CRAY RESEARCH RELENTS\Silicon Graphics buys independent supercomputer firm.

Byline: Evan Ramstad Associated Press 

Cray Research Inc. agreed to be purchased by Silicon Graphics Inc. on Monday, ending 24 years in which it stood alone in defining 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 out 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. More recently, though, some customers had put off delivery, expressing worries about Cray's long-term chances.

"Although I think they would have rebounded without help, when the customers start to stretch out buying decisions, when the customers start to hesitate, that's disastrous," said Rich Partridge, analyst at D.H. Brown Associates in Port Chester, N.Y.

Since its founding in 1972, Cray had dominated the supercomputer industry and was the U.S. standard-bearer in a contest for bragging rights about who made the world's fastest computers.

The machines can cost several million dollars each and are used for sophisticated tasks like 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.

In addition, with microprocessors always becoming more powerful, more customers wanted computers built from standardized components and software. Just as in mainframe computers, supercomputer makers had to convert from specialized designs and most could not manage it.

"Cray was the last player standing," said Gary Smaby, president of the Smaby Group, a Minneapolis-based consulting firm that specializes in supercomputers. "They did win out in the end, but the market that they dominate is a market that's mature. This will be a way for them to leverage the franchise they've nurtured into a market that's growing."

The push to a more common design put much more powerful competitors against Cray, including IBM, Digital Equipment Corp., Hewlett-Packard Co., Intel Corp. and Silicon Graphics. All have machines that combine microprocessors by the dozens or hundreds to approximate the processing speed of traditional supercomputers.

One sign of the shifting mix came last fall when Hewlett-Packard bought Cray's last remaining independent rival, Convex Computer Corp.

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Photo (Color) Ed McCracken, left, CEO of Silicon Graphics, and J. Phillip Samper, chairman of Cray Research Inc., answer media questions Monday. Associated Press Box (1-2--Color) CRAY RESEARCH, INC. The squeeze on Cray (1) Factors (2) Cray's future Chart (1--Color) Profits (2--Color) Revenues AP