HP bets enterprise server business on Itanium

Palo Alto (CA) - Hewlett-Packard (HP) affirmed its commitment to develop enterprise server systems based on Intel’s Itanium processor. The statement follows of wave of announcements from the Itanium Solutions Alliance (ISA) promoting the processor, which so far has been trailing industry expectations ever since its introduction in 2001. Meanwhile, Intel is gearing for the release of the next-generation Itanium 2 CPU in Q2.

HP, a member of the ISA, supports its commitment with a recently published report by market research firm IDC, which claims that companies will be purchasing more Itanium-servers over the next years. According to IDC, the market will grow to a volume of about $6.6 billion by 2009, representing an average annual growth rate of about 35%. HP believes that more than two-thirds of HP PA-RISC server customers will switch to Itanium.

HP says it currently offers the best-selling Itanium system. Its Integrity servers were responsible for more than $1.6 billion in sales in fiscal year 2005.

HP apparently is banking on the effort of ISA members to invest $10 billion in "developing the Itanium platform" as well as increasing the visibility of the technology through marketing programs. Part of that development is done by Intel itself, which is preparing to ship its first Itanium 2 processors with the 90 nm Montecito core.

Montecito will be the first dual-core Itanium processor, which initially was scheduled to be released at the beginning of this year, but currently is listed in Intel’s roadmap for a second quarter introduction. According to sources, the 1.7-billion-transistor processor will launch in five versions, which can be integrated in systems with up to 512 CPUs. The flagship of the series will be the Itanium 2 9050, which runs at a clock speed of 1.6 GHz and integrates 24 MB of L3 cache. The models 9040 and 9030 will also be clocked at 1.6 GHz, but come with smaller caches (18 and 8 MB). 9020 will offer 1.42 GHz and 12 MB of L3 cache. The entry level new Itanium 2 will be a single core model (9010, 1.6 GHz, 6 MB).

Pricing for the new Itanium processors will begin at $696 for the 9010 single-core version and end at $3692 for the high-end 9050.

Sources said that Intel will be continuing to offer the current Itanium 2 (Madison core), when Montecito is introduced. A quick transition to the new technology however is expected for the second half of the year. Intel will not reduce the prices of the current Itanium 2, which is currently priced from $910 (1.3 GHz / FSB400 / 3 MB L3) to $4226 (1.66 GHz / FSB667 / 9MB L3).