IBM 60/20 at Carlton Collage in Minnisota. He would later spend 10 years as an Artis-In-Residence at the University of Triese in Italy. He returned to the united states to Syracuse University in 1980 to reinvigorate the CG program there which had begun in the early 70s. http://web.syr.edu/~ezajec/ez- plain.html [IMAGE RAM 3/16 plotted drawing 1969] [COINCIDENCE!] It should be noted that this Edward Zajec (with an ³e²) is not the same as the Edward Zajac (with an ³a²) who worked at Bell Labs. Two early pioneering CG artists, two very closely spelled names! LDS-1 (Line Drawing System). The first commercial CAD wireframe graphics machine system released by E&S. Incorporated hardware design from Garry Watkins, designed input by Chuck Seitz (University of Utah faculty 1970-73), Bob Shumaker and others. [LDS-1 FACTOID] A local play-on-words for the LDS-1 was based on the fact that the Mormon church was very prominent in Utah, and more commonly known by the contraction of the Church¹s full name ³Latter Day Saints²: LDS John Warnok (University of Utah Ph.D. 1969) Developed the Warnock recursive subdivision algorithm for hidden surface elimination. Alan Kay (University of Utah Ph.D. 1969 ) First developed the notion of a graphical user interface with the Alto project at Xerox PARC (Palo Alto, CA), which directly influenced the design of Apple MacIntosh computers. Computer artist Lloyd Sumner creates Christmas cards under the company name ³Computer Creations² Bell Labs developed the first frame buffer for storing and displaying 3bit images. Gary Demos first becomes acquainted with computer assisted graphics with John Whitney Sr. who is teaching at Cal Tech in California. An IBM 2250 ran a custom operating system, images where photographed in Ektachrome and printed on Kodachrome. 1970's Widespread commercial use of this early technology did not begin until the 1970¹s when early pioneers saw the potential in the broadcast video market for the new creative tools. Companies like Image West(LA), Dolphin Productions (New York) and Computer Image Corp (Denver, President Lee Harrison) used these realtime computer assisted video graphics machines to introduce new imagery to both broadcast clients and the viewers at home. [BIO SNIP] Lee Harrison, the inventor of analog video- based computer animation, was the founder of Computer Image Corporation(1969) in Denver, CO.; where the ANIMAC, Scanimate, C.A.E.S.A.R., and System IV analog animation devices were developed. Lee won an Emmy for SCANIMATE in 1972. Relatively affordable commercial random access frame buffers became available in the mid to late 70¹s which opened up the market for CG production. The input for these earliest machines were often banks of patch wires, paper tape or punch cards, very different from today's mouse and graphic interfaces. These first million dollar commercial machines were mostly capable of only limited, video resolution raster based graphics. While their output was limited in most cases to videotaping or filming monitor screens, their imagery did introduce the public at large to the new art form. By the end of the decade affordable raster technology out paced the earlier vector graphic mainstay. Pioneering work done by Jim Blinn at the Jet Propulsion Laboratory (JPL) in Pasadena California (started in 1975 by Bob Holzman). David Em (who would work with Alvy Ray Smith at Xerox PARC on Dick Shoup's Superpaint system in about 1974 or so) also later joined Jim at JPL to create some of the early serious computer art in raster form. Nelson Max at Lawrence Livermore National Laboratories uses CG to illustrate basic biologic research; the first ³scientific visualizations². Jim Kajiya, Gary Demos, Steve Gabriel and the Cal Tech contingent [FACTOID] Artist and Author Jasia Reichardt estimates in 1970 that there are perhaps ³1000 people in the world working with computer graphics² who are not involved in pure research or mechanical design. (In other words: CG artists) 1971 Gary Demos visits NASA AMES and Evans & Sutherland while researching a documentary film about computers for ³Dimension Films² in LA. It is there that he first meets Ivan Sutherland and expresses his ambitious desire to create complex and realistic high resolution CG images for films. (Gary is only about 21 years old at the time) Since most of the hardware and software technology that would make this possible does not yet exists, Gary joins E&S in hopes of creating these missing pieces. John Warnock ran the San Jose E&S office before going to NYIT, and Ivan himself was working on his own hidden surface solutions at the time. Gary helped develop a high precision ³data table² (table not tablet because it was 4 feet by 5 feet) accurate to 100th of an inch for digitizing images. The table used two pens to define two simultaneous points in 3D space. Programming was done in assembly code on a PDP-11 with a Picture System 1 for vector display. Both Henry Gouroug and Bui Toi Phong worked on shading at E&S, so that area was well covered needless to say. Gary and the E&S team next tackled the challenge of building the first ever random access frame buffer. They began with the first 8 DRAM chips every produced, which came from a company in Texas called Mostek(sp?). 1972 PONG developed by Nolan Bushnell. (Later founder of Atari) The first feature film appearance of CG: West World. A "block pix" scene done at Information International Inc. (III; aka "Triple I") Led by John Whitney Jr., digitally processed film was used to portray a pixelated android point of view. 1973 ACM/SIGGRAPH is formed 'Interact' at the Edinburgh Festival, a seminal event in establishing the use of computers for the creation of art works. Organized by John Lansdown. Edwin Catmull (Ph.D. 1974 University of Utah) develops both the Z-buffer algorithm and the concept of texture mapping in 1973-74. (Texture mapping techniques were later refined by Catmull, Alvy Ray Smith, Tom Duff, Lance Williams, and Paul Heckbert at NYIT. First physical structure designed entirely with computer- aided geometric modeling software: A large Easter egg which is still standing in Vegreville, Alberta, Canada. "The Easter Egg Capitol of the World". By Ronald Resch, pioneer in the field of computer art, and member of the Computer Science Faculty at University of Utah from 1970-1979. The programmer that worked with Resch was Robert McDermott (who got his Ph.D. from the work at U. of Utah). Frank Crow (University of Utah Ph.D. 1975) Developed anti- aliasing methods for edge smoothing. 