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IBM Splits Support Between Itanium and POWER

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Last Monday, Intel and IBM made several announcements that sent important signals about their respective processor strategies. While Intel unveiled the third generation of its 64-bit Itanium 2 processor, IBM announced servers and benchmarks that supported Itanium 2 but touted IBM's POWER processor as a worthy competitor.

In a long-anticipated announcement, Intel took the wraps off its most powerful Itanium 2 chip yet. The 64-bit processor, formerly known by the code name "Madison," offers 30-50% greater performance than the previous "McKinley" version of Itanium 2. The processor also offers 25-30% greater transaction processing performance than Intel's fastest 32-bit chip, a Xeon MP running at 2.8 GHz. Madison comes in three versions: a 1.5 GHz processor with 6 MB of integrated L3 cache; a 1.4 GHz processor with a 4 MB L3 cache; and a 1.3 GHz processor with a 3 MB L3 cache.

On the same day that Intel launched Madison, IBM made several announcements of its own that spoke volumes about how it will position its Madison-based servers versus those that run on POWER, including the iSeries and pSeries. On the one hand, the computer giant announced the eServer xSeries 450, a four-way Intel server that utilizes the Madison chips. On the other hand, it announced a more powerful xSeries 445 that supports up to 16 of Intel's 32-bit Xeon MP chips today and will support up to 32 Xeons by the end of this year. IBM also refreshed many of its existing xSeries models with more powerful Xeon MP chips that Intel announced along with Madison.

At the same time, IBM revealed that its pSeries 690, a 32-way POWER processor, had just beaten an Itanium 2 server on the TPC-C transaction processing benchmark. In a configuration that included a p690 running the AIX operating system at 1.7 GHz, DB2 Universal Database (DB2 UDB), and TotalStorage FAStT900 disk arrays, IBM logged a world record 763,898.39 transactions per minute (tpmC) at a cost of $8.31 per tpmC. In setting the record, the p690 bested a Hewlett-Packard Superdome that logged 707,102 tpmC at a cost of $8.44 per tpmC. It just so happens that the HP Superdome was running 64 of Intel's new Madison chips and Windows Server 2003 Data Center Edition.

IBM's 64-Bit Balancing Act

As last week's announcements make clear, IBM's 64-bit processor strategy is far from simple. Indeed, Big Blue is treading a thin line between collaborating and competing with Intel that could become increasingly thinner as Intel ramps up Itanium 2. In this endeavor, Intel is relying heavily on HP, which is migrating its UNIX and high-end Windows servers to Itanium 2 while jockeying with IBM for the title of the world's largest server provider.

IBM's strategy is complex precisely because some parts of the company partner with Intel while others compete with it. On the one hand, IBM's xSeries group must maintain its partnership with Intel, as it is only with Intel's help that it can compete against HP and Dell in the Windows server market. On the other hand, IBM's pSeries and iSeries groups must maintain the POWER processor's share of the 64-bit market to protect their server bases. At the same time, IBM wants to have a stake in Itanium 2 in case the processor does win market acceptance.

To meet these divergent objectives, IBM is supporting Itanium 2 but limiting it to four-way servers. Above that level, the company believes it can effectively compete against larger Itanium 2 configurations with POWER systems that deliver equivalent price/performance and greater performance per processor. As part of this strategy, IBM will position its POWER servers against HP's Itanium 2 servers to dispel the perception that its pSeries and iSeries servers are more expensive than Intel systems.

In a further development, IBM intends to ship a two-way server later this year that runs on Advanced Micro Device's 64-bit Opteron processor. While Opteron offers 64-bit performance levels that are similar to those of Itanium 2, it can also run 32-bit Windows applications at blazing speeds. This is something that Itanium 2 cannot do, though Intel is preparing a 32-bit emulation environment for the chip that should become available soon.

Taken together, IBM's actions form a fascinating strategy that can be summarized as follows. First, retain Intel as a strategic partner for 32-bit servers. Second, try to restrict Itanium 2 to smaller servers by matching it on a price/performance basis with POWER. Third, attempt to split the market for 64-bit alternatives by supporting both Itanium 2 and Opteron, thus keeping both chips from gaining serious momentum. Fourth, maintain a stake in both Itanium 2 and Opteron so that if either one does gain momentum, IBM can jump into the market.

While this elaborate strategy might seem somewhat Machiavellian, it makes perfect sense given the uncertain fortunes of both Itanium 2 and Opteron. As Intel and AMD are learning quickly, making headway in the 64-bit market will be anything but a cakewalk. While their processors dominate the 32-bit world because of their low cost, their 64-bit chips will likely differ little in terms of price/performance from established competitors such as POWER and Sun's UltraSPARC. As such, it is highly likely that customers and software vendors will soon be asking themselves why they should switch from their existing 64-bit servers. IBM knows this and--as its processor strategy indicates--is betting on it.

Lee Kroon is a Senior Industry Analyst for Andrews Consulting Group, a firm that helps mid-sized companies manage business transformation through technology. You can reach him at This email address is being protected from spambots. You need JavaScript enabled to view it..

LEE KROON
Lee Kroon is a Senior Industry Analyst for Andrews Consulting Group, a firm that helps mid-sized companies manage business transformation through technology.
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