Another year, another chip, another market domination plan.
When Intel (INTC) releases its highly anticipated new Pentium II-generation processor on Monday, the Xeon, Sun Microsystems (SUNW) may feel an increasing crimp in its dominance of the workstation and server markets.
Xeon, a server and workstation extension of the Pentium II processor, is expected to substitute for the old workhorse Pentium Pro server processor.
The chip is scheduled to debut at Intel's San Jose, California, headquarters on Monday, when a slew of workstation and server companies will also unveil Xeon-based hardware. These companies include NEC, Hewlett-Packard, Hitachi, Dell, and Gateway.
While server and workstation vendors like IBM (IBM) and Silicon Graphics (SGI) plan to support both the Intel architecture and Unix, Sun Microsystems could find itself increasingly isolated as it hews exclusively to a Unix operating system (the company's Sparc Unix OS).
The workstation market is one of the few frontiers left for Intel to conquer.
Analysts predict that competition between Intel and Sun, which plans to push up its CPU clock speed in response to Xeon, will turn into a dramatic horse race. Research firm Aberdeen Group foresees Intel making significant inroads in the mid-range server arena, though Sun is likely to hold its position as top high-end workstation performer.
Intel, which analysts say has been steadily gaining share over rival RISC processors, hopes the new Xeon will win converts to the company's architecture by virtue of its bigger memory bus configuration and increased cache. Intel will initially offer a 400-MHz version, according to an Intel spokesperson, while a 450-MHz version appear by year's end.
A key part of Intel's strategy is Xeon's multiprocessor capabilities. Intel is releasing a reference platform allowing for up to four processors on a chipset. But release of the four-processor chipset will be delayed by four weeks thanks to a bug discovered earlier this week.
The Intel spokesperson said the bug was discovered through "the very normal process of testing and validation" and will have zero affect on Monday's announcement or on general industry support for the chip. Semiconductor industry observers largely agree with Intel's assessment.
"It's certainly embarrassing for them to find bugs a few days before their product launch, but overall I don't think it's going to be much of an impact," said Linley Gwennap, editorial director of the Microprocessor Report. "I don't think it will cause that much trouble for either Intel or the system vendors."
The projected sales of Xeon processors are comparatively low, Gwennap said, so the overall financial impact is also low.
Meanwhile, the Xeon may have significant meaning to Microsoft as well. The Xeon chip will run the Windows NT operating system, so any future popularity of Xeon will boost NT sales in the process. The chip's success could therefore come at the expense not only of competing microprocessors but the increasingly beleaguered Unix operating system and the companies that support it.
