Intel aims Itanium 2 at high-end server market

Intel Corp. launched the second version of its Itanium processor Monday, trying once more to carve out a business for itself in the lucrative market for high-end workstations and servers.

At least 20 vendors will offer Itanium 2 systems in the coming weeks and months, including Hewlett-Packard Co. and IBM Corp. Operating systems including Microsoft Corp.’s Windows, Hewlett-Packard Co.’s HP-UX, and Red Hat Inc. Linux are also being rolled out, along with enterprise software products from Oracle Corp., SAP AG and others.

But cracking the high-end server market, where RISC (Reduced Instruction Set Computing) chips from Sun Microsystems Inc., IBM Corp. and others hold sway, won’t be an easy task. Business customers in particular are wary of new technologies, and need to be convinced that the systems and software on offer are stable and reliable enough to run their critical applications, analysts said.

Because of that, and because many of the systems and software products will be rolled out gradually in the coming months, analysts predicted a gradual uptake for the new chip.

“The primary issue is having something that’s stable and trusted,” said Dean McCarron, president of Mercury Research Inc. in Scottsdale, Ariz.

Intel’s first 64-bit chip, launched in May last year, for the most part failed to impress. It was released behind schedule, its performance was lacking, and systems and software on offer were too new to inspire confidence among end users, analysts said. Moreover, server vendors were wary of designing servers around an architecture that was expected to change a year later with the release of the current chip.

This time around the story looks more compelling. Thanks to several design improvements, Itanium 2 should perform as much as 50 per cent to 100 per cent better than its predecessor, according to Intel test results, although those have yet to be verified independently. Intel applied the lessons it learned with the first chip and, “as a result, Itanium 2 is a significant improvement,” McCarron said.

The software on offer also has had time to mature a little, noted Nathan Brookwood, an analyst with Insight 64 in Saratoga, Calif. Vendors including Microsoft, IBM, Oracle and SAP offered versions of their software that ran on the first Itanium and have had a year to improve the performance and stability of those products, other analysts said.

Nevertheless, “this is not like shooting fish in a barrel,” Brookwood said. Because the chip is new, Intel needs to demonstrate that systems based on Itanium 2 can offer the performance, reliability and scalability that customers demand from servers that are priced from US$20,000 to a million dollars or more. “In theory they do, but they need to get some customers out there using these products and then circulate the success stories,” he said.