“With the Net faithful looking for redemption as Red Hat makes
its IPO today, few watchers will have as much at stake as Silicon
Graphics (SGI). While Linux fans everywhere uncork champagne, SGI’s
spin team is mopping up from a morning of headlines on the
company’s plans to lay off up to 17 percent of its workforce and
undertake its second reorg of the year. In addition to the
workforce cuts of up to 1,500, SGI will spin off its media
operations and ditch its Cray supercomputer division. Instead it
will focus on high-end servers and graphics workstations with an
emphasis on Linux.
Wall Street turned thumbs down on the idea. Shares of SGI
dropped nearly a quarter of their value.”
“But other analysts thought the move to Linux made sense.
‘SGI can say, ‘Of all the system vendors, we have the cleanest
shot of becoming a pure Linux play,’ ‘ said Daniel
Kunstler, a J.P. Morgan analyst.”