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By Tony Hallett, 12 September 2002 08:34

NEWS Intel has denied it is disappointed with sales of its 64-bit Itanium II product, despite sluggish demand for the processor since it was launched in July. The second version of Itanium has come out at a time when IT buyers are reluctant to spend on the kind of powerful, multiprocessor servers Itanium is found in, manufactured by companies such as HP, IBM, NEC, SGI and Unisys. Intel senior VP Mike Fister called Itanium II analyst reports "rewarding to see" but there is little hiding that customers are being cautious with their budgets. Speaking to silicon.com at this week's Intel Developer Forum in San Jose, Abhi Talwakar, Intel VP Enterprise Platforms Group, said: "We are not disappointed with Itanium II sales, though the general economic position is disappointing. We see Itanium II in terms of driving this new architecture." He said sales will come from users doing high-performance computing, typically using Linux as their operating system, as well as those running demanding database and data mining applications. In summer next year Intel will release a 64-bit processor currently code-named Madison which the company says will mean 30 to 50 per cent gains in performance for applications. It said Madison is likely to keep the Itanium II branding but Intel is unlikely to want to wait for this next Itanium iteration to make its "big push". There is some confusion over whether HP - which should be the biggest buyer of Itanium chips as co-developer of the platform and now home to what was previously the Compaq Intel-based server business - is using Itanium II. Intel insisted HP has at least been shipping 2- and 4-way Itanium II servers since July. However, there is little doubt that Dell remains the main computer seller to be absent from the Itanium II roster. Intel's Talwakar added: "Dell's business model is to focus on mature markets, as you see when they tried to enter the storage market and it wasn't ready for them." Some mainstream software has been optimised for Itanium II from vendors such as BEA, IBM, Microsoft, Oracle, Red Hat, SAP and SAS.