Intel set to rattle server market with Itanium

Production versions of long-awaited 64-bit chip are set to ship
Written by John G.Spooner, Contributor

At long last, Intel will lift the veil of silence next week from its Itanium chip, setting off a new round of competition in the market for servers and advanced workstation PCs.

Intel on Tuesday will announce that it has started shipping of production versions of the 64-bit chip, according to sources familiar with Intel's plans. Itanium workstations and servers will begin hitting the market as soon as next month, the sources said.

Itanium is the first step in Intel's effort to shake up the market for high-end servers, currently dominated by Sun Microsystems, which uses its own expensive Reduced Instruction Set Computing (RISC) chips. Itanium machines are expected to cost considerably less than traditional Unix servers sold by Sun and others, giving the chip giant a wedge to get businesses to switch.

Intel, which requires computer makers to adhere to a web of stringent nondisclosure agreements on "unannounced" products, will lift those restrictions pertaining to Itanium products on Tuesday, the sources said. Once the curtain comes up, a number of PC makers, including Dell Computer and Hewlett-Packard, will engage in an Itanium free-for-all to show support for the chip.

HP will, for example, ship three new Itanium products -- a workstation and two servers -- in the near future. Dell already announced plans to begin selling its first Itanium server this summer.

To date, the chipmaker, through sampling and pilot programs, has shipped about 40,000 Itanium chips.

Initially, Intel expects eight to ten PC makers to announce products based on the chip. It also expects 20 to 60 applications. Currently, Itanium will work with seven operating systems, including the HP-UX and IBM's AIX-5L versions of Unix, Microsoft's Windows and 64-bit versions of Linux from Red Hat, Caldera, SuSE and TurboLinux.

Over the course of the year, Intel expects another 15 computer manufacturers to pick up Itanium, for a total of 25 companies shipping about 35 models. Over the course of the year, Intel expects developers to announce many more applications, for a total of about 400, an Intel representative said.

HP, for example, will ship three new products in the near future, including a dual-processor i2000 workstation and four and 16-processor models of the HP Server rx, said Mark Hudson, worldwide marketing manager for HP servers. Meanwhile, Dell has said it will begin selling its first Itanium server this summer. IBM is expected to ship one server and one Intellistation workstation fitted with Itanium. Compaq and Gateway are also expected to ship Itanium servers.

The new machines will cost more than servers using Intel's current Pentium III Xeon chip. However, Intel insists customers who budget for the extra cost over and above a Pentium III system will receive added performance and reliability.

Analysts say that despite multiple delays, Itanium has aged well for the most part.

"Given how late the chip is, its performance, especially on technical applications, is still pretty impressive," said Nathan Brookwood, principal analyst at researcher Insight 64. The chip will provide the largest performance increases for floating point-intensive applications, such as graphic art programs and computer-aided design, he said.

Meanwhile, when it comes to other applications, "Intel does have some room for improvement," Brookwood said.

Itanium systems are expected to cost less than traditional Unix servers or workstations, including those based on RISC chips, such as on HP's PA-RISC or Sun Microsystems' UltraSPARC III-based Sun Fire servers and Sun Blade workstations.

Initial price lists indicated that the chip would range in cost from $4,227 for an 800MHz Itanium with 4MB of performance-enhancing tertiary cache memory to over $3,500 for a 733MHz Itanium with 2MB of tertiary cache.

While the 4MB version will cost the same, the lower-end models will cost less. For workstations, Itaniums running at 733MHz and containing 2MB of cache memory will sell for between $1,000 and $2,000, or in the range of Intel's current Xeon chips. Judging by Intel's pricing history, the 800MHz Itanium with 2MB cache will likely have a similar price.

Analysts believe Itanium will cause companies that sell RISC/Unix workstations and servers to readjust their product lines. For HP, IBM and Compaq, all of which offer both Intel and RISC-based workstations and servers, this will require product line juggling. However, Sun and other RISC-only server makers might have to cook up lower-priced offerings. Otherwise, "they're going to find they're going to lose a lot of low-end business to these Itanium boxes," Brookwood said.

Many factors make Itanium different from the Pentiums that came before. Itanium was designed to address a larger amount of memory, which helps to speed applications such as databases, and also to perform more work per clock cycle than a standard Intel chip, such as the Pentium 4. Itanium does this extra work by dividing and processing larger chunks of data in parallel.

Adding performance with new features that increase reliability, Intel says, will decrease the cost of maintaining servers and workstations.

The added bang for the buck could shake things up in the server market, though a massive initial impact from Itanium is unlikely, given the typical reluctance of companies to adopt new and unproven technologies.

Instead, Itanium's early adopters will likely be a small number of companies that are after immediate performance gains. These customers, which include Motorola, Wells Fargo and Lycos, are likely to be running Web security applications, mining data, maintaining large databases or doing scientific computing.

Intel maintains that for applications such as scientific computing, the chip can "bring the economics of IA [Intel architecture] with the performance of what you've seen in supercomputers", said Lisa Hambrick, director of marketing for the Itanium processor family at Intel. "I certainly think that end users who wants that capability will deploy it right away."

She acknowledged that for other market segments, Itanium will take longer to get rolling. "But they will grow more over time," she said. "It's not like a desktop launch where everything goes on Day 1."

HP's server business sees the new chip creating its own economy. Its introduction gives HP the opportunity to offer services such as consulting to customers releasing new servers based on the new chip. Over a period of as many as five years, HP executives said, the company will be able to consolidate its servers on Itanium, which will help it to reduce costs.

For Intel, the chip is the beginning of what it hopes will be a long-running family of workstation and server chips. Though work continues on future versions of the chip, it's also the end of a protracted initial development process. Many people at Intel, and co-developer HP, will breathe a sigh of relief when the curtain raises on the chip, which has been more than seven years in the making.

"Just like any new technology, it's going to take several years to establish [itself] in the market," said HP's Hudson. "The first generation will be...targeted at early adopters."

Brookwood agreed. "I think it's going to take another six to 12 months before people begin ordering these" in any kind of numbers, he said. "I think McKinley [a follow-on version of the first Itanium] is going to be the volume play."

Intel spins it a little differently. Instead of acting as a stepping-stone for faster, future versions of the Itanium, this first chip will create a foundation for 64-bit computing, an Intel representative said.

Though even higher-performing chips will follow, including McKinley and other new versions codenamed Madison and Deerfield, still others wait in the wings. Intel plans to ship pilot versions of its McKinley chip at the end of the year, with the first production systems coming in 2002. That chip is expected to debut at gigahertz or higher speeds.

After the launch of the first chip, which had been known by the codename Merced, Intel says the Itanium family should continue to evolve for up to 25 years.

See Chips Central for the latest on processors and the semiconductor industry.

Have your say instantly, and see what others have said. Click on the TalkBack button and go to the Chips Central forum

Let the editors know what you think in the Mailroom. And read other letters.

Editorial standards