November 19, 2002 9:30 PM PST

Dell to produce Itanium 2 computers

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LAS VEGAS--Despite being one of the more visible skeptics of Intel's Itanium chip family, Dell Computer will incorporate the Itanium 2 chip into future high-powered computers, a company executive said Tuesday.

The Austin, Texas-based computer giant will come out with computers containing Intel's latest 64-bit chip, called Itanium 2, according to Joe Marengi, senior vice president for Dell's Americas division.

"We will support Intel all the way on this...We will have an IA-64 2 (Itanium 2) product on our road map," Marengi said in an interview with CNET News.com at Comdex Fall 2002 here. "The technology is totally solid."

Commenting further on the company's vision, Marengi pointed out that Dell continues to grow rapidly, gaining 1,500 to 1,600 new business customers a quarter--including some from rival Hewlett-Packard.

"At the end of the day, our whole (model) is to be easy and flexible to work with," Marengi said. "We don?t have a strategy of the day. We don't try to do rocket science."

Tim Golden, director of marketing for industry standard servers at HP, said that the company has retained a vast majority of its customers.

The change of mood on Itanium 2 seems to close the book on one of the more florid server melodramas of the past year. Itanium is Intel's entry into the market for chips for high-end servers, a lucrative field dominated by Unix systems containing chips from Sun Microsystems, IBM and HP.

While it scores high on benchmark tests, Itanium has not sold because of product delays and a lack of software, according to analysts and high-tech executives.

To run well, Itanium requires different software than Intel's Xeon or Pentium chips, which process data in 32-bit chunks. Chips that process data in 64-bit chunks, such as Sun's UltraSparc and Itanium, can digest twice as much data at once. Among other benefits, these 64-bit machines can handle more than 4GB of memory--the limit for 32-bit machines. Still, the performance benefits are simply theoretical if the software doesn't exist.

Although both HP and IBM have come out with Itanium machines, Dell has been more cautious. Dell released a workstation containing the original Itanium chip in 2001, but then quietly pulled it off the market.

At Comdex last year, Marengi said that demand for Itanium servers in the current economic climate was "effectively zero." Dell came out with a server containing the first version of Itanium in 2001, but then held off on adopting Itanium 2, which came out this past summer.

Simultaneously, Dell began a fairly public flirtation with Advanced Micro Devices, which next year will come out with Opteron, a server chip that can run software written for Xeon and Pentium chips as well as 64-bit versions of these applications.

Opteron represents an easy path to the 64-bit club for PC makers, according to analysts. CEO Michael Dell and other company executives have said that Dell has been testing Opteron for the past year. Recently, company representatives have said that Dell will make its 64-bit decision clear by the end of the year.

While Marengi declined to discuss Opteron in depth, he noted that the benchmark scores of Itanium are relatively strong and that the path for adoption among corporate customers seems inevitable.

"Over time, that (Itanium) is going to be the technology that takes hold," he said. Last year he was negative on Itanium, but "this year I am in a neutral-to-positive stance," he added.

Still, Dell has not committed to how or when it will adopt Itanium. The technology downturn has put a damper on server purchases.

SoundView Technology analyst Mark Speckter said that Dell's vacillation over the past year was largely for show. Adopting AMD chips would have required Dell to design completely new computers as well as stock additional parts. Servers running AMD chips have also historically been shunned by corporate buyers, he added.

Meanwhile, Microsoft has continued to pledge its support to Itanium. Itanium has been "not a matter of if they (Dell) do it, it is a matter of when," Speckter said.

Scott Randall, also an analyst at SoundView, said that Opteron was also hurt by delays. If the chip had come out six months ago, it would have posed more of a competitive threat, he said.

Neither Intel nor AMD representatives could be reached for comment.

 

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