Itanium 2 finally opens server rooms for Intel

Intel’s 64-bit hope, the Itanium, has remained just that—a hope, since 2001, when the first version was released. But Madison, the latest version of Itanium 2, is turning the tide for Itanium with significant market acceptance, claims the processor pasha. Ivor Soans finds out what’s happening on the Indian front

Everything was going according to script at an Intel Developer Forum (IDF) in Bangalore in April this year. Intel and SGI were announcing that the Supercomputing Education Research Centre (SERC) at the Indian Institute of Science (IISc) in Bangalore had purchased India’s first SGI Altix 3000 system, powered by 32 Itanium 2 processors. Then one journalist asked SERC chairman Dr S M Rao why they had chosen the system, and the eminent scientist answered that when they [SERC, IISc] got something for free, there was no reason for them not to take it. Intel’s PR machine immediately went into damage-control mode and clarifications were issued that SERC had in fact paid for the system, but the initial damage was done. Similarly, just a month before the IDF, when Scott McNealy, chairman, president and CEO of Sun Microsystems was asked for his opinion on Itanium’s prospects during his India visit, he casually dismissed the question by asking for proof of any enterprises actually using Itanium 2 processors, rather than in ‘proof-of-concept’ trials. There were no more questions on Itanium.

However, the tables seemed to have turned ever since the launch of Itanium 2’s latest coming, Madison, in end-June. Intel has been more upbeat about its 64-bit server processor than ever before. According to Intel, Madison offers almost a 50 percent jump in performance over the earlier Itanium 2 and has also done well on audited benchmark tests. But there’s more to it than that.

Says G B Kumar, director sales, Intel Technology India, "Itanium 2’s move to the enterprise has already happened in India. In the last 60 days we’ve seen notable wins, and more are in the pipeline." He rattles off a list of corporate users in India, including names like the TVS Group, which runs SAP on Itanium 2 Madison-based servers, Lakshmi Vilas Bank, which will run core banking applications on Madison servers and the Shapoorji Pallonji group. There are more names on the list (See Box: Intel’s recent Itanium 2 wins). While Kumar refuses to fix any numbers he insists that Itanium 2 will gain market share ‘significantly’ in the near future. Confirms Jyothi Satyanathan, country manager, xSeries & Intellistations, IBM India, "We see good volumes building for our products [based on Itanium 2] in the next few months." According to IDC, the number of Itanium-based servers shipped to the Asia Pacific, excluding Japan, will rise from 700 in 2003 to 42,500 in 2007.

Finally, it’s working!

No one can deny that Intel’s Itanium strategy finally seems to be coming together—more than 50 different Itanium 2 systems are expected to be available by the end of the year, with more than 40 two- and four-processor systems and more than 10 big iron systems with eight or more processors. SGI has announced plans to extend the scalability of its Altix 3000 servers to encompass a record 128 processors, running a single instance of Linux. While all the MNC server giants (except Sun) present in India already have or are in the process of offering Itanium 2-based systems, even India’s home-grown giants like HCL are key players in this strategy.

And of course, even Dell is part of the pack this time around. The PC numero uno and growing force on the server front (Dell is ranked No 4 on global server rankings) had joined the Itanium bandwagon when the first Itanium was released, but then dropped its Itanium-based system and ignored the initial Itanium 2, bluntly citing lack of demand. Dell is widely recognised as being a cautious player that only enters markets that exist in the here and now. So, with Dell taking up Itanium again, and when you consider that Dell has increased the number of servers shipped compared to the year before, by more than 10 percent for each of the last 22 quarters (according to Gartner), that definitely adds to Itanium 2’s lustre.

And the software applications part seems to be getting there too. Narendra Bhandari, APAC regional manager, Strategic Relations, Internet Solution Groups, Intel Asia, has a long list of Indian software services players who’re working with Intel to port applications to the Itanium 2 platform. These include the likes of TCS, Wipro, Infosys, Satyam and i-flex. Of course, there’s also the 64-bit Windows 2003, software from SAP, Oracle’s 9i database, besides other business intelligence, supply chain management software and the like—more than 400 applications—also ported to Itanium today.

