Intel Changes Direction on Next-Generation Itanium Platform

The "Kittson" chip will be 32nm, rather than 22nm, and will not be socket-compatible with Intel's Xeons, fueling questions about Itanium's future.

While HP won the court case, the situation took its toll. Sales of its Itanium-based servers fell sharply since Oracle made its announcement, which also highlighted the shrinking ecosystem around Itanium. (Other software makers, including Microsoft and Red Hat, had already pulled support for the platform.) In addition, it was revealed that HP, which buys more than 90 percent of the Itaniums made, over the years had paid Intel hundreds of millions of dollars to keep developing the platform.

Analysts at Clabby Analytics, in an eight-page report in December 2012, outlined a list of 10 reasons HP will continue to see stagnant—at best—sales of its Itanium-based systems, ranging from increased competition and the migration of workloads from HP-UX to Linux on x86 servers to the growing costs of development, growing customer indifference and Intel's end-of-life plans for Itanium.

The top reason was what the analysts said was a "broken ecosystem."

"With major vendors pulling support for Itanium, combined with fewer independent software vendors (ISVs) signing on to host their applications on Itanium-based systems, fewer and fewer key industry solutions are being made available on Itanium-based servers," they wrote, noting not only the defections of Oracle, Microsoft and Red Hat, but also VMware's decision to never offer its technology on Itanium. "Fewer solutions = fewer sales."

In addition, they said they "do not see the next-generation business analytics and big data applications being hosted on Intel's Itanium architecture (but we do see these applications being hosted on Intel's x86-based Xeon multi-core architectures, Power Systems, and mainframes)."

The Clabby analysts pointed out that the high point for HP's Itanium systems came in 2007, when the company sold more than $1 billion of these systems. That number is hovering around $400 million now, they said. HP officials in November said that in the company's fiscal 2012 fourth quarter, revenues for its Business Critical Systems fell 25 percent from the same period in 2011, following a pattern that officials said had been exacerbated by Oracle's move.

The declining demand in the overall Unix market mentioned by the Intel spokesman also has been ongoing. According to Gartner analysts, third-quarter 2012 revenue in the RISC/Itanium Unix market fell 18.5 percent from the same period the year before. Within that market, HP has been losing share to IBM.