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Reaching for hybrid heaven

Facing competition from AMD's Opteron hybrid chip, Intel is about to counter with one of its own. Will this new market take off?rn

Intel Corp. is about to do something rare: Follow the lead of a competitor.

This summer the chipmaker will introduce a 32-bit Xeon processor with extensions (dubbed Nocona) that will run 64-bit applications, a year after arch rival AMD Corp. released its Opteron server processor with that feature.

Since then AMD has added an Athlon64 processor for workstations.

The Opteron is the first hybrid processor for systems running Windows and Linux to have 64-bit extensions added to an x86 architecture CPU. It’s AMD’s answer to Intel’s full 64-bit Itanium family of processors, which is aimed at taking Intel deeper into enterprise computing with a CPU that can run Unix as well as an upcoming 64-bit version of Windows Server Edition.

The less well-financed AMD reasoned that businesses and governments won’t quickly abandon their investments in 32-bit applications, which will need expensive porting to 64-bit to run best on Itanium. Opteron lets users run 32-bit applications in mixed environments until they’re ready to fully convert to a 64-bit world, making it a less expensive stepping stone to Itanium.

Opteron has another advantage: Unlike a standard Xeon chip, it can address up to four Gigabytes of memory. That’s quite a lure for data-hungry users who don’t give a fig about 64-bit computing, especially because only Linux has an operating system that can take advantage of it. Microsoft won’t release a version of Windows 2003 Server optimized for 64-bit extensions until later this year.

AMD guessed right: IDC Canada says just over 1,000 Itanium servers were sold here last year. That’s about one per cent of the entire server market. It will have only six per cent of the market by 2008, the research firm predicts.

Meanwhile, in about a half a year Opteron server and workstation Canadian sales totalled 600 units.

Intel saw a trend. And with its announcement in February to launch Nocona, major OEMs including IBM and Hewlett-Packard — which also sell Opteron servers — quickly said they will release servers on the new Xeon hybrid chip as soon as they can.

So has Santa come early to resellers? Will there be an explosion of demand for hybrid servers, especially with the Intel brand behind them?

No, judging by interviews with a few system integrators. There’s consensus that hybrid chips will help interest in 64-bit computing, but not at an accelerated pace.

“”We’re still seeing that area of the market as a niche,”” says Todd Irie, director of marketing at NexInnovations Inc. An IBM reseller, it has seen little customer interest in the manufacturer’s rack-mount dual CPU Opteron-powered eServer 325.

On the other hand, Irie admits customers are looking for more choice in preserving their 32-bit apps, and Intel’s entry into hybrid processors will give them that.

Price will be a major factor, says Alain Lamoureau, director of enterprise storage and server for Eastern Canada at Compugen Inc.

“”If the price is similar to (today’s 32-bit) Xeon processors, companies will want to target that just in case they decide to run a 64-bit OS,”” he says. But if there’s a too much of a premium Intel’s hybrid chips will be a hard sell.

“”I see it as a teaser to go to a full-blown 64-bit architecture,”” he says. “”People who need 64-bit are still going to buy RISC or Itanium systems.””

And, he figures, in two years Itanium prices will have dropped enough to wipe out any advantage of hybrid chips.

Even some OEMs speak cautiously. “”We’re going to see that general business customers are going to want to take advantage of 64-bit capabilities over time, and this a way for them to get there in a very evolutionary, controlled fashion,”” says Alex Yost, worldwide director of project management for IBM’s Intel and AMD-based xSeries lines.

IBM offers only one Opteron server, although it just released an Opteron workstation.

Spokesmen for Hewlett-Packard, which has one single-CPU ProLiant Opteron server and in June will release a four-way unit, are more upbeat on the Intel announcement. “”Our belief is this will accelerate customers wanting to get into 64-bit,”” says Steve Shaw, HP Canada’s business development manager for enterprise servers. “”Part of the problem is there are a lot of 32-bit apps that haven’t been ported to 64, but customers want bigger memory, bigger file sizes.””

On the other hand, he notes hybrid servers can only handle four processors, compared to Itanium’s 64.

Meanwhile, others see niches. Startup OctigaBay Systems Corp. of Vancouver — just bought by Cray Inc. — says it will release an Opteron-powered server for high-performance computing this year. Prices will start at US$100,000

Intel Canada manager Doug Cooper sees nothing to be excited about. The demand for hybrid CPUs, he believes, is limited to certain markets needing server clusters with large memory space. Nor, he says, will hybrid chips slow adoption of Itanium, which Forrester Research analyst Richard Fichera argued in a report last month.

He also disagrees with Fichera that Intel’s move to hybrid is an admission that Itanium doesn’t offer a compelling price/performance advantage on legacy code and has met with more resistance than expected. Extensions won’t help certain applications.

“”The impact on Itanium will be profound,”” Fichera predicted of Intel’s addition of a hybrid CPU into its line. It will be difficult for customers to move to it because of the higher cost and lack of software. Itanium can run 32-bit apps, he noted, but at lower performance than equivalent 32-bit processors. Opteron, he wrote, offers adequate 64-bit performance and superior 32-bit power.

Will the price of 32-bit Xeon servers fall as Intel makes room for its hybrid, or will it find space for a slightly premium-priced CPU? Get ready for the ride.