When you add all of this to Intel’s fearsome manufacturing and marketing muscle, Itanium 2 Madison is perhaps the processor that may mark the turnaround of Intel’s Itanium fortunes. Itanium’s history has been beset by a long litany of woes, including delayed releases, lack of application and vendor support, all of which, many experts say has almost resulted in a psychological barrier against Itanium in the market.

According to G B KUMAR, enterprise usage of Itanium 2-based systems is slated to rise tremendously

Target markets

But Intel is shrugging off the past as it seeks to capture new markets in India. According to Kumar, new verticals are being targeted for Itanium 2. In telecom, the areas being focused on are billing applications, customer care and interconnect. In manufacturing, ERP is the focus area. But the banking, financial services and insurance sector (BFSI) may be the biggest catch. Explains Kumar, "In the next 18 months more and more public sector banks are slated to adopt core banking solutions, and considering the size of these banks, Itanium 2 would be an ideal platform."

E-governance is another target area, and Intel has an interesting strategy in place here. Since there are not too many standard applications in this segment where customised applications rule the roost, Intel is working closely with Indian ministries and government bodies. Large projects are identified and Intel Solution Services moves in to help port the required applications to Itanium and help in rollouts. Intel’s longstanding Itanium partnership with HCL, which has deep relationships in the government sector, will obviously help.

HPC on a high

High performance computing (HPC) has been a strong point for Itanium for some time now and Intel aims to take this advantage further down the road with Itanium 2. Says Vijay Keshav, APAC regional manager, High Performance Computing, Intel Asia, "It’s not only the scientific community, but even IT services firms are into HPC. Infosys uses clusters in its work in the finance segment, while TCS and Satyam use clusters in life sciences." The Indian oil & gas segment is also expected to use HPC clusters in a big way as competition heats up with the expected privatisation of some state-owned firms and the entry of Reliance into the fray. Intel sources say that some big wins from these segments will be announced soon.

Competition

But competition is anything but easy. Intel is not only battling Itanium’s not-so-encouraging history, but also powerful players like IBM and Sun with their RISC processors. IBM is both a partner and competitor rolled into one. Big Blue sells Itanium-based servers as part of its xSeries line, while it uses its own processors in its pSeries and iSeries mid-range servers. Sun of course is perhaps Itanium’s biggest competitor. Says a combative Anil Valluri, director-Systems Engineering, Sun Microsystems India, "There is a big difference between enterprise acceptance and having a good CPU. Itanium 2 is nowhere close to it. By citing sporadic wins and the odd ISV support, Intel may make market noise, but they are certainly not winning the enterprise battle."

In fact, Valluri claims that Sun Microsystems India has hardly gone head-to-head with Itanium 2-based systems in recent marketing pitches. "It is ironical that with so much of hype, we have hardly competed or lost to Itanium-based offerings in the market place," he claims.

Then there’s AMD with its 64-bit Opteron, which can run not only 64-bit applications natively, but also 32-bit applications, something the Itanium doesn’t do as well. Although AMD isn’t a huge force in the Indian server market, Intel will face some heat. IBM has announced its offering based on the Opteron processor—the eServer 325. Besides, Opteron has also seen some big wins in the recent past in the global HPC space, and that may impact Intel’s HPC plans around Itanium 2. And of course, there’s Intel seemingly competing against itself. (See Box: The Xeon factor)

What the future holds

A low-voltage, low-priced version of Itanium 2, codenamed Deerfield, is expected to be launched in a few days. Deerfield will not only bring the Itanium into a cheaper price range, but will also take the Itanium into the growing blade server arena. Since the Deerfield consumes less power, it also does not heat up as much as normal Itaniums, thus being ideal for blades.

On the marketing front, Intel is working out plans to involve its channels in the Itanium strategy. While company officials were tight-lipped about these plans and refused to divulge any details, sources say that some new initiatives on this front may be announced soon. Speculation is that Intel may involve its Intel Premier Providers, who have the capabilities to build low-end servers to push Itanium in the Indian market.

All in all, it’s fairly certain now that Itanium is headed towards growth, now that the earlier problems have been ironed out. Of course, the quantum of that growth will depend on pricing, how vendors push Itanium and how competitors reach with their products and strategies. And the quantum of growth is what will finally make the difference between runaway success and an also-ran. The race has been joined for sure, but the 64-bit crown is still a long way off.