HP to Invest $3 Billion in Itanium-Powered Servers

Hewlett-Packard Co. is planning to spend $3 billion over the next three years to grow the server product line that runs on Intel Corp.'s 64-bit Itanium 2 processors.

Officials with HP, of Palo Alto, Calif., are announcing Thursday that the money will be spent to expand the number of applications that can run on the Itanium chip, improve the robustness and scalability of its Integrity servers and grow the management software around the systems.

In addition, HP is announcing that Intel, of Santa Clara, Calif., will hire HP's Itanium development team, which is based in Fort Collins, Colo. The move will enable Intel to streamline the development of the chip architecture and hopefully entice more OEMs to adopt Itanium, said Don Jenkins, vice president of marketing for HP's Business Critical Systems group.

Intel and HP, which co-developed Itanium, initially expected the processor to become the primary 64-bit platform of the future. However, adoption over the years has been slower than expected, and now both companies target Itanium at the $20 billion high-end RISC market, dominated by Sun Microsystems Inc.'s SPARC and IBM's Power architectures.

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Intel rival Advanced Micro Devices Inc. also impacted the plans for Itanium with the introduction of Opteron, a processor that can run both 32-bit and 64-bit applications. Earlier this year, Intel introduced similar capabilities to its 32-bit Xeon processors, with technology called EM64T.

Both Sun and HP have adopted the Opteron processors for their volume servers, and IBM also has released an Opteron-based system. HP also sells ProLiant servers running on Xeon chips.

Click here for a review of the Xeon-based ProLiant DL380 G4.

But HP is standardizing its high-end systems on Itanium, phasing out such platforms as PA-RISC and Alpha. In mid-2005, HP will unveil that last of the new HP 9000 systems running the PA-RISC chip, though it will continue to service and support the systems for several years after.

HP's Itanium-based Integrity systems now account for about 23 percent of the BCS servers sold, Jenkins said. The goal is to grow that to 50 percent by the end of 2005, and to 70 percent in 2006.

The $3 billion investment will be made in several key areas, he said. Currently, about 2,900 applications can run on Itanium-based systems. HP is working to grow that to 4,500 throughout 2005, Jenkins said.

In addition, HP will invest in the engineering around the servers and the chip sets that run with Itanium, to improve the scalability and robustness of the platform. The company will focus particularly on the two- and four-way systems, where competition is greatest. The engineering also will include focusing on the operating systems—Linux, HP-UX, Microsoft Corp.'s Windows and HP's OpenVMS—that run on Integrity.

HP recently discontinued its line of Itanium-based workstations. Click here to read more.

In January, HP will release a production version of OpenVMS for Integrity systems, aimed at AlphaServer customers. HP also is looking to scale Linux on the Itanium systems.

"We're not sure how big that market is, but there is a lot of interest in running Linux in 16-way [and] 32-way systems," Jenkins said.

In addition, HP next year will release NonStop systems running on Itanium.

HP also will invest in increasing virtualization capabilities in Integrity servers. In the second half of 2005, the company will release virtual machine capabilities for the systems.

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