HP sends Itanic boat people to Intel

HP once celebrated the unique contributions it could make to the Itanium processor architecture. Such days will soon be over with HP trading its Itanium design team to Intel, sources tell us.

The companies are expected to announce tomorrow that "hundreds" of HP's Itanium engineers located in Colorado will become Intel chattel. This will leave Intel as the sole caretaker of the chip it co-invented with HP. In addition, HP is expected to announce that it will put even more money behind Itanic. In a face saving gesture, the company will pledge to back up the struggling chip with billions in investments - an interesting move given that HP just cancelled its line of Itanium workstations.

HP has long enjoyed the top position in the Itanium ecosystem. As co-designer of the processor, it gained insight into the chip's direction unavailable to other OEMs. In fact, the story goes that Intel and HP traded off work on each generation of the chip. Intel blundered Merced - the first version - and HP came to the rescue with McKinley - the second Itanium chip.

Most of the work being done on future Itanium designs is currently being handled by former DEC Alpha processor engineers now working for Intel. HP traded these engineers to Intel when it purchased Compaq. It seems Intel will now take on all the rest of HP's chip experts as well.

This move has to be seen as yet another cost-cutting exercise by HP. The company has sent numerous server staffers packing since it acquired Compaq. HP also halted its work on PA-RISC and Alpha (thanks to Compaq), deciding on Itanium for its high-end servers. Most recently, HP gave up on spending money to develop its Tru64 Unix software, picking up Veritas' code instead.

What's most interesting about HP's engineer offload is the timing of the move.

Intel's CEO-to-be Paul Otellini recently said Itanium has no place in workstations or low-end servers. This comment, according to an HP insider, came as quite the shock at HP where low-end Itanium shipments are key. In HP's fourth quarter, a whopping 88 percent of Integrity server sales were low end systems with 10 percent in the midrange and just 2 percent on high-end systems, according to internal figures obtained by The Register.

In addition, other HP insiders have noted that Intel has always kept the cost of Itanium chips too high to really get much widespread market penetration. So why not make Intel deal with the struggling beast on its own?

We expect to bring you more details on the arrangement tomorrow, when it's officially announced. ®

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