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By | Timothy Prickett Morgan 26th April 2010 04:30

HP: last Itanium man standing

Nehalem lives the dream

Comment Make no mistake: If Hewlett-Packard had not coerced chip maker Intel into making Itanium into something it never should have been, the point we have come to in the history of the server business would have got here a hell of a lot sooner than it has. But the flip side is that a whole slew of chip innovation outside of Intel might never have happened.

In this respect - and some might even be so cynical as to argue in only this respect - Intel's and HP's troubled chip development marriage and its resulting Itanium love child can be deemed a success. Without the threat of Itanium, which was never really fulfilled, perhaps IBM would have never knuckled down and put some money into decent Power chip development, which allowed the company to go from joke to dominance in the Unix server racket.

And without Intel relegating 64-bit processing to Itaniums and leaving Xeons to 32-bits, there would not have been a gap in which Advanced Micro Devices could leap and create the Opterons, which are the inspiration for the Nehalem family of processors that have put Intel back in the driver's seat when it comes to server CPUs and which give Intel a chance to have the kind of dominance in the data center that it enjoys on the desktop in the not-too-distant future.

None of us has the energy or the time to go over the multitude of sins that Intel and HP committed with the Itanium, ranging from the hubris of changing the instruction set to the stupidity of having too aggressive a deliver schedule in the early years to all but ignoring Itanium in the later years. But to understand what will happen to Itanium - and what will not happen to it - we have to review a little history.

The whole Itanium plan was predicated on all the major server vendors porting their platforms to the operating system, and as the 1990s came to a close and Itanium was still a threat rather than a disappointment, all the major OS makers swore their fealty to Itanium. That includes IBM with AIX, Sun Microsystems with Solaris, Hewlett-Packard with HP-UX, Santa Cruz Operation with OpenServer, Compaq with OpenVMS and Tru64 Unix, Microsoft with Windows, various emerging Linux players with their revs of that open source platform, and myriad proprietary and mainframe platforms (many of which help prop up the Itanium chip today).

The enthusiasm was more fear than anything else - fear of crossing Intel and suffering the consequences in the volume x86 business and fear of being left out on a big opportunity. And thus early forecasts, which had Itanium server sales kissing $40bn in 2001, look ridiculous now as we look back on them.

With HP finally getting around to launching machines based on the quad-core "Tukwila" Itanium 9300 processors, which made their debut back in early February with only HP and Super Micro committing publicly to using the new chip in systems. While none of the shippers of prior Itanium systems would bad-mouth the Tukwilas, the unwillingness of Unisys, Fujitsu, Silicon Graphics, Bull, NEC, and Hitachi to even admit they were working on Tukwila platforms was an astounding reversal of what server makers were saying back in 1996 and 1997 when it looked like Itanium would take over the world. And maybe Uranus, too.

IBM and Dell pulled the plug on their Itanium lines after only a few years, giving them about as much marketing effort as most politicians push for campaign finance reform. Which makes HP the John McCain of the Itanium world, I suppose, and perhaps a prisoner of war in a concentration camp it helped construct.

But hardware sales are driven by software sales, and software vendors don't write operating systems or application software for chips that don't look like they are going to hit their volumes or provide lots of margin to cover the work, as do mainframes and other high-end proprietary or Unix boxes.

So by the turn of the millennium, the IBM-Compaq-SCO triumvirate that was supposed to get the Monterey/64 converged AIX-OpenServer Unix running on Itanium got the work done and pulled the plug, and similarly Sun Microsystems, which completed an Itanium port of Solaris, sat on it. Microsoft supported Itanium for many years with Windows Server, but the company is always looking for a way to cut back on platforms when it comes to Windows Server. (Remember how Windows Server was supposed to run on x86, MIPS, Alpha, and Power platforms when it was launched in 1994?)

Microsoft relegated the Itanium version of Windows to a database engine with Windows Server 2008, and earlier this month Microsoft said that enough was enough and that Windows Server 2008 R2 was the last release of its operating system that would be supported on Itanium. El Reg broke the story late last year that Red Hat was going to kill off Itanium chip support in the Enterprise Linux 6 distro.

That leaves HP's HP-UX, OpenVMS, and NonStop operating systems, Novell's SUSE Linux Enterprise Server 11, and a handful of proprietary OSes from Europe and Japan on Itanium chips. With the exception of SLES, these customers have no alternatives, any more than IBM and Unisys mainframe or IBM OS/400 shops do. Which means as long as customers have difficulty in moving their applications and as long as Intel is willing to dedicate enough capacity to crank out the 400,000 or so Itanium chips needed (and can make money on the $1.5bn to $2.5bn in estimated annual Itanium chip revenue) to satisfy these customers, then Itanium will be around through the next eight-core "Poulson" and perhaps 16-core "Kittson" Itanium generations.