1974 The first ACM/SIGGRAPH conference is held in Boulder Colorado. There are 600 attendees. The New York Institute of Technology Computer Graphics Laboratory (CGL) is founded in 1974 Dr. Alexander Schure, and hires recent Utah graduate Edwin Catmull to head the new CGL group. (See the companies chapter for a good history of the NYIT CGL.) Phong Bui-Toung develops the Phong shading method at Utah. (Later become a professor at Stanford? When?) Dr. Ivan Sutherland and associate Glen Flex start a Hollywood company called Picture Design Group with John Whitney Jr. and Gary Demos. One of the first tests they do is for a feature film proposed by Walter Films and Carl Sagan, called ³Cosmos². Using an E&S Picture System at UC San Diego Demos began tests on one-million-star galaxy simulations. Operating with a clunky front-end system that crashed every fifteen minutes, it forced him to wait 5 minutes to boot, and took 5 minutes to back up data after only 5 minutes of working before the system would crash again. (in addition to having to go so far as to write his own random number generator) They did other work for educational films, and the Museum of Science and Industry, but after about 9 months Ivan wanted to give in favor of going back to academia. Demos and Whitney would then go to Triple-I. 1975 ACM/SIGGRAPH in Bowling Green, Ohio with 300 attendees. Hunger by Peter Foldes: "First fully animated figurative film every made using computer techniques.² (Computer Interpolation or inbetweening). Like Csuri¹s work, some of the first geometric interpolation or "Morphing" techniques. Foldes would also create the film "Metadata" The venerable icon of early computer graphics, the famous ³Utah Teapot² is designed by Martin Newell at the University of Utah. The TWEEN animation system is developed by Dr. Edwin Catmull at NYIT. Originally written in assembler language (Ed hated Fortran), TWEEN was re-written completely in C to run on UNIX about a year later (It took up ??megs of memory on a PDP-11). He then actually renamed the program ³MO-TRUCK² for ³motion trucking-thru-the-frames² but no one would use the new nameso TWEEN it stayed. After 20 years of research Dr. Benoit Mandelbrot publishes his seminal paper: "A Theory of Fractal Sets." The study of fractal geometry is revealed to the popular press. (The theory had been around before, and contributed to by noteworthy mathematicians such as Julia, Poincare, and Falconer. Mandelbrot gave it a name and codified it.) John Whitney Jr. and Gary Demos form the Motion Picture Project Group at Triple-I. 1976 ACM/SIGGRAPH in Philadelphia, Pennsylvania with 300 attendees, and the first exhibition (with 10 exhibitors!) Future World: Gary Demos, John Whitey Jr. and a team at Triple-I creates the first feature film appearance of 3D CG; a 3D polygonal representation of a hand, and of actor Peter Fonda¹s head. (Rendered and filmed out at 2000x2560 pixel resolution.) The film also featured the first ever digital composite, a sequence of ³samurai warriors² materializing in a chamber room. Warner Communications buys Atari from Nolan Bushnell for $28 million Nelson Max's sphere inversion film shown at SIGGRAPH Jim Blinn environment (reflection) mapping while a graduate student at the University of Utah. The paper is co-authored with his professor Martin Newell, published in the Communications of the ACM in 1976. [SIDEBAR] Close Encounters CGALMOST! Bo Gehring, founder of Bo Gehring Associates of Venice, California, produced computer animation tests for Steven Spielberg's CLOSE ENCOUNTERS OF THE THIRD KIND. Like similar tests created by Triple-I, the tests did not result in any CG production work on the film. 1977 ACM/SIGGRAPH in San Jose, California with 750 attendees and 38 exhibitors. Star Wars (Twentieth Century Fox) The Death Star simulation was designed and created by pioneering algorithmic artist Larry Cuba. George Lucas was impressed both by Cuba¹s early abstract CG film First Fig(1974) and the fact that he had worked with another pioneer of motion control and computer graphics John Whitney Sr. Ben Burt, the films sound designer, had been tasked to get the word out around town and track down bids for the work. Cuba designed storyboards from the description of the scene in the script, and worked on the job at the University of Illinois Chicago. A 2D drawing program that Cuba designed with the GRASS language was modified to allow input of a third Z axis for every point entered on the digitizing tablet, creating the 3D representation of the Death Star surface. Using the Vector General based GRASS graphics system designed by Tom DeFanti, Larry worked night and day for 12 weeks to produce 2 minutes of film of which 40 seconds appeared in the final film sequence. [RENDER TIME QUOTE] ³(While the GRASS system was capable of real time animation) the real time capability came from the Vector General's hardware implementation of basic transformations, like translation, rotation and scaling. also the projection transformation that turns a 3D object into a 2D drawing, but it was only capable of a parallel projection (that is, no 'true perspective'). Since I needed perspective for this project, I was back to using software for the projection and therefore *not* able to animate the scene in real time. I was getting a frame rate of about two minutes of computation per frame and so the whole shot took about 12 hours.