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Is IBM shutting down its Itanium shop?

Chipset snub says, 'maybe'

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Will IBM keep selling Itanium servers down the road? No one knows. It won't say.

IBM is keeping the press in the dark about its Itanium plans, after CNET broke a story revealing that its latest chipset does not support Intel's 64-bit processor. Unlike its predecessor, the "Hurricane" chipset - due out in 90 days - will only work with Xeon processors from Intel. Why did IBM shun Itanium this go round? A lack of sales, of course.

Here's IBM explaining why the new X3 server architecture that includes the Hurricane chipset won't support Itanic.

"We did forgo (Itanium support) on X3," Tom Bradicich, CTO of Intel-based servers at IBM told CNET. "It is a function of the market acceptance of Itanium."

Could this be true?

The Register turned to IBM spokesman Tim Willeford for an answer.

"If IBM has anything to share, we'll drop you a line," he said.

Er, gee thanks.

As it turned, IBM decided it did have something to share. About 10 minutes after we slammed down the phone, Willeford called back with the following message:

"X3 does not support Itanium," he said. "When Intel announces a future generation of Itanium, IBM will decide on support at that time."

IBM will continue to sell its x455 Itanium-based server that runs on the third-generation Madison chip. Intel near year end will release the dual-core version of Itanium named Montecito. It seems IBM will decided at that time whether or not it wants to sell Montectio systems that are based on Intel's own Itanium chipsets.

The upshot of all this is that the days of Itanic could be numbered at IBM.

"IBM told us that they made a conscious decision to not create a parallel path for Itanium in this generation of chipset as they had in the previous one," said Gordon Haff, an analyst at Illuminata. "That's hardly surprising, given IBM's increased emphasis on Power and its continued de-emphasis of Itanium."

"Now that Intel has introduced 64-bit extensions for x86 (Xeon), IBM has a 64-bit xSeries system that doesn't require a separate development effort for not much volume - and one which doesn't compete so directly with Power," Haff concluded.

IBM has a long history of shunning Itanium in favor of its own Power processor. Spokesmen have called Itanic a "science project" and said there is no real market for the chip.

In the fourth quarter, IBM moved just 800 Itanium servers, according to the the latest data from Gartner. That's a 26 per cent drop in sales from the 1,082 systems shipped in the same period last year. IBM pulled in $115m from Itanium sales in all of 2004.

IBM's Power4 and Power5 chips have been strong performers and helped IBM regain server market share from Sun Microsystems and even HP to some extent.

Exactly what this Itanium snub does to relations between IBM and Intel remains to be seen. IBM has bent over backwards to tout Xeon over AMD's Opteron chip much to Intel's pleasure. But with friends like IBM, who needs enemies? ®

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