Fallout From Dell's Itanium Decision

At least one competitor wasted no time trying to capitalize on the news that Dell will stop making servers based on Intel's Itanium processor.

Dell's decision was described as ''a staggering blow to [Itanium] co-designer Hewlett Packard, which invested more than a billion dollars over the last decade in a bid to win the hearts and minds of millions of computing systems buyers,'' in an e-mail sent to internetnews.com by IBM's Systems Group.

Whatever its effect on HP, Dell, while one of Intel's staunchest allies, was in fact never a strong supporter of Itanium.

The Round Rock, Texas, computer maker said yesterday it would stop making systems based on Itanium and would instead continue using Intel Xeon-based servers for its high end offerings. Dell was not available for comment but an Intel spokesperson confirmed Dell's decision.

''Based on Dell's business model, the volume server market, their decision makes sense and we continue to work closely with them in other areas,'' said Intel spokesperson Erica Fields. ''We have seventy-five OEMs that sell and support Itanium and [Dell's] impact on sales was small compared to the rest.''

IBM's high-end Power architecture servers compete directly with HP, which is by far the leading provider of Itanium-based high-end servers. HP strongly disputed the assertion that Dell's decision will hurt its business, much less the overall market for Itanium systems.

''Dell is a supply chain driven, keep it simple, keep it high volume supplier and anything else doesn't fit their business,'' Brian Cox, director of worldwide server marketing for HP, told internetnews.com. ''Once you get into a more consultative sell it really doesn't fit their business model.''

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