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Intel takes the wraps off 500-MHz Xeon

The chipmaker takes another step toward elbowing in on the turf of high-performance processor companies.

Intel took the wraps off its new Pentium III Xeon chip today, another step in the manufacturer's plan to elbow in on the turf of high-performance processor companies.

Intel boasts that the new chip, which runs at 500 MHz and contains up to 2MB of performance-enhancing cache memory will put it in the same class as Reduced Instruction Set Computing (RISC) chips, the powerful processors that run many high-end corporate servers and workstations. With this chip, Intel and the PC powers aim to take market share from companies that sell multiprocessor RISC and Unix operating system-based products, such as Sun Microsystems.

The 500-MHz Pentium III Xeon comes with 512KB, 1MB, or 2MB of cache memory and can be used in one-, two- or four-processor systems. Intel will then release a 550-MHz version of the chip containing 512KB of cache memory in April, while versions with 1MB and 2MB of cache memory that can be used in four- and eight-processor systems will follow in the third quarter. The chip will exceed 600 MHz before the end of the year, added Paul Otellini, general manager of the Intel Architecture Business Group.

With these speeds, the Intel architecture is and will be a driving force in all aspects of computing, he said.

"The Internet is powered by Intel," he said. "One hundred percent of the growth in the workstation marketplace was made by Intel architecture [systems]."

While Xeons bring power to the platform, they are also important to Intel's bottom line. The 500-MHz Xeon with 512KB costs $931 in volume, a few hundred more than the nearly identical 500-MHz Pentium III, Intel's most expensive desktop chip. The 500-MHz Xeon with 2MB of cache goes for $3,692 in volume.

Although more expensive than desktop chips, Intel has been rapidly expanding into the server and workstation arena because RISC products are still more expensive, according to analysts. Moreover, the additional revenue permits Intel to cut prices at the low end of the product line without cutting profits.

"Xeon has been growing fast enough to keep our average selling price flat," said Mike Aymar, an Intel vice president. "Our average selling prices have been pretty stable in the past few quarters."

Aymar and several computer executives also added that the current supplies of all types of Xeons appear to be adequate. Last year, two separate bugs forced Intel to delay releasing Xeons for four-processor systems, which in turn engendered a shortage.

Nonetheless, Intel's plans to move into the eight-processor server market is still on the way. While eight-processor Intel servers were originally slated for late 1998, and then for the first quarter, most server vendors won't ship systems until the third quarter, said Otellini and others. The Profusion chipset that is crucial to eight-way servers is in the validation process and won't hit volume until the second quarter, he said. Both Compaq and IBM are contributing to the Profusion effort.

"They have been making tremendous progress on workstations and servers," said Nathan Brookwood, a consultant with Insight 64. The transition to Pentium III Xeon, from Pentium II Xeon, he added, should be easier than Intel's first foray with the Pentium II Xeon last year.

But PC makers, like Gateway, may be offering some of the most compelling systems--in this case for consumers, not information system departments or engineers.

Many companies are singing from Intel's songbook. Among today's announcements:

  • Gateway is probably offering the best deal so far with a new consumer desktop. The Gateway Performance 550XL includes a single Intel Pentium III Xeon 550-MHz processor, 128MB of memory, a fast 18GB hard drive, Nvidia AGP NV4 graphics chip, a 19-inch monitor, DVD-ROM drive, modem, TV/FM tuner card, and Windows 98 and Microsoft Office 97 for $3,999.

  • Hewlett Packard (HP) today introduced the HP Kayak XU PC workstation, targeted at software developers, design engineers, financial analysts, and multimedia authoring professionals. A Kayak XU PC featuring a 500-MHz Pentium III Xeon processor, Matrox Millennium G200 AGP graphics, 128MB of memory, and a fast 9.1GB hard drive is expected to be available immediately for an estimated U.S. street price of about $4,350. Models based on the 550MHz Pentium III processor are expected to be available in April.

  • Compaq announced the Professional Workstation SP700 and the addition of the new PowerStorm 600 high-end 3D graphics chip. The new so-called "SIMD" instructions--one of the selling points of the Pentium III--"provide significant performance improvements on many graphics-intensive and multimedia applications," Compaq said. The Professional Workstation SP700 with Pentium III Xeon 500 MHz processors is available immediately starting at $4,023. This system includes 128 MB memory, a 9.1 GB hard drive, an ELSA graphics circuit board. A Pentium III Xeon 500 MHz processor-based system with PowerStorm 600 3D graphics technology, and 256 MB of memory starts at $8,140. Pentium III Xeon 550-MHz processors will be available in the Professional Workstation SP700 in the second quarter of this year.

  • Intergraph Computer Systems, which has been wrangling with Intel over antitrust issues, today announced the availability of its InterServe 9000 server product line. Prices start at $10,000--also available in a non-RAID configuration beginning at $7,678. Intergraph also cites the new SIMD instructions as useful : "By leveraging the new Streaming SIMD extensions of the Intel Pentium III Xeon processor, the InterServe 9000 is ideal for Internet applications such as web hosting, security, and e-commerce."

  • IBM will begin selling its high-end Netfinity 7000M10 server with the 500-MHz Xeons. The four-processor systems, which start at $9,900, support up to 8 gigabytes of memory and come with IBM's "chip kill" technology, which can correct for communication errors from a computer's memory. And at the lower end, IBM will a four-processor 5500M20 system beginning at $8,000, a spokesperson said.

    IBM also will offer eight-processor systems using the Profusion chipset in the second quarter of 1999.

    In workstations, IBM is offering the new Xeon in its high-end Xeon-based IntelliStation Z Pro systems in single- and dual-processor configurations, the company said. In addition, the company will offer the system with Big Blue's new Fire GL 1 video system, designed by IBM and produced in partnership with Diamond Multimedia. The Fire GL 1, migrated down from IBM's Unix-based RS/6000 workstation division, can take advantage of the new Pentium III instructions.

  • Toshiba will start offering Magnia 5100 servers using the 500-MHz and 550-MHz Xeons beginning in June. These two-processor systems will be available with all the configurations of the new Xeon chips.

  • Dell's server lineup will be updated with the new Xeons today. In addition, Dell put the new 550-MHz Xeon chip into its high-end Precision Workstation 610, available immediately and with prices starting at $3,000, not including a monitor.

  • SGI will show a version of its high-end Xeon-based Visual Workstation 540. The machine won't actually begin shipping until the second quarter of 1999.

    While SGI is working on adding servers based on Intel chips to its product line, the company hasn't yet announced any systems.

  • Sequent, which specializes in higher-end systems than most Intel system vendors, will bring the Xeon chip to its lineup by the end of June. Today the company will show a system that combines four Pentium Pro chips, four Pentium II Xeons, and four Pentium III Xeons in one box.

  • Data General is showing the processor in its Aviion servers today.

    Among those showing new servers and workstations are Compaq, IBM, Hewlett-Packard, Dell, Gateway, Toshiba, Silicon Graphics, Sequent, and Data General, all of which will show new systems at a debut taking place in San Francisco and New York.'s Brooke Crothers contributed to this report.