Intel Notebook: StrongArm Shows Promise as Network-Processor Standard

Also, the company's Merced processor springs forth fully formed and running actual operating systems.
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PALM SPRINGS -- One thing about Intel (INTC) - Get Report: When the chip giant moves into a new market, it really moves in.

At a large press conference here at the

Intel Developers Forum

, Intel rolled out one network equipment customer after another for its new StrongArm-based network processor. One of the new customers,

Omni VideoNetworks

VP of network engineering Rod Sinks, was sighing with relief. Less than a year ago, when Omni first came to the world's biggest chipmaker to buy a network processor, Intel's vision seemed hazy.

"We demanded StrongArm but they tried to sell us Pentiums," Sinks said. "Their story wasn't quite clear." But now that Intel has boldly come forth with its networking processor -- named the IXE 1200 and presented to the world Tuesday -- Sinks says it's a different story. "For us it was the only clear processor that would solve our problems."

In unveiling the new chip, Intel said it aims to build a new networking architecture for the next decade based on its StrongArm embedded processor that it inherited from

Digital Equipment

18 months ago. The strategy is similar to the one it has used successfully to define a PC architecture in the last decade.

These days