Paul: What do you make of this. I thought INTC had this problem pretty well in hand. Given this article one would think otherwise. Now this guy only bats about 500 on his reliable sources. What do you think?
StreetAdvisor Bears Bad News For Intel Kevin Prigel
Oct 15 1999
Intel Corp. NASDAQ:INTC
Technology | Quote | News | Research
There is no debate about where the future of Intel lies. The company, and analysts, have firmly staked the current valuation on the promise of servers in the future. Intel's next generation processor, the Itanium, has been promoted as an enterprise-level server solution. Over the past months, the only news on these processors has been positive, including the news on Intel's conference call this week that the processor had been successfully tested on three major platforms (Windows 64-bit, HP Unix, and Linux).
However, extremely reliable industry sources are now indicating the Itanium will be a far cry from enterprise-level, and Intel will instead have to rely on the Itanium successor McKinley processor to provide an enterprise solution. The problem with the Itanium processor comes with so-called "8 way" systems, which utilize 8 processors. These servers cost around $100,000 each, and would be a direct competitor to non-Intel enterprise servers (currently Intel powers no enterprise servers).
Early tests of Intel "8 way" systems indicate that they offer only a 40% performance boost over 4 processor systems when serving 20 clients, and no performance advantage when serving more than 30 clients. This poor performance results from a flaw in the memory bus, which feeds commands to the processors. Essentially, the bus that Intel has developed can not feed commands to the processors fast enough, leaving the systems idle up to half the time.
To further exacerbate the problem, HotRail Inc. claims to have a solution that will support the optimal use of 8 processors, based around AMD's Athalon. This could leave Intel with an very inferior solution to AMD for the first time in its history.
Crunch time is upon Intel, as the Itanium will ship in production quantities next year. StreetAdvisor will closely monitor the problem, and look for management guidance on the impact of the situation. JFD
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