Compaq to swap Alpha for Intel

Compaq will transfer its entire 64-bit family of servers to Intel's Itanium microprocessor architecture by 2004. Also as part of the agreement, Compaq will sell key intellectual property behind its Alpha processor business to Intel, the companies announced Monday.

Compaq currently offers high-end servers based on Intel, Alpha and MIPS processor architectures. Monday's announcement means that Compaq will standardise on one architecture.

"There will be a single base line across all our platforms. We are standardising on the Itanium microprocessor line," said Compaq CEO Michael Capellas. "We are definitely looking at a common server architecture down the road."

Before the transfer is completed in 2004, Compaq will release its upcoming next-generation Alpha processor known as EV7, while designing and building NonStop Himalaya servers that use MIPS chips, Capellas said. "There will be two more performance increases within that time," Capellas said.

Under the non-exclusive, multi-year agreement, Compaq will transfer Alpha tools and engineering resources to Intel, along with granting licenses to Compaq's Alpha microprocessor technology and compilers, Capellas said. "This is great for efficiency. It allows everyone to do what they do best, and it allows us to simplify our product line," Capellas said.

"We're not releasing financial details on the transaction," Capellas said. Intel president and CEO Craig Barrett added, "Clearly, we're talking about a significant amount of money here."

Though he repeatedly declined to "go into specific numbers," the agreement will include the transfer of some engineers to Intel, Capellas said. Over the next couple of years, several hundred Compaq microprocessor engineers, compiler experts and infrastructure employees will be offered employment with Intel, both Capellas and Barrett said.

"Intel gets a whole lot of very smart engineers in the deal," said Nathan Brookwood, principal analyst with Insight 64. Included with that are engineers working on a technology called SMT (Simultaneous Multi-Threading), which allows a single processor to appear as multiple processors, each working in tandem. Compaq has been working on this technology for some time now, while rumours have been circulating that Intel has been looking into using the technology in future releases of its 32-bit architecture, Brookwood said.

"We are not buying the Alpha chip product line," stressed Paul Otellini, executive vice president and general manager, Intel architecture group. Furthermore, because the arrangement for buying Compaq's intellectual property was non-exclusive, neither company believed the deal would pose any regulatory issues, Barrett said.

"We believe this is just an extension of competition in the marketplace," Capellas said.

Both Barrett and Capellas said the arrangement would provide its customers with unparalleled price and performance. "This agreement is more cost effective for the customer," Barrett said.

Companies using code written for the Alpha processor will now have to recompile it to run on Intel's Itanium platform, said Brookwood. "On one hand, I'm sure that it's going to represent more work to those customers than if Compaq continues to come out with new versions of Alpha, but I think that most of them realised the economic constraint of offering a proprietary processor can be daunting."

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Laura Rohde

PC World

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