Dell Snubs Itanium 2

Intel Corp. today launched its new and improved Itanium 2 processor, with major computer makers –- aside from one key vendor -- unveiling workstations and servers featuring the 64-bit chip.

Itanium 2 comes in three flavors, a 1GHz version with 3MB of level 3 on-die memory cache priced at $4,226; a 1GHz chip with 1.5MB of level 3 cache for $2,247; and a 900MHz processor with 3MB of level 3 cache priced at $1,338.

Hewlett-Packard Co., IBM, Unisys Corp. and several smaller vendors are backing the launch by introducing Itanium 2 workstations and servers, but noticeably absent will be Dell Computer Corp., traditionally one of Intels closest partners, which disclosed last week that it has no plans to offer the chip.

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The decision by the worlds second largest server vendor (based on units sold) not to sell Itanium 2 could undermine Intels efforts to compete against market leader Sun Microsystems Inc.

"Our customers are telling us that theyre taking a wait-and-see approach with Itanium, and so we are doing that too," said Bruce Anderson, a spokesman for Dell, based in Round Rock, Texas.

Dells decision highlights wavering support for Intels 64-bit processor. Previously, IBM shelved plans to port an upcoming version of its proprietary AIX operating system to the chip after doing so for the previous version of the processor. As a result, IBM will offer Itanium 2 systems with only Linux and Microsoft Corp. software, virtually assuring that its major financial and government customers will purchase 64-bit systems using IBMs "Power" processors, rather than Intels

Intel claims its 1GHz Itanium 2 offers up to twice the performance of its 800MHz predecessor, which has suffered from poor sales since its release in May 2001. Itanium 2 will fare much better, Intel contends, because of performance enhancements, such as moving the level 3 memory cache onto the die, that will enable it to outperform Suns UltraSparc III chip. Itanium 2 should also benefit from greater software and system availability, the chipmaker says.

Despite the improvements, even enterprise users who have hands-on experience with Itanium have yet to embrace the chip.

"Im still not sure when well integrate them because there are still some software issues we need to address," said Niraj Patel, chief information officer for GMAC Commercial Mortgage, who has run tests on two four-processor Itanium servers over the past eight months as part of Intels pilot program.

Market analysts also hold little hope for Itanium 2 to gain much ground next year.

"Itanium 2 numbers arent going to amount to much" in the next 12 months, said Jonathan Joseph, a market analyst with Salomon Smith Barney in San Francisco, who covers Intel. "Theyre just trying to cover some of their R&D costs, but I dont see this product impacting their bottom line."

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