Rick Belluzzo became CEO
in January 1998 after spending 22 years as at Hewlett-Packard
. Many at SGI blame him for pushing the company that was heading down hill faster. Rumors on sgi.badattitude
believed that Belluzzo's job was to break up SGI into several smaller companies and sell off Cray
(which it just bought 2 years prior) to HP. What he did was worse than many imagined
Within two months of Rick Belluzzo starting at SGI, MIPS was spun off for $71.6 million. This portion of the company was quite profitable and produced the processor that SGI used at the time. MIPS continues to be quite profitable (with 0.35 earnings/share compared to sgi at -2.69).
Another change under Rick Belluzzo was the introduction of the "Visual Workstation" which ran not IRIX, but Microsoft NT. As part of this change, the support staff which was previously entirely Unix based had to be trained in all the nuances of NT and able to support it. While this was in theory supposed to toss SGI back into the market with high margins, it lost miserably - who would buy a $10k machine with the name "SGI" on it when you can get the same thing from Dell (a company with a track record in NT systems and support) for $2k.
Upon realizing that the Visual Workstation running NT was a failure, SGI turned to another operating system - Linux. The date was August 1999 and SGI had just laid off 17% of its staff, including a good sized chunk of engineering. They needed an operating system that ran, and was already ported to the platform (Linux has run on SGI systems since the Indigo2). This change from NT to Linux was driven from the engineering department and up rather than from the top.
In September 1999 Belluzzo joined Microsoft. From the perspective of employees Belluzzo's stay was essentially sucking up to Bill Gates. Some attitudes expressed hoped that he would mess up Microsoft as bad as he did SGI.