Bishop steps in as Belluzzo exits SGI
Replacement CEO vows to continue with restructure.
Richard Belluzzo has unceremoniously left troubled workstation vendor SGI, 17 months after being named chief executive of the company formerly known as Silicon Graphics.
Belluzzo's shock departure, and his summary replacement by SGI board member Robert Bishop, was announced in a terse statement by the vendor.
It claimed Belluzzo had "resigned to accept a position in a business that is not competitive with SGI", but rumours are rife that the former Hewlett Packard executive is headed for Microsoft to run its internet operations.
Belluzzo, who is tipped to start at Microsoft this month as executive vice president, declined comment.
Meanwhile, Bishop ruled out any possibility of embarking on sweeping changes in his first act as chief executive. Instead, he reiterated his commitment to the reshuffle announced by Belluzzo 18 days ago.
"I am excited by the opportunities at SGI. Having participated in the formation of our strategy, I am committed to the next phase in SGI's transformation that positions the company for sustained growth and profitability," he said.
Bishop also denied SGI's restructuring was a way to make it a more appealing acquisition target. "We are not planning to dress the company up on a sale basis. I have taken the job on the basis that this is a long-term position," he said.
Parts of SGI's business will be spun off as part of the changes. The company is seeking a partner to take over operations of its Cray supercomputing unit, which will become a separate entity.
At the time of the restructure announcement, Belluzzo said: "We feel that customers and shareholders will be better served by focusing on this unique set of customers technology, and that trying to continue to keep it blended within SGI is difficult to manage and results in less than ideal outcome."
Other changes include transferring the management of the vendor's Windows NT-based Visual Workstation line. SGI has indicated that it has reached a "preliminary understanding" with an unnamed company to do so.
"Workstations have been a challenging endeavour for SGI," Belluzzo said.
"On the one hand, SGI represented some leadership technology and functionality in the industry but, at the same time, we feel it's important to use that across a broader set of customers, across more channels and more volume.
To do that, we've decided to work with a partner."
In turn, SGI will concentrate on visual computing systems and broadband internet access, a plan that includes the formation of a business unit that will produce broadband internet systems.
The reshuffle will result in between 1,000 and 1,500 jobs being lost from SGI's total workforce of 9,000. The cuts will affect areas including administration and marketing. Another 1,000 to 1,500 jobs could be shifted to SGI's new business partners.
While Belluzzo's sudden departure stunned the industry, SGI appeared unperturbed.
Jim Irving, UK director for channels and workstations at SGI, stressed that Belluzzo's departure would have no effect on its strategy. He claimed Bishop was as "channel friendly" as Belluzzo.
But industry analysts were more sceptical. Shawn Willett, senior analyst at Aberdeen Group, said: "He has his work cut out for him. SGI has to think where it adds value to the market - graphics, the internet and broadband - not in the low-end NT workstation."
Phil Rueppel, an analyst with Deutsche Bank, said: "On the one hand, Belluzzo hasn't lived up to expectations. On the other, he brought a great deal of experience and credibility to SGI."
Richard Doyle, managing director of reseller Esteem Computers, was unclear about SGI's future. "I'm not sure it has the size and the investment capability to be able to compete in an extremely competitive and expensive market," he said.
He added that instability at SGI and its failure to introduce a coherent roadmap had caused it to lose its way, allowing other vendors to overtake it in the market. But he welcomed the restructuring programme as a "good sign".