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Intel And Friends To Invest $10 Billion In Itanium

Intel's Itanium chip has been struggling in the market, with three of the four largest server makers choosing not to build systems based on the processor. But the high-end processor architecture will not fail due to lack of financial support. Intel and a group of technology companies that includes Hewlett-Packard on Thursday pledged to spend $10 billion over the remainder of the decade to support Itanium.

Originally envisioned by Intel and co-designer HP as a technology platform that would supplant x86 chips as a mainstream processor architecture, Itanium has since been rescaled to target "mission-critical" server applications, the same market currently served primarily by IBM's Power and Sun Microsystems' Sparc processors.

"The marketplace is looking to go through a transformation over the course of the next several years, which is really why we are investing," says Carol Barrett, director of enterprise platform marketing for Intel. "We think we have critical mass behind us and exciting opportunities coming to us in the future."

Intel declined to provide specific Itanium shipment numbers, but according to IDC unit sales of Itanium-based systems totaled less than 9,000 in the third quarter of 2005. Those numbers pale compared to larger x86-based server market. But the high-end servers that use Itaniun offer opportunities for higher revenue as compared to the more commoditized x86 market.

Itanium sales are strong when compared to sales of other RISC-based processors at similar points in their early history, Barrett says. Itanium platform revenue currently totals 58% of Sun Sparc revenue and 33% of IBM Power revenue, she says. In addition, more than 6,000 applications are currently available to run on Itanium-based systems.

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