2 July 2002 PC giant Dell has said that that it will not make servers and workstations based on Intel’s forthcoming Itanium 2 microprocessor until it sees clear signs of demand from customers. The admission is an embarrassment for semiconductor giant Intel, which is set to launch the chip on Tuesday next week.

Dell’s decision follows extensive research among its core customers, which uncovered a ‘wait and see’ attitude. Given the poor reception of the original Itanium, they want to see how many applications are ported to the new platform and whether it takes off first.

Dell has therefore adopted a similar attitude, fearing that systems based on the new Itanium will either be too expensive or too high-end for its customers’ tastes. According to Kevin Krewell, an analyst at MicroDesign Resources, volume shipments of Itanium – and therefore more competitive prices – are still a year out.

However, Dell has been investigating an alternative source of 64-bit technology with Advanced Micro Device’s (AMD) forthcoming Opteron. This would give Dell customers a lower cost 64-bit alternative that also offer a smoother upgrade path from existing Intel/AMD 32-bit-based machines.

This is because whereas Itanium 2 only supports the IA-32 instruction set in emulation – slowly – AMD’s Opteron will support 32-bit instructions natively, enabling it to run legacy applications much faster.

While Intel has gathered together an impressive array of hardware vendors to support the launch of Itanium 2, Dell’s snub underscores the challenge that the semiconductor giant faces in usurping existing 64-bit Risc-based architectures.

Nor is it the first indication that Dell was unsure about Itanium. In November 2001, Dell senior vice president Joe Marengi publicly admitted that demand for Itanium-based systems was “effectively zero” and that there was little incentive for software developers to port software to the new platform.

At the moment, there is a little over 100 applications available for Itanium, which compares poorly with both the 32-bit Windows platform and Sun Microsystems’ Solaris Unix operating system, which can boast more than 12,000 applications.