In-Depth

Intel, HP Shake Things Up

Chip giant Intel last week announced a reorganization of its business units, while HP announced new Itanium solutions and updated software for OpenVMS

• By Stephen Swoyer
• 01/25/2005

Last week was a big one for two of the biggest players in the enterprise server space. Intel Corp. announced a reorganization of its business units; Hewlett-Packard Co. introduced a range of new Itanium solutions, along with updated versions of several of its legacy operating environments.

In Santa Clara, Intel announced a broad reorganization designed to align its product groups to drive the development of complete technology platforms. To that end, Intel announced the formation of three new groups to lead its efforts in mobile technology, the digital enterprise, and the digital home. In addition, Intel will target specific vertical markets, such digital healthcare and worldwide channel distribution.

Charles King, a principal with consultancy Pund-IT Research, says that reorganizations are often interesting for several reasons. “First, they offer certaininsights into how companies perceive the evolution of the greater market. Second, they delineate how companies wish to be perceived,” King says.

“As to the first, Intel’s reorganization into platform-specific product groups is yet another step in a journey begun last year when it announced its Centrino mobile solutions, as well as plans to drop clock speed as a primary marketing device and product differentiator. At its heart, Intel’s moves reflect a growing understanding that IT customers are becoming increasingly sophisticated about technology.”

Long-time Intel watcher Nathan Brookwood, a principal with microprocessor consultancy Insight64, says that in some ways, last week’s reorganization was unprecedented. “In [the] move, Intel placed its two largest product divisions on the chopping block, sliced and diced them, and then combined the pieces in new and interesting ways,” he says

For example, Intel eliminated its Intel Architecture Business Group (IABG), which Brookwood says sold the Pentium, Celeron, Xeon, and Centrino processors. Gone, too, are the IABG’s three constitutive units—the Mobile Platforms, Desktop Platforms, and the Enterprise Platforms Groups. Also eliminated was the Intel Communications Group, which sold xScale processors, Strataflash memory, and high-end communications devices and switches, says Brookwood.

Intel’s reorganization should have little, if any impact, on its 64-bit business, analysts say.

HP Announces New Integrity Solutions, OpenVMS, Non-Stop Offerings

Also last week, HP announced several enhancements to its Integrity servers, including faster Itanium2 processors, new multi-OS virtualization capabilities, and expanded high-availability and disaster recovery features for HP-UX 11i and Windows Server 2003.

In addition, HP touted new production releases of OpenVMS and SuSE Linux Enterprise Server 9, along with HP Non-Stop server evolution services.

As if that wasn’t enough, the Palo Alto computing giant also announced what it says is its first pay-per-use model for Windows.

Pund-IT’s King says that HP’s media blitz—which included a Webcast with CEO Carly Fiorina—was aimed at shoring up support among shareholders and customers alike.

“HP’s Integrity announcements are designed to reassure both customers and the marketplace that the company’s ongoing migration to Itanium is right on track. The new versions of Itanium2 should deliver a performance boost for Integrity servers, and expanded virtualization capabilities and availability/ disaster recovery features could both please existing HP-UX and Windows Server customers and tempt new ones into the HP fold,” he writes.

As for the updates HP delivered for OpenVMS and its Non-Stop operating environment (which it acquired, by way of Compaq Computer Corp., from the former Tandem), King says they’re most likely intended to keep potential competitors at bay.

“While some of the new features and capabilities provide welcome, if predictable refreshes to existing products, the OpenVMS and Non-Stop solutions stand as an attempt by HP to stave off competitors from poaching on two of the company’s most venerable and vulnerable customer groups, both of which have been somewhat lost—or perhaps only misplaced—in the Itanium shuffle,” he concludes.