Momentum builds for Pentium successors

Federal demand for the latest crop of microprocessors—the so-called "sixth generation" chips succeeding the Pentium—is slowly building and may experience its first surge this summer.

The key competitors in this market are Intel Corp. with its Pentium Pro chip and Cyrix Corp with its 6x86 processor. When the Pentium Pro was announced last year, such prominent federal vendors as Compaq Computer Corp., Dell Computer Corp. and Zenith Data Systems announced PCs based on the chip. And federal buyers might get a chance to buy some Cyrix-based systems as well since systems integration powerhouse Electronic Data Systems Corp. agreed last month to build systems for Cyrix. Although the companies have yet to discuss specific marketing plans, the EDS/Cyrix PCs could emerge as a budget-priced Pentium Pro alternative for federal customers.

Another chip competitor, Advanced Micro Devices Inc. (AMD) , which recently merged with NexGen, is sitting on the sidelines and is expected to announce a sixth-generation chip late this year. The company had marketed a Pentium-class chip but has withdrawn that product from the market.

These companies are vying for a tiny piece of the market, but one that carries significant profit and prestige. The number of PCs based on sixth-generation chips is very small, and the participants in the market won't shed any light on sales volume, said Dan Klesken, senior semiconductor analyst for Robertson, Stevenson and Co., San Francisco. "There are no numbers now," he said. "The estimates range from 2 million units to 4 or 5 million units last year. Intel isn't giving any hints."

Early Adopters

The federal market is in step with the broader commercial trends. Among federal indefinite-delivery, indefinite-quantity (IDIQ) contracts, only Intergraph Corp.'s three Navy Computer-Aided Design-2 contracts carry Pentium Pro computers. Demand "is just building now," an Intergraph spokesman said.

Some sixth-generation chips, meanwhile, have begun to show up on General Services Administration schedule contracts. International Data Products Corp., for example, is offering single- and dual-processor Pentium Pro machines on its GSA pact. George Fuster, president of IDP, characterized Pentium Pro sales as "onesy, twosy" so far. "It's not a large market, but it will be," he added.

Government Technology Services Inc. is carrying Pentium Pro PCs from Hewlett-Packard Co. and Compaq Computer Corp. on its GSA schedule. Tony Colangelo, GTSI's director of vendor relations, said agencies are very interested in the PCs but have funding issues to work out and performance tests to complete.

"It's premature to see [Pentium Pros] on contracts as a big item," said Bob Guerra, executive vice president of Sysorex Information Systems Inc. "The technology is incredible, but the price is through the roof."

A 180 MHz Pentium Pro chip costs about $800, which is about twice the price of a 150 MHz Pentium chip, according to federal PC executives.

Federal acquisition executives reported that the advanced chips will eventually arrive on contracts. Steve Meltzer, director of GSA's Federal Computer Acquisition Center, said he has not looked into such chips as the Pentium Pro, noting that his customers have not inquired about them.

Likewise, David Goldberg, deputy associate commissioner for information resources management at the Immigration and Naturalization Service, said the Pentium Pro is not yet a factor on his organization's Personal Workstation Acquisition Contract. "Over the contract's life, you might see [Pentium Pro] pop up as a refresh exercise," Goldberg said. At this point, however, the chip is not being actively considered, he added.

Future Boom

Yet the still-developing market for sixth-generation chips is expected to heat up in a matter of months, according to industry watchers.

"We see the market going toward Pentium Pro," said Jan Morgan, a research analyst with IDC Government Market Services (IDC GMS). "The 486 will be phased out completely in the next three or four months, and the Pentium will take its place as the low-end product," she said. "The Pentium Pro will be coming on really strong in the summer."

Guerra said he expects to see the Pentium Pro chip make initial federal inroads as a server upgrade on current contract vehicles. "You will see it as a change proposal for a server," he said.

"[Pentium Pro] makes a perfect server," IDP's Fuster said, citing the Pentium Pro's error-checking and correction (ECC) capabilities and other features. "The chipset is much better; it has all of these advanced features that people have been looking for." ECC, a successor to parity-checking technology, detects and fixes data errors caused by bits of data changing while stored in volatile RAM.

The sixth-generation chips will soon see service in servers, desktop PCs and workstations, said Gary Newgaard, director of federal sales at Compaq. "I think you'll see rapid migration to the Pentium Pro in the server arena because it is an affordable alternative to the [reduced instruction-set computing] chips," he said.

Industry executives expect the first significant wave of Pentium Pro sales to coincide with the government's peak buying season. The GSA schedule and some IDIQ sales will drive Pentium Pro sales to account for 30 percent of the PCs sold during the summer, IDC GMS' Morgan predicted.

The Pentium Pro trend will only accelerate from there. By the time the summer 1997 buying season rolls around, 70 percent of the PCs the federal government buys could be Pentium Pro-class machines, according to IDC GMS.

