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Intel toasts Itanium's success by giving servers away

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Intel has declared 2003 "The Year of Itanium" and then backed up this bold statement with a server give-away program.

It's rare that a vendor kicks off a free trial program for one of its most successful, rapidly selling products, but that's exactly what Intel has done. Aptly dubbed "The Intel Itanium 2 Solution Challenge," the new program allows Global 500 customers who have RISC-based systems to use an Itanium 2 server and related services for up to 90 days for a gratis kit evaluation.

"We are bullish on the Itanium 2 processor's performance and price advantage versus proprietary offerings," said Lisa Graff, director of Intel's Itanium Group. "Intel, along with our industry partners, wants CIOs to experience the difference an Itanium 2 architecture-based server can make."

(Proprietary clearly means something else at Intel.)

You might wonder why Global 500 customers have yet to dabble with the Itanic. After all, this is "The Year of Itanium," and Intel promises that 100,000 chips will be shipped by year end. Honest.

Even a server industry novice can tell that Itanic is the pride of Intel's processor fleet. Intel gave Itanium a full 40 days to enjoy its position as processor-of-the-year. For some reason, the company known for aggressive marketing tactics decided a stealth approach was best for its 64-bit processor. Just as the year neared its end, Intel unleashed the secret weapon and backed up the rocketing sales with a giveway program to tempt actual customers to buy the product. It makes perfect sense.

Any why not be bold? IDC just put out third quarter numbers on the chip, which showed Itanic is indeed setting records. In Q3, a whopping 4,957 Itanium servers were shipped. That's up from 3,250 in Q2 and 1,963 in Q1.

By contrast, 10,746 Opteron servers were shipped in Q3. That's more in one quarter than Intel shipped so far this year, and it's not even the year of Opteron. That's also twice as many Opteron boxes as shipped in Q2.

Let's also compare this figures to another relative 64-bit newcomer - Sun Microsystems' UltraSPARC IIIi. This processor took just about as long as Itanic to come to market and has been on sale for but two quarters.

Only counting two of Sun's products with the chip, Sun shipped more than 24,000 of its V210 and V240 servers. Over two quarters, that means Sun has out-shipped the entire Itanium ecosystem by about 2.5x and done so with just two servers. And this is a struggling company, just like AMD.

If you're a software maker looking for volume sales, "The Year of Itanium" may not be a major celebration for you.

A lot of people will argue that Intel is selling large SMPs, which makes processor and system sales different beasts. Following that line of reasoning, take Intel's own number of 100,000 processors for the entire year. Through three quarters, Intel has shipped close to 10,000 servers, according to IDC, which puts the processor per server count at about 10. With more server sales in Q4, that number will fall. We're talking midrange kit - at best.

In addition, HP accounts for more than 90 percent of the Itanium market and only this quarter rolled out 8 and 16 way systems. We suspect the vast majority of sales are for one and two processor systems - boxes similar to the V210 and V240.

If year 12 of the Itanium project was its finest showing to date, you can only imagine how well lucky 13 will go. ®

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