Intel is scheduled to launch on Monday Nehalem EP, the server version of the chipmaker's next-generation microarchitecture. But while the new features within Nehalem EP coincide with the direction of computing, corporate adoption is likely to be hampered by the economic downturn.
Intel is expected to introduce Nehalem EP processors and highlight the systems of major computer makers, such as Hewlett-Packard, Dell, and IBM, at its corporate headquarters in Santa Clara, Calif.
Analysts agree that Nehalem EP, with its integrated memory controller for better performance, is poised to deliver more power to meet the increasing demand of virtualization in the data center. In addition, Nehalem-based processors should help with the push toward cloud computing, which typically refers to the running of applications in an Internet server or downloading the software from the Internet each time it's used. Google Apps is an example of business applications delivered via cloud computing.
Initially, Nehalem EP processors will primarily be available with four cores. Intel plans to introduce a six-core Nehalem processor and an eight-core design, called Nehalem EX, by the end of the year.
But sales of the new Intel products are expected to be slow this year, as companies riding out the economic recession cut IT spending and delay projects. "It's pretty clear that companies are going to be very conservative with the money they spend this year, and that's going to slowdown adoption," John Spooner, analyst for Technology Business Research, told InformationWeek.
Where companies typically replaced old servers every three years, many businesses are likely to stretch out that replacement cycle by an additional year or two, Spooner said.
Indeed, worldwide server shipments and revenue fell 11.7% and 15.1%, respectively, in the fourth quarter of last year from the same period a year ago, according to IDC. The downward trend in spending is expected to continue this year.
If companies delay purchases of Nehalem EP-based servers this year, then it's unclear how customers will react to the launch next year of Nehalem processors based on Intel's 32-nanometer manufacturing process, which will produce faster, more energy efficient chips than the current batch of 45-nm processors. Companies could skip this year's Nehalem EP systems in favor of those based on the 32-nm variant, code-named Westmere, next year.
"In the second half of 2010, when demand for systems in general will return, the combination of Nehalem and Westmere seems more potent on the demand side for really reaping the [performance] benefits," IDC analyst Shane Rau said. However, Intel has options in terms of pricing and adjusting production levels, so Nehalem EP and Westmere could serve different segments of the market.
On the technology side, Nehalem EP's integrated memory controller isn't new to the industry. Intel rival Advanced Micro Devices was the first with an on-chip controller in its 2003 Opteron server processors. While Intel has played down the need for the technology in the past, it's obvious that the demands of computing today have made the need for the higher-performing architecture pivotal.
Other important features within Nehalem are very sophisticated management of multithreading and of the multilevel caches. In addition, the architecture includes more advanced power management technology that computer manufacturers can tap into to reduce a system's energy consumption.
The Nehalem variant, known as Core i7, for high-end desktops and workstations was launched late last year.
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