Hewlett-Packard on Tuesday plans to disclose advancements for its high-end Integrity line of servers, including new operating system choices and virtualization capabilities.

The announcements come about a month after the company said it would discontinue internal design development on the 64-bit Itanium processor, the processing engine for the Integrity server, and transfer several hundred employees to Intel.

As part of that decision, HP says it will invest $3 billion during the next three years in improving system-level design, software, and services to support the Integrity line. The effort is part of HP's move to transition its traditional PA-RISC and Alpha processor customers to Itanium-based platforms over the next few years.

"It's been a long-standing plan to wind down our processor chip development, as we wind down our RISC offerings, and fully embrace the Itanium processors," says Brian Cox, worldwide product line manager for HP servers. "We are basically reengineering our cost structure so that we're investing in other areas than microprocessor design."

Integrity offerings--including servers, storage, software, and services--have surpassed $1 billion in revenue, according to HP. About 25% of HP's Business Critical Server unit revenue is derived from Integrity-based systems, and HP believes that will grow to 50% by the end of 2005 and to 70% by the end of 2006, according to the company.

HP will continue to sell the RISC-based servers through next year and provide support through the end of the decade, but it wants to accelerate the move away from the older architectures. Still, "this is not a forced march to Itanium," says Mark Hudson, VP of enterprise storage and serves for HP. "We want to keep them as HP customers, and our programs are tailored for companies to evolve."

One of those evolutionary moves will be the availability of OpenVMS v8.2, and SuSE Linux Enterprise System 9 with the Linux 2.6 kernel, for use on Integrity systems beginning in the second quarter. HP has about 10 million installed users on about 400,000 systems running OpenVMS on Alpha-based servers, Cox says. The new release of the operating system will be able to run on both Integrity and Alpha servers, allowing customers to create mixed-cluster environments as the transition their enterprises, he adds. "OpenVMS has been around for about 20 years, and we're going to add another 20 years of life as we bring it out on Integrity platforms," he says.

By bringing out the latest version of Linux for Integrity, HP will be able to provide support beyond the current two- to four-processor market, and support configurations up to 16 processors on a single instance, Cox says.

Not surprisingly, HP competitors are unimpressed by the moves. The availability of OpenVMS on Integrity is a year late, and "while this may breathe new life into the existing space, it will certainly not draw any new people onto the platform," says Larry Singer, senior VP and strategic insights officer at Sun Microsystems. In the last 18 months, Singer says, Sun has help migrate 175 HP customers to its platforms, representing about $200 million in revenue. "While its competitors have introduced major enterprise innovations over the past year, HP has cut R&D, lost key executives, and abandoned product lines," he says. "HP is not committed to the enterprise and has made too many missteps to be taken seriously any longer by enterprise customers."

But HP's Cox says another indication of support for Itanium and Integrity is continued expansion of applications in production. In the past year, supporting applications have doubled to about 3,000, he says.

HP also plans to detail on Tuesday the Virtual Server Environment, which is designed to help businesses achieve greater return on investment by optimizing server resource utilization, says Ute Albert, marketing manager for server virtualization at HP.

New offerings will include a pay-per-use program for Windows operating environments, a Global Workload Manager for HP-UX 11i and Linux for controlling a multisystem Virtual Server Environment, and Serviceguard updates for HP-UX 11i and Linux for increased availability in Oracle and SAP environments.

One recent customer win for Integrity is Premier Bankcard Inc., a provider of credit-card services for First Premier Bank in Sioux Falls, S.D. The company has grown rapidly in the past two years, with about 2.7 million active accounts, which is growing at a pace of about 160,000 accounts per month, according to Dave Geiver, VP of technology for Premier Bankcard.

The company has been operating on 32-bit Xeon-based servers from HP, but found the systems could not keep up with the processing demands for running Microsoft SQL Server. In October, the company completed an installation of three Integrity servers and has seen immediate results, he says. For example, analytical queries from its analysts that pervious took as long as 22 hours to complete now can be executed in 45 minutes, Geiver says.

"But we're seeing a performance lift almost across the entire playing field," he says. "In addition, we were continuously running into the problem as we deployed newer [32-bit] servers, we would quickly run into resource issues, particularly for memory. The significant querying of the SQL database was essentially bringing the server to its knees."

Keeping its high-performance computing customers in the HP fold is critical for HP going forward, Cox says. Although RISC and Itanium-based servers currently account for only 20% of server units sold, they account for about half of all revenue, according to market researcher IDC.

"This is a big business and HP wants to continue to be their supplier," Cox says. "That's why we're moving solutions forward to an Itanium-based framework that will be the foundation for the most demanding workloads for the next 20 to 25 years."