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"Clearly, database software is a crucial element in this kind of high-end system, and it's far easier for an end user to change the underlying hardware platform than it is for them to change the underlying database platform," Brookwood said.
HP's revenue from Business Critical Systems, which includes its Itanium servers, dropped 23 percent in 2012 compared to the previous year. In December, IDC forecast that Itanium server shipments would remain roughly flat through 2016, at around 26,000 systems a year -- less than half the volume sold in 2008.
HP has been laying a path to help customers transition from Itanium to Xeon processors if they so wish. It is developing an Integrity Superdome server codenamed Dragon Hawk that will let customers use Itanium and Xeon server blades in the same chassis.
HP and Intel have also taken steps to reduce their Itanium development costs, by allowing Itanium to use the same chipsets and other external components as the Xeon. In November they said that would go further, allowing Itanium and Xeon to use the same motherboard and some "silicon-level" components.
That would have reduced costs further in the longer term, making continued Itanium development more viable. But the companies will no longer make that investment, at least for now. Sticking with the same manufacturing process will also save them some money. "Pulling the plug on 22-nanometer certainly reduces their R&D expense a whole lot," Brookwood said.
An Intel spokesman said a combination of factors led to the changes, including declines in the overall Unix systems market, of which HP-UX is a part. The revised roadmap also "answers certain requirements of our customers," the spokesman said, though he declined to elaborate. HP is by far Intel's biggest customer for Itanium.
HP declined to discuss the matter but said in a statement that it remains committed to its Integrity products, including a new line of Kittson-based systems.
"The recent statement by Intel has no impact on those plans or on HP's ongoing commitment to our mission-critical customers," HP said. A spokesman confirmed that HP continues to develop Dragon Hawk, the system that will accommodate both Xeon and Itanium blades. HP may now feel compelled to accelerate development of that system, Brookwood said.
Intel painted the decision as a positive one for customers. Because Kittson will now be socket-compatible with current Itanium chips, upgrading existing systems will be much easier.
But it's unclear what the cost will be in performance. The latest Itanium chip released in November, known as Poulson, included significant architectural changes, and Kittson was expected to benefit primarily from the new manufacturing process, which produces faster, more energy-efficient transistors.
Intel won't discuss details of Kittson, noting it isn't due for release for two to three years. "It's going to be better, obviously, but we haven't discussed how much better," the Intel spokesman said. Manufacturing improvements can be made, even within the context of the current process, he said.