SI
SI
discoversearch

Technology Stocks : Apple Inc.
AAPL 153.340.0%May 24 8:10 PM EDTNews

 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Alomex who wrote (29994)1/17/2001 8:03:50 PM
From: Alomex  Read Replies (1) of 197674
 
Here's a relevant paragraph in English about SGI founder Jim Clark and the former CEO Ed McCracken:


A whispering campaign wasn't Clark's style. Anything he said
to his engineers he also said directly to McCracken. Dick
Kramlich recalls a meeting between Clark and McCracken,
attended by himself and Glenn Mueller. "Jim just ripped Ed
apart. He explained to Ed everything that was wrong with his
character. Jim can be truly brutal--unfairly so. And that day
he just took Ed apart into pieces. By the time he was finished,
Ed was crying. No one knew what to say." Clark's friends who
did not know McCracken came to believe the man's name was
Fucking Ed McCracken. "Fucking Ed McCracken," Clark would
say, "he may have helped to stabilize the company, but now
he's destroying it. He can't see what's happening."

What was happening was the personal computer. When Clark
created Silicon Graphics, the computer world was a pyramid.
At the top were people like him and his engineers, who played
with the fastest machines. At the bottom was the personal
computer. The PC had been created in Silicon Valley as a toy
for hobbyists, a joke technology derided by the sort of
hotshot who worked for Jim Clark. Now it had found a
market for its services. Moore's law, which stated that the
price of computing power would fall by half every 18 months,
implied that the pyramid must collapse. The PC would soon be
able to perform all the functions of a Silicon Graphics
workstation. Microsoft controlled the market for personal
computers through its operating system, and so Microsoft
would displace Silicon Graphics. Microsoft and Silicon
Graphics sold shares in themselves to the public the same
year, 1986. Silicon Graphics might have been stunningly
successful, but Microsoft was taking over the world. "You
could see a time when the PC would be able to do the sort of
graphics that SGI machines did," says Clark. "And SGI would
be toast. Eventually, Microsoft would take over its business."

The falling price of computing power was leading the
computer into new markets. Moore's law came with a social
corollary: High tech could not remain high tech for long. You
might be the smartest engineer in the Valley, and you might
have built the most sophisticated computer, but it was only a
matter of time before some schlepp with a PC wrote a
program that let him do everything you could do, at a
fraction of the cost. Technical vanity did not pay. If you
wanted to make a great deal of money and acquire a great
deal of power, you cultivated a more egalitarian outlook.

In the late 1980s and early 1990s people with a reputation
for inventing the future spent a lot of time talking about
where the trend might lead next. Jim Clark was one of these
people. In December, 1990, he joined a discussion at a
conference called PC Outlook. One of the questions the panel
considered was "Will personal computing and personal
communications be combined, or will it just remain as
science fiction?" In 1990 the idea that people would use their
PCs to communicate with one another was outlandish. Yet it
was still worth discussing, for if the computer ever did
become a communications device it might transform not just
the Valley but the economy. It would plug the masses into the
thinking machine, and the thinking machine into the masses.
At the conference Clark predicted that this would happen
once the computer became fun to use. For the preceding two
years he had argued that the new new thing was computer
games, like Nintendo. He was wrong, but in an interesting
way. He was groping toward a mass market. "Jim always was
looking to democratize the technology," says Dick Kramlich.
"He was always thinking about how to make some high-end
technology accessible to a larger audience. That's what he'd
done with the Geometry Engine. His chip cut the cost of
real-time computer graphics from millions of dollars to tens
of thousands."

Clark saw only one solution: Silicon Graphics had to build a
cheap computer to compete with the personal computer.
Cheap machines meant mass markets, and mass markets
meant great sums of money. In early 1987 he started arguing,
in characteristically undiplomatic fashion, that SGI was
doomed. "Jim was probably two or three years ahead of the
rest of us in seeing what was coming," Ed McCracken says. "He
could see problems down the road and the problems became
emotionally important to him." "I was saying, 'Goddamn we're
out of our minds,'" says Clark. "I was so worried about the PC.
I was adamant that we had to build a low-end product, and
that it had to be something that sold for under five grand." It
didn't happen--largely because McCracken did not share
Clark's view. Fred Kittler, then an analyst with J.P. Morgan,
recalls visiting Clark in his office at SGI in early 1990. "I was
out here with a couple of analysts, and he was pacing back
and forth like a man in a prison cell complaining about how
his board wouldn't let him create his cheap computer. It was
clear by then he had no real power."

Clark thought that Silicon Graphics had to "cannibalize"
itself. For a technology company to succeed, he argued, it
needed always to be looking to destroy itself. If it didn't,
someone else would. "It's the hardest thing in business to do,"
he would say. "Even creating a lower-cost product runs
against the grain, because the low-cost products undercut
the high-cost, more profitable products." Everyone in a
successful company, from the CEO on down, has a stake in
whatever the company is currently selling. It does not
naturally occur to anyone to find a way to undermine that
product. Clark thought he knew how to become the agent of
his own creative destruction, and he was prepared to do the
deed. He wanted Silicon Graphics to operate in the same
self-corrosive spirit.

More to the point, he wanted Ed McCracken to operate in
this way. But Ed McCracken was not the man to roll the bones
on the future--for which he could hardly be faulted, since as
CEO he would get a lot more of the blame for any gamble
that went wrong. Still, he manufactured a kind of
contradiction in the heart of his company. All the good things
that happened at Silicon Graphics happened because Clark
had guessed that computer graphics had a commercial
future. The company had been built entirely on Clark's
foresight. But once it became a big company it had no room
for Clark or his hunches. A big company--even a big company
as highly charged as SGI--needs to believe its own internal
propaganda: that its products are the best, that its
technology will win, and so on. It has trouble entertaining the
thought that it is doomed.

globetechnology.com
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

Copyright © 1995-2017 Knight Sac Media. All rights reserved.Stock quotes are delayed at least 15 minutes - See Terms of Use.