HP Exits Future Itanium Design

by Michael Singer

Intel scoops up the engineers, and HP spends $3 billion to refocus its efforts.

HP is ending its 12-year involvement with the design of the Intel's Itanium processor, Intel confirmed Wednesday.

The chipmaking giant said it has acquired the remaining members of HP's Itanium chip design team in Ft. Collins, Colo. -- a group of about 100 engineers, according to a source close to the arrangements.

Intel also said HP will instead invest more than $3 billion over the next three years to support its Intel Itanium 2-based Integrity servers in an aggressive $20 billion server market segment. Intel said HP's investment spans research and development, server and system software design, partner-led application solutions, and sales and marketing.

Rich Marcello, vice president and general manager of High Performance Systems told internetnews.com the $3 billion will be invested in increasing their stake in software virtualization for Unix, Linux, and Windows, establishing a low-cost design system in Singapore and increasing its Integrity ISV based from 3,000 to 4,500.

"We'll focus on those areas that differentiating ourselves at higher level in the stack," he said. "We've accomplished what we've set out to do with Itanium, and with growth like this, the best strategy is to double down."

Marcello said the Singapore facility should be up and running in the next six months, noting that HP is already shuttling personnel and resources into the area.

HP's Ft. Collins team played a key role in the design of several current and future Itanium platforms, including the forthcoming dual core processors code-named "Montecito" and "Montvale." Intel said its expanded team will continue to work on these processors, in addition to working on the multi-core processor, code-named "Tukwila," and on other future Itanium processors. The team will join the Intel Enterprise Platforms Group led by Abhi Talwalkar, vice president and general manager.

"The cost reduction that HP sees by moving the Itanium team to Intel is about $50 million a year," Gartner analyst Martin Reynolds told internetnews.com. "This is insignificant against a billion dollar market development expense. HP is clearly confident about Intel's commitment to Itanium or they would not have done this."

HP's exit from Itanium's design, however, ends a 16-year semiconductor design relationship between the two Silicon Valley powerhouses. The shift away from contributing to Itanium follows HP's decision to no longer put Itanium processors in its high-performance workstations.

"They are done with what they hoped to accomplish with Itanium," John Enck, an analyst with Gartner told internetnews.com. "HP needed to replace their PA-RISC systems and include attributes like support for Non-Stop and Open VMS to survive processor failovers in their high-end systems. Now that the Intel roadmap has all of those aspects on it going forward, I would argue that is why they are getting out of the design process."

The departure does make it easier for Intel to sell its Itanium chip designs to other high-end computing companies like IBM, and Fujitsu.

"There is no question that HP is feeling the heat on IBM especially with Power architecture," Enck said. "But it really raises the bar that Itanium will be more of a standard in high-end systems. Clearly Itanium has 10 years of life to it. It is arguable that RISC-based chips would have that much left. Multi-core is interesting but where is the real innovation?"

HP's system-level chipsets have been able to take advantage of things that other vendors really have not.

"For example, by putting dual Itanium 2's up to 6M on a daughter card to fit into a single CPU socket, or producing a special rev of its zx1 chipset that lets it use a special 533MHz Front Side Bus version of Itanium 2 targeted at high performance computing," Jonathan Eunice, an industry analyst with Illuminata said. "But while HP may be Itanium's strongest supporter and major volume customer, Itanium is not just an HP thing."

Reynolds suggests HP's departure bodes well in for Itanium as a whole since, "Its performance progresses in fits and starts, and Intel should be able to sort this out now that it owns both teams," he said.

This article was originally published on internetnews.com.

This article was originally published on Friday Dec 17th 2004
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