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Intel unveils its long-awaited Itanium processor Tuesday, promising a new wave of competition in the server and workstation markets that could mean lower prices and more choices for high-end users.

Hewlett-Packard and IBM are among the major server makers who plan to offer Itanium-based servers and workstations in the coming weeks and months. Dell has already outlined plans to offer an Itanium-based rack-mount server by midyear.

Itanium is the product of a seven-year joint development effort by Intel and HP, and it's a very different processor than Intel's existing PC and server chips. Most notably, Itanium is a 64-bit processor, which makes it better suited to running large databases and corporate applications such as data mining and online transaction processing. Intel's existing chips process data in 32-bit chunks.

Intel competitor Advanced Micro Devices is also planning its own 64-bit processor family called Hammer, and last week fellow chip maker Transmeta signed on to use the same technology in its own processors.

Intel Targets New Competition

While Intel currently competes mainly with AMD in the 32-bit processor world, the company hopes Itanium will help it compete with other companies in this new market. The chip should give Intel the ability to contend with powerful Unix-based systems from the likes of Sun Microsystems, IBM, and HP, which dominate the midrange and high-end server markets today. Those machines run proprietary versions of Unix and specialized, 64-bit RISC processors developed in-house by their respective vendors.

Different vendors will offer Itanium systems with a variety of operating systems including a 64-bit version of Microsoft Windows, various Linux distributions, and versions of Unix from IBM and HP. Experts predict the servers and workstations will sell for less than their RISC-based counterparts, and corporations accustomed to relying on a single Unix vendor for their big servers will have the option to shop around for Itanium systems.

Unix vendors including HP and IBM have pledged to continue developing their proprietary RISC chips even while they promote servers and workstations based on Itanium. Only Sun has shunned the Itanium crowd, arguing that its decision to stay focused on a single, proven platform will give it the edge over its rivals.

Launch Signals Major, but Slow, Transition

Analysts don't expect Itanium to shake up the server market overnight. Corporate buyers are notoriously averse to risk and will tread cautiously as they explore the new platform. Plus, the availability of compatible applications may also limit adoption rates early on.

Another reason some buyers may hold off: Intel plans to release a more powerful follow-up to Itanium next year, dubbed McKinley. Some analysts say they expect that chip to make a much greater impression on picky buyers.

"This is the beginning of a large-scale industry transition," says David Graves, a spokesperson for Dell's Precision workstations division. "Obviously, in a transition like this, things don't happen overnight."

System Details, Sans Pricing

Intel's hardware partners are showing off a variety of servers and workstations based on the new chip. However, for the most part, vendors say they won't be ready to discuss pricing until the systems actually begin shipping.

HP systems include an RX4610 server that will run on up to four Itanium processors, a 16-way RX9610 server, and a two-way I2000 workstation. The company plans to offer the systems with HP-UX (HP's version of Unix), Red Hat's Linux distribution, and a 64-bit version of Windows. The workstation and RX4610 server are due in the next quarter, and the 16-way machine will follow soon after, an HP spokesperson says.

IBM plans an EServer x380 that will be available with up to four Itanium processors and 64GB of memory. The server will scale out to hundreds of nodes and is suitable for running data-intensive applications such as data mining and data warehousing, online transaction processing, and security applications, the company says.

The company also plans an IntelliStation Z Pro workstation, due June 29, starting at $16,799.

Dell, meanwhile, announced last week a PowerEdge 7150 server that will use up to four Itanium processors running at 733 MHz or 800 MHz and will support up to 64GB of memory. Dell will offer the data-center bound rack-mount server with Red Hat Linux or Microsoft Windows.

Doug Gray and Ashlee Vance in San Francisco contributed to this report.