² Larry Cuba (A rented Mitchell camera filmed the imagery off of the computer monitor) The finished footage was originally intended to be shot as a rear projected element live on stage with the actors in London, but greatly reduced production deadlines made that impossible. The full story as told by Larry Cuba himself: [QUOTE] ³Around two months from my deadline, I was sent a production schedule and I noticed that the live action shooting of the shot that my work was to be used in, was scheduled a month earlier than the delivery date specified on my contract. So instead of having two months left to finish the shot, I had only one. When I mentioned this to the Assistant Producer, he informed me that it was even worse than that because they required the film to be delivered 4 weeks earlier than shooting in order to have time to make back up copies (should anything happen to the footage during the live action filming). So apparently, since I couldn't send out the shot immediately, we were already dead in the water. The 'solution' he came back to me with was that they would rearrange the schedule and place that scene (the briefing room scene) on the last day that they had the large sound stage (they were shooting in England. All communication went from me, in Chicago, to the Assistant Producer in LA, to the Producer, Gary Kurtz in London and then to Lucas and then the reverse trip back). This would give me four more weeks to produce the shot (rather than the eight that I thought I had). So with my schedule cut in half, I stepped up production. I was getting three hours of sleep a night by sleeping on the sofa in the (over air conditioned) lab with the computers. computers generate a lot of heat so computer rooms need to be kept cool or the computers will fail to work. Working in this way, I was able to finish building the computer model of the Death Star and program the fly through sequence just in time for it to be filmed and sent off. But once I started the film run (which had to run continuously for 12 hours), the computer would crash about 30 minutes into it. Up until this point, the occasional crash was not a problem. reboot and keep going. But now this was a disaster. I couldn't put the shot together filming in 30 minute bursts. (I could if I rewrote the program, but there was no time for that now). We tried everything we could think of to get the system to stop crashing. (we even took the hard disk apart and cleaned it), but 30 minutes after every start, the system crashed. It was getting late on Saturday night and I had to put the exposed film in the mail on Monday. By 3am (my bedtime), I decided that it was useless. On Monday morning, instead of sending out the film, I would have to call LA and tell them that I had failed to deliver and that our only recourse at this point was to shoot the scene blue screen and optically print my animation in later. Since there was no more hope, I figured I would at least be more comfortable, so before I went to sleep, I turned off the air conditioning so I wouldn't freeze, and I started the shot from the beginning one more time (what the heck?). This time it ran continuously throughout the night and Sunday morning, completing the shot just in time.² Larry Cuba There was traditional hand animation done for the final four seconds of the bomb entering the death star exhaust port and exploding; completed by John Wash at Image West. Other computer graphic and video display images were created for Star Wars by several different people. John Wash, Jay Teitzell and Dan O¹Bannon at Image West created many electronic video graphic effects for the targeting computers and background tactical displays. Larry Cuba also completed several graphics seen in the DeathStar guard room when R2 and C3PO first tap into the central computer. [SIGGRAPH FACTOID] The 1977 SIGGRAPH convention Electronic Film Show also ended with Larry Cuba¹s work, although not as planned. Halfway through his film ³First Fig² all the power went out in the hotel bringing it, and the show to a premature ending. 1978 ACM/SIGGRAPH in Atlanta, Georgia with about 1500 attendees and 44 exhibitors. Jim Blinn produces the first in his series of animations for the The Mechanical Universe while at JPL. Jim Blinn also publishes his technique of bump mapping, completed as part of his graduate thesis at the University of Utah the previous year. His demonstration of the new shading code is shown as 128x128 resolution, 16 frame loop of a bumpy sphere. His initial method of calculating both the angle and amount of perturbation is later refined and simplified as an altitude description, allowing for incremental gray scale values to define intermediate angles of surface normals. 1979 ACM/SIGGRAPH in Chicago, Illinois with about 3000 attendees and 79 exhibitors. Edwin Catmull leaves NYIT to head the Lucasfilm Computer Development Division. He is soon joined by Alvy Ray Smith, David Di Francesco, Tom Duff and Ralph Guggenheim. [QUOTE] ³In 1979, the most significant artistic event of my career occurred: Ed Emshwiller and I created Sunstone. It is primarily his piece, but we worked very closely on this piece and I am still extremely proud of it. It is in several museum collections of the world, including MOMA. Lance Williams and Garland Stern also helped some on it.² Alvy Ray Smith The Black Hole (Disney): Opening grid/black hole simulation. By John Hughes (Rythm and Hues) et al. at Robert Abel & Associates. Jim Clark designs his ³geometry engine², the basis for his future company Silicon Graphics. Alien: Alan Sutcliffe at Systems Simulation Ltd. Of London created a computer monitor sequence showing a 3D terrain fly- over, rendering computer-generated mountains as wireframe images, with hidden line removal. Meteor has vector graphics created by Triple-I Julien Gomez developes TWIXT at Ohio State software used at Cranston Csuri Productions. Raytracing developed at Bell Labs & Cornell University. Turner Whitted published a paper for SIGGRAPH 79 describing raytracing techniques. 