24th April 2011

Oracle vs. HP and Intel’s Itanium – a semiconductor perspective

Recently a friend mentioned about the tremendous impact on Intel from Oracle’s March 22 announcement of its discontinuing development on Itanium.

While I had known about this announcement, I had not really given it much thought from the semiconductor perspective. So when I heard this comment, I started digging up…!

A bit on the background first: Using an architecture (based on explicit instruction level parallelism - in which the compiler decides which instructions to execute in parallel; as opposed to the superscalar architectures in which the processor manages the instructions dependencies at run time) that originated at HP and was later jointly developed along with Intel, Itanium is a family of 64-bit Intel microprocessors. The architecture was formerly called IA-64.

By 2009, the chip was almost entirely deployed on servers made by HP, which had over 95% of the Itanium server market share making HP-UX the main operating system for Itanium.

Ironically, the hardware competition to Intel’s Itanium comes from a chip from its own stables – the Xeon (Intel’s response to AMD’s x86-64 Opteron in 2004) that has cranked up its market share in the server pie over the years.

In comparison with its Xeon family of server processors, Itanium has never been a high-volume product for Intel. Majority of Intel’s server business is x86 and it will in the end suffer only a token loss of revenue as a result of Oracle’s announcement. Itanium has become such a niche product for Intel that the announcement had little effect on the chipmaker’s stock - Intel shares were up .02%, to $20.15 the morning after.

Here are some figures:

In the fourth quarter 2010, both Gartner and IDC saw x86 server revenues grow more than 20 percent. According to Intel (which cites figures by IDC), revenues of Itanium-based servers was $4 billion in 2010. By contrast, x86-based server sales was around $33.3 billion in 2010. With the x86 server market being eight times larger than that of Itanium, it does not make much sense for Intel to invest into Itanium’s development. On the other hand, it also cannot simply ignore the $4B Itanium market especially with the fact that the sockets for Itanium and Xeon are NOT interchangeable – as yet. Intel shared some information and re-iterated its commitment on the Itanium roadmap this month.

Btw, Intel recently announced 2 more server makers into its Itanium roster: Huawei Technologies and Inspur – that’s a 50 per cent growth rate in the Itanium OEM base.

posted in Semiconductor, Product, Business | 0 Comments

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