SGI to buy ParaGraph

Hoping to bolster its Windows development tools business, Silicon Graphics (SGI) today said it will purchase tiny 3D Internet software developer ParaGraph International.

As reported yesterday by CNET's NEWS.COM, SGI's board of directors recently approved the acquisition as a means to further strengthen its early claim on VRML (virtual reality modeling language) technology with its Cosmo line of products.

Under the definitive agreement, ParaGraph's operations will be moved to SGI's Mountain View, California, campus where it will be integrated into Cosmo Software, SGI's new multiplatform Internet software business unit.

Financial terms of the deal were not disclosed.

"One of the most important long-term growth opportunities for Silicon Graphics is to empower the designers, developers, and service providers of the Second Web," said Edward McCracken, SGI chairman and chief executive, in a statement. "With the acquisition of the leading PC 3D Internet company and the formation of Cosmo Software, we are increasing our investment and reinforcing our leadership in the market for the software and services that will bring about this new interactive medium."

The ParaGraph buyout should help SGI strengthen an area of its business it is aggressively seeking to expand. ParaGraph makes a visual Windows and Macintosh authoring tool called Virtual Home Space Builder, which allows nontechnical users to create 3D environments based on the VRML standard.

SGI already offers a VRML plug-in called Cosmo Player, but its Cosmo Create VRML authoring tool is limited to Irix, SGI's Unix platform.

By promoting a Windows-based tool, SGI may be able to jump-start more development of VRML applications than with the less popular Irix operating system.

"The fit with Silicon Graphics, the most dedicated and successful pioneer of pervasive 3D computing, couldn't be better. The combination of these two focused companies should generate significant value for shareholders," said Gregory Slayton, president and chief operating officer for ParaGraph, in a statement.

Privately held ParaGraph was founded in 1989 in Russia by current chief executive Stepan Pachikov and world chess champion Garry Kasparov.