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January 29, 2006

Intel and allies pledge $10 billion to promote Itanium

Posted by David Hunter at 1:25 PM ET.

Stephen Shankland at CNET:

Intel, Hewlett-Packard and seven other server companies will spend $10 billion through 2010 to try to increase adoption of the Itanium processor.

The money is coming from Intel and HP–Itanium’s co-developers and top backers–as well as from Unisys, Silicon Graphics Inc., NEC, Hitachi, Fujitsu, Fujitsu-Siemens and Groupe Bull. The companies said Thursday that they will spend the money on research and development, marketing, and work to help software companies support the high-end processor.

“Itanium has been taking share from both IBM power and Sun Sparc. We’re on the right trajectory, but we want to go faster,” Tom Kilroy, general manager of Intel’s Digital Enterprise Group, said at a press event here. “The $10 billion investment is a statement that we want to accelerate as a unified body.”

The companies are members of the Itanium Solutions Alliance, which includes Microsoft, Red Hat, Novell, Oracle and other software companies.

Yes, Microsoft was in the audience, although they didn’t ante up. The Silicon Valley Sleuth is a little skeptical:

But as it turns out, the alliance simply wrapped an old stone in some shiny gift-wrap. Because the $10bn adds up to what the alliance members are already investing anyway.

In related news, the next Itanium version, Montecito, will have reduced power consumption and will eliminate under-performing x86 emulation hardware as Stephen Shankland relates at CNET in Intel scraps once-crucial Itanium feature:

The change, which Intel had refused to discuss until now, reflects the company’s diminished Itanium ambitions, which cast the chip as being only for higher-end servers. Intel’s retreat to that market segment was in part because Itanium couldn’t run x86 software effectively, which imposed major transition burdens on software companies and server customers.

That article apparently rankled Intel VP Will Swope who fired off a rather cryptic letter to the editor which was greeted by Ashlee Vance at The Register with amazement. Excerpt:

Brag and Itanium should never be linked unless you’re a manager at IBM, Dell or Sun Microsystems talking about how you didn’t bet your company on Intel’s hapless chip.

Intel, for example, has recently been talking up Itanium’s market gains and the broad software support for the processor.

According to IDC, the quarter-by-quarter unit volume for Itanium servers since the fourth quarter of 2003 goes as follows:

- Q403 7616
- Q104 8678
- Q204 8085
- Q304 8235
- Q404 8996
- Q105 8127
- Q205 8500
- Q305 8596

It’s true that Itanium server revenue has gone up as a result of larger systems being sold, but you can see how flat shipments have been. Meanwhile, IBM has surged from similar Power volumes in 2001 to shipping more than 100,000 servers per year, and Sun is up to more than 300,000 SPARC servers shipped per year.

I guess that’s the “taking share from IBM and Sun” that Mr. Kilroy mentioned in the first quote.

Filed under Alliances, Hardware, Intel, Itanium

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