The 64-Bit Bet: Itanium Chip Faces Slow Adoption

While Intel devotes a lot of time and money to expanding its role in the consumer-electronics and home-networking markets, it continues to play a dominant role in business computing. With Microsoft, it created the Wintel standard for desktop computing.

Today, about 90% of servers that sell for less than $10,000 use Intel processors. Even if Intel grabs the rest of that low-end market, it wouldn't be a big boost to the company. That's why Intel wants a bigger piece of the high-end computing market, and its 64-bit Itanium processor was intended to do that. But that's not how it has worked out (see story, p. 24).

Businesses have been slower to move to 64-bit computing than originally predicted. IDC in December predicted manufacturers will sell $7.5 billion worth of Itanium-based servers through 2007, down $1.2 billion from September's estimates. But four years ago, when Itanium held a lot more promise, IDC estimated $28 billion in sales of Itanium-based servers in 2004 alone.

Like most early Itanium users, CompUSA Inc. is digesting the technology in small pieces. So far, the company likes what it sees. CompUSA, which last year had 227 stores nationwide, has since added 70 locations thanks to the acquisition of consumer-electronics retailer Good Guys Inc. "One of the key things we're trying to put together was hourly updates of store sales," says Doug Gray, CompUSA's director of SAP and data-warehouse operations. In November, the company moved its data warehouse from an eight-way Hewlett-Packard ProLiant server to a couple of four-way, Itanium-based HP Integrity servers.

A risky move, given the proximity to the holiday buying season. But CompUSA executives wanted to know quickly what was going on with store sales during the holidays. Gray says the Itanium-based system provided sales numbers, forecast numbers, and gross margins by pulling information from transaction logs located within each store's registers. "Pulling, parsing, and processing data, even on the day after Thanksgiving, never exceeded 30 minutes," he says.The move to 64-bit is paying off, says Larry Stein, CompUSA's senior database administrator: "There are things I simply couldn't do before, such as data mining, which is just raw processor power."

And the same may be true for Intel. "There's much more of an opportunity at the high end," says Nathan Brookwood, principal analyst for research firm Insight64. "And Itanium looks ready to hit its stride."