Dead End: Silicon Graphics
Abstract
Silicon Graphics (SGI) built the machines that made 3D graphics real: the workstations behind Jurassic Park, the chip inside the Nintendo 64, and the OpenGL standard that still drives graphics today. Founded in 1981 on Jim Clark’s Geometry Engine, it grew to $3.7 billion in revenue, then was destroyed in a decade by cheap PC graphics cards designed largely by its own former engineers. The company went bankrupt twice and sold for $42.5 million in 2009. Google’s headquarters sits on its old campus.
The Geometry Engine
Jim Clark, an associate professor at Stanford, and his student Marc Hannah designed the Geometry Engine, a VLSI chip that did the matrix arithmetic of 3D graphics (transforming, clipping, and scaling geometry) in hardware instead of software. Clark founded Silicon Graphics in Mountain View on November 9, 1981, to sell it. The IRIS workstations that followed from 1984, running the company’s IRIX flavor of UNIX, were for two decades the machines you bought when you needed to see 3D in real time: molecular modeling, flight simulation, car design, medical imaging.
SGI’s cultural footprint came from Hollywood. Industrial Light & Magic rendered the liquid-metal T-1000 of Terminator 2 (1991) and the dinosaurs of Jurassic Park (1993) on SGI hardware, and the film returned the favor with the most famous product placement in computing: the “It’s a UNIX system, I know this!” scene shows a real SGI Crimson running fsn, SGI’s experimental 3D file-system browser. From 1995 to 2002, every single Academy Award nominee for Visual Effects was produced on SGI systems. Under CEO Ed McCracken, revenue grew from $5.4 million to $3.7 billion.
OpenGL
SGI’s most durable artifact is a standard, not a machine. In 1992 the company took its proprietary IRIS GL programming interface, cleaned it up, and released it as OpenGL, licensing it cheaply to competitors and setting up an industry consortium to govern it. The calculation was self-interested (a standard API meant software written for SGI’s strength, 3D, rather than for Microsoft’s), and it worked far beyond the company’s lifespan: OpenGL and its descendants outlived every machine SGI ever shipped (see Graphics APIs).
Nintendo
In 1993 SGI signed with Nintendo to design the Reality Coprocessor, the graphics and audio chip of the Nintendo 64 (1996), putting SGI-designed 3D into fourteen million living rooms for $199 while SGI’s own workstations cost tens of thousands. The project also previewed the company’s fate: in 1997 twenty SGI engineers led by project head Wei Yen left to found ArtX, which designed the GameCube’s graphics chip and was absorbed into ATI. It was one exodus among many. Founders and key engineers of 3dfx, and much of the early talent of the PC graphics industry, came out of SGI; the knowledge walked out the door and reappeared on $300 add-in cards (see The GPU Revolution and Jensen Huang and Nvidia).
Jim Clark had already gone. Frustrated with the board’s attachment to high-margin big iron, he left in January 1994 and founded Netscape with Marc Andreessen weeks later (see Marc Andreessen and Netscape).
The Commodity Wave
SGI’s business rested on one premise: real-time 3D requires expensive special-purpose hardware. By the late 1990s a gamer’s PC with a 3D accelerator card delivered a growing fraction of an IRIS workstation’s graphics for a fortieth of the price, and Moore’s Law closed the gap a little more every quarter. SGI’s management answered with almost every available wrong move. It bought Cray Research in 1996 and sold it off in 2000 without ever integrating it (see Seymour Cray and Supercomputing). It abandoned its own MIPS processor roadmap for Intel’s Itanium, the industry’s most expensive cul-de-sac (see Dead End: Intel Itanium). It shipped Windows NT workstations on Intel chips, which destroyed the IRIX margin story without winning the PC market. Each pivot was announced, half-executed, and reversed.
Dead End
The market capitalization that had exceeded $7 billion in 1995 was $120 million when the stock was delisted in 2005. SGI filed Chapter 11 in May 2006, emerged, and filed again on April 1, 2009, selling substantially all assets to Rackable Systems in a deal that closed at $42.5 million, roughly one percent of a good year’s revenue. Rackable took the name, sold servers as Silicon Graphics International, and was bought by Hewlett Packard Enterprise in 2016 for $275 million.
The geography tells the story compactly. Google leased SGI’s former Amphitheatre Parkway campus in 2003 and bought it in 2006 for $319 million; it is now the Googleplex. The Computer History Museum occupies another former SGI building next door. The company that proved 3D graphics could be a business was right about everything except who would end up selling it: the workstation died, the graphics went into everyone’s pocket, and the buildings went to the next era.