The latest figures from analyst firm Gartner Dataquest show that sales of servers in the US have started to pick up again. This comes at a time when servers are about to undergo some interesting changes, especially in Intel-based systems that are commonly referred to as standard high-volume (SHV) servers.

An important development will be the appearance of AMD's 64bit Opteron chip as a direct rival to Intel's Itanium in the 64bit server market. Opteron may affect the roadmap that Intel has planned for its 64bit Itanium and 32bit Xeon processors for SHV servers.

According to Gartner Dataquest, server sales in the US for the first quarter of 2002 rose a modest 0.6 percent across all vendors, compared with the same quarter last year. Compaq's sales grew 1.6 percent, while HP's dropped 13.3 percent. Together, the newly merged HP and Compaq would have 31.4 percent of the total market.

The economy is now improving, and sales of servers will strengthen as companies start to look at their future requirements. The developments in processors will be important in deciding their plans. Buyers will look for scalability, both in terms of the number of processors and also in the maximum amount of RAM that can be used in a system. However, when making their plans, many firms may also be influenced by the need to continue using existing 32bit applications, and to protect their investment in this software.

Intel is the dominant supplier of processors, so its roadmap will have a key role in influencing companies' plans. In particular, it will be important for IT buyers to understand Intel's plans for its 32bit Xeon MP chip and its 64bit Itanium chip.

At HP's recent server launch, Nigel Wilson, Intel's European manager for future products, said that despite being designed for use in multiprocessing systems, the Xeon MP has only 1MB of Level 3 cache, which restricts its suitability for multiprocessor environments. IBM is selling the Xeon MP in x440 16-way servers, but it adds several megabytes of Level 4 cache to improve performance. Wilson said the Xeon MP is not intended for large systems. Judging by his comments, it seems Intel is still tweaking the features of its chips to position its products and reduce areas of overlap.

"I read the roadmap as showing the Pentium being the processor for single processor environments," said Wilson. "The Xeon will be scaled back from its current four-way capability to two-way systems by the end of 2003. For four-way systems and above, servers will then use Itanium chips."

By the end of next year Intel also expects to launch Deerfield, a low-end Itanium expected to be targeted at four-way servers, as well as modular brick and blade servers. It seems that 2003 will be a year for much upheaval in Intel's product lines as it attempts to push customers away from its 32bit processors and towards its 64bit chips in the server market.

AMD's Opteron chip is likely to compete in the market for systems with up to four processors. The 64bit Opteron has several things in its favour. First, it fully supports existing 32bit applications. This is not the case with Itanium, which emulates the required 32bit environment.

A more important selling point for AMD is that it has won the support of Microsoft in the shape of 64bit extensions to Windows XP to support the Opteron.

According to Nathan Brookwood of analyst firm Insight 64, this will make Opteron attractive to corporate customers. "[Support for Microsoft Windows] is clearly a prerequisite for AMD to have any success in the entry-level server market," he said. The early signs of success are already being seen. Michael Dell has already hinted that his company plans to use Opteron.

AMD's processor could therefore fill a gap in Intel's roadmap. Unlike Itanium, it promises to help companies move to 64bit systems while still being able to run their legacy 32bit applications.

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