Compaq Computer Corp. will transfer its entire 64-bit family of servers to Intel Corp.'s Itanium microprocessor architecture by 2004. Also as part of the agreement, Compaq will sell key intellectual property behind its Alpha processor business to Intel, the companies announced Monday in a joint telephone press conference in New York.

Compaq currently offers high-end servers based on Intel, Alpha and MIPS processor architectures. Monday's announcement means that Compaq will standardize on one architecture.

"There will be a single base line across all our platforms. We are standardizing on the Itanium microprocessor line," said Compaq Chairman and Chief Executive Officer (CEO) Michael Capellas. "We are definitely looking at a common server architecture down the road."

Before the transfer is completed in 2004, Compaq will release its upcoming next-generation Alpha processor known as EV7, while designing and building NonStop Himalaya servers that use MIPS chips, Capellas said. "There will be two more performance increases within that time," Capellas said.

Under the nonexclusive, multi-year agreement, Compaq will transfer Alpha tools and engineering resources to Intel, along with granting licenses to Compaq's Alpha microprocessor technology and compilers, Capellas said. "This is great for efficiency. It allows everyone to do what they do best, and it allows us to simplify our product line," Capellas said.

At least one Alpha customer was concerned about the announcement. "Of course I'm a little worried. I want to make sure my investments are protected," said Eric Thomas, founder and chief executive officer of L-Soft International Inc. based in Landover, Maryland. L-Soft runs and maintains e-mail list applications, including the widely-used Listserv list management program.

"It may not be a bad thing, because I think Intel will pour a bunch of money into it," Thomas said. But L-Soft's Thomas is not planning on leaping onto the Itanium bandwagon just yet. "It's too early to say if we'll switch. I want more details," he said.

Intel's purchase of the technology could also be beneficial to Intel if the company incorporates it into its next generation of 64-bit processors, Thomas said. "My only real worry is that there will be so much focus on the Windows world that (Compaq) might lose focus on Unix and VMS."

From Intel's side, the purchase gives Intel technology it can use to enhance its Itanium architecture, Thomas said. As far as Compaq's side of the deal, they either sensed they didn't have financial resources to win a battle against IA-64, or they felt that they could really dominate the server market with the help of a larger player, he added.

"We're not releasing financial details on the transaction," Capellas said. Intel President and CEO Craig Barrett added, "Clearly, we're talking about a significant amount of money here."

Though he repeatedly declined to "go into specific numbers," the agreement will include the transfer of some engineers to Intel, Capellas said. Over the next couple of years, several hundred Compaq microprocessor engineers, compiler experts and infrastructure employees will be offered employment with Intel, both Capellas and Barrett said.

"Intel gets a whole lot of very smart

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