Is Montecito Intels Second Chance for Itanium?

News Analysis: Analysts say even though the new-generation 64-bit processors look good on paper, the chip-making giant may be painting too rosy a market picture for an underperforming product line.

SAN FRANCISCO—Intel finally has its dual-core Itanium 2 chip out on the market. The question now becomes whether "Montecito" is the technology that will invigorate the architecture, or if it will become another in a long line of expensive Itanium processors that yield relatively disappointing results.

The Santa Clara, Calif., chip maker launched the Itanium 2 9000 Series at an event here July 18, complete with a stage showing massive Itanium systems from eight vendors, including Hewlett-Packard, Fujitsu Computer Systems, SGI and Bull.

/zimages/2/28571.gifClick here to read more about the Montecito launch.

But as with most previous Itanium announcements, conspicuous by their absence were the other three top-tier OEMs: Dell and IBM, which have backed away from Itanium, and Sun Microsystems, which never used it, opting instead for Advanced Micro Devices Opteron processor.

Its that fact, coupled with highly competitive and well-established RISC-based options from IBM and Sun, that has some industry observers doubting whether Montecito will make the sort of splash that Intel officials are hoping for, despite the massive 24MB of Level 3 cache, on-chip virtualization technology and other features.

Yes, dual core is sexy and desirable, said Clay Ryder, an analyst with The Sageza Group, in Union City, Calif., "but many chips have this. Is all that extra cache going to be important outside of specific applications?"

Pat Gelsinger, senior vice president and general manager of Intels Digital Enterprise Group, told reporters and analysts that the new "Montecito" processors—designed expressly for high-end, high-performance servers—will bring twice the performance for 20 percent of the power.

"They double the performance and lower energy requirements, improving performance per watt by 2.5 times compared to existing, single-core versions," Gelsinger said. All server-maker members of the Itanium Solutions Alliance—the companies noted above plus a few others—will launch new Itanium 2 series-based products.

The flagship 9050 model features two complete processing cores and nearly triples the cache or memory reservoir compared with Intels previous generation. It also can execute four instructions or threads per processor enhanced by Intels Hyper-Threading technology, an Intel spokesperson said.

Not only is Montecito the first dual-core Itanium chip, it also features the on-chip Intel Virtualization Technology. The chip contains 1.7 billion transistors, offers 24MB of cache—triple the current amount—and consumes 104 watts, less than the 130-watt envelope of the current single-core "Madison" chip.

Almost a year late, but theyre here

These new super-duper chips were due out last October but ran into "circuit design marginalities, so improvements had to be made," Gelsinger told eWEEK.

"It was a little embarrassing, to say the least, because we had said wed have the chips at a certain time and then we didnt," he said. "Were the biggest [chip maker] in the world, and we cant get the product out on time."

The retooling happened over the winter of 2005-2006, when "there was a lot of stepping [versioning], and a huge amount of testing that went on. We started shipping them in June, and since they are a drop-in socket type of chip, our OEMs were able to put them to work very quickly," Gelsinger said.

Intel and its partners like to talk about Itaniums momentum—and they did often during the July 18 event, pointing to growth in the number of applications ported to the architecture and growing revenues for Itanium systems—but at the same time, analyst group IDC, of Framingham, Mass., reported that Itanium shipments declined by 2 percent between 2004 and 2005.

/zimages/2/28571.gifClick here to read what Oracle, HP and Intel are doing to push the Itanium platform.

"[Sales] volume and systems revenue are separate items," Gelsinger said. "The way we look at it is this way: Would you rather have 1,000 developer kits out there at a $2,000 to $3,000 price point, or 1,000 big iron systems companies buying your chips and sending you hundreds of thousands of bucks apiece? Theyre separate and distinct categories. If you look at systems revenue from Itanium, youll see a continuous line going up from left to right.

"Systems revenue—thats the metric that matters. If you look at that from the IDC point of view, youll see a huge step up from 04 to 05."

Gelsinger said that Intels Itanium products have cut 52 percent into Suns SPARC market over the last six years and about 45 percent into IBMs Power processors share.

"There we were at el zero six years ago [when Itanium was introduced], and now look where we are," Gelsinger said.

Next Page: Intel paints a rosy picture.

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 13 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...