SGI eyes greater slice of HPC market

Is SGI returning home? Is it again going to be the preferred choice of high performance computing (HPC) users? For a clear answer, one has to see what actually prompted SGI to shift to Linux.

According to Prasad Meduri, SGI has contributed a significant part of its technology/IPR to the main Linux kernel

Linux isn’t a recent initiative at SGI. It was one of the three organisations chosen by Intel to work on the proof-of-concept and validation of the Itanium 1 and 2 platforms. SGI had offered some systems powered by Linux with Itanium 1 earlier. "Our initiative of offering high-end computing is not very recent," says Prasad Meduri, managing director, Silicon Graphics Systems India (SGI). But working on the Itanium 2 and Linux combo is a fairly new initiative. Launched last year at the Denver Super Computing Show, SGI’s Altix, a 64-bit Linux-based system powered by Intel Itanium 2 processors was made available in India in February 2003 as part of its strategic launch process.

Quashing cautious expectations, the Altix is performing beyond what the company itself imagined. The first few systems launched by SGI were 900 MHz to1 GHz Itanium 2-based systems. Last month the company launched 1.3 and 1.5 GHz Madison (the latest Itanium 2 processor) platforms, for which the performance figures are said to be outstanding. Some of the benchmarks for the technical and scientific specs indicate performance ratios between 1.4 to 7 times for different applications as compared to IBM, Sun and HP. These apps could be in computer aided engineering (CAE), life sciences or bioinformatics—all third-party applications.

One of the major wins that the company has seen in the last six months is at IISc, Bangalore. There are 28 Itanium 2 processors in the system, installed with 256 GB of globally shared memory. The system allows for logical partitions, which can help solve multiple problems simultaneously. Another example of a high-end computing win for SGI on Linux is at Tata Motors, where it is driving Oracle 9i on its Altix system, perhaps one of the first installations of a major database app on Linux in a mission-critical area like product lifecycle management.

Honeymoon with Windows over?

Meduri clarified that his company is not making any sweeping statement about dumping Microsoft. Being a company that offers dual technology platforms—including its own proprietary MIPS-IRIX operating system on a Unix platform—it cannot afford to say so. According to SGI, there are customers who still demand proprietary systems. For instance, customers in the oil and gas sector love to work on IRIX. Meduri says it ultimately depends on the customer’s choice.

"There are some early developers in the corporate world who are looking at Linux very seriously. It may be because of the total cost of ownership (TCO), the availability of third-party apps on Linux today, and the robustness of the operating system (OS)," says Meduri. Companies are now getting rid of multiple platform environments and are trying to see if they can have a single platform across the enterprise. "What better methodology than by having a Linux-based open source platform instead of one big proprietary platform?" asks Meduri.

Meduri says that people are buying a standard Linux distribution and loading their own special value offerings on top of that. SGI loads ProPack on top of a standard Linux distribution to allow the benefits of scalability. The company already has an agreement with SuSe and will soon have another such agreement with Red Hat. Meduri had no inhibitions in accepting that Windows is still the clear leader in the market. "It still has the 80 percent mass with it, and the figure may be higher in the 32-bit space," affirms Meduri. But if we look at the northward curve of different operating systems, Linux is the winner. All the early developers are hopping on to the Linux platform. "Currently we are looking at the second portion of the wave where people want a balanced and mature OS for developers in sectors like manufacturing and enterprise apps. We are witnessing a positive response too," he says.

Still on the proprietary bandwagon are people who use specialised defence applications and high-availability weather forecasting apps and so on, where the effort of converting the existing platform to a Linux platform will be very high. "SGI is currently looking at the middle segment," reveals Meduri. This segment, which has a significant presence of the Windows OS, will be the most crucial for SGI to tap. Unix too has a substantial share here, but a large number of people in this segment—whether it is sciences, manufacturing or GIS—also want to start working on Linux. The reason is simple and obvious: the ability to drive one’s own computing environment so that issues related to scalability, security and systems administration can be better tackled. Besides, the TCO of Linux will also be lower, come what may.

No special preference

It’s not that SGI is in a tug-of-war situation with Microsoft. The company has pushed Windows heavily in the past. Meduri admits that three years ago only Windows drove SGI’s sales. "We were offering Microsoft’s OS and we amassed a huge installed base of IA-32 boxes," he says. The company then discontinued the boxes because of the lack of sustainable margins. But, says Meduri, "We have no inherent bias for/against Microsoft. Neither do we have a special flag flying for Linux."

Then what’s the reason for the hype around the Linux-based Altix? Meduri acknowledges that SGI also wants to join the bandwagon before it’s too late. In the mid-1990s the company saw Windows-based IA-32 systems sweeping the entire market. Now the company feels it’s time to ride the Linux wave. Listen to Meduri: "SGI has made a serious effort to make Linux powerful. The company has contributed a significant part of its technology/IPR to the main Linux kernel, whether it is the XFS-file sharing management system or OpenGeo, the main graphics library. We have already shared key technology with Linux." Besides, SGI insists it’s the only company that can help Linux scale to a 64-processor, 128-processor and now a 512-processor-based platform. "We can make Linux HPC-ready, and we are the only people who can do it," claims Meduri. Thus the choice before SGI was clear—either do it or don’t. The company felt it was appropriate to jump on to the bandwagon instead of still going around with Microsoft. The result was Altix.

Altix provides a great business opportunity for the company. It has three distinct technologies: Linux open source, Intel’s Itanium 2 processor, which supports it, SGI’s scalable and modular architecture. Altix is all about joining these three pieces of technology in one box. "This is what we call Linux for the high-end and that’s where SGI is the market leader," says Meduri.

Market leadership elsewhere

Meduri also admits that SGI has lost a big chunk of the manufacturing sector to Windows NT. "Five years ago we would have sold 500-600 workstations in the manufacturing segment for CAD/CAM operations." A big chunk of PTC’s ProEngineer has gone to Windows NT. "It thus became very difficult for SGI to compete with Microsoft where the latter offers low-cost solutions. All players, including HP, IBM and Sun have lost market share to Windows NT," says Meduri.

But at the same time the company has gained market share at the top. "We have gained in high-end CAE and in high-end visual prototyping," reveals Meduri. If we look at SGI’s product mix, earlier it was 70 percent workstations and 30 percent high-end servers. Today the company says it is the opposite, 70 percent high-end servers and 30 percent workstations. That’s the market SGI has supposedly lost to Windows. Historically, if we look at the buyers of SGI products, the media and the production market (post-production/animation) were the largest buyers of SGI offerings. Now a huge chunk of the low-end has gone to Windows, so SGI’s visibility is restricted to mid- and high-end markets. But the company has gained in another segment, which is real-time graphics in broadcasting. "That’s the market we dominate worldwide," claims Meduri.

Marketing weakness

Silicon Graphics has not been a marketing-driven company. Concedes Meduri, "We have been an exceptionally good technology company, but are not so good at marketing."

In India the company is now taking a slightly different approach. Earlier, it indulged in a lot of indirect marketing activities and publicity through events. Now the company, instead of a mass-scale presence, wants to pitch specific technology to specific users. Between December 2002 and March 2003 SGI did reality centre technology tours in the seven top cities where it found potential users.

Along the way, SGI has shown great interest in utilising Indian manpower resources, and could look into the possibility of extending its outsourcing facility to India. The company is already working with a software firm called Alias in Bangalore with 25 people on board. Alias offers solutions in animation and industrial styling.