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New SGI Channel Program Enables Channel Partners to Build Businesses on Untapped Technical and Creative Opportunities

Posted on: Monday, 6 June 2005, 09:00 CDT

MOUNTAIN VIEW, Calif., June 6 /PRNewswire-FirstCall/ -- Silicon Graphics today announced it will aggressively expand its global channel distribution strategy and indirect sales model. This announcement includes the launch of the new SGI(R) Channel Connection program -- a robust sales, marketing, and technical support program that will enable channel partners to build mutually successful business opportunities in the rapidly growing low- to mid-range HPC market.

According to the recent HPC Server Forecast 2005-2009 by the analyst firm IDC, the worldwide high-performance technical server units (priced under $100,000) is forecasted to grow at an estimated 10.8% (CAGR).(1) "The mid-range of the High Performance Technical Computing market is growing dramatically. During 2004 it grew over 47 percent and is expected to do well again this year. In addition, we expect indirect server sales will increase in significance in the market as vendors work to expand their reach through more aggressive channel strategies," said Earl Joseph, vice president of High Performance Technical Systems at IDC. "These two trends coupled with SGI's new channel strategy positions the company to take advantage of these growth factors."

SGI is the only vendor committed to providing channel partners with competitive, differentiated and channel-friendly computing solutions and the marketing and sales support to win these technical and creative HPC customers. As this industry segment continues to grow, SGI's new channel-centric strategy, scalable product line, and channel program firmly position the company to increase revenue generated through indirect channels.

"SGI's future growth is dependent upon success in the channel and we are committed to building mutually profitable businesses with our channel partners," said Bob Bishop, chairman and CEO, SGI. "SGI has something unique to offer our channel partners: differentiated SGI solutions that maximize revenue while providing great customer value."

SGI's new global channel distribution strategy addresses three key areas for fueling company and partner growth in SGI's target markets of government and defense, sciences, manufacturing, energy, and media, as well as driving opportunities in new markets.

-- SGI Channel Connection: A specialized channel organization that opens

technical and creative market opportunities to channel partners who

offer vertical solutions for specific industry needs. SGI is creating

fresh indirect sales opportunities with new program components enabling

SGI to expand its reach into existing and new markets.

-- Independent Software Vendors (ISVs): SGI partners with the top

application software vendors in its target markets to highlight SGI's

key differentiation. For example, SGI has partnered with Landmark

Graphics, a leading ISV for the energy market, to become SGI's

preferred reseller in Latin America for the energy market

there -- allowing SGI to maintain its existing visualization business

and expand into additional opportunities. (See release dated

May 2, 2005)

-- New Markets: SGI's goal is to drive new innovations into new vertical

markets via the original equipment manufacturer (OEM) channel. In the

initial phase of the program, SGI has signed strategic agreements with

Signate, Kraftway, and IPEX, for the Linux(R) OS-based SGI(R) Altix(R)

high-performance compute server products. In addition, the company has

licensed SGI(R) NUMALink(TM) interconnect technology and Silicon

Graphics Prism(TM) visualization technology to DE Shaw and FUJIFILM

Medical Systems USA, respectively. As the number of strategic

relationships continues to grow, SGI expects to create better ROI for

SGI's R&D investment (See release dated May 2, 2005.)

New Global SGI Channel Connection

Along with this channel-centric strategy, SGI is announcing a new channel program -- SGI Channel Connection. This program redefines and delivers the tools, the campaigns and the capability to provide partners with the means to go to market easily and successfully. Under this new program, all types of SGI Channel partner associates -- value added resellers (VARs), system integrators (SIs) original equipment manufacturers (OEMs), licensees, and independent software vendors (ISVs) are consolidated under a single global umbrella, guided by one global strategy.

To achieve this, SGI has developed a global program to better support the channel and reorganized the SGI field organization to support a limited number of named accounts. Non-named accounts are identified as channel-only business. SGI has developed a robust program foundation to accompany this philosophy.