1980's The first digital computers used in CG were those in the Digital Equipment Corporation (DEC) line including the early PDP-1, PDP10 and PDP-11 of the last decade. However because of their cost and high maintenance, these were restricted to large budget University and major production settings. Typical of this work is Jim Blinn at JPL creating the Voyager Flyby films, the Cosmos Series for Carl Sagan, and the Mechanical Universe project; all from about 1979 to 1983. The ³workstations² as we know it today were introduced in the early 1980s by companies such as Apple Computer and Silicon Graphics Inc. The consumer market for personal computer graphics began with the Macintosh personal computer and its MacDraw and MacPaint software in 1984. The Xerox Alto did of course pre- date the Mac by a decade, but did not reach personal use in any numbers; it¹s initial market was government and University settings. Commercial CG production was boosted by the new generation of digital machines such as the (MORE INFO!) and the early Silicon Graphics workstations such as the IRIS 3130 in 1989. At the same time, third party companies began providing specialized software to run on these new graphic platforms. For 2D graphic design and image processing, Photoshop was introduced for the Mac in 198?. Early 3D animation software for the higher end market included Wavefront(1987), Intelligent Light(198?), and Alias v1.0(1984). The mid 1980¹s to early 1990¹s were a time of tremendous advances in technology and stunning creative breakthroughs. Companies such as Robert Abel and Associates, Triple-I, Magi/Synthavision, Omnibus, and Digital Productions created such memorable images as Sexy Robot (ABEL), Chromosaurs (PDI), and the Benson & Hedges(Digital Productions) commercials. The U.S. National Science Foundation began to provide supercomputer access to university research programs, including the University of Illinois Supercomputing Center. 1980 ACM/SIGGRAPH in Seattle, Washington with about 7500 attendees and 80 exhibitors. LOOKER: Triple-I produces seven minutes of computer graphics under the Direction of Richard Taylor et al. Polygonal models of a complete human body were created. Loren Carpenter's fractal extravaganza "Vol Libre" is presented at SIGGRAPH 80 Loren Carpenter at Lucasfilm's Games Group & Atari created "Rescue From Fractalus!" Chris Briscoe and Paul Brown co-founded Digital Pictures as the UK's first specialist computer animation company 1981 ACM/SIGGRAPH in Dallas, Texas with 14,000 attendees and 124 exhibitors. Nelson Max begins making computer graphics for the IMAX film format at Lawrence Livermore National Labs. Steve Levine and George Matthews here also had lots of contact with NYIT in the early days. They were making graphics of "superheated spheres" (get it?) Computer Assisted Animation Stand(CAAS) at NYIT Computer Graphics Lab. Omnibus Video Inc. is founded in Toronto Canada. Adam Powers (The juggling tuxedo guy): Part of Information International Inc. (III) demo reel shown at SIGGRAPH that year. Nintendo introduces the Donkey Kong video game 1982 ACM/SIGGRAPH in Boston, Massachusetts with about 17,000 attendees and 172 exhibitors. Tom Brigham (NYIT) introduces the first full raster ³morf² technique at the 1982 SIGGRAPH conference. Silicon Graphics Inc. formed by Jim Clark (University of Utah 197?) For lots of details see the ³Companies² chapter. Autodesk formed by Dan Drake and John Walker, release Auto- CAD v1.0 at COMDEX. Mits Kaneko and the Japan Computer Graphics Lab (JCGL) produce the series "The Yearling². Episode No. 2 was broadcast in April 1982 and became the world's first television animated program completely processed with a computer. (See the Company history on JCGL for more details.) The first all digital computer generated image sequence for a motion picture film: Star Trek II: Wrath of Khan/genesis sequence. Amazing use of fractal geometry and particle systems, (by Loren Carpenter based on his own work from his ³Vol Libre² film, completed while at Boeing). Bill Reeves fire, Tom Porters stars, and Tom Duffs moon. Conceived and Directed by Alvy Ray Smith. Tron (Disney) The first extensive use of 3D CGI animation for a feature film. This milestone project was originally boarded by Bill Kroyer and Jerry Rees and pitched to Disney by Steve Listberger. Bill and Jerry came up with the titles ³Computer Image Choreographers² for their roles which were much more than traditional Animation Directors. The model motion and choreography, along with camera blocking and motion paths were all sketched out in exacting detail to be passed on and realized precisely by four CG production houses. [TRON FACTOID] The largest format pencil tests ever! The Disney art and animation team that were previsualizing the CG for the film, never had any way to view a traditional pencil test. The first time they got a chance to see their planned motion scenes was only after the CG was created, rendered and output to 70mm film. Because of a technical limitations at Disney, the film was actually rear projected in the screening room. So who did what CG on TRON? Robert Abel & Associates created the title sequence for the film, and the entry to the digital computer world. Digital Effects created the little bit character. Mathematical Applications Group Inc. (MAGI) created the light cycles and most of the recognizers. Information International Inc. (Triple-I) created Sark¹s carrier, the solar sailer, and the MCP character sequences near he end of the film. In total, there was actually only about 15 minutes of computer generated imagery created for the film, supervised by Richard Taylor. The majority of effects were accomplished by traditional animation techniques involving tens of thousands of hand rotoscoped individual frames of artwork. 