Intel Corp. is looking to the industry's entrenched OEM base to give its Itanium 2 processor an early leg up in the high-end enterprise server market. But by doing so, some systems makers are putting their own proprietary MPU architectures in direct competition with Intel's newest 64-bit chip.
The Itanium 2, which will be formally introduced this month, has been in "pilot launch" since December, making the rounds at various OEMs, end users, and software developers. The architecture, which shares little in common with Intel's first 64-bit Itanium chip, marks a concerted effort by the Santa Clara, Calif., company to grab the lion's share of the last remaining server market not already under its influence-high-end platforms that typically use processors like IBM's Power4, the PA-RISC architecture of Hewlett-Packard, or Sun's UltraSPARC.
Ironically, two of these companies-IBM Corp. and Hewlett-Packard Co.-are rolling Intel's Itanium 2 into their server roadmaps, even if that means introducing a competitor to their proprietary processor families.
HP, for example, which developed the Itanium architecture in collaboration with Intel, is expected to be "an aggressive early adopter," said Lisa Hambrick, Intel's director of enterprise server processor marketing.
That's no small feat, given HP's strong position in the high-end server space. In the fourth quarter of 2001, the Palo Alto, Calif., company captured more than 50% of the total market revenue for servers in the $50,000 to $100,000 range; controlled about a third of the systems sales in the $100,000 to $125,000 segment; half of the $250,000 to $500,000 server market; and roughly 25% of the market for platforms selling in excess of $500,000, according to research firm IDC, Framingham, Mass.
An HP spokeswoman said the company will support both Itanium 2 and its own PA-RISC for many years. "Our customers ultimately will determine the mix of each server architecture that we sell," she said.
IBM's enterprise server group is also jumping on the Intel bandwagon. In addition to offering its proprietary Power4 server systems, the company has announced a dual marketing strategy by adopting Itanium 2 as an alternate processor architecture.
"No one can predict what portion of IBM's server business will be in Itanium 2-based servers, but we should get some portion," Hambrick said.
A spokeswoman for IBM, Armonk, N.Y., said the multibillion-dollar enterprise server market can support several architectures and that IBM's goal is to capture as much revenue as possible. "Our customers have different needs and we will offer both platforms and let the market choose between them," she said.
Intel also claims to have attracted other large enterprise server makers, like Bull, NEC, and Unisys Systems, that are already using Intel 32-bit processors in their systems. Additionally, other high-end-server OEMs that do not have their own proprietary chips are expected to adopt the Itanium 2, analysts said.
Companies using nonproprietary processors constitute about 10% of the enterprise server market's revenue, according to IDC data supplied by Intel.
"Itanium 2 is a standard enterprise server chip that allows other OEMs to compete aggressively with rivals that are using proprietary architectures," said Nathan Brookwood, an analyst at InSight64 Research, Saratoga, Calif. "Itanium 2 can do for the enterprise server market what Pentium processors have done for PCs."
The use of a standard chip carries no competitive penalty for high-performance-server OEMs, which differentiate their systems by offering custom features and options, Brookwood said.
Intel also hopes to make it easy for smaller server OEMs to use Itanium 2 by selling them populated motherboards or even the server box itself, which the companies can then relabel.
Intel expects this ready-made customer base will position it to take market share away from Sun and IBM. Hambrick conceded that Intel's rivals have an entrenched end-user base, but said Itanium 2 systems will compete effectively as users gradually need to replace hardware.
"It will be a long process," she said. "This is no Pentium 4 PC market ramp."
Made on a 0.18-micron process, the Itanium 2 operates at 1GHz with 3Mbytes of on-die L3 cache. The chip uses a 128-bit-wide, 400MHz processor bus with 6.4Gbytes/s of bandwidth and executes six instructions per clock cycle.
Hambrick said Itanium 2 has no Hyperthreading capability, although she believes the chip's extensively parallel design achieves much the same result. Future versions of the Itanium family could possibly add Hyperthreading, she said.
The follow-on to the Itanium 2, an enterprise server processor code-named Madison, will be made on 0.13-micron processing, allowing Intel to increase the on-die cache to 6Mbytes. Another chip, a 0.13-micron device called Deerfield, will include 3Mbytes of on-die cache and will be aimed at the midtier server space.
Both chips are slated to be introduced next year. The first enterprise server chip made on 90nm processing, dubbed Montecito, is targeted for 2004, according to Intel.