Key features of SGI Channel Connection include:

-- Channel Connection Academy: Focuses on training partners with industry

and technical specialization for a deeper understanding of customers'

needs.

-- Market Advantage: Delivers sales and marketing tools, including Market

Development Funds (MDF), to enable partners' success.

-- Service Advantage: Focuses on helping partners drive their own

successful services business, without competition from SGI.

-- Opportunity Registration: Enables a clear engagement model with no

channel conflict or competition.

Channel-Ready Products

SGI's primary focus is in the scientific, creative and engineering markets, and it is within those areas where the open systems Linux environment of SGI Altix high-performance computing servers and Silicon Graphics Prism visualization systems, along with SGI(R) InfiniteStorage solutions, offer the greatest value to end-users. SGI(R) NUMAflex(TM) architecture, coupled with SGI's highly differentiated shared memory capability, running in a true 64-bit Linux environment on Intel(R) Itanium(R) 2 processors simply provide incredibly high-performance compute and visualization solutions that no other company can offer. SGI will also be announcing new low-end Channel-friendly products and quick-ship configurations in the coming months to focus on low- to mid-range, departmental server, storage and visualization needs.

Customers can truly "Expand on Demand" with SGI solutions, whether the compute power need is 2 processors or more than 10,000 processors and can grow as the customers' needs change.

For more information on SGI Channel Connection and to learn how to qualify to become an SGI Channel Connection member, visit http://www.sgi.com/resellers. SGI Channel Partners applaud the new Channel Connection Program, to view channel partners' reaction see quotes at /company_info/newsroom/press_releases/2005/june/channel_program.html

SILICON GRAPHICS | The Source of Innovation and Discovery(TM)

SGI, also known as Silicon Graphics, Inc., is a leader in high-performance computing, visualization and storage. SGI's vision is to provide technology that enables the most significant scientific and creative breakthroughs of the 21st century. Whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate, providing technologies for homeland security and defense, or enabling the transition from analog to digital broadcasting, SGI is dedicated to addressing the next class of challenges for scientific, engineering and creative users. With offices worldwide, the company is headquartered in Mountain View, Calif. and can be found on the Web at http://www.sgi.com/.

NOTE: Silicon Graphics, SGI, Altix, XFS, the SGI cube and the SGI logo are registered trademarks and Silicon Graphics Prism, CXFS, NUMAlink, NUMAflex, and The Source of Innovation and Discovery are trademarks of Silicon Graphics, Inc., in the United States and/or other countries worldwide. Intel and Itanium are registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries. Linux is a registered trademark of Linus Torvalds in several countries. All other trademarks mentioned herein are the property of their respective owners.

Safe Harbor Statement

This news release contains forward-looking statements regarding SGI technologies and third-party technologies that are subject to risks and uncertainties. These risks and uncertainties could cause actual results to differ materially from those described in such statements. The reader is cautioned not to rely unduly on these forward-looking statements, which are not a guarantee of future or current performance. Such risks and uncertainties include long-term program commitments, the performance of third parties, the sustained performance of current and future products, financing risks, the ability to integrate and support a complex technology solution involving multiple providers and users, and other risks detailed from time to time in the company's most recent SEC reports, including its reports on Form 10-K and Form 10-Q.

(1) IDC Research Report: May 2005 -- Doc # 33358

Worldwide High-Performance Technical Computer Server 2005-2009

Forecast Christopher G. Willard, Ph.D., Earl Joseph, Ph.D., Addison

Snell

MEDIA CONTACT

Marla Robinson

marlar@sgi.com

256-773-2371

SGI PR HOTLINE

650-933-7777

SGI PR FACSIMILE

650-933-0283

SGI

CONTACT: Marla Robinson, +1-256-773-2371, or marlar@sgi.com, or SGI PRHOTLINE, +1-650-933-7777, or SGI PR FACSIMILE, +1-650-933-0283, all of SGI

Web site: http://www.sgi.com/

Source: PRNewswire-FirstCall

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