Investment in Alpha chip reassures users

Users concerned about the long-term viability of the Alpha chip found some reassurance in the $US500 million technology and marketing initiative launched last week to boost the chip's fortunes. But analysts were less upbeat.

Compaq, Samsung and Samsung subsidiary Alpha Processor, announced a partnership to enhance the technology and attract software development around the platform.

The $500 million investment comes as Compaq is preparing to unveil its new Wildfire Alpha servers in February. The Unix- and OpenVMS-based systems, which scale up to 32 processors, will support advanced partitioning capabilities and are expected to be contenders at the high end.

The announcement also bolsters past statements by Compaq that it has remained fully committed to Alpha at the high end. Concerns about the future of Alpha peaked soon after Compaq's purchase of Digital Equipment, the chip's inventor, in June 1998 and were fuelled recently when the company said it would end Windows NT development on Alpha.

The investment "makes me feel a whole lot better" about betting on Alpha, said Kal Raman, CIO at online drug retailer Drugstore.com, in Seattle. "I think they have finally realised that their core enterprise strength lies in Alpha, and they have decided to focus on that," Raman said.

Although it's a step in the right direction for Alpha customers, "the real question is whether it is too little, too late" to improve Alpha's market share, said James Garden, an analyst at Technology Business Research. Large portions of the investment will go toward playing technological catch-up with IBM RISC processors and attracting independent software vendors, he said.

Specific steps that are expected after the investment include the following:

Investments by Samsung will introduce some performance-enhancing technologies such as copper interconnect and silicon-on-insulator.

Partnerships with and funding for Linux software vendors. Compaq is hoping to to make Linux - rather than Windows NT - the mass-volume operating system on Alpha.

A fourfold increase in Compaq funding - from the $100 million announced in September - for Tru64 Unix on Alpha development is expected.

Business development initiatives should push Alpha servers into new markets such as network appliances.

"This is exactly the kind of validation of Compaq's commitment to Alpha" that enterprise users are looking for, said Jeff Killeen, a board member at the Digital Equipment Computer Users Society. "It shows they are betting on Alpha as their enterprise [platform]," he said.

Apart from reassuring the customer base, last week's investment will do little to change Alpha's competitive positioning, said Mike Feibus, an analyst at Mercury Research. But Feibus noted that support for Linux could help boost the platform's sales at the low end.

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