Even more threatening to Intel, the Opteron chip promises to seamlessly run existing software, potentially allowing AMD to get in the door with corporate users by promising a smoother transition to 64b technology. By contrast, Itanium users have faced a penalty in using current 32b software, which runs more slowly in a special emulation mode.
Intel is already under the gun, industry executives said, because Microsoft has committed to offering its operating system for the Opteron as well as Itanium. If Intel were forced to introduce a similarly compatible processor, which is reportedly in the works at the company's research labs as an insurance policy, it would be forced to either follow AMD's standard or persuade Microsoft to invest in yet a third 64b operating system.
Perhaps more significantly, AMD is pricing the new Opteron chips to compete against Intel's 32b Xeon processors, which are now widely used in the market for low-end corporate servers.
If the Opteron lives up to the earlier performance expectations and is widely adopted in corporate applications, it could badly undercut Hewlett-Packard as well as Intel, particularly because corporate spending on information technology has been cut by the recession.
"In many ways this is an excellent time to introduce the Opteron," Hector Ruiz, AMD's chief executive, said. "It will be possible to make a simpler transition because it will be possible to run the existing 32b software without modification."
Hewlett Packard and Intel executives respond that Opteron faces its own challenges in the marketplace. Bringing application software to new computer designs will be more complex than AMD suggests, they said.
"It is a hard, complex problem that we've been working on for a long time," said Shane V. Robison, chief strategy and technology officer for Hewlett-Packard. "The Opteron guys are going to have to go through the same thing."
Ready for what?
"Having the microprocessor is one thing," Robison added. "Having it ready for the enterprise -- all the software, management tools and other expertise you need -- is another."
He also asserted that HP and Intel will retain a performance edge because of Intel's manufacturing advantages in building chips with even smaller design features.
Apart from manufacturing, AMD's biggest challenge is to quickly establish support from industry leaders for its new design.
"It's important for AMD to build a sense of momentum for Opteron," said Jim Turley, publisher of Silicon-Insider, a computer industry newsletter in Pacific Grove, California. Dell, IBM and Sun Microsystems are all potential backers for the new AMD processors but none has publicly announced a commitment yet. Industry executives said it was likely that at least one of the computer makers would announce its support on Tuesday in New York, when the new processor is publicly unveiled.
The jockeying inside the industry has been brutal, according to a number of people who have been engaged in the struggle.
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