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SGI chief outlines roadmap out of mortuary

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McKenna said he was astonished that SGI had failed not just to capitalize on its rich IP portfolio, but had waved the white flag as soon as the shooting started.

"I am surprised by SGI's reluctance to defend its IP," he said.

This we interpreted as SGI's capitulation to NVidia, in 1999. NVidia and commodity Linux clusters became SGI's nemesis - and few staff at the time could understand the logic of Belluzo's decision to turn a surefire court win, and potential licensing bonanza, into a defeat. One can't imagine, say, a Qualcomm surrendering its CDMA assets for a flaky joint venture with a tiny upstart. This isn't how business is done.

McKenna added:

"SGI has a legacy of selling stuff for a small one-time fee. That's not going to happen again," he said.

And this we interpreted to be a reference to the day SGI met a giant, and agreed to give it many of its vital graphics patents. The deal, with Microsoft, was first brought to light here in early 2002, and the net value to SGI was just a handful of beans. Or $62.5m, to be precise.

"We have a hell of a lot of IP left," McKenna insisted. To stop the rot, he said he had lawyers writing letters in his second week.

He confirmed, however, that the OpenGL trademark was up for sale, along with other "non core" copyrights.

When we checked back to the 2001 10Q in which SGI disclosed the Microsoft deal, it also described the IP assets as "non core".

We wish Dennis and his 1,800 staff all the best. But recommend he has a "core inspector" on hand, to be safe.

SGI's history is full of strange echoes like this. Remember that the hasty Microsoft deal was arranged because of a dispute between Nvidia and Redmond over the first generation Xbox that threatened to delays its launch. But wasn't SGI at one time in the business of designing games consoles? Indeed it was.

And why is SGI now excited by a processor based on an Intel core that's twelve years old? The Woodshed is based on the P3 core, which is little more than the Pentium Pro with added marketing instructions. It's undergone a brief, two year emergency surgery to bring it up to date. Yet twelve years ago SGI owned an industry leading RISC chip that was both widely OEM'd and future proof. This was MIPS, which was spun out, and with Itanium on the road map, mothballed. You can speculate on how much advantage SGI might have gained from just two years' worth of similar focus on MIPS.

But back to now, and McKenna said SGI saw the opportunity to spin out of some of its software products and letting them benefit from a smaller organization. McKenna didn't say which, but he said SGI would retain a minority stake.

As for SGI's outlook, McKenna acknowledges the grim reality for the company's shareholders, but sees if not a sunny day, then at least some light.

"When I saw The Register's headline about our Chapter 11 filing, I thought, 'It's better to be titsup than titsdown'," he said.

"They'll use that," a PR minder warned the CEO.

We have no idea what he meant. ®

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