Meta trend

With highly distributed n-tier (DBMS, application, and Web) server architectures commoditizing during 2002-04, Unix (other than Solaris) will recede to high-end, low-volume, niche-platform status by 2005/06. Windows will increasingly dominate for midtier application servers (2002-04), due to growing ISV reference platform momentum, and be a suitable DBMS server for more than 90 percent of application requirements. Linux on Intel ("Lintel") will be a successful high-volume Web, technical computing, and appliance server OS, but enterprise application package (2003/04) and DBMS (2005/06) server penetration will be slower. Linux software and services prices will increase to about 10-20 percent less than those of Windows by 2004/05.

Itanium's rising tide

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The first-generation Itanium ("Merced") suffered from long delays, poor performance, and minimal software support. With Itanium 2 ("McKinley"), Intel has corrected the hardware-level shortcomings. Indeed, initial Itanium 2 performance benchmarks are strong, with 4-way Itanium 2 systems delivering significantly better performance than most current 4-way Xeon systems, as well as performance comparable to RISC/Unix systems (and better price/performance). However, we believe Itanium 2's biggest market-acceptance obstacle will not be raw hardware performance or competition from RISC/Unix servers, but rather the existing mature and tested 32-bit Intel x86 software environment (i.e., operating systems, databases, middleware, and applications). We predict that Itanium processor family-based software will mature rapidly; by 2H03, we expect a faster third-generation version ("Madison").

We also expect faster and larger (8-plus CPUs) Madison-based systems to be even more competitive with RISC systems. After Madison is introduced, we expect widespread Itanium production deployment (2H03/04). This transition should be characterized as a rising tide, rather than a flood, as users increasingly favor 64-bit Windows on Intel ("Wintel") and, eventually, Linux on Intel ("Lintel") platforms over enterprise Unix on RISC by 2004/05. By 2006, we believe IBM's Power processor technology will remain the only competitive RISC alternative to Intel (with HP sunsetting both Alpha and PA-RISC). Further, we believe Sun's future SPARC performance will continue to lag both IBM and Intel.

Although the long-term price/performance advantage of Itanium will gradually make itself felt in the marketplace, in the near term, we expect many users to feel somewhat complacent about the computing horsepower of 32-bit processing on 2- or 4-way systems. In addition, we believe most independent software vendors will follow Microsoft's lead on pricing software for 64-bit Intel platforms. We expect Microsoft to take a long-term approach by not charging premium Itanium-based software prices to increase market adoption (and of course, to host more demanding applications).

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