Compaq to phase out non-Intel computer lines

Eric Auchard

NEW YORK: Compaq Computer Corp. on Monday said it had agreed to a
technology-sharing pact to build high-powered computers with Intel Corp., its
leading chip supplier, freeing Compaq to scale back computer lines based on chip
technology developed in-house.

The pact gives Intel broad access to technology used in Compaq's Alpha and
NonStop Himalaya families of computers - servers that are used to run
high-powered databases and business operations from stock exchanges to phone
networks.

"Compaq will consolidate its entire 64-bit family of servers onto
Itanium microprocessor architecture by 2004," Houston-based Compaq said in
a statement. Itanium is Intel's latest generation of chip technology designed to
run powerful computer servers and usher in a new era of mainframe-class power on
PC machines. Sixty-four bit processing multiplies the amount of data that can be
processed on a computer compared with the more common 32-bit chips.

The deal with Intel frees Compaq to phase out its Alpha server platform,
based on non-Intel chips. Alpha was developed a decade ago by Compaq acquisition
Digital Equipment Corp. as the first 64-bit chip family.

To reassure existing client base of big business customers, who rely on
Compaq Alpha servers, the firm said it would build next generation of Alpha
systems prior to merging the technology with Intel's Itanium. Compaq said it
would also build new NonStop Himalaya systems based on rival MIPS chips during
the transition to Itanium.

Himalaya is Compaq's ultra-high-volume transaction technology, used to run
bank automated teller machines, stock market exchanges and phone company central
switch operations.

Compaq quoted customers and software vendors such as Black and Decker, the
London Stock Exchange and Oracle Corp., which have relied on Alpha technology
for much of the past decade, as saying the Compaq-Intel plan gave them
confidence in the future of their investments in Compaq servers.

Compaq said it would translate its Unix and other high-end software, which
until now have run on non-Intel chips, into Itanium-friendly code that will
preserve the life of these systems. The bulk of Compaq's computers run on
Intel-based Windows software and the company is making a push to adopt
Linux-based software to run its server computers as well.

While Alpha chips have offered speed and performance advantages over earlier
versions of Intel chips, the Alpha failed to catch on as a mass-market
alternative to Intel's microprocessors, which run most of the world's computers.
Compaq said it is transferring significant Alpha microprocessor and development
tools to Intel.

Compaq said the deal would bring Alpha technology to a far wider range of
users as it is incorporated in future versions of Intel chips. "In one bold
stroke, Compaq is extending its 10 years of leadership in 64-bit computing for
the next decade and beyond," Compaq said.

As part of the deal, Compaq and Intel have agreed to work together on joint
engineering projects to advance parallel computing, a state-of-the-art design
that pushes the outer boundaries of what is possible for computers to process.
Financial terms of the Compaq-Intel pact were not disclosed.

(C) Reuters Limited 2001.