Server vendors stay optimistic on Itanium 2 sales

Defying skeptical analysts, server vendors including Silicon Graphics (SGI) and Fujitsu Siemens plan to win new customers by selling machines based on Intel’s "Montecito" dual-core Itanium 2 chip, due to launch Tuesday.

Fujitsu Siemens will upgrade from single to dual-core Itanium chips in its 8, 16, and 32-socket PrimeQuest servers by late this quarter.

The company hopes to gain customers who need to consolidate collections of scattered databases into single, centralized systems, said Frank Reichart, director of product marketing for the enterprise server business at Fujitsu Siemens.

Likewise, SGI plans to ship its high-end Altix 4700 and midrange Altix 450 servers by late August. Typical customers will use the servers to handle fast floating point operations with large data sets, such as drug discoveries, weather forecasts or simulations of automotive noise and vibration.

Thanks to the computing density and power efficiency gained from upgrading the single-core "Madison" version of Itanium to the new dual-core, SGI also plans to sell servers to business users running enterprise analytics.

"It lets us get into a new domain of data mining. They have an explosion of data and they need new ways to exploit it," said Jill Matzke, marketing product manager for HPC server systems at SGI.

Analysts paint a grimmer picture of the future of Montecito, saying its improvements may have come too late to rescue its dwindling stake in the server market.

Itanium has been forced out of the lucrative market for low-end servers by chips like Advanced Micro Devices' Opteron and Intel’s own Xeon, according to a June 2006 research brief from Clabby Analytics.

Those chips feature hybrid designs that allow customers to smoothly transition from 32-bit to 64-bit computing. The Itanium processor has a 64-bit architecture with a reputation for demanding awkward transitions from 32-bit platforms.

Compared to other high-end processors, Itanium chips use a computing architecture called EPIC (explicitly parallel instruction computing), while IBM’s Power chips use RISC (reduced instruction set computing).

RISC chips such as IBM’s Power Architecture, Sun’s SPARC and HP's PA-RISC processors dominate the midrange and high-end server marketplace, while Itanium has a very small market share, the report said.

And that market continues to shrink: Since 2004, both Dell and IBM have stopped building Itanium-based computers.

Still, SGI is optimistic that Itanium will help it win customers. The company even designed its new Altix servers to be compatible with "Montvale," the generation of Itanium to follow Montecito.

"If you buy IBM, you’re locked into Big Blue for your service and software stack, but eight major OEMs have systems running Itanium," said Tony DeVarco, senior manager of global technology partnerships at SGI.

Companies planning to sell servers with Itanium chips include: HP, Fujitsu, Fujitsu-Siemens, Hitachi., NEC, SGI and Unisys, he said.

The IDG News Service is a Network World affiliate.