Hewlett-Packard drops Itanium development

Hewlett-Packard is getting out of the chip-making business. The company announced on Thursday that it has reached an agreement to...

Hewlett-Packard is getting out of the chip-making business. The company announced on Thursday that it has reached an agreement to transfer HP's Itanium processor design team move to Intel in January. The agreement puts an end to the last microprocessor development within the company.

As part of the revised strategy, HP will refocus its Itanium efforts on system and software design and on helping independent software suppliers port their applications to the platform, Marcello said.

The group of several hundred engineers, based in Colorado, had been working with Intel on Itanium since the 64-bit processor was first conceived in the early 1990s. Intel initially planned the processor as a general replacement for its 32-bit line of x86 processors. Since its introduction, Itanium has mainly seen adoption as a high-end server processor.

Although HP has long promoted its co-development of the Itanium processor as a competitive advantage, the relationship hampered the chip's adoption by other system suppliers, which saw HP as having an unfair advantage, Marcello said. "You can have too much market share," he said. With Intel now the sole developer of Itanium, both companies hope the processor will be more widely adopted.

Marcello said Intel has agreed to produce Itanium processors into the next decade. "We are entering into a long-term relationship with Intel, which essentially guarantees us a supply of Itanium product family chips for a very long period of time," he said.

HP, for its part, will increase the amount of money it spends on Itanium-related development, at least in the short term. The company will spend £51m a year over the next three years on Itanium systems and software, with part of that going toward a new design centre in Singapore for HP's Itanium-based Integrity servers. The centre will focus on designing low-cost systems for servers with less than four processors, Marcello said.

HP will also spend more money developing virtualisation capabilities for the Integrity products, which will become more flexible and configurable as these capabilities are added over the next year, Marcello said.

Bringing Itanium's development under one roof may assuage rival computer maker's concerns about HP's special relationship with Itanium and could also smooth out the microprocessor development process, said Gordon Haff, an analyst with industry research firm Illuminata. Hover, Haff said, "Intel had certainly been giving the appearance of pulling back from Itanium over the last year or so."

With HP recently handing over the development of high-end Unix clustering and file system capabilities to Veritas, Thursday's announcement appears to be part of a broader plan to refocus its product development work, Haff said. "HP is outsourcing everything they can," he said.

Robert McMillan writes for the IDG News Service

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