1982/83 Where the Wild Things Are (Test done at MAGI): The first instance of digital compositing for motion picture work. The character animation was done at Disney (lead by Glen Keane,) and the cg backgrounds, rendering, painting, and compositing was done at Magi/Synthavision. Jon Lasseter was the official Disney-Magi liaison. Ken Perlin supervised the project, with the CG work lead by Chris Wedge and Jan Carlee (both now at Blue Sky.). Software was by Ken Perlin, Christine Chang, Gene Miller, and Josh Pines. Look for many more details in the Companies Chapter! 1983 ACM/SIGGRAPH in Detroit, Michigan with about 14,000 attendees and 195 exhibitors. AVCO Finance spot shown at SIGGRAPH Electronic Theatre. (This was the first fully rendered raster 30-second commercial spot.) Alias Research Inc. founded in Toronto Canada The Bosch FGS-4000 (the first true turnkey 3-D System) is introduced at NAB in 1983. Cube Quest(Simutrek Inc.): Early 3D graphics video game. Return Of The Jedi (Twentieth Century-Fox/LucasFilm Ltd.): Holographic Endor moon sequence by the LucasFilm Computer Graphics Group. Bill Reeves and John Lasseter did it using vector graphics to simulate raster graphics! 1984 ACM/SIGGRAPH in Minneapolis, Minnesota with 20,390 attendees and 218 exhibitors. Synthavision, a division of MAGI, is sold off to a Canadian investment company. Silicon Graphics releases it¹s first commercial product, the IRIS 1000 terminal (which ran off a VAX host). Wavefront software company formed in Santa Barbera, CA by Bill Kovacks et al LOTS MORE A modern global illumination rendering technique called Radiosity is presented by a team led by Don Greenberg at Cornell University. The Apple Macintosh computer is released. The first personla computer with a graphical user interface (GUI). The Adventures Of Andre And Wally B. LucasFilm Computer Graphics Division. Alvy Ray Smith directed John Lasseter in his first CG short animated film. [SIDEBAR NOT!] Dune: Cool 3D CGI body armor. NOT! (Traditional animation done by Jeff Burks while at Van derVeer Photo Effects.) The Last Starfighter (Lorimar): The first CG project by the new Digital Productions formed by Gary Demos and John Whitney Jr. after having just left Triple-I. 2010: Odyssey Two: Digital Productions worked with Boss Film Corp.¹s Richard Edlund. Larry Yaeger, Craig Upson, Neil Krepela, et al. combined computational fluid dynamics with CGI to create the planet Jupiter. 1985 ACM/SIGGRAPH in San Francisco, California with 27,000 attendees and 254 exhibitors. Disney¹s The Black Cauldron is the first use of 3D computer graphic elements in an animated film. (true?) The first ever Academy of Motion Picture Arts and Sciences award recognition for computer graphics achievement: John Whitney Jr. and Gary Demos of Digital Productions receive The Scientific and Engineering Award was for ³the practical simulation of motion picture photography by means of computer generated images (1984). Bob Abel¹s Sexy Robot completed for the Canned Food Council. The animated short film Tony de Peltrie by Phillipe Bergeron shows at SIGGRAPH 85. Using digitized clay models, and the new user friendly TAARNA 3D animation system (From U. of Montreal) along with additional keyframe interpolating algorithms by Doris Kochanek described at the previous years SIGGRAPH. (Phillipe also did hero animation on the Symbolics short Stanley and Stella in 1985) [SIDEBAR NOT!] Max headroom was NOT computer generated. (Really, take my word for it.) Beginning with the 1985 British music video show and TV pilot, he was portrayed by actor Matt Frewer in stylized makeup with added video editing effects. The US TV series produced in 1987 did feature some other on screen CG (created with an Amiga) but never Max himself. (BTW, 10 years later actor Matt Frewer later stared in the LawnmowerMan II sequelinfinately less good than Max IMO) For all things Max visit: http://www.maxheadroom.com/altfaq.html Commodore introduces the Amiga color personal computer. Playland (Atari Corp.): Bill Kovacs. Los Alamos National Lab: The Ultra-High Speed Graphics Project is started. It pioneers animation as a visualization tool and requires gigabit-per-second communication capacity. An early massively parallel (128-node) Intel computer is installed. Young Sherlock Holmes: The stained glass knight sequence. The first CG Character in a feature film The first computer generated images in a feature film to be exposed directly onto the film with a laser. One shot was also the first ever all digital composite of CG with live action footage for a feature film. (The rack focus shot that starts on the knight¹s hands grasping the sword hilt and then tilts up to his face) By the graphics group at LucasFilm LTD. [FACTOID] David DiFrancesco built the ³digital film printer² that was used for Young Sherlock Holmes. Designed as one unit with three main components; a scanner and a printer with a Pixar Image Computer in between. The former video artist would later receive two separate Academy Awards for his pioneering work. A Sci-Tech Award in 1994 for the scanner portion, and a Technical Achievement Award in 1999 for the printer work. Money For Nothing MTV video by Dire Straits.(Steve Barron director) Gavin Blair and Ian Pearson created the animation at Rushes Post production in London, done on the Bosch FGS- 4000. The Quantel effects were done by Viv Scott. Ian and Gavin now own and run a company in Vancouver called Mainframe, out of which they produced Reboot(1994). Cranston-Csuri produces many national broadcast network graphics, but closes in 1987. Many of its employees go on to later form MetroLight Studios (1987). [BIO] Gary Demos: (studied under Ivan Sutherland at Utah?) Cal Tech, went to work at E&S in 1972 and met John Whitney Jr. Began working on projects with III then went with Whitney to III to form the ³Motion Picture Design Group² in 1974. Left III just before Tron production, again with Whitney, to form there own company Digital Productions. DP filed for chapter 11 in 198? But was then continued as Optimistic by Whitney. Demos the formed his own company, which still exists today: DemoGraFX. 