Intel admits Itanium failings

NEWS In a rare admission, an Intel executive said on Tuesday that the company's high-end Itanium chip family still isn't living up to popularity expectations.

"Are we meeting the specific goals this year? Not to the aggressive levels we've set," Abhi Talwalkar, general manager of Intel's Enterprise Platform Group, said while answering questions after a speech at the Intel Developer Forum here.

Intel once positioned Itanium as the chip that would become as dominant in the server market as the Pentium is among personal computers. But Intel's Xeon processor, which runs the same software as Pentium machines, still accounts for the majority of server shipments, and Intel in recent years has positioned Itanium only as a replacement for competitors' high-end chips, such as Sun Microsystems' UltraSparc and IBM's Power.

Despite the admission, Talwalkar also said Itanium is strong and meeting its long-term goals.

In large-scale servers, Itanium server revenue has been doubling or tripling, compared to year-earlier periods, while increasing tenfold for top-end machines with 16 or more processors. In addition, the number of dual- or four-processor Itanium-based server models has increased from 20 in 2002 to 70 this year, while the number of systems with eight or more Itanium processors has increased from five to 20 during the same period, he said.

Despite the slow start, Intel remains committed to Itanium. Earlier Tuesday, Talwalkar demonstrated a four-processor server that uses the next-generation Montecito model in the Itanium family, due in 2005.

And in his own speech, Talwalkar showed a plan for a faster Montecito code-named Montvale, due to arrive by the end of 2006. In addition, there will be a low-voltage version of Montvale.

There is a place for both Xeon and Itanium, he said. "We believe the dual-architecture approach is the best approach to meet the diverse needs" of corporate buyers, Talwalkar said.

But he also acknowledged the difficulty caused by the decision to upgrade Xeon with 64-bit extensions, a feature that lets it address more memory and that previously was one of the main advantages Itanium had over Xeon.

"I would be remiss to say the impact was zero, but the impact was mostly noise and confusion," Talwalkar said of the decision, referred to as EM64T. "It set us back a few months, I think, with the general audience."

Illuminata analyst Jonathan Eunice offered a translation of Talwalkar's words: "The EM64T thing knocked them for a loop," he said. "They should have expected that, but planning cycles and announcement cycles aren't always synchronized."

Intel was forced to announce EM64T earlier than it hoped, because rival Advanced Micro Devices was stealing too much thunder with its own version of the technology, AMD64, which went on sale with the Opteron processor in 2003, Eunice said.

"The AMD stuff was just getting too hot and too visible. Really good customers were getting too interested," Eunice said.