SGI TAPS MCCANN FOR LAUNCH INTO DIRECT PC SALES: CHALLENGE IS TO DIFFERENTIATE LINE IN SEA OF CLONES

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Silicon Graphics Inc. will enter the direct PC market with a high-powered product it hopes to differentiate from a sea of PC clones.

SGI last week named McCann-Erickson Worldwide, San Francisco, as first agency for the estimated $40 million account of its new Visual PC Group, which in the next four to six months is expected to launch a line of performance PCs running Microsoft Corp.'s Windows NT and Intel Corp.'s top chips.

McCann edged out Arnold Communications, Boston, in a review managed by Michael Markman, principal at Markman Associates, Mountain View, Calif.

OPPORTUNE TIME

The agency enters the picture at an opportune time: SGI, which in January recruited Hewlett-Packard Exec VP Richard E. Belluzzo as chairman-CEO, is in the midst of change, moving into the NT market while it grapples with restructuring, losses and limited revenue growth in its traditional workstations and servers.

McCann conceivably could displace SGI's corporate agency, CKS Silicon Valley, Cupertino, Calif., which competed in the Visual PC review but didn't make the final cut.

CKS last summer was hired by now-departed management for what was expected to be a $20 million account. But CKS has been given limited work while SGI has been in flux.

Jerry Giaquinta, VP-corporate marketing and communications, stressed the charge of the recent review was only to hire an agency for Visual PCs and said SGI hasn't discussed consolidating its account at McCann.

"Right now, [there is] no change," he said. "For now, that's our operating plan."

McCann is expected to produce print, Web and possibly TV advertising. SGI hired Think New Ideas, West Hollywood, Calif., for work on the division's new Web site.

Michael Mace, the division's marketing director, declined to elaborate on distribution plans, but is expected to focus on direct sales over phone and Web, the fastest-growing area in the PC market.

SEVERAL CHALLENGES

Ron Benza, McCann exec VP-general manager, said the company faces a number of challenges, including establishing the direct sales program and taking the campaign to other countries where database marketing and direct marketing are "in various stages of development."

SGI until now sold only powerful proprietary computers, largely powerful graphics machines favored by designers and creative professionals. Its new line will target creative and technical people who require Windows and power.

Mr. Mace estimates this segment accounts for 10% of the PC market, and he's counting on SGI's brand and features to draw in customers who don't want, or can't use, the proprietary technology of an Apple Macintosh but also don't desire to own a mainstream business brand such as IBM or Compaq.

Mr. Mace, who moved from Apple to SGI last year, vowed that SGI will leap in with a massive dose of advertising.

"Generally, if you dip your toes into the PC market, they will get bitten off," he said. "You either have to swim or not swim, and we will swim."

Contributing: Alice Z. Cuneo.

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