HP, Intel Push Itanium, But Sun Goes to 32-Bit
It's been a rough year for large IT providers, but some major industry leaders say they are bullish on their near-term prospects, and will continue to aggressively pursue new technologies. Tuesday morning at Gartner's ITXpo/Symposium, being held in Orlando, the CEOs of HP, Intel, and Sun Microsystems all say their organizations are weathering the economic storm, and seeing growth in some areas.
Intel's CEO, Craig Barrett, said Intel continues to pour more than $5 billion annually into research and development for new technologies. The pace of innovation continues unabated, he said. "Technology does not recognize economic recessions," he pointed out. "I don't see any slowing down in the near term."
Barrett feels that one of the major reasons for the IT slowdown has been the Y2K overhang -- the frenzy of spending in 1999. Now, he observed, there are many shops with 1999-model computers -- with 500Mhz of power or less -- that need upgrades. "No one can tell me that a 500Mhz computer can deliver the reliability and performance of today's 2.5Ghz to 3Ghz systems," he said. "The computer sector is relatively ripe for further investment, further capabilities, further productivity for the enterprise segment."
HP, in today's tough economic climate and in the aftermath of its recent megamerger with Compaq, has been undergoing an extensive restructuring, with a great deal of cost cutting, said CEO Carly Fiorina. Much of this cost-cutting will take place within the company's enterprise services group. "This is where we have the most duplication and repetition as a result of the merger," she pointed out.
Fiorina downplayed news of competitor Dell Computer's planned entree into its lucrative printer business. "'Dude, you're getting a Lexmark' just doesn't have the same ring, which may be why Michael Dell plans to private-label his printers," she quipped. "The fact that Dell is making an announcement doesn't leave us shaking in our boots. We've been competing successfully against low-cost printer suppliers for some years now."
Intel's Barrett said there is a lot of opportunity for Intel and its partners in the wireless LAN arena. "Everywhere to having the interfaces that talk to one another, to being able to write applications, so if you're writing to the desktop, you can immediately compile it to the handheld, and visa versa. The customers will demand that they work together."
Barrett also said that key to Intel's future prospects are the growth of its Itanium-class 64-bit microprocessors, Barrett noted. While Itanium has not taken off as rapidly as expected, both Barrett and Fiorina said Itanium-based systems are on track for growth. Fiorina disputed Gartner's projection that Itanium 64-bit processors will only have penetrated 7 percent to 8 percent of the overall server market by 2007. "I think Itanium is the bet to make," she says.
Barrett concurs, noting that "we expect that family to ramp up quickly in the second half of this year into 2003," he said. The major stumbling block to adoption of Itanium -- as with any new processor -- is that it's "not particularly useful to anyone unless it comes equipped in a system with an operating system with application stack which has been ported and tuned to it." Intel has been working closely with Microsoft as well as Linux and Unix hardware and software suppliers to tune their operating systems to run on Itanium over the past year. Only one major OEM -- Sun Microsystems -- has not signed on to support Itanium.
Sun's CEO, Scott McNealy, also participated in a Q&A session Tuesday morning, promoting Sun's Web services and taking his expected jabs at Microsoft. Sun's strategy is to continue to offer infrastructure and software support around what McNealy called a "Big Freaking Webtone Switch," which, he said, included free or near-free middleware. Sun's offerings now include an application stack that includes MySQL, the leading open-source database, with Star Office running on Linux or Solaris. Sun is also competing with Dell Computers in the small server space, offering an x86-based hardware box with operating system and application software bundled in for free. When asked if this would cut into Sun's lucrative proprietary hardware business, McNealy said that "it's better to cannibalize your own business than have someone else do it."
Offering this 32-bit configuration also is a technology step down for Sun, which has been aggressively pushing its 64-bit SPARC architecture in recent years. "We thought the whole world would have gone 64-bit by now, McNealy said. "But for many companies, 32-bit is good enough."
Joe McKendrick is an independent consultant and author specializing in surveys, technology research and white papers. He's a contributing writer for ENTmag.com.