HP and Intel have confirmed earlier reports that located a massive migration of HP Itanium boat people making their way to Intel.
True to speculation, Intel has agreed to hire hundreds of HP's Itanium engineers working at a Ft. Collins, Colorado facility. This move puts all of Itanium's future development in Intel's hands and ends a very, very long engineering partnership between the vendors. Intel now has a full set of ex DEC, Compaq and HP staffers to help it focus on making multicore, multithreaded Itanics.
HP moved quickly to counter any overachieving reporters who might suggest that it has given up on the disastrous 64-bit chip. It announced a $3bn, three year investment in the processor, and many organs jumped at the chance to bring you word of this remarkable commitment.
HP insisted that the money will be used to increase the number of ISVs supporting Itanium, to work on chipset designs and to tune HP's own software for the processor. These, of course, are all tasks HP was already working on with all its might.
While the wording of HP's press release makes the $3bn investment seem new, it's not at all. HP has been designing Itanic chipsets for ages, paying software makers to port to the chip and subsidizing server migrations. In fact, one has to wonder what cost-savings HP has enjoyed by abandoning PA-RISC and Alpha in favor of Itanium. It no longer employs any chip engineers. Intel is handling production. And HP is still paying almost as much as IBM and Sun Microsystems do to develop their chips? That's peculiar.
Funny enough, HP and Intel portrayed this engineer exchange as being in the best interests of Itanium. The deal could ease other OEMs' concerns about HP receiving early insights into Itanium's future directions.
That spin doesn't fit with what HP showed in its statement about the deal.
"HP's server design innovation includes work across the breadth of the Integrity server line, with expanded focus on growth in the highly competitive two- to four-processor server market," HP said.
Notice the emphasis there at the end of the sentence on the "highly competitive" market for low-end Itanium servers.
Last month, Intel's future CEO Paul Otellini said the company has basically given up on pursuing the low-end server market with Itanium. Anyone get the feeling HP is trying to cover for that reality slip up?
For those of you curious about what types of Itanium systems customers are buying from HP, we're here to help. The majority - 63 percent - of HP's Itanium server revenue came from HP-UX customers in the fourth quarter. Another 18 percent came from Windows customers, 9 percent came from Linux users and 10 percent of HP's customers picked no OS on their Itanic boxes. HP owns 70 percent of the worldwide Itanium server market in revenue and is damn proud of that fact.
Incidentally, today's deal went over really well in the mainstream press.
"I think history will record Itanium as a failure," David House, a former Intel exec who once approved the original Itanic project, told the Wall Street Journal. ®
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