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  • Intel Merced Prompts Strategy Change Among Japan Computer Makers
  • May 11, 1998 (TOKYO) -- With mass production of Intel Corp.'s Merced (IA-64) next-generation, 64-bit microprocessor expected to start in mid-1999, Japan's computer makers already are at a turning point in their enterprise server strategies.
    Some vendors are trying to concentrate their management resources by rearranging and consolidating their own platforms to prepare for the emergence of Merced. Specifically, this consolidation means taking advantage of a horizontal integration model, where each computing element such as a processor, operating system and application is provided by different vendors, into a traditional vertical integration model, where each of those components is provided by a single vendor.

    Subtle differences are found between Japanese vendors having direct contacts with company clients and U.S. vendors selling products through system integrators. However, there seems to be no doubt that the enterprise system market in Japan should undergo big changes with the advent of Merced.

    NEC Aims to Tackle Opportunity

    NEC Corp. is considering adopting Merced for future types of smaller mainframes in the ACOS-2 line. (See chart.) "The cost versus performance of the ACOS-2 line will be greatly improved if we can mount Merced on our machines, for Merced is a general-purpose processor," said Takashi Torii, associate senior vice president at NEC.

    NEC has wanted to use general-purpose processors in mainframes.

    "It is desirable to use 64-bit processors in implementing ACOS-2, which has a 47-bit address space," Torii said. "But we have not yet considered this, because so far all 64-bit processors available in the market have been developed and sold by companies that also handle server machines."

    Intel does not sell sever machines, which means no direct competition with NEC's business.

    Moreover, the performance of Merced is very high. "Given the announced performance of Merced on its first delivery, the processor can easily meet the performance requirements of ACOS-2," he said.

    NEC likely will bring new ACOS-2 machines with Merced to the commercial market by the end of 2000.

    NEC will reportedly change the current ACOS-2 operating system to Windows NT if Merced is chosen as the new processor. But the architecture of ACOS-2 will be retained by preparing ACOS-2 emulator software that can run on NT.

    This adds another strong selling point: that both NT applications and ACOS-2 applications can run simultaneously. In a past example, the company switched System 7200 office computers to Express5800 PC servers.

    If Merced is applied to ACOS-2, the types of processors used by NEC in its main platforms will total only three: Merced, ACOS-4 type and ACOS-6 type.

    It will drastically improve efficiency of investments, because NEC needs only to develop the NOAH ACOS-4 type processor. The ACOS-6 processor is developed by Bull of France.

    Fujitsu, Hitachi Still to Present Clear Strategies

    While it is possible for Fujitsu Ltd. and Hitachi Ltd. to rearrange and integrate their own platforms with Merced, so far the companies have regarded Merced as just a succeeding processor for machines currently using Intel or PA-RISC processors.

    Fujitsu President Tadashi Sekizawa said, "It is nonsense to try to present a complete series of all the types of platforms." But clear and specific integration plans are yet to be issued by the company.

    Fujitsu said on April 9 that it created a corporate alliance with Sun Microsystems Inc. of the United States and would cooperate in development of the Merced version of Solaris initiated by Sun Microsystems.

    The above contract will lead to the possibility that the Merced version of Solaris could be applied to the Granpower7000 Series, Fujitsu's higher level server machines using SPARC processors. Nonetheless, Junji Maeyama, a member of the board and group president of Fujitsu's software group, said that so far, only the Granpower5000 is expected to adopt the Merced version of Solaris.

    Hitachi is yet to make clear the policy about Merced, either. The hardware and operating system of the UNIX Server3500, which has been developed by Hitachi, have reasonable compatibility with those of UNIX Server HP9000 of Hewlett-Packard Co. of the United States. Additionally since 1997, Hitachi has been making migration of the leading machine in the UNIX server business to 9000V, an OEM type from HP9000.

    It is most likely that Hitachi will integrate PC servers with UNIX servers by adopting Merced after the movement of HP. Nonetheless an executive of Hitachi avoided revealing their decision at present, saying "We are still in a phase to check various choices including a future strategy about UNIX Server3500."

    The reason why Fujitsu and Hitachi cannot present clear product lines for their platforms after introduction of the Merced is that they cannot judge the impact of their choices on existing users. The same issue is implicated by NEC's statement emphasizing that the company is just considering the introduction of Merced for ACOS-2.

    Because of their direct sales to user companies, domestic vendors must support clients by themselves when any troubles occur in integrating or abolishing platforms. By comparison, U.S. vendors sell through system integrators and can have them handle such problems.

    Intel Japan to Approach Users Directly

    The differences in Merced adoption between Japanese and U.S. vendors are continuing without change. Therefore, Intel KK of Japan has adopted a strategy to indirectly push hardware vendors to buy its product.

    Intel Japan President Nobuyuki Denda said, "We are going to create an environment where client companies understand the high level of cost/performance of Merced servers, so that they will purchase Merced processors."

    Intel Japan will soon establish two new branch offices as the core of the above strategy. They are tentatively called the Enterprise Computing Alliance and the Intel Architecture Solution Center (IASC).

    The former organization will be jointly managed with independent integrators and Intel. The latter organization will be solely managed by hardware vendors.

    Though there is a distinction between the two, each has a main mission to help Intel tune applications to users and user companies. At present, Japan is the only country where Intel has chosen to open those organizations.

    The Enterprise Computing Alliance is due to be managed by Intel and Nomura Research Institute Ltd. NRI will be in charge of field validation work and consulting. Intel Japan will also cooperate. President Denda said, "We will offer a fund of multiple 100 million yen (US$1-2 million) per year while dispatching engineers to support the work."

    As for IASC, Intel expects its establishment in June or July. Though business talks are ongoing with each vendor, several companies already have been chosen as target places to found the IASC. Intel will not invest money to establish them. However, Intel is going to provide free training of vendor staff and free development tools and resources to support IASC.

    Chart: NEC is considering adoption of Merced
    as the processor for smaller mainframes of the ACOS-2 line.

    Current platforms and those after the advent of Merced (after 2000) were compared with one another.
    The figures after the advent of Merced were obtained from estimates by Nikkei Computer.

    (return to news)

    Related stories: Fujitsu, Sun to Develop Solaris With Intel Chip
    NEC Licenses HP-UX; Integrates Computer Associates Software

    (Nikkei Computer)

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    Updated: Sun May 10 10:20:11 1998