|
|
|
Instant Insight |
|
|
Intel Introduces New Itanium 2: Third Time’s the Charm
or Madison Blues? Intel this week announced the availability of the
newest iterations of its 64-bit Itanium 2 processor line, formerly code-named
“ Net/Net Since Intel’s original “ Sounds impressive, but does this mean that the new
Itanium 2 will lead Intel toward the 64-bit market domination that the
company and many industry pundits believe is inevitable? We have our doubts.
Historically, vendors have gained 64-bit market share against rivals either
by making it easier for 32-bit customers to make the transition to higher end
systems or by offering significant price/performance benefits over
competitors’ solutions. As to the first, the impact of AMD’s Opteron introduction earlier this year suggests that
Intel missed the boat by pursuing a 64-bit architecture completely separate
from its well-known 32-bit products. While it is true that the company has
pledged to improve the performance of 32-bit applications on Itanium 2, AMD’s
native approach is more elegant and is also buttressed by the Opteron’s notable scalability enhancements. Additionally,
Opteron costs significantly less than equivalent
Itanium 2 processors, which is always a plus to vendors developing
transitional solutions for SMBs and for smaller vendors that focus on highly
targeted markets such as technical workstations. While benchmark records are as changeable as the
weather, IBM’s TPC-C announcement suggests that Itanium 2 has a more than a short
way to go in establishing dominance in the 64-bit market. The problem we see
here is not who leads the benchmark pack at any given time, but that the
gains by any player represent an essentially incremental game of leapfrog.
This is not to denigrate any vendor’s solution, but to point out that
offering minimal price/performance improvements over competitors is a far
from compelling message in a market as demanding as the 64-bit space, and are
unlikely to convince many if any datacenter owners to replace their old
equipment with new Itanium 2 machines. We believe Intel’s success will reflect the abilities of its system vendor allies to convince their clients of Itanium 2’s value proposition. That has been the case with the company’s x86 products, but the 64-bit market is far more competitive and far less homogenous than the 32-bit space. The fact is that Intel’s continuing x86 dominance has largely come at the expense of less able opponents. The company has never faced the likes of IBM or Sun on even ground. This could have ramifications for the many vendors dependent on the success of Itanium 2. For HP, delivering a seamless transition from soon-to-be-extinct platforms such PA-RISC, Alpha, and MIPS (Tandem) to Itanium will be critical to the success of the company’s greater enterprise product strategy. If the company’s customers suspect any hiccups along the way, they are likely to realize (perhaps with some gentle prodding from the competition) that the migration path to POWER or SPARC solutions is no more painful than the one to Itanium 2. Vendors like IBM, for whom Itanium 2 is merely one of many solutions, will be less affected by and likely less motivated to drive Intel’s success. Overall, while Itanium 2 is likely to continue gaining market share, we believe that Intel’s road to 64-bit leadership will be longer and more difficult than the company and many in the industry expect. |