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SGI up for grabs? Not likely…

Shiny military contracts and general feel-good make it look viable on its own

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There have been rumours that SGI may be the target of a takeover because its share price has edged up rather suddenly, but in the absence of some solid announcement, there is a perfectly good explanation to be had from a look at recent events. War is good for IT hardware sales and investor confidence, and SGI has been getting some good orders as a result of its sales effort for the Balkans. Today SGI announced that the US Navy had increased the size of its SGI kit to improve the safety and effectiveness of US ships and aircraft in its mobile Balkans reference sites. In addition, the US Naval Oceanographic Office has expanded its Crays (the SGI merger was in 1996) so that there is now a 816-processor T3E, with five smaller Crays and a bunch of assorted SGI kit. Last week SGI announced that Lockheed Martin had given it a contract to provide kit for networked F-16 simulators. There wasn't any mention in the press releases as to how much these contracts might be worth, but it must be a few bob. This year, Silicon Graphics has been pushing its rebranding to SGI and repositioning itself in the supercomputer space. It also launched some Wintel workstations using NT this year, as a development of last year's strategic alliance with Microsoft. We didn't feel the need to enquire whether the boys (and probably girls) in the US forces in the Balkans were protected by NT, but there seems to be enough microprocessors there to act as sandbags. The SGI feel-good factor has also been helped by some sharp moves with Linux: following last month's news that SGI was releasing an XFS journaled file system into the public domain, it was announced this week that Linux drivers by Number Nine had been developed for flat panel devices from SGI. Although we can't see anyone rushing out to buy one of these flat panels as a result of this, it is quite significant that Linux has achieved such importance in this market. All this adds up to some right moves by SGI and some cash rattling in the pockets of the gnomes of New York from their sale of some Internet shares. Takeover? We don't think so. ®

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