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Intel Corp. next week will launch its 1GHz Itanium 2 processor, code-named McKinley, sources said, with Hewlett-Packard Co. and IBM to announce new servers featuring the 64-bit chip on Monday.
But while HP, which co-developed the chip, remains a stalwart backer of the new high-end processor, support among other computer makers appears to be wavering.
IBM, for example, has decided not to support the processor in an upcoming version of its proprietary Unix operating system, AIX 5.1. While IBM will offer Itanium 2 servers with Linux and Microsoft Corp. software, the lack of AIX support virtually assures that many of the companys financial and government customers will continue to purchase AIX-based servers featuring IBMs Power4 processors.
Dell Computer Corp., the worlds second largest server vendor, based on units shipped, has also not committed itself publicly to offering an Itanium 2 server. The company pulled the plug on its Itanium-based workstation only a few months after release, citing a lack of demand.
Even before it was released in May 2001 after a two-year delay, cracks began to appear in what was once widespread industry support for Itanium when Sun Microsystems Inc., the worlds leading seller of 64-bit systems, shelved plans to release Itanium-compatible versions of its proprietary Solaris operating system.
Despite a multiyear campaign by Intel and HP to ignite interest in the chip, the processor has largely gotten the cold shoulder from enterprise customers who rely on 64-bit servers to run their most critical business applications. In fact, since its release in May 2001, the chip has appeared in less than 1 percent of servers shipped, according to International Data Corp.
Intel and HP are optimistic customer demand will finally heat up with the release of Itanium 2, which offers up to twice the performance of its predecessor.
In order to further foster sales, Intel, the leading PC chip maker based in Santa Clara, Calif., will even manufacture its own four-way Itanium servers, basically “bare-bones hardware,” and supply them to regional computer makers worldwide. The move is aimed at assuring that Intels partners that have limited experience in 64-bit systems, such as Chinese computer maker Legend Holdings, will be able to offer Intels newest product.
Itanium 2 to Launch to Lukewarm Reception – Page 2
Intel is heavily counting on Itanium to enable it to break into the lucrative 64-bit market, where high-end systems featuring the chips can sell for $1 million or more. The push has taken on greater importance in the past year as Intel has seen its profit margins on PC processors dwindle due to falling sales and a price war with longtime rival Advanced Micro Devices Inc.
While Intel contends its not surprised by the tepid response to Itanium, given that its targeted at a conservative market known for slow adoption rates, industry analysts contend the chip may be suffering from its inability to live up to its own hype, which started in 1994 when the then-envisioned processor was first promoted.
“When they first started talking about this, they said it was going to blow away the performance of all the RISC-based processors [like IBMs Power and Sun Microsystems UltraSparc chips] … and its going to be totally backward compatible with Windows-based [32-bit] desktops. That didnt happen,” said Tony Iams, an analyst with D.H. Brown Associates Inc. in Port Chester, N.Y.
So while Itanium 2 does shine on some benchmark tests, Iams said, 64-bit chips from IBM and Sun still offer competitive performance, which when combined with their established customer base and vast array of compatible applications gives them a competitive advantage.
On another point, enthusiasm over Itaniums once touted backward capability to run 32-bit Windows applications was largely doused last year after tests revealed that the chip could only process such programs about as fast as a 4-year old Pentium II chip.
Itanium 2 to Launch to Lukewarm Reception – Page 3
But perhaps Itaniums biggest competition comes from Intel itself and its success in developing and selling ever faster performing 32-Xeon chips designed for workstations and servers. The growing adoption of Xeon chips by small- to large-scale businesses has significantly reduced the potential market for Itanium, Iams said.
“So now theres really no reason for the vast majority of traditional users of Windows and industry-standard servers to move up to Itanium because it turns out you can get fantastic performance improvements just by staying on 32 bits,” he said.
Even Intel, one of the worlds largest high-tech companies, noted a couple of years ago that it ran all of its critical business applications on 32-bit Xeon servers.
Nevertheless, Intel remains fully committed to Itanium, having already spent about $1 billion developing the chip and $500 million in funding software support for it, according to industry analysts.
As the worlds largest PC and server chip maker, Intel also has the ability to leverage its close ties to many of the worlds leading computer manufacturers to assure that Itanium 2-based systems will be widely available within weeks of the products launch.
Leading up to the chips debut, Intel has assured that more than 40 computer vendors will announce systems based on the chip, with more than 10 offering complex, high-end servers featuring eight or more processors.
Leading software makers have also pledged their support and have committed to offering Itanium-compatible applications, including HPs HP-UX operating system, a 64-bit version of Microsofts Windows, the Linux community, Oracle, BEA Systems Inc. and others.
But perhaps the greatest obstacle to Itaniums success may not come from competitors, but from a weak global economy that has spurred a worldwide cutback in IT spending. Even Intel lowered its sales forecasts for the quarter, citing weaker than expected demand.
Given the harsh economic climate and formidable, entrenched competitors, market analysts say that it could be five years or more before Intel sees any profit from its heavy investment in Itanium.
Related stories:
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- Partnerships Key to Itanium 2 Push
- Intel Findings Show Itanium 2 Beats Sun Server in Performance
- Russian “Itanium Killer” Isnt Dead Yet (ExtremeTech)
- Itanium to Drive HP Servers
- Intel Recommits to Itanium