ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, February 27, 1996 TAG: 9602270102
SECTION: BUSINESS PAGE: B-5 EDITION: METRO
DATELINE: NEW YORK
SOURCE: Associated Press
Cray Research Inc. agreed Monday to be purchased by Silicon Graphics Inc., ending 24 years in which it defined high technology's frontier by creating and advancing the supercomputer.
The $736 million deal put Cray in the hands of the company best known for the workstation computers that created the visual effects in movies such as ``Jurassic Park'' and ``Forrest Gump.''
Cray sought the deal to assure customers of its financial stability. Silicon Graphics gets a new revenue source and, potentially, a way to stand out from its competitors.
Cray lost money last year, but customers placed orders in record amounts after it introduced new machines. Recently, though, some customers have put off delivery, expressing worries about Cray's long-term chances.
Since its founding in 1972, Cray had dominated the supercomputer industry. It was the U.S. standard-bearer in the bragging contest about who made the world's fastest computers.
The machines can cost several million dollars each and are used for sophisticated tasks such as forecasting weather, finding oil or building bombs. But the business started to erode after the end of the Cold War reduced demand by government agencies, the military and its contractors.
``Cray was the last player standing,'' said Gary Smaby, president of the Smaby Group, a Minneapolis-based consulting firm that specializes in supercomputers. `` This will be a way for them to leverage the franchise they've nurtured into a market that's growing.''
``The marketplace is in transition. There are a lot of technology changes,'' said Ed McCracken, chief executive of Silicon Graphics.
Silicon Graphic's stock tumbled 8 percent on the New York Stock Exchange, closing down $2.121/2 a share to $25.371/2. Cray climbed $3.25 to $28.50, or 13 percent, also on NYSE.
Cray will keep its name, its 3,700 employees and remain based in Eagan, Minn., near Minneapolis-St. Paul.
LENGTH: Short : 45 linesby CNB