Intel acknowledges Itanium flubs, predicts strong future

SANTA CLARA, Calif.--A top Intel executive acknowledged significant problems with Itanium but said Thursday that the company is increasing investments in the high-end chip family to brighten its future.

"I'm not happy with our sales figures, I'm not happy with our execution delays, I'm not happy with our killed projects," said Pat Gelsinger, senior vice president of Intel's Digital Enterprise Group.

But at the same time, Itanium server sales are more than half of Sun Sparc server sales and a third of IBM Power server sales, and there are new customers and partnerships such as a major deal with computing technology supplier Electronic Data Systems. "Do I feel good or bad? The answer is yes," Gelsinger said in an interview at Intel headquarters here.

Itanium may have grown more slowly than Intel initially expected and hoped, but it's no different than other major server designs, said Intel Chief Executive Paul Otellini. "We looked at the unit ramp of Power, Sparc and Itanium set to time zero. We're right on their curves from first shipments," Otellini said.

And transitions are necessarily slow when it comes to large servers, Otellini said. "In the mainframe space, you're displacing 10- to 20-year-old architectures; it's a marathon."

Intel and Hewlett-Packard, the initiator of the Itanium project and its biggest advocate, have begun trying to take the offensive with the chip family. The new assertiveness includes $10 billion in Itanium technology and market development spending through 2010. Half of that is coming from HP.

Intel has had troubles with Itanium--most recently the delay of "Montecito," the first dual-core model and a product Intel says will double performance over its "Madison" predecessor. But the company has increased internal spending on engineers so future designs--"Montvale" due in 2007, "Tukwila" in 2008, and "Poulson" some time after that.

After the agreement in which HP's Itanium design team moved to Intel, "We did a top-down look" at Itanium, Gelsinger said. "We looked at the road map--the embarrassment of Montecito--where we needed to be with Montvale, with Tukwila, with Poulson, and what does it take to execute."

Consequently, Intel has been hiring engineers in Fort Collins, Colo., and Massachusetts. "We have not been more specific in terms of how much we incremented," he said, but it should help Intel with "better execution, credibility and predictability."

[fred dunn]

The Edsel had a strong future too...

Enough said already. All Intel is trying to do is keep people from forgetting this multi-billion dollar flub of a project.