Upcoming deals that are likely to feature machines with advanced chips include the Air Force's massive Desktop V. "There will be quite a few [Pentium Pro PCs] that are either bid on Desktop V or that will be technology refreshed for Desktop V," Morgan said.

In addition, advanced PC chips are also under consideration for such deals as NASA's Scientific and Engineering Workstation Procurement II and the Army's PC-2 deal. IDP's Fuster said his company is looking at the possibility of bidding Pentium Pro chips on SEWP II and other projects.

Kevin Carroll, an acquisition division chief at the Army's Information Systems Selection and Acquisition Agency, said his organization is debating the inclusion of high-end processors on PC-2. A draft request for proposals on PC-2 is expected later this month.

Carroll said the inclusion of a PC platform equipped with an advanced chip would depend on factors such as the number of users requiring such technology and the cost. "How much technology can we afford in the current budget climate?" Carroll asked.

NT, Other Growth Factors

Another factor that will influence the demand for high-end chips is the growth in popularity of Microsoft Corp.'s Windows NT.

"My sense is that [Pentium Pro] is going to have a strong surge...as Windows NT becomes more popular and more applications that take advantage of Pentium Pro become available," analyst Klesken said.

The adoption of Windows NT is a key issue in the fight for market share between Intel and Cyrix because the Pentium Pro's performance suffers when it is running Windows 3.1 or Windows 95. This is due to the 16-bit code in those operating systems. Running a 32-bit operating system such as Windows NT lets Pentium Pro chips run faster. In Federal Computer Week's Test Center, Pentium Pro PCs outpaced Pentium systems running a Windows NT application benchmark by a significant margin [Government Best Buys, March 4].

But Cyrix claims the upper hand when running software that users are more likely to have today: Windows 3.1 and Windows 95.

"For the software [that] people are primarily using, we have the fastest processor, period, for running those operating systems today," said Bill Blagdan, Cyrix's marketing director for 6x86 products.

In addition, the Pentium Pro and other sixth-generation chips will become more mainstream as the number of applications for the chips' power grows. Three-dimensional graphics for training, World Wide Web pages, simulators and games will drive demand for the more powerful chips, said Richard Dracott, Intel's product marketing manager for the Pentium Pro.

And pricing, of course, will also propel advanced chip sales. "You will see the price come down so that mainstream buyers will buy them," Dracott said.

Indeed, Pentium Pro machines eventually will be priced competitively with Pentium PCs, making the former irresistible. "The price will be so compelling [that] it will be an easy decision," Newgaard said. "The price points they will come in at won't warrant doing anything else."

By the first quarter of 1997, a 180 MHz Pentium Pro chip will cost about $400—the same price a 150 MHz Pentium chip sells for now, according to industry executives.

That price break could translate into "tens of millions" of units in 1997, Klesken said, and as many as 40 million to 60 million units in 1998. Cyrix and AMD may have a chance to grab a slice of this pie, but Intel will remain dominant, Klesken said. He predicted the company will hold 85 percent of the market, with Cyrix and AMD taking the remainder.

Integration Strategies

To integrate—or not to integrate—is a key question in competing microprocessor design strategies.

Intel integrates functions that are usually on the computer's system board into its Pentium Pro chip to provide faster performance. Cyrix and IBM Microelectronics, which manufactures chips for Cyrix, believe the host of upgrades incorporated in their 6x86 chip are sufficient and that integrating too many features inflates the cost of the processor without gaining enough of a performance edge.

Cyrix's sixth-generation chips boast an impressive roster of technologies that the Pentium-class fifth-generation chips lack. This list includes superpipelining, register renaming, data-dependency removal, multibranch prediction, speculative execution and out-of-order completion. Like the Pentium, both the Pentium Pro and the 6x86 are superscalar, with 80-bit floating-point calculators and 16K on-chip primary memory cache.

Intel's goal with the Pentium Pro, meanwhile, was to develop a chip that could be manufactured using the same technology as the Pentium but that would offer significantly better performance, according to the company. Because the Pentium is superscalar, which means it can execute more than one instruction per clock cycle under the right circumstances, the new technologies are aimed mainly at giving the chip a better chance to run multiple instructions per cycle.

Such features as out-of-order completion and speculative execution let the processor work on new instructions while it is waiting for information on an earlier job. When that information comes back from main memory, then the whole series of results is issued.

To reduce the chance that the processor will have to wait for information from main memory, chip makers include a primary cache with the processor to hold some information. Intel and Cyrix currently have 16K primary caches.

Intel also employs an on-chip secondary cache in the Pentium Pro. Unlike the primary cache, this cache is not part of the chip itself. It is another chip that is part of the Pentium Pro processor and that is directly connected to the processor itself.

**

-- John Moore contributed to this story.

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