Itanium 2: Pricing is key

HP reveals plans for the first workstations and servers based on Intel's new high-end processor, and price is a big part of the equation. But the machines may still struggle to find a market

Where it comes to Itanium 2, Intel's new high-end server processor, the chipmaker spends a lot of time emphasising the chip's performance. But the company and its partners are hoping that Itanium 2's secret weapon will be its low price.

On Monday, Intel's manufacturing partners began to reveal the details of their product lines, from single-processor workstations up to servers with several processors. HP, the first to show off its new lines, and often the most keen to promote the Itanium platform, is selling workstations for as low as $4,600 (£3,220) and servers starting at $5,400. The average server price is $15,500, according to HP.

The prices undercut competitors such as Sun Microsystems, whose servers can average more than $100,000. They are also lower than those of HP's previous Itanium products, which used the more costly first-generation Itanium chip.

At the low end of the workstation line is HP's zx2000 workstation, a single-processor, 900MHz machine whose pricing is supposed to be about the same as the upper end of the 32-bit workstation market. Starting at about $4,934, the machines compare to last year's i2000, which uses a 733MHz or 800MHz chip and starts at $7,995.

HP is confident that early adopters such as industrial engineers will flock to the platform. The company has already sold about 1,000 systems and expects these to be "the tip of the iceberg", said Barry Crume, product marketing manager for HP's workstation division.

"For them, that's their life. They are addicted to performance. If it takes them a few hours less to render something, then they can spend those hours working on the next project. There's a direct benefit," Crume said.

He said that some customers had already switched to Itanium 2 workstations because they found that their previous systems, costing hundreds of thousands of pounds, were outperformed by the entry-level Itanium machine.

Itanium's architecture, EPIC, originated in HP's laboratories more than a decade ago. HP joined with Intel on the project in order to give the processor the advantage of Intel's immense manufacturing base, and drive prices lower than would be possible for competitors.

HP also announced a higher-end workstation and two servers.

The zx6000 is a one- or two-processor workstation with 900MHz or 1GHz chips, 3MB of on-chip L3 memory cache and up to 12GB of RAM.

The rx2600 server, at the entry level, comes in a two-processor configuration with 900MHz or 1GHz processors and up to 12GB of memory, and fits a 2U rack form factor. The rx5670 server takes up to four processors running at 900MHz or 1GHz and up to 48GB of memory. HP also offers upgrades to Itanium 2 from the previous HP Server rp5400 series.

HP also announced performance benchmarks for Windows running on rx2600 and rx5670. The entry-level server reported a 40,638 transactions per minute result on the TPC-C online transaction benchmark, while the four-way rx5670 reported 79,000 transactions per minute, which HP said outpaces RISC and IA-32 servers with twice the number of processors.

However, price and performance alone may not be enough to help Itanium 2 hardware succeed. Industry analysts say that the lack of a wide range of readily available software and a prolonged downturn in the high-tech sector may mean that the platform will struggle to find buyers.

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