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Pro push may presage Pentium decline

Intel on Monday is expected to introduce new low-cost Pentium Pro technologies, while major PC vendors follow suit with low-priced systems, possibly cutting short the life of the Pentium in corporate America.

Intel on Monday is expected to roll out a group of low-cost technologies centered on the company's Pentium Pro processor, as major PC vendors ready less-expensive systems which use this chip.

The announcement is expected to trigger the first significant wave of competitively priced business desktop PCs designed around the Pentium Pro, Intel's newest processor, and may signal the beginning of the end for its older cousin, the Pentium processor, in corporate America.

The Intel announcement will cover three areas primarily: the latest--and cheapest--additions to the chipset family for the Pentium Pro processor, a new series of low-priced Pentium Pro motherboards that include support for the company's Desktop Management Interface (DMI), and PC management software.

Chipsets are companion chips to the processor; the motherboard is the main circuit board inside a PC, which, together with the processor and chipset, constitutes the core of a personal computer.

Top-tier PC vendors will quickly take advantage of the new Intel technologies. Companies including Compaq, IBM, Hewlett-Packard, Digital Equipment, Dell, AST, Gateway 2000, and Micron are expected to begin delivering Pentium Pro systems in the next few weeks, priced below $3,000 in some cases, said sources familiar with the announcement.

These prices will drop to $2,500 in the second half of this year. Currently, most Pentium Pro desktop systems are priced above $4,000. Most--if not all--of the vendors are expected to use the new Intel motherboards, the sources added.

The new Pentium Pro technologies are targeted at companies that are moving, or plan to move, to Pentium Pro-based desktop PCs running the Windows NT operating system--and particularly the upcoming Windows NT 4.0 OS, said Carl Everett, an Intel senior vice president.

"We expect many 386 and 486 [corporate] users looking to upgrade will bypass the Pentium," said a source at one major PC vendor.

Intel was more blunt: "The Pentium is for the consumer. The Pentium Pro is the new corporate standard," said one company spokesperson.

Speaking separately at a conference in San Francisco this week, Compaq, Dell, and Intel executives all stated that there is still a huge installed base of 386 and 486 users in corporations--estimated by the companies at between 70 percent and 80 percent of the total base.

This, at least, presents the possibility of many of these users skipping the Pentium generation and moving to Pentium Pro systems running Windows NT.

Intel will make the move as compelling as possible by introducing new technologies for the Pentium Pro. New motherboards, for example, will have built-in support for DMI, Everett added.

DMI is a technology that standardizes how corporations remotely retrieve information about a user's PC. For information system managers, remote management can lower the cost of PC maintenance and support--since they don't have to physically visit every PC to fix problems--and it can make software upgrades easier.

In support of DMI, Intel on Monday will also begin offering new LANDesk software, the "LANDesk Client Manager," which works with the company's LANDesk management software to help users diagnose PC problems.

Intel's reason for delivering this PC management technology has become painfully obvious. An astonishing 50 percent of the "cost of ownership" of a PC over a three-year period is support costs, according to a number of studies. The actual purchase cost of the PC is only a small fraction of the total cost of ownership.

"It is incumbent upon us to deliver hardware and software tools that we can use to drive down the total cost of [PC] ownership," Everett said.

Despite all these compelling reasons to move to Pentium Pro, some observers are skeptical about a mass migration to the processor this year.

"I think this is jumping the gun," said one industry source familiar with the roll-out.

Prices won't really come down to levels that turn heads until Intel introduces third-generation Pentium Pro technologies in 1997, he added.