HP Ships Itanium Team to Intel

Ending a disappointing chapter in its history, Hewlett-Packard (NYSE: HPQ) today announced that Intel (Nasdaq: INTC) would hire its Itanium chip team, severing a 12-year development partnership between the companies. HP, however, said it was still planning to spend US$3 billion over three years on the 64-bit technology.

"It surprised me to find there were still HP guys involved in it," Enderle Group principal analyst Rob Enderle told TechNewsWorld.

Doomed Effort

The Itanium chip, envisioned a decade ago as a bridge between 32-bit and 64-bit applications, was doomed by cost overruns and a late appearance.

"It was incredibly late, and when it showed up, it wasn't the right part, at least not for the broad market," Enderle said. "So AMD (NYSE: AMD) was able to slip in and steal any momentum that Itanium had."

AMD's 64-bit Opteron processor, designed for high-performance corporate use, beat Intel's planned workstation chip to market. The original Itanium chip did not handle 32-bit applications well, Enderle said, making it useless as a transition chip.

Intel will extend job offers to several hundred HP engineers who worked on the Itanium project at HP's Fort Collins, Colorado, campus.

The HP team helped build the upcoming dual-core processors code-named "Montecito" and "Montvale" and will continue to work on them. Intel said the engineers will be added to the team developing the multi-core processor, code-named "Tukwila," and on other future Itanium processors.

"Intel's clearly keeping the part, and these folks have a unique skill set. I don't know where else you're going to get folks like this," Enderle said.

Involvement Continues

HP will continue to design Itanium chipsets and develop the market for its Itanium 2-based Integrity servers, which it has positioned as a replacement for PA-RISC systems.

It will also use the money to recruit software makers into the Itanium "ecosystem," helping them to optimize their products for the processor and encouraging them to design new 64-bit applications.

In September, HP announced it would stop building high-performance workstations with Itanium processors. It said a lack of 64-bit applications from Microsoft (Nasdaq: MSFT) combined with the move toward 64-bit extension Xeon chips from Intel and AMD's Opteron prompted the decision.