MIPS Computer Systems Inc vice-president of finance, sales and marketing, David Ludvigson, says that once the proposed acquisition of the company by Silicon Graphics Inc is complete, the firms’ respective system products will be combined into a single line as soon as possible, with MIPS’ commercial boxes being absorbed into Silicon Graphics’s technical range. It […]
MIPS Computer Systems Inc vice-president of finance, sales and marketing, David Ludvigson, says that once the proposed acquisition of the company by Silicon Graphics Inc is complete, the firms’ respective system products will be combined into a single line as soon as possible, with MIPS’ commercial boxes being absorbed into Silicon Graphics’s technical range. It gives Silicon Graphics, largely a direct sales operation, some new OEM business, but not necessarily any really new markets, but at least a window into the commercial marketplace. Because of their ties to the Advanced Computing Environment initiative, the move effectively changes the complexion of the industry, but no one knows yet whether it will be pock-marked or clear-skinned. An immediate effect is to thrust a small niche player like Silicon Graphics on to the same stage as industry demigods IBM Corp, Digital Equipment Corp, Hewlett-Packard Co and Sun Microsystems Inc, vendors with their own chip operations. The new twosome is trying to position the merger as a perfectly normal evolution of their long and intimate supplier-client relationship, uninfluenced in any way by the dire straits in which MIPS has been swimming or the commercial roadblock Silicon Graphics encountered when its deal with Compaq Computer Corp fell apart, and say it will enhance the strength of the now waning 11-month old Advanced Computing Environment initiative. Such a conclusion, however, is neither as obvious nor as universally shared as they might like to think. Because of the inherent weakness of its systems business, the pre-merger MIPS could at least argue that it was independent. With Silicon Graphics at its back, such neutrality evaporates, leaving Advanced Computing Environment members to wonder whether, for all the avowals made to the contrary, the MIPS chips they are designing into their systems are actually optimised for Silicon Graphics’s use. Indeed, Silicon Graphics senior vice-president Mike Ramsey admitted last week that Silicon Graphics intends tightly coupling the processor to its own machines, claiming this will improve systems performance and benefit the whole initiative. The test for bias, one participant reckoned, will have to be made down the road inside the ARC subcommittees that have been set up. However, Hewlett-Packard’s vice-president, Wim Roelandts, claims the initiative is already dead, its passing marked by the flight of Compaq back to the low-end, Santa Cruz Operation Inc back to Intel Corp and DEC to Alpha. He voices the rumours long-heard in the industry of MIPS sinking fast and concludes Silicon Graphics’s intervention only delays execution. He deems it unlikely that a third-tier company such as Silicon Graphics, faced with limited resources, the demands of the market for a new silicon family every 12 to 18 months, and MIPS’ dependence on outside fab lines, will be able to salvage – let alone improve – the MIPS chip business. The R4000 was a leader a year ago, he says, but isn’t even out yet and will soon be overshadowed by competitors. Others, as expectant as the rest of the industry that someone would eventually move to pick up MIPS’ architecture, maintain that Silicon Graphics had no choice, because as MIPS’ first customer seven years ago it was too tightly tied to MIPS’ architecture and needed to preserve its chip supply. Such dependence makes the pair’s argument of strong synergy more compelling.