1986 ACM/SIGGRAPH in Dallas, Texas with about 22,000 attendees and 253 exhibitors. SoftImage founded in Montreal by Daniel Langois. Mick Jagger's Hard Woman music video. Digital Productions Brad deGraf, Bill Kroyer, Kevin Rafferty. Et al. CG Co- Produced by Nancy St.John and Alan Peach. "The Juggler": An Amiga demo by Eric Graham. Digital Productions create the three minute opening sequence for the feature film Labyrinth. Complex 2D vector graphics character animation was produced by Digital Productions for the Mick Jagger music video Hard Woman. PIXAR formed by Lucasfilm Computer Graphics Division pioneers Edwin Catmull and Alvy Ray Smith along with about 35 others including John Lasseter, Ralph Guggenheim, Bill Reeves, et al. Purchased from George Lucas by Steve Jobs (Apple/NeXT) for $10 million. Luxo Jr. (PIXAR Animation Studios): First CG Short Animated Film to be nominated for an Oscar for Best Short Animated Film Flight of the Navigator: Omnibus Computer Graphics creates the silvery reflective spaceship. Contributors included Jeff Kleiser(KWCC), Les Major(ILM) and Kevin Tureski(Alias) The Great Mouse Detective: Disney first use of 3D computer graphic elements in an animated film. (Or was it The Black Cauldron in 1985?) Howard the Duck: first digital wire removal for a feature film. Painted by Bruce Wallace at ILM with proprietary ³Layerpaint² software on a Pixar Image computer. Layerpaint code originally written by Mark Leather and modified by Jonathan Luskin and Doug Smythe. Star Trek IV: First use of Cyberware 3D scanner for film Digital Productions is purchased(June), then also Robert Abel & Associates (September), by Omnibus Computer Graphics in 1986. Omnibus goes out of business one year later on April 13th 1987. 1987 ACM/SIGGRAPH in Anaheim, California with about 30,541 attendees and 274 exhibitors. Rhythm and Hues formed by ex-Abel staffers, opens in a former dentist office. Captain Power and the Soldiers of the Future The first television series to include 3D characters that were done entirely with computer animation. It went on the air (September) in North America. Soaron and Blastarr were two CG robots that appeared in the 22 episode series. The computer animation was produced by Arcca Animation in Toronto. [SYNTHAVISION FACTOID] ³Arcca was the reformation of Sythavision staff and software to do the Captain Power series that was a creation of Landmark Entertainment (Hollywood) and financed by Mattel. The show featured toys that were interactive with the television show by registering blast hits on the toy (via a 30hz flicker on TV) or on the TV show character (via a trigger pull during a 15hz flicker from the TV).² Paul Griffin About four minutes of computer graphics was animated for each episode every week using two SGI 3130 workstations running Wavefront software. The motion was then ported over to Sythavision data. [ANIMATING WITH STICKS AND STONES] ³Animation was incredibly arduous sometimes. First you'd plot the model and the path of your animation on graph paper. Then input hundreds or thousands of text lines in a form that Sythavision would understand. If you were out as much as a space or tab in your input file, it wouldn't run. To review your animation, you played in back by flipping images through a frame buffer that often time had pixels as big as postage stamps and based on this make a decision as to whether or not to send your rendered animation to the film recorder. Two days later it would come back from the lab and you could see where all the mistakes were and start over again. But it was a beautiful renderer. The quality of the solid modelled surfaces and the lighting routines made for some great images.² Paul Griffin Rendering was done on 13 Sun Workstations that ran a proprietary job control system, that would pick up new frames in a sequence as they were completed, which may have been the first render farm of its time. The work for the show won Arcca a Gemini Award (the pinnacle in Canadian film production) for Technical Achievement in 1988. The producer was Bob Robbins. The art director was Earl Huddleston. Paul Griffin(ILM) was Animation Director, Andy Varty, Sylvia Wong(Rhythm & Hues, ILM), Les Major (ILM, Pixar). Paintbox work by Rob Smith and Mike Huffman. Jenniffer Julich was in charge of storyboards. Rob Coleman, was Arcca's onset liason/line producer. Mark Mayerson now directs Monster by Mistake on DisneyTV and YTV (Canada). On the live action production side, Doug Netter (Rattlesnake Productions) and Larry Dittillo(sp?) (the writer) went on to develop Babyon 5. 1988 ACM/SIGGRAPH in Atlanta, Georgia with about 19,000 attendees and 249 exhibitors. Fruit Machine (Wonder World): The first all digital film composite for a feature film outside the U.S. by Computer Film Company (CFC)/London. Multiple film elements were scanned into a computer, 100% digitally composited, and filmed back out again. see the Companies chapter on CFC for more details Jim Henson and Digital Productions create a real-time 3D digital character for the Jim Henson Hour. The first of its kind. Steve Whitmeyer(sp?) was the puppeteer and voice. Thad Bier(PDI/Hammerhead) and Grahm Walters and Rex, shipped all the equipment up to Toronto one week before SIGGRAPH. The opening to the show was done by Jamie Dixon(PDI/Hammerhead). Mike the Talking Head The first real-time character (aka motion-capture, vactor, performance animation). Michael Wahrman and Brad deGraf did it at deGraf/Wahrman live at the SIGGRAPH Electronic Theatre in Atlanta. ( Mike was a virtual caricature of the late Mike Gribble, the host of that show, and the Mike of Spike and Mike's animation festival.) Willow (MGM/Lucasfilm Ltd.): First feature film use of digital morphing technology. CAPS(Computer Animation Paint System) developed jointly between Pixar and Disney. Tin Toy (PIXAR Animation Studios): First CG Short Animated Film to win an Oscar for Best Short Animated Film 1989 ACM/SIGGRAPH in Boston, Massachusetts with 27,000 attendees and 238 exhibitors. Indiana Jones and the Last Crusade (Lucasfilm Ltd. /Paramount): Contrary to what you may have read elsewhere, this was NOT he first all digital composite for a feature film. (ILM¹s own Stained Glass Knight in Young Sherlock Holmes, CFC¹s Fruit Machine, and Triple-I¹s Future World all came before) The ³Donovan¹s destruction² sequence by ILM was the first to use many multiple scanned film elements, digitally composited, and then scanned back out to film with a laser. (By now it gets a little silly with all of the sub-sub classifications of ³firsts² in areas such as these.) The Abyss (GJP Productions/Twentieth Century-Fox): Water Pseudopod. 