Itanium Gaining Traction Overseas

Here’s one way to mitigate Itanium’s bumpy ride — change the discussion.

In
a conference call with reporters today, 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 U.S., 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 late last year. 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.

News Around the Web