The 64-Bit Question

The introduction of Windows Server 2003 may well be a watershed for business computing, but uptake may be slow

The atmosphere was supercharged in 1995 when Microsoft ushered in a new era of low-cost 32-bit computing with the introduction of Windows 95. Late-night star Jay Leno hosted the launch party, rock icons the Rolling Stones provided a theme song (for a reported $8 million), and computer stores around the country stayed open until midnight so eager techies could be the first on their block to try the new operating system.

The launch this week of Windows Server 2003, the first mass-market 64-bit operating system, is more low key. But it may prove to be a similar watershed event for the industry. Business-technology managers who don't want to pay premium prices for 64-bit RISC systems running Unix now have a lower-cost alternative. The 64-bit Enterprise and Datacenter editions of Windows Server 2003 provide more power and speed than 32-bit versions, run on Intel's Itanium chips, host 64-bit applications from Microsoft and key enterprise software vendors, and are priced at $999 and $3,999, respectively--the same as 32-bit versions of the operating system.

It sure took long enough to get here. Intel and Hewlett-Packard have been developing the 64-bit Itanium chip architecture since the early '90s, and a developers' edition of 64-bit Windows has been available for nearly two years. At last, all the pieces are coming together: Microsoft this week also will unveil a 64-bit version of its SQL Server 2000 database, and there will be databases from IBM and Oracle; apps from i2 Technologies, J.D. Edwards, SAP, and SAS Institute; and systems-management software from Computer Associates, HP, and Symantec tuned to run on the new systems. HP, NEC, and Unisys plan to ship Windows-on-Itanium systems this summer or earlier, and IBM will enter the market by midyear.

Windows Server 2003 changes the conventional wisdom of the computer industry, says Roger Jones, CIO of Fortis Health, the health-insurance division of Fortis N.V., which plans to run Windows Server 2003 on part of its new high-end Unisys system this month. "A decade ago, if you had an office with 10 people, you would use Windows," he says. "To support 10,000 people, you'd buy Unix, and to support 20,000 people, you'd buy a mainframe."

Not any more. As part of a cost-cutting plan, Fortis Health is replacing 17 RISC servers. It expects to slash application costs by 40% by turning data analysis, file serving, and Citrix thin-client support over to Windows Server 2003 Datacenter Edition running on eight Itanium 2 chips inside a 32-processor Unisys system. "Sixty-four-bit Wintel raises the bar for what you can do in Windows," Jones says.

Computers running test versions of 64-bit Windows and SQL Server have snared three of the top 10 spots on the Transaction Processing Council's closely watched list of business-workload benchmark results for a single system. The second-fastest machine on the list, a $5.6 million NEC system with 32 Itanium 2 processors running Windows Server 2003, crunches transactions just 5% slower than the top-rated system, a $12 million Solaris-on-Sparc Fujitsu machine with 128 CPUs. "This is Microsoft going back to its original playbook and being the cost leader," says David Freund, an analyst at research firm Illuminata.

Sixty-four-bit Windows Server 2003 will appeal to users who've run out of headroom on 32-bit Windows systems, which address only 4 Gbytes of memory directly, making it hard to hold large databases in memory--crucial for handling hundreds of thousands of transactions per minute. A computer that processes data 64 bits at a time can address up to 1 petabyte of data. That makes it a candidate for big databases and server-consolidation projects.

Among the first Windows 64-bit servers will be Unisys' ES 7000/560, which can support up to 32 Itanium 2 chips and 106 CPUs overall, and HP's Superdome server, with up to 64 CPUs and 512 Gbytes of RAM, both due this summer. NEC next week will debut 64-bit Windows 2003 Enterprise and Datacenter editions on eight- and 16-CPU models, as well as the 64-bit Datacenter Edition on a machine with up to 32 CPUs and 512 Gbytes of RAM.

There are advantages to Windows Server 2003 besides 64-bit processing. Enterprise and Datacenter editions for x86 chips now support clustering across eight nodes. The operating system also provides utility software other vendors charge extra for (see story below). Microsoft is also releasing Visual Studio .Net 2003, its graphical development tool for building Web-services applications. And Windows Server 2003 includes Microsoft's .Net Framework, required to run Web-services apps.

"Bang for the buck, they're clearly ahead of all the other guys," says Michael Keithley, CIO at Creative Artists Agency LLC. The Hollywood talent agency has Windows Server 2003 installed on three 32-bit systems in its data center and is testing it on several others. Once the rollout is complete and add-on software such as Real-Time Collaboration Server 2003 and Windows Rights Management Services appear, Keithley envisions greater control over the 7 terabytes of video, audio, and other data in CAA's storage network. But he doesn't plan to use 64-bit systems right now. Microsoft and Intel need to first "work out the bugs. It's probably six to 12 months before I really start taking it seriously."

About 29% of 719 business-technology pros surveyed in January by InformationWeek Research plan to buy the new Windows server in its first year. More than one-third of them cite 64-bit Windows as one reason for the upgrade, and two-thirds name tighter security.

The stubborn economy doesn't make this the best time to debut a major product, and there are other reasons for buyers to wait. Some marquee vendors aren't shipping Itanium apps, and there are thousands of homegrown applications that need to be ported to the new platform.

Kasper ASL Ltd., which makes the Anne Klein New York line of clothes, isn't upgrading, mainly because its largest vendor of clothing-design software isn't going 64-bit. "Speed does matter when you're handling graphics," says VP and CIO Myron Melnyk, but Kasper "isn't on the cutting edge of .Net."

Another alternative comes from Advanced Micro Devices Inc., which this week will launch its Opteron x86 CPU capable of running 64-bit apps (see story,

p. 21). Microsoft expects to release in midyear a beta version of Windows Server 2003 that runs natively on AMD's Opteron chip for servers and a beta version of Windows XP for the Athlon 64-bit PC chip.

Even Microsoft execs aren't expecting too much too soon. During a conference call with Wall Street analysts last week, CFO John Connors said Windows Server 2003 won't contribute much revenue this fiscal year, which ends June 30. Still, for future growth, Microsoft is betting on server product sales, which rose 21% during the quarter ended March 31 to reach $1.83 billion.

Microsoft would love to see business-technology managers embrace Windows Server 2003 in the same way the computer industry adopted Windows 95. That's unlikely, but a steady upgrade to 64-bit computing isn't. --With Larry Greenemeier

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