1990's The entertainment world as we know it began to change in the 1980s when motion picture images in Tron, Star Trek II, The Last Starfighter, and Young Sherlock Holmes gave the audience a taste of the future. Now, George Lucas¹s Industrial Light + Magic began to continuously raise the popular standard by which all CG was judged by creating such images as the water pseudopod in James Cameron¹s film The Abyss (1989) and the T-1000 in Terminator 2: Judgment Day (1990). In 1993 ILM smashed all previous conceptions about computer graphics when Jurassic Park¹s photo-real dinosaurs took center stage in theaters around the world. 1990 ACM/SIGGRAPH in Dallas, Texas with 24,684 attendees and 248 exhibitors. The feature film ³Flight of the Intruder². Rhythm and Hues created over 30 shots of photo-realistic aircraft, cluster bombs, and smoke in full daylight..all with their own proprietary software. deGraf/Wahrman did The Funtastic World of Hanna- Barbera, the first CG ridefilm. It was a fully 3D chase/ride through Bedrock and Scooby-Doo's castle, with cel animated characters, for Universal Studios Florida. (Additional CG work by Rhythm and Hues) Robocop 2 (Also by deGraf/Wahrman) was the first use in feature films of Performance Animationamong those who also contributed were Ken Cope(animation) and Gregory Ercolano(TD). Kroyer Films creates the full length animated feature film FernGully: The Last Rainforest. It contains 40,000 3D hidden line computer plotted cel frames to augment the bulk of the traditional animation. It also contains a digital-ink- and-paint sequence by Sydney-Right, a feature film first. The Rescuers Down Under: The first complete feature film to be ³completely digital². The CAPS system digitally ink and paints every frame of the film. Die Hard 2:Die Harder (Twentieth Century-Fox): The first digitally manipulated matte painting created at Industrial Light & Magic. Matte department supervisor was Bruce Walters, Paul Huston and Michael McAllister helped in design and composition and Yusei Uesugi was the matte painter extraordinare. Four separate images were digitized from the painting (13 feet wide by 5 feet tall), decreasing in resolution from the center outward. The images were assembled in a MacII computer, and manipulated by Uesugi using Photoshop. The image was combined with numerous live-action elements of people, lights and steam with a camera move programmed by Pat Myers. NewTek releases the Amiga based Video Toaster. 1991 ACM/SIGGRAPH in Las Vegas, Nevada with about 23,100 attendees and 282 exhibitors. Terminator 2: Judgement Day (Carolco): T-1000 liquid metal cyborg Beautiful all CG commercials by PIXAR for Listerine, Life Savers and Tropicana set s new standard for broadcast excellence. Disney¹s Beauty And The Beast ballroom sequence is a major new direction in feature length animated films. 1992 ACM/SIGGRAPH in Chicago, Illinois with 34,148 attendees and 253 exhibitors. Death Becomes Her (Universal): Photoreal human skin and body replacement. 1993 ACM/SIGGRAPH in Anaheim, California with 27,000 attendees and 285 exhibitors. Wavefront acquires the TDI software company from Thompson Corp of France. In exchange Wavefront receives a major capital investment from Thompson PDI opens a Hollywood production office. This office would close in a short few years. Marc Scaparro, Eric Gregory and Brad deGraf did Moxy for the Cartoon Network at Colossal Pictures. Produced by Anne Brilz. It was the first live broadcast of a virtual character. Jurassic Park (Amblin/Universal): Photo-real 3D Digital Dinosaurs 1994 ACM/SIGGRAPH in Orlando, Florida with about 25,000 attendees and 269 exhibitors. Reboot: the first 100% CGI television series airs on ABC from Mainframe Entertainment Inc. Microsoft acquires Softimage Forrest Gump (Paramount): Photoreal/invisible 3D and 2D digital effects blending new footage with old, changing archive footage, and removing Gary Sinese(sp?) legs! By ILM of course. Flintstones (Universal): First feature film digital hair developed for the saber toothed tiger. 1995 ACM/SIGGRAPH in Los Angeles, California with 40,100 attendees and 297 exhibitors. Silicon Graphics, Inc. acquires both Alias and Wavefront, merging the two companies. Toy Story (PIXAR Animation Studios): First full length CG Animated feature film. Director John Lasseter wins a Special Achievement Academy Award. Judge Dredd (Cinergi): Early examples of fully 3D digital stunt people by the Kleiser-Walzack Construction Company for Mass-Illusion. Casino (Dir. Martin Scorsese): Matte World Digital utilizes LightScape software to seamlessly integrate a 1970s virtual Las Vegas strip into present day live action footage. The first time radiosity lighting was used in a feature film. Batman Forever (Warner Brothers): Early example of 3D realistic digital stuntman by Warner Brother Imaging Technology (W.B.I.T.)and Pacific Data Images. Also a very realistic, fully 3D cityscape by W.B.I.T. Casper (Amblin/Universal): Record number of on screen shots with a digital character. 400+ Jumanji (Tri-Star): Further development of particle based digital hair technology for Lion sequence. 