Dell Declines Itanium 2

HP, IBM and others will support chip, but snub could undermine rollout.

Intel Corp. plans to launch its much-touted Itanium 2 processor this week, with some major computer makers unveiling workstations and servers featuring the 64-bit chip. One key player, however, Dell Computer Corp., will be missing from the stage.

Hewlett-Packard Co., IBM and several smaller vendors will back the launch by introducing Itanium 2 workstations and servers, but absent will be Dell, traditionally one of Intels closest partners. Officials with the Round Rock, Texas, company last week said they have no plan to offer the chip in Dell systems.

The decision by the worlds second-largest server manufacturer not to sell Itanium 2 could undermine Intels efforts to compete against Sun Microsystems Inc., of Santa Clara, Calif. "Our customers are telling us that theyre taking a wait-and-see approach with Itanium, and so we are doing that, too," said Dell spokesman Bruce Anderson.

Dells decision is another example of the 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. IBM will offer Itanium 2 systems with only Linux and Microsoft Corp. software, virtually assuring that its major financial and government customers will buy 64-bit systems using IBMs Power chips.

Itanium 2 will come 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.

Intel, also of Santa Clara, said 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 better, Intel officials said, due to enhancements, such as moving the Level 3 memory cache onto the die, that will enable it to outperform Suns UltraSPARC III chip. Itanium 2 will also benefit from greater software and system availability, the chip maker said.

However, even enterprise users who have hands-on experience with Itanium 2 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, CIO for GMAC Commercial Mortgage Corp., in Horsham, Pa. GMAC has tested two four-processor Itanium 2 servers over the past eight months as part of Intels pilot program.

"Itanium 2 numbers arent going to amount to much" in the next 12 months, said Jonathan Joseph, an analyst with Salomon Smith Barney Inc., in San Francisco. "Theyre just trying to cover some [research and development] costs, but I dont see this product impacting their bottom line."

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