Assuming Itanium is on a two-year cycle, then there will be Itanium processors available for at least six to seven years, bolstering an Itanium server business that did around $5bn in sales in 2008, according to the Itanium Solutions Alliance. The analysts at Gartner have been cited saying they believe Itanium-based machines comprised 9.3 per cent of total worldwide server revenues in 2009, which works out to $4.07bn. That's an 18.5 per cent decline, which is not too bad compared to an overall server market that fell by 18.3 per cent to $43.1bn worldwide, according to Gartner.

Niche trap

Itanium fared no worse than the market at large, although there is every reason to believe that with big Opteron and Xeon iron out there and Microsoft and Red Hat pulling the plug, Itanium may not bounce back or even hold its position in the coming years. Itanium is just in a niche, not the dominant platform as Intel and HP had dreamed.

While that makes Itanium the butt of many jokes and a sore disappointment to HP, Intel, many server OEMs, operating system makers, and customers who endorsed the platform and had high hopes for it, that doesn't mean Itanium servers are not a good business, at least in the near term, like mainframes or proprietary minis rehosted on anything other than an x64 chip. If you chant Itanic three times and click your heels together, it is still not going away. HP and Intel could shoot it in the head, of course, but not for a few years.

What Intel has its mind set on, and what Itanium was always part of, is attacking the remaining bits of the server racket that it does not own because this is where the big money is. The funny thing is, once Intel tears down the midrange and the high-end and commoditizes it, the chip maker may find that the money vanishes, like a mirage, because all the revenue Intel can't get its hands on with x64 chips is there precisely because porting applications off other platforms is such a herculean task. Once everything runs on x64 iron and there is no upward pull on server prices, maybe the whole damn thing goes commodity and no one can make a dime off this racket any more.

El Reg sat down recently with Shannon Poulin, director of Xeon platform marketing at Intel to discuss the "Nehalem-EX" Xeon 7500 launch and its impact on the Itanium business. And here is the chart that sums up what annoys Intel to this day:

Intel Server Revenue Share

In this chart from Poulin, MSS is short for market segment share, and as you can see, the Intel share of the server revenue pie, which includes both Xeon and Itanium server sales, has been trending upwards at a steady clip. But at this rate, it will still take Intel another 10 to 15 years to get Intel's revenue share anywhere near the dominant shipment share it enjoys in the server racket, which is north of 96 per cent most quarters.

Poulin says that great progress has been made in getting companies to adopt x86 and x64 platforms. In 2000, some 1.6 million non-x86 systems shipped worldwide, and by 2009 he estimates that some 200,000 non-x64 systems (with around 400,000 processors) shipped against some 7.5 million total servers consumed by the companies and governments of the world. But for all Intel's efforts, it still has less than 60 percent of the server revenues, and it wants more.

That means not getting religious or even philosophical about Xeon versus Itanium, a fight that was over in 2003 when AMD shipped the first Opteron and it became clear that Intel would have to counter with much-improved Xeons rather than try to undercut AMD with an Itanium roadmap that had serious issues.

"We're not going to hold Xeon back in any way," explained Poulin. "We're going to put as many capabilities as we can in both products." As for what ISV and server partners might or might do, Intel seems pretty resigned, but also pretty confident that the Xeon 7500 lineup can meet the requirements of 90 percent of the so-called "mission critical" server segment. "Whatever happens, happens. We have two horses in a four horse race." That's Xeon and Itanium versus Power and Sparc, in case you are wondering.

You didn't actually think Intel would admit that the Opteron is suitable for mission-critical systems, did you?

So, as HP launches its revved Itanium-based systems this week, the talk will turn, as it always has in recent years, to what HP will do with HP-UX, OpenVMS, and NonStop. The answer will be: as little as possible to make the money. And that means sticking to the Itanium roadmap and staving off the day when HP will have to port its own operating systems to x64 iron and try to get as many of the 14,000 Itanium applications as possible to jump to yet another platform.

Two thoughts. First, wouldn't it be funny if the "Sandy Bridge" Xeon chips had an optional Itanium emulator that would plug into the chip package and help run emulated Itanium code? (The Itanium chips had an x86 emulator, you will remember, and also emulated some PA-RISC instructions that HP-UX needed). And wouldn't it be far easier if HP just bought Red Hat and asked its HP-UX customers to make just one more port and compile, to RHEL running on x64 iron? Novell would be cheaper to acquire and still supports Itanium with its SLES Linux, and that would also do. ®

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