1996 ACM/SIGGRAPH in New Orleans, Louisiana with 28,800 attendees and 321 exhibitors. Alvy Ray Smith, Ed Catmull, Tom Porter, and Tom Duff receive a Technical Academy Award for digital image compositing (ie the alpha channel) Dragonheart (Universal): Breakthrough 3D CGI character animation and lip-synch dialog. Twister: Breakthrough realistic tornadoes and weather effects by Industrial Light and Magic using Wavefront¹s Dynamation.. 1997 ACM/SIGGRAPH in Los Angeles, California with 48,700 attendees and 359 exhibitors. Floops (done at Protozoa by Brad deGraf, Emre Yilmaz, Steve Rein and others) was the first character distributed as 3D (VRML), the first episodic cartoon on the Web, and the first significant animation on the web (30 minutes worth). Star Wars/Special Edition (Twentieth Century-Fox/LucasFilm Ltd.): Restored and enhanced 20 year old film footage. About 350 shots were added or modified for all three films. Spawn: Photo-real fully 3D creature transformations, full screen digital stunt doubles, and dynamic simulated cape. All with bone-cracking, digital-drool slinging realism. Titanic: Large scale use of motion-capture and 3D digital crowd extras. [Quantel looses PATENTS ISSUE] ³British company Quantel has been asserting a set of patents against companies for about a decade now, patents that many of us in the digital imaging and computer graphics business believed were invalid. These 1980s-vintage patents covered airbrushing (digital painting with soft-edged brushes), digital image compositing (!), pressure-sensitive stylus, mixing paints on a window called a palette, etc. I and my colleagues have long believed these notions to be too simple to be worthy of "invention" hence patent coverage. Furthermore, if anyone were to deserve credit for the "invention", it certainly wasn't the Quantel people in the 1980s but rather several of the many practitioners (in the US mainly) in the 1970s. Jim Blinn, Lance Williams, and I tried to help save a British company called Spaceward from these patents in a London trial in 1989. We were unsuccessful, largely, I believe, because we didn't have any hard evidence - no code, no program. This changed in September 1997. Quantel sued Adobe, well-known US producer of popular software products such as Photoshop, for patent infringement on US versions of the UK patents that had been held against Spaceward. The trial was held in Wilmington, Delaware. The following colleagues joined me in helping Adobe this time: Marc Levoy, Christie Barton, David Em, Dick Phillips, Jim Blinn (by deposition), and others. The Adobe attorneys did a great job of gathering evidence, including hard evidence this time. They obtained actual code that I had written in 1977 and 1978 and recompiled it under Windows. So I was able to demonstrate directly to the jury exactly what we had done in the 1970s - in this case I was showing the first full-color (RGB, or 24- bit) digital paint program, which of course did many of the things Quantel claimed to have invented in the 1980s! Marc Levoy's 1978 full-color paint program (the second one) was similarly found and recompiled and shown to the jury. Long story short: The jury found all five patents at issue invalid (and that Adobe was innocent of infringement).² -Alvy Ray Smith 1998 ACM/SIGGRAPH in Orlando, Florida with ??? attendees and ?? exhibitors. 1998 saw an unprecedented number of SciTech awards go to the computer graphics community. Individuals at Alias, Pixar, PDI, Side Effects, SoftImage and Wavefront all were recognized for various components of those systems. In addition, several individuals were recognized for their contributions to CG. A Scientific and Engineering Academy Award was awarded to Richard Shoup, Alvy Ray Smith and Thomas Porter for their pioneering efforts in the development of digital paint systems used in motion picture production. The award reads: ³Much of the foundation for the numerous contemporary digital paint products for motion pictures can be traced directly back to the early work of these digital pioneers.² A Scientific and Engineering Academy Award was awarded to Craig Reynolds for his pioneering contributions to the development of three-dimensional computer animation for motion picture production. The award reads: ³The early contributions of Mr. Reynolds in the digital animation arena have become both influential and instrumental in the architecture of many later systems developed at companies throughout the computer animation industry.² Geri's Game (Pixar): Academy Award winning animated short film showcases the newly rediscovered modeling technique of ³subdivision surfaces². Bingo (Alias|Wavefront) Chris Landreth¹s test piece for the initial Maya release received a Genie Award from The Academy of Canadian Cinema and Television. It was named Best Computer Animation at Ottawa 98 and at Imagina in Monaco, Bingo also received an award from France's Societe des Auteurs et Compositeurs Dramatiques (SACD) for "Most Innovative Story and Production". Antz is released (PDI/Dreamworks) A Bug's Life (Pixar/Disney) 1999 Autodesk merges it¹s newly acquired Discreet Logic (Montreal) division with its Kinetix (SanFrancisco) division into the new Discreet entertainment division. May 19th, 1999 Star Wars/Episode 1: The Phantom Menace Almost 2000 state-of-the-art digital effect shots, most of which are created at Industrial Light & Magic in less than two years production time. The Gungan JarJar Binks is the first all digital leading character in a motion picture. The few shots that were not effects related were also scanned and color corrected to produce a full digital master. Later that summer, LucasFilm premiers the film in New York and LA with a new electronic projection system. The Texas Instruments system uses 1920x1080 progressive video resolution to project the film at 24fps directly from digital storage.
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