Federal Focus Sharpens

September 2000
By Michael A. Robinson

Seeing the big picture allows graphics generators to zoom in on a niche market.

For Anthony K. Robbins, building a billion-dollar business is about more than high performance. Indeed, as the president of SGI’s recently launched federal business subsidiary, success depends on generating images such as realistic battle scenes and high-resolution relays from outer space.

In many ways, Robbins’ own life mirrors that of the company he now heads—both grew up in a military sales environment. SGI, formerly known as Silicon Graphics Incorporated, was launched 18 years ago after it received a research grant from the Defense Advanced Research Projects Agency. Robbins, now age 40, grew up in Huntsville, Alabama, where his mother had worked in a civil service foreign sales position with the U.S. Army Missile Command. Her job encompassed both the Chaparral and Patriot missile programs.

“I have been around the government business for a long time,” Robbins, who also serves as a corporate senior vice president, says. He divides his time between the federal unit’s headquarters in Silver Spring, Maryland, and the holding company’s headquarters in Mountain View, California.

“As I have told my teams and our customers, at the end of the day, we are all taxpayers. Fundamentally, that’s what I care about and what I hope to build in this organization. That is the mark I would like to leave on this business,” he explains.

Launched last April, SGI Federal is expected to grow at least as fast as its parent company, Robbins, a 10-year SGI veteran, says. If anyone should know about the company’s federal opportunities and its chances for sales and revenue growth, it is Robbins, who was in charge of federal programs before the parent company restructured the business into a single coherent unit.

In addition to its emphasis on high-performance computing and visualization, SGI Federal has a wide-ranging mandate that includes providing solutions in modeling and simulation as well as commercial off-the-shelf and open systems. Other sources of revenue include data mining, geospatial imaging, supercomputing and streaming media, a growing area because of the popularity of the World Wide Web.

Robbins notes that SGI won several important government contracts over the past five quarters, adding that he expects the momentum to continue.

For example, Lockheed Martin awarded SGI a contract to develop and install a turnkey visual system solution for the Israeli air force F-15 flight and system trainer. The Israelis will be able to train in real time at jet speeds by using a realistic geo-specific and photo-specific virtual environment. This environment is developed using satellite-derived photographic images of the region where pilots wish to train. Current Israeli simulators support geo-typical databases that do not use photo-realistic imagery of an actual geographic region. The new F-15 simulator is scheduled to be ready for training in March 2001.

In addition, the company is providing advanced high-performance visual computing equipment and servers to power the U.S. Army’s aviation combined arms tactical trainer-aviation reconfigurable manned simulator (AVCATT-A). Based on the “one Army, one simulator” concept, the system offers a realistic, high-intensity virtual combat training environment for the Army and the National Guard’s full suite of attack, reconnaissance and utility helicopters. The AVCATT-A system can simulate battlefield conditions such as smoke, wind, low cloud cover and blowing snow, dust and sand in day, dusk and night environments.

In June 1999, Lockheed Martin awarded SGI a contract on the $500 million distributed mission training program. SGI supplies the high-performance visual-computing equipment to power the first networked, full-mission F-16 simulators. As part of a virtual reality environment, the initiative allows pilots to experience an automated full-mission briefing, participate in combat missions, and link with other forces such as airborne warning and control system aircraft, ground troops and tank commands.

If the federal business simply keeps pace with its parent operations, it would roughly double its sales to more than $1 billion in less than five years. The subsidiary currently accounts for more than 20 percent of SGI’s $2.7 billion in sales, or about $540 million in sales.

SGI Federal’s aggressive expansion plans may seem at odds with the broad industry trend of cutbacks and consolidations at many government contracting companies, some of which have left the business altogether. But James McDivitt, a former astronaut who sits on the board of directors of both SGI Federal and the parent company, says now is actually a good time to grow, particularly in the areas of modeling and simulation.

“In the federal government, cost is always a problem,” McDivitt observes. “In the intelligence and defense sectors, that is particularly true. It is a very costly business to go out and train when you are trying to simulate the exact environment in which you are going to be operating. Simulation is a cost-effective way to do that.”

For his part, McDivitt is something of an expert on the effectiveness of simulators. He is a retired U.S. Air Force brigadier general and served as an astronaut at the National Aeronautics and Space Administration (NASA), where he established six world records for space flight.

He joined the Air Force in 1951 and flew F-80 and F-86 fighter aircraft in 145 combat missions during the Korean War. At NASA, he was command pilot for Gemini 4, a four-day mission launched on June 3, 1965. During that mission, Edward H. White made the United States’ first space walk.

McDivitt next commanded Apollo 9, a 10-day earth-orbit flight, and became NASA’s manager of lunar landing operations in May 1969. In August of that year, he became manager of the Apollo spacecraft program. He left NASA in 1972 to enter business, serving as president of the Pullman Standard Corporation, and then as senior vice president, government operations and international, for Rockwell International Corporation.

Consequently, McDivitt has seen simulation undergo enormous growth over the last 50 years, adding that the difference is night and day. He compares the advances to the old World War II movies when the blue and yellow boxes were used as flight simulators. “The stuff was so unsophisticated you really couldn’t accomplish very much,” he adds. “Today’s simulators are very sophisticated. They are very realistic. You can actually get motion sickness sitting in one of these things.”

In fact, SGI—the parent company—has long been heralded for its impressive graphics and is arguably best identified with breakthrough technology for graphics workstations. The company was founded by entrepreneur Jim Clark, who later went on to found Netscape and Healtheon and who has been identified in media accounts and in several books as a major Silicon Valley visionary.

SGI’s workstation and server technologies continue to collect awards and recognition. AV Video Multimedia Producer magazine, which is influential in entertainment and digital content, awarded SGI the publication’s 2000 Outstanding Achievement and Readers’ Choice awards for the Silicon Graphics 320 visual workstation and the SGI 2100 server, respectively.

That tradition continued last June when SGI introduced the Silicon Graphics Octane2 visual workstation, a power desktop line that company officials say offers the highest level of visualization of any UNIX desktop workstation. Octane2 V8 is the first UNIX workstation to offer 128 megabytes of configurable graphics memory. This flexible block of memory can be used by an application as texture memory or for graphical effects with 96-bit accuracy, according to the firm’s officials.

As it has in the past, SGI is finding its workstations popular with movie studios. Pixar Animation Studios, Richmond, California, known for its work with Disney on the animated movies “Toy Story” and “A Bug’s Life,” ordered 240 of the Octane2 systems. Pixar representatives say the company plans to use them on the Disney/Pixar feature “Monsters, Inc.,” which is set for release at Christmas 2001.

SGI also is considered the leader in image generation and simulation technology, according to the marketing consulting and training firm Frost & Sullivan. A report released by the consulting company last April shows that, since assuming leadership in 1996, SGI steadily has increased its market share in the three reported market areas, including the overall, commercial and military markets.

The company has made great strides in the commercial market, garnering a 31 percent share for high-end image generation, and also excels in the entry-level market dominated by the personal computer. Its lead in the military market is even more commanding, with a 42 percent market share, Frost & Sullivan said, concluding that “SGI has a close relationship with the U.S. military simulation and training community, with a legacy of technology development geared toward meeting the U.S. military’s requirements. This has helped to maintain SGI’s strong presence in the military sector.”

“We want to continue to have a strong relationship with the federal government,” Robbins adds. “This is obviously an important part of our business. We want to focus on being a strong, valued partner that delivers quality products on time and under budget. I think we are living my ideal today.”