After years of preparation, Intel feels that Itanium 2 will be the processor that finally begins its dominance in the 64-bit space, an area where it has had virtually no presence till now. Will the going be easy for Intel, or will it be a walk on hot coals? Ivor Soans and Prashant L Rao find out

Few companies can make a mark in computing trends as Intel, with its dominance in the 32-bit desktop PC processor segment, and low-end server market. But what Intel’s been missing for a long time was a play in the lucrative high-end server market and for the last ten years or so, Intel has been trying hard to rectify this hole in its armour.

The business equation is simple while a vast majority of servers sold (88 percent in unit terms) are Intel processor-based, in terms of revenues it’s a wholly different story. According to IDC, almost 60 percent of revenues in the server market goes to non-Intel based systems. Most of the Intel-based servers currently sold have price tags of $1,000 onwards. But in the market for 64-bit processor based systems, high-end systems sell for more than $25,000 to well over $1 million. And given that margins on desktop processors have been falling due to slowing sales and a long-drawn battle fought with rival AMD, the 64-bit Unix server market, which was worth $20.6 billion in 2001 according to Gartner, is certainly an attractive proposition for Intel.

Intel started developing its 64-bit processor (originally codenamed Merced) years ago, in association with Hewlett-Packard. It was based on an entirely new architecture called Explicitly Parallel Instruction Computing (EPIC), which Intel claims will enable the chip to outperform Reduced Instruction Set Computing (RISC)-based processors like IBM’s Power4, Sun Microsystem’s UltraSparc, HP’s PA-RISC, the erstwhile Digital/Compaq’s Alpha, and SGI’s MIPS. Of these, only Big Blue’s Power4 and Sun’s UltraSparc are in the tug-of- war with Intel’s 64-bit offering, since HP is phasing out PA-RISC in favour of Intel, and the same is happening with Alpha.

The Merced was branded as the Itanium, and after massive delays finally made it to commercial release in May 2001. However, Itanium performed well only on scientific jobs such as simulation, and didn’t do as well on enterprise business software such as databases or ERP. The result was that Itanium did pretty poorly in the market, and even Intel termed it as an ‘initial deployment vehicle.’ According to IDC, in Q3 of 2001, less than 500 Itanium servers were shipped in the US market. Gartner says that just 2,700 Itanium servers were shipped in 2001.

The Itanium 2 story
That brings us to Itanium 2, released last month by Intel. The processor pasha expects a completely different market reception for Itanium 2, as compared to the original Itanium.

The Itanium 2 processor supports high transaction volumes, complex calculations and vast amounts of data and users. It has a 400 MHz bus, which is 12 bits wide, as compared to 8 bits on the original Itanium. This makes for greater data transfer rates. The 3 MB integrated Level 3 (L3) cache enables high processing rates and performance for faster online transaction processing, data analysis, and simulation and rendering. Intel says the processor also has advanced reliability features, including extensive error detection and correction on all of the processor’s major data structures.

HP is the biggest supporter of Itanium 2, and has placed almost all its eggs in the Itanium basket it will adopt Itanium family processors in its mid-end servers to its top-of-the-line servers, which are typically used in 24x7 jobs. Sun (the No. 1 in the 64-bit space) has decided to go it alone, and IBM is sitting on the fence. IBM continues to invest heavily into development of its Power4 platform, and will offer Itanium 2-based systems running only Linux and flavours of Windows. Big Blue’s AIX flavour of Unix will not be ported on to Itanium 2. This effectively locks Itanium 2 out of IBM’s base of high-end customers who use AIX on Power4 processors.

Intel claims that Itanium 2-based servers and workstations deliver up to twice the performance of Itanium-based systems, and outperform comparable Sun systems with 50 percent higher transaction processing performance, at lower costs. But Anil Valluri, director systems engineering, Sun Microsystems India, has a different take on Intel’s claims, “Intel is comparing Itanium 2 with old processors from Sun. We have no doubt about the superiority of our 900 MHz and 1 GHz UltraSparc processors,” he says.

Valluri further adds, “If you take an UltraSparc III and replace it with an UltraSparc IV, all the applications will run with the same level of optimisation and capabilities. If you replace an Itanium 2 with future versions of Itanium it won’t run with the same level of optimisation. Applications have to be recompiled for each release of Itanium.” In response, William Wu, regional marketing manager, Itanium processor family, Intel Asia Pacific, says, “We have designed both Madison and Montecito (future releases in the Itanium family) to be socket and software compatible with the Itanium 2 processor and will offer the E8870 chipset for each platform. Basically, this means that Intel will provide our customers and end- users with terrific investment protection since Madison and Montecito processors can be swapped in the same systems if need be today and in the future. Applications do not need to be recompiled for each release of Itanium to deliver high-performance results. There will be significant performance gains without recompiling.”

However an expert says that he’s still not completely convinced about this. “What Intel is saying is that there will be significant gains without recompiling-It would have been more convincing if Intel had said that the full benefits of future chips would be realised without recompiling software.”

The applications question
However, what could significantly impact the immediate fortunes of Itanium 2 is the number of applications which can support it, and the rollout of systems based on Itanium 2. Intel’s high-decibel campaign over the years has resulted in almost everyone in the industry joining the Intel herd (only Sun completely dropped out). From Microsoft to HP to a host of Linux developers, almost everyone has pledged allegiance to Itanium 2.

However, very few of these applications and systems will roll out immediately. Take Microsoft for instance, which is expected to release an Itanium 2 version of Windows Advanced Server Limited Edition 1.2 in August, but will release the 64-bit version of Windows XP for workstations only in Q1 2003. Most other Microsoft software for Itanium 2 will also be released only later this year and next year.

Some systems built using Itanium 2 processors will also come out in the next few weeks, with HP perhaps being the fastest off the block. Intel has said that 40 computer vendors will announce systems based on the Itanium 2, with more than 10 offering very high-end servers with 8-plus processors. The notable exception in this herd is Dell, which has decided against offering Itanium 2-based systems currently. Dell’s business model is largely based around high-volume products, and that might be one of the main reasons why Dell is skipping Itanium 2 for the time being.

Many other software applications for Itanium 2 are also still with the developers. Says Wu, “Today, there are more than 100 applications in production and we continue to engage with hundreds of vendors in targeted application segments to deliver their solutions on the Itanium 2 processor. The world’s leading enterprise software makers are building commercial applications for Itanium 2-based systems.”

He goes on to add, “The Itanium 2 processor works with seven operating systems, more than any other high-end enterprise platform.” Intel has an IA-64 fund, which has invested close to $250 million in start-ups to encourage them to develop Itanium apps. Besides, using all its persuasive skills (and Intel certainly doesn’t lack those, given its pole position in the processor sector), Intel is getting more and more vendors on to the Itanium 2 platform. Consulting and testing labs, which help port and optimise existing applications to Itanium 2 have been set up around the world, including India.

An Intel India spokesperson explains, “We have got commitments from all our leading ISVs in India along with lot of our OEMs. Intel also has an early access program in place to facilitate adoption on to Itanium 2. We have companies like Infosys, Pramati, Persistent and Bindview already on this.”

A host of Indian third party software developers have already ported, or are in the process of porting their software to Itanium 2. Says Subrahmanyam Goparaju, associate vice president and head-SET Labs, Infosys Technologies, “Infosys is working on performance engineering on Itanium. Itanium 2-based servers and workstations will be an important factor in high performance computing. Itanium 2 is faster and offers better security and QoS.” He adds that Infosys has already done some deployments on Itanium. SET Labs is also working on migrating legacy applications to Itanium 2.

But when you compare the number of applications currently available for Itanium 2, vis-à-vis the number of applications available on Sun’s platforms, it’s obvious that Itanium 2 still has a long way to go. “Intel claims that it has a 100 applications on the Itanium platform. We have over 11,000 applications on Solaris-SPARC,” claims Valluri of Sun.

While Intel refuses to make any estimate on when Itanium 2 will be supported by the same number of applications as Sun’s platform, it’s clear that Intel, which has waited for years and dealt with numerous delays, has a very long-term strategy for the young Itanium family, and has factored this aspect into its gameplan. The processor giant knows that customer acceptance in this segment is far slower as compared to desktops, considering the costs involved, and also the risks-few corporates would try out a new processor for vital business processes, even if Itanium 2 costs less as compared to similar systems from competitors. And also given that the global economic slowdown is still a reality, Intel would also know that spending would be far more careful and slower in these times. However, some markets (HP’s base for instance) would be far more receptive to Itanium 2, and that should see a readymade market for Intel.

Project Tiger
Another plan by Intel to push Itanium 2 is a project codenamed ‘Tiger.’ As part of this plan, Intel will build complete servers for vendors who don not have the capability to design and build Itanium 2-based systems. The vendors will brand and customise these boxes. This strategy is of great relevance to developing nations, where many local giants may not have the capability to design and build Itanium 2-based systems. While China’s Legend, and Russian vendors have already been mentioned by analysts as possible partners for this programme, Tiger could see a play in India too. Although Intel was tight-lipped on this, vendors like Zenith, HCL, could be possible candidates.

AMD’s Hammer
AMD is going on from being Intel’s bugbear in the desktop space, to threatening it even in the server space. AMD’s 32/64-bit Opteron processor, formerly codenamed Hammer, runs 32- and 64-bit applications in native mode. Itanium 2 runs 32-bit apps in emulation mode, which is slower (when the Itanium was released, the processor was outperformed by Intel’s own Pentium III on office applications). With experts saying that 80 percent of existing applications are 32-bit, performance in this area is something Intel will not be able to ignore, even if it’s a fact that most large users and system vendors take Intel far more seriously, as compared to AMD.

Manufacturing advantage
Besides all these, Intel does have one more ace up its sleeve-manufacturing capabilities. Intel possesses a larger manufacturing infrastructure than anyone else does in this space. This gives Intel a huge advantage when it comes to cost savings, accelerating speeds or developing and manufacturing multiple products simultaneously, or changing assembly lines faster than anybody else, in order to meet demand. Whatever happens, Itanium 2 will definitely be the starting point for Intel’s real play for domination in the 64-bit space. The real volumes may only come from Itanium 2’s successors, scheduled for release in 2003. But Intel is prepared for the long haul, and this is exactly what may happen.

Itanium 2 stats
Code name: McKinley
Originally expected: Second half of 2001
Actually launched: July 2002
Available Speeds: 900 MHz, 1GHz
Cache size: 3 MB or 1.5MB level 3 cache; 256 KB level 2 cache; 32 KB level 1 cache
System Bus: 400 MHz, 128-bit wide; 6.4 GB/s bandwidth
Successors: Madison and Deerfield (2003), Montecito (2004)
Source: Intel