Intel Launches Next Itanium With New Price-Performance Pitch

Intel on Tuesday rolled out the latest version of its Itanium processor for high-end computing and promised a big improvement in price-performance.

The Itanium 2 9000 series, formerly code-named Montecito, is the architecture's first dual-core model and will run at 1.4GHz to 1.6GHz with 6 Mbytes to 24Mbytes of onboard L3 cache, Pat Gelsinger, senior vice president of Intel's digital enterprise group, said at a launch event in San Francisco. The new chips also include virtualization technology for the first time, as well as hyperthreading and cache safe technology that identifies and corrects cache errors, he said.

The Itanium 2 9000 processors perform twice as fast as previous models and feature a 20 percent reduction in power, Gelsinger said.

Intel has promised that the new Itanium 2s will perform better and be priced at about two-thirds of the cost of the older Itanium architecture, according to one systems integrator.

As in other processor rollouts this year, Intel has priced the products competitively to move the industry to dual-core technology, Gelsinger said, adding that existing models will be priced at parity with older models now on the market. The processors are priced in low quantities at $696 on the low-end (for a single-core part) to $3,692 on the high end.Intel is committed to continuing the line, Gelsinger noted. "We have three more generations of Itaniums under development today," he said.

Though the Itanium 2 9000 series suffered delays and the Itanium processors in general haven't sold as well as some in the industry had hoped, some solution providers said they have seen increased uptake of Itanium-based servers.

Larry Holzenthaler, executive vice president of sales and marketing at Total Tec Systems, an Edison, N.J.-based solution provider and partner of Hewlett-Packard, which holds the lion's share of the U.S. Itanium market, said he expects more growth in Itanium-based Integrity servers when the new processors start shipping in August.

Integrity sales are about 15 percent of Total Tec's business, compared with about 30 percent in HP servers and blades overall. But Holzenthaler said he expects that to move to parity this year as OpenVMS gets more popular on Integrity.

Open VMS 8.2 was launched in January for the Itanium architecture. The platform is expected to help move customers from HP's older Alpha systems and aging VAX hardware to more modern Itanium-based systems.

"Most of our Alpha customers are migrating to Integrity," Holzenthaler said. "I can't think of any customer we've lost. It's a slow and steady migration."HP is releasing its last Alpha-based systems this year, in favor of the newer Itanium platform.

Dhruv Gulati, executive vice president of Lilien Systems, a Larkspur, Calif.-based HP partner, said delays in the Itanium 2 9000 series have hurt because customers have been waiting for new systems before purchasing. Yet he said he expects to sell better now that Intel has a more robust cadre of software to support the architecture.

"Itanium systems have started to sell a lot better in the last 18 months as available applications have grown," Gulati said.

Still, observers point out that Itanium sales are growing slower than expected. Roger Kay, president of research firm Endpoint Technologies, and some solution providers, noted that Advanced Micro Devices' Opteron processors' price-performance story has cannibalized sales of some high-performance computing customers.

And the x86 architecture continues to move upstream. For example, AMD has vowed to add more features to appeal to the higher end of the computing spectrum."As x86 crawls up a little at a time, it is gnawing away at the Itanium market," Kay said. "These systems have been around for a while, but they have real currency now."

Gelsinger said Itanium answers specific needs of the mission-critical computing market that the x86 architecture can't meet, such as ultra-large caches, added security and error correcting for cache. That market is high-margin, he said, although its unit sales are much smaller than the typical x86 volume market.

Intel now has about 8,200 applications supporting Itanium, up from about 700 in 2003, and eight OEMs now manufacturing systems, Gelsinger said. Though HP still does the bulk of the business, he said he believes the number of Itanium system makers will even out this year as more vendors enter the market.

System vendors, such as HP and Unisys, expect to have servers on the market for the new Itanium processors by September.