Silicon Graphics' Cautionary Tale

In Silicon Valley (to paraphrase Leo Tolstoy), successful companies are all alike, while every unsuccessful company is unsuccessful in its own way. Despite the region's glittering reputation, flameouts do happen. And when the mighty stumble, the fall can be spectacular. Look at Apple Computer Inc., which makes the critically acclaimed Macintosh technology that may one day be a relic, and which has had a long and painful corporate unraveling that recently was capped by CEO Gilbert F. Amelio's departure. Equally startling is the abrupt free fall at Silicon Graphics Inc. Here was a company that had everything going for it: cutting-edge workstations, ballooning revenues as recently as two years ago, and a chief executive who was a White House regular. Like successful companies in Silicon Valley, SGI seemed to have the Midas touch.

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