Dell to Discontinue Itanium Workstation

Frustrated by a lack of sales, Dell Computer Corp. is going to pull the plug on its Itanium-based workstation, according to sources at the company.

Frustrated by a lack of sales, Dell Computer Corp. is going to pull the plug on its Itanium-based workstation, according to sources at the company.

The withdrawal of the Dell Precision Workstation 730 would mark another setback in Intel Corp.s efforts to boost relatively lackluster sales of its first 64-bit processor targeted for use in high-end workstations and servers.

Since Intel introduced the Itanium in May, market research firms have found that computer makers have shipped relatively few Itanium-based workstations and servers. Figures compiled by Gartner Dataquest show that computer makers have shipped just over 1,700 workstations and 2,600 servers based on Itanium chips worldwide this year.

Numbers from International Data Corp. confirm Itaniums minor stature in the market, with sales of systems featuring the chip only accounting for about 1 percent of worldwide server sales during the third quarter.

Its not surprising that Dell is abandoning the workstation, said Pia Reippo, a Gartner analyst, in San Jose, Calif.

"Sales havent been very big, and theyre a volume player, so it doesnt make sense for them to be in that market at this stage," Reippo said. "Theyll probably wait and see what happens when the next generation of Itanium, known as McKinley, is introduced (next year), and see whether sales take off or not before deciding whether to offer it again."

Indeed, Compaq Computer Corp., the worlds largest seller of Intel-based servers, disclosed last month that it had still not shipped its new Itanium-based server, the ProLiant 590/64, which was first announced in July, because the system failed to pass stress tests conducted by Compaqs labs.

Intel representatives later said the problem resided with the BIOS software packaged with the processor, and that around Thanksgiving they had issued a modified BIOS. Compaq, of Houston, received the BIOS modification, but a spokesman said the company plans to conduct further tests on the Itanium server, and has yet to decide when the systems will ship.

Currently, the 64-bit processor market is dominated by Sun Microsystems Inc., IBM and Hewlett-Packard Co., with each company offering Unix-based hardware built using their own RISC-based 64-bit chips and tied to proprietary software. Intels hoping to carve out market share by targeting companies looking to add high-end servers based on Microsoft Corp.s new 64-bit Window operating system.

Itaniums sales are slow in part because the chip utilizes a new and unique architecture, which requires the use of customized operating systems and application programs. Relatively few of todays most common business applications can operate on an Itanium-based system.

The move by Dell, of Round Rock, Texas, marks the latest problem for Intels efforts to spur adoption of Itanium. The Santa Clara, Calif-based chipmaker spent hundreds of millions of dollars and over seven years developing the technology, but its launch was plagued by several delays.

Despite the setbacks, an Intel spokeswoman said the company is happy with the adoption and expects sales to heat up with the release of the second version of Itanium next year.