MOUNTAIN VIEW, Calif. and OAKLAND, Calif. (August 25, 2003)--SGI (NYSE: SGI) and SuSE Linux today announced plans to extend the Linux® OS to new levels of scalability and performance--offering, for the first time, a fully supported 64-processor system running a fully supported, enterprise-grade Linux operating system.

Expected to be available in October, SGI will bundle SuSE Linux Enterprise Server 8 on SGI® Altix™ 3000 servers and superclusters. SuSE Linux will support the unique 64-processor single-node scaling capabilities of the SGI Altix 3000 platform. SuSE will also provide third-level customer support to SGI customers in a seamless support agreement with SGI.

The companies also announced that SGI and SuSE will work on co-development efforts, including SGI's program to scale Linux to128 processors, which the companies anticipate will be available next year.

While other hardware vendors and Linux distributions support only small systems and partitions running Linux, SGI and SuSE can deliver large-scale systems--with nodes from 4 to 64 and soon to 128 processors--capable of addressing high-performance computing and technical database requirements. This collaboration opens doors for further expansion of standard Linux in the marketplace.

"Oracle welcomes SGI and SuSE's alliance, because it will enable Oracle customers on that platform to avail themselves of Oracle's support for Linux," said Dave Dargo, vice president of Platform Partners, Linux and Performance, Oracle Corp. "SGI servers, coupled with solutions based on Oracle Database and SuSE Linux Enterprise Server, will give customers increased choice for their enterprise Linux applications."

Not only will the companies continue to expand the capabilities and reach of SuSE Linux, but the new offering also broadens the market opportunities for both SGI and SuSE. Together the companies will develop and deliver an offering for customers whose technical or scientific applications interact with additional large-scale databases and enterprise infrastructure software. Ideal for a broad range of markets--from bio-informatics to automotive design and production--the combined offering provides industry-leading computing power, bandwidth and database performance.

"SuSE Linux Enterprise Server 8, certified for the industry's key hardware and software, will enable Altix customers to leverage the inherent security and stability of Linux," said Uwe Heine, chief alliance officer, SuSE Linux. "Together, SuSE and SGI can deliver high-performance Linux systems capable of handling the unique system load demands of scalable integer processing, throughput and memory."

The SGI Altix 3000 family of servers and superclusters combines SGI® supercomputing architecture with Intel® Itanium® 2 processors and the Linux operating system. Since its introduction, the SGI® Altix™ supercluster has been recognized as the first Linux cluster that scales up to 64 processors within each node and the first cluster to allow global shared-memory access across nodes. Inspired by the success of the SGI Altix family and the powerful combination of standard Linux and Intel® processors, more than 60 high-performance manufacturing, science, energy and environmental applications have been ported by their commercial developers to the 64-bit Linux environment, more than two-thirds of which have been certified and optimized for the platform.

"SuSE's support of advanced Linux features, such as scalability, the XFS filesystem, security and native 64-bit environments provide SGI and SuSE with a wealth of opportunities for collaboration," said Dave Parry, senior vice president and general manager, Server and Platform Group, SGI. "As a highly respected and experienced provider of open-source solutions, SuSE shares SGI's vision of a broadly scalable and robust Linux environment for technical and scientific computing."

On August 5, SGI announced plans to extend the Altix platform to encompass a record 128 processors within a single instance of Linux. See the press release titled "SGI Leads Effort to Scale Linux to 128 Processors in a Single-System Configuration" on www.sgi.com/newsroom.

Availability

SuSE Linux Enterprise Server 8 is expected to be available on Altix systems from SGI and SuSE in October 2003. SGI Altix 3000 servers and superclusters supporting 64-processor nodes, in configurations up to 128 Intel Itanium 2 processors, are available today from SGI. For customers demanding even larger Altix superclusters, SGI expects to support configurations of 256 processors in September and 512 processors in October 2003. Additional Altix system technical and availability information is posted on www.sgi.com/servers/altix.

This news release contains forward-looking statements regarding SGI technologies and third-party technologies that are subject to risks and uncertainties. These risks and uncertainties could cause actual results to differ materially from those described in such statements. The reader is cautioned not to rely unduly on these forward-looking statements, which are not a guarantee of future or current performance. Such risks and uncertainties include long-term program commitments, the performance of third parties, the sustained performance of current and future products, financing risks, the ability to integrate and support a complex technology solution involving multiple providers and users, and other risks detailed from time to time in the company's most recent SEC reports, including its reports on Form 10-K and Form 10-Q.

About SuSE

SuSE Linux is one of the world's leading providers of products and services based on the Linux operating system. In addition to the operating system and application software for private customers, SuSE offers software solutions and complete systems for the use of Linux in the enterprise. SuSE supports enterprise customers with a comprehensive range of qualified consulting, training and support services. Hosting the world's largest development team for Open Source solutions, SuSE Linux shares its unique project and support information online in the largest existing Linux knowledge database.

About SGI

SGI, also known as Silicon Graphics, Inc., is the world's leader in high-performance computing, visualization and storage. SGI's vision is to provide technology that enables the most significant scientific and creative breakthroughs of the 21st century. Whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate or enabling the transition from analog to digital broadcasting, SGI is dedicated to addressing the next class of challenges for scientific, engineering and creative users. SGI was named on FORTUNE magazine's 2003 list of "Top 100 Companies to Work For." With offices worldwide, the company is headquartered in Mountain View, Calif., and can be found on the Web at www.sgi.com.

Silicon Graphics, SGI, XFS and the SGI logo are registered trademarks and Altix is a trademark of Silicon Graphics, Inc., in the United States and/or other countries worldwide. SuSE is a registered trademark of SuSE Linux AG. Linux is a registered trademark of Linus Torvalds in several countries. Intel and Itanium are registered trademarks of Intel Corporation. Oracle is a registered trademark of Oracle Corporation and/or its affiliates. All other trademarks mentioned herein are the property of their respective owners.