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Itanium Gains Traction Overseas

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Here’s one way to mitigate Itanium’s bumpy ride — change the discussion.
HP is billing its ‘Integrity server ecosystem’ as being about more than just
the microprocessor.

In a conference call with reporters Thursday, HP executive Rich Marcello emphasized its Itanium-based Integrity servers are about more than the microprocessor.

“Integrity is an all-encompassing brand that includes the overall system, the software, vertical [operating systems]. It’s more than just a microprocessor, and from that perspective we’ve got a really good story,” said Marcello.

HP is touting its Integrity sales overseas in so-called BRIC countries (Brazil, Russia, India and China), where it highlighted 17 recent customer wins.

Marcello said the 17 are a fraction of recent HP Integrity sales overseas. “We have a major initiative over there that’s really paying off.”

Sixty-five percent of HP’s first quarter revenue in 2006 came from outside the United States., including significant sales in the BRIC countries.

“We are one of a handful of companies over there with a global investment in R&D,” said Marcello.

Intel’s Itanium, originally developed by HP, has been hurt by upgrade delays, even as it’s been repositioned from its more mainstream origins as a replacement to high-end RISC-based systems.

The dual-core version of Itanium, code-named Montecito, was supposed to ship in late 2005. Intel then pushed that back to the second quarter of 2006 and then again to mid-summer 2006.

If that schedule holds, Marcello said he expects HP to deliver Montecito-based Integrity systems by September.

In the interim, HP recently started shipping so called Montecito-ready Integrity servers.

These systems sport a new chipset and other upgrades HP says boosts performance as much as 35 percent over earlier models.

Companies can upgrade those systems to Montecito when its ready or add newer Montecito-based Integrity servers with the same architecture, which HP plans to deliver this fall.

Marcello sited one of Integrity’s strengths as its ability to consolidate servers using virtualization and run multiple operating systems including Windows, Linux and HP’s own HP-UX.

IBM had a slight lead — 32 percent to 30 percent — over HP in Unix market share for 2005, with Sun at 26 percent, according to IDC.

In Brazil, the federal government mandated the use of Linux and open source software, both of which Integrity supports. Marcello also said about half of SAP’s customers worldwide use Integrity systems.

While Itanium may be new to some of the BRIC companies, that is proving to be an asset for HP.

“These emerging markets share some common characteristics that play well for us,” said Marcello.

“They are implementing new infrastructures, essentially next-generation data centers, and we have an architecture we think will last for about the next 25 years.”

Integrity systems are designed to handle highly complex computing tasks for customers such as financial institutions, telcos, oil and gas companies and the government of China.

“They want systems that run 24 by 365 days a year and that maps well to Integrity,” said Marcello.

In Russia, HP opened a solution center focused on oil and gas exploration that Marcello said is the first of its kind there designed to test complex problems in that industry.

AMD recently hired an important group of engineers working on Itanium for Intel. But Marcello expressed confidence in Intel’s ongoing engineering efforts and roadmap for Itanium.

He also confirmed HP’s substantial commitment of $1 billion a year for the next five years in the “Integrity ecosystem.”

This is separate from HP’s status as a main contributor and founding member of the Itanium Solutions Alliance, which has pledged $10 billion for Itanium marketing and developer support over the next five years.

This article was originally published on

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