A month ago, I discussed the reasons that I thought Advanced Micro Designs (AMD) might take control of the 64-bit microprocessor market with its upcoming x86-compatible Opteron processor line. This week, however, Intel announced the immediate availability of its second-generation 64-bit Itanium line, the Itanium 2, and various server and workstation systems based on that design. I recently talked with Intel Director of Enterprise Product Marketing Lisa Hambrick and offered her the chance to address the AMD challenge. Predictably, Hambrick was happy to do so, but I was surprised by her forthright dismissal of AMD's chances in the 64-bit space.
"Unlike AMD's offering, the Itanium is uniquely architected for this space," Hambrick said. "It's not a one size fits all strategy. We're targeting high reliability and scalability \[with Itanium 2\]." Hambrick cited Itanium 2's broad support with hardware and software makers as a key differentiator with the Opteron: More than 20 PC and server makers are releasing Itanium 2 systems this year, and a number of these manufacturers are providing high-end 8- to 32-processor solutions.
Regarding scalability, Hambrick said that AMD wasn't even in the Xeon space yet, let alone that of Itanium 2. Xeon is Intel's high-end 32-bit microprocessor, which the company is currently aiming at server and workstation markets. "AMD has a long way to go," she said. On the high end, Intel sees Sun Microsystems moving its RISC-based processors downmarket, a similar strategy to AMD's, which Hambrick says will also fail. "Sun wants to reach down from there, but now it has to compete in a market that doesn't value \[the\] features \[it built into its SPARC chips\]. We focused the Itanium's features on what customers want."
The Itanium 2 comes just a year after the lackluster debut of the original Itanium, which has sold poorly. In fact, the Itanium did so badly that some PC makers—notably Dell, the world's largest PC maker—walked away from Itanium-based solutions. And Dell says that it's taking a wait-and-see approach with Itanium 2. On paper, the Itanium 2 doesn't appear to offer much of an advantage: It will debut at speeds of 933MHz and 1GHz, just a hair faster than the 733MHz and 800MHz Itanium chips Intel shipped last year. But as Apple has noted vainly in its Macintosh advertising, MHz isn't everything. Intel says that the Itanium 2's performance is 1.5 to 2 times faster than the original Itanium, thanks to its higher bandwidth system bus, larger and integrated Level 3 (L3) cache, streamlined internal design, and other improvements.
"The proof is in the numbers," Hambrick said, pointing to a chart showing performance ratings comparing Itanium 2 to the Sun UltraSPARC III. "We're 30 to 100 percent faster at one processor." Intel says that Itanium 2 offers about 1.3 times the performance at integer operations, more than 1.5 times the performance at transaction processing on 4-processor systems, and about 2 times the performance at floating-point operations, when compared with Sun's offering. And the Intel-based solutions that outperform Sun's hardware cost much less. For example, Reuters.com recently switched its structured negotiation servers from Sun to Intel with amazing results. A $50,000 2-processor Itanium 2 Hewlett-Packard (HP) server now outperforms the previous solution—a $230,000 8-processor UltraSPARC III—by a factor of four.
Two factors hampered the original Itanium chip: niche market segments and the dated 32-bit x86 platform's surprising resilience. The earlier Itanium targeted two main markets—science and engineering workstations and large database servers—because the chip's bigger pipeline improved data access throughput. But even high-end database servers, especially those running Microsoft SQL Server, usually performed better with farms of inexpensive 32-bit hardware, thanks to Microsoft's Windows platform scale out and manageability improvements.
With Itanium 2, Intel hopes to tackle both the niche market and x86 resilience concerns. First, Itanium 2's potential market segments are much greater. In addition to science, engineering, and database uses, Intel will target enterprise resource planning (ERP) and business intelligence solutions, security transactions, and other high-performance computing scenarios. Itanium 2 is better suited to these markets because it scales better than its predecessor, and more companies now offer 8-, 16-, and 32-way systems.
Second, on the software front, Microsoft is supporting Itanium 2 with new 64-bit versions of Windows XP, Windows Advanced Server Limited Edition, and Windows Datacenter Server Limited Edition; Microsoft will update the latter two products this month and update them again to final shipping versions when Windows .NET Server ships late this year. Other environments, such as Red Hat Linux and HP UX 11i are also available.
Looking to the future, Hambrick says Intel is serious about Itanium and plans to continue to update the product family. In 2003, Intel will release the next-generation Itanium, code-named Madison/Deerfield, which will bump L3 cache from 3MB to 6MB and shift the Itanium family to a more efficient 0.13 micron manufacturing process (the Itanium 2 still uses older 0.18 micron technology). In 2004, the company will introduce its Itanium "Montecito" chip, which will halve the manufacturing process to just 0.09 microns; other details are up in the air.
So that customers who purchase Itanium 2 hardware won't be abandoned when faster chips arrive in the future, Intel has made the chip upgradeable. Many potential customers skipped over Intel's first-generation Itanium products because they knew that better and faster hardware would soon replace the chips. With the Itanium 2, Intel introduces a new daughterboard design that provides a way to slide out the chip and replace it with new versions—Madison/Deerfield and Montecito—as the company releases them.
Are Intel's improvements enough to stave off AMD, with its internal Microsoft support and good press? It's too early to say, but if the apathy that accompanied the original Itanium sticks around for this generation, Intel might have some scurrying to do.