January 22, 1998 11:10 PM PST

SGI to name HP executive as CEO

Silicon Graphics (SGI) tomorrow morning is expected to name the general manager of Hewlett-Packard's computer organization as its new chief executive officer.

Richard E. Belluzzo, one of two executive vice presidents at Hewlett-Packard, will head the struggling high-end graphics workstation company, said sources close to the companies.

Belluzzo brings to the table experience overseeing HP's computer systems, computer products, and the software and services group.

HP's computer systems includes workstations, large-scale computer systems, and consulting. This should bode well for SGI, a high-end workstation and server computer maker that has encountered rocky times of late in pushing its server sales forward, getting its production on track, staving off an onslaught from Windows-Intel workstations, as well as polishing its cutting-edge image.

SGI yesterday reported a second-quarter loss of $31 million, largely due to a restructuring charge, and flat year-over-year revenue growth for two quarters in a row. Revenues reached $851 million.

Belluzzo will replace Edward McCracken, who in October announced he would step down once a replacement was found. McCracken has run SGI for more than 13 years, one of the few tech CEOs with such a long history at one company.

Brian Eisenbarth, an analyst with San Francisco-based Collins & Company, had previously said that any replacement for McCracken would face some tough issues. These include heavy competition and pricing pressure, in addition to the need to curb costs and improve the company's image so that all of its product offerings, not just workstations, would be recognized in the marketplace.

And in naming Belluzzo as CEO, SGI is repeating history. McCracken also joined SGI after coming from HP, where he had helped launch HP's first commercial line, the HP 3000.

Belluzzo, who joined HP in 1975, initially worked in the accounting department, was later appointed as controller for the former Information Products Group, and in 1986 named marketing manager for the former Peripherals Group.

Belluzzo in 1993 was promoted to general manager of the Computer Products Organization. And two years later was elected a senior vice president. Later that year, he assumed management responsibility for the newly formed Computer Organization and named an executive vice president.

 

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