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Intel to Release Updated Version of High-Power Chip for Computer Servers

Posted on: Sunday, 29 June 2003, 06:00 CDT

Jun. 30--Intel will launch the third version of its high-performance server chip, the Itanium 2, today. The chip has been one of Intel's lowest-volume products since it was introduced two years ago.

The Santa Clara chip giant, however, is starting to make some gradual inroads among corporate users, with the advent of more software. The chip, which crunches data in chunks of 64 bits instead of the standard 32 bits, was initially launched in May 2001 running only on Linux and certain versions of Unix, such as Hewlett-Packard's HP UX, hampering wide acceptance. The chip also has a completely different architecture, designed jointly with Hewlett-Packard, than the standard Intel x86 family of chips.

In its first two years, the Itanium 2 was chosen frequently by supercomputing centers and technical computing users, which are always looking for lower-cost ways of doing high-end computing for tasks such as weather modeling or explosion simulations. But these technical users have not racked up a lot of sales for the chip. According to IDC, since the Itanium's launch, it has shipped in less than 10,000 servers, a paltry amount for a company used to shipments of millions for its Pentium family of processors. Each server uses between two to four chips, IDC estimates.

Corporate customers have been hesitant to rewrite all their software to be 64-bit compatible. Lackluster sales were also partly caused by delays in the launch and the poor performance of the first chip.

"During the economic downturn, customers don't want to put in brand new technology and that is one reason it it hasn't taken off," said Jean Bozman, an analyst at IDC. "But the Itanium ecosystem has really grown."

In April, Itanium got a serious boost when Microsoft finally released its 64-bit version of the Windows server software, which had only been in limited release with the last version of Itanium 2. Other big-name software packages have followed, such as Oracle, IBM's DB2 and Microsoft's SQL Server.

"I think what you will see is probably an acceleration now, of people taking their applications and rewriting them," said Kevin McHugh, vice president of platform marketing at Unisys.

Mike Fister, a senior vice president and general manager of Intel's enterprise platforms group, said they are making progress in broadening the market for Itanium 2. "This is the barometer," he told a press briefing last week, pointing to a slide with almost 100 customers.

Many of these customers, are of course, the supercomputing and technical users that are the early adopters of any high-performance technology. But they also include companies such as DreamWorks, JetBlue, Reuters and Wells Fargo. These corporate customers are Intel's ultimate goal if it is to make a major dent in the high-end server market against Sun Microsystems and IBM.

JetBlue, a low-cost airline based in New York, for example, is using Itanium 2-based servers developed by Unisys to run its frequent-flyer program and its data warehouse.

"We are extremely cost conscious," said Jeff Cohen, a vice president and chief information officer for Jet Blue. "I only run Windows. If it doesn't run on Windows, it doesn't run on Jet Blue. I am hard and fast on it because it keeps my total cost of ownership down."

The new Itanium 2, previously code-named Madison, is being launched with a clock speed of 1.5 gigahertz, an improvement over last year's chip, code-named McKinley, which clocked in at 1 gigaghertz. The speed bump translates into a 30 to 50 percent performance improvement, Intel said.

Another, more concrete, measure of performance for server chips is transactions. Intel said according to an industry benchmark, an HP SuperDome server running Itanium 2 chips recently handled 707,000 transactions per minute, vs. 680,000 transactions per minute on an IBM eServer pSeries server running its IBM's Power4 processors.

Intel has a bevy of hardware companies that are unveiling servers, starting this week, based around the Itanium 2, including Hewlett-Packard, IBM, Dell Computer, SGI, Unisys and NEC.

"There is a lot more system vendor participation this time around," said Nathan Brookwood, an analyst with Insight 64. "The software is much more mature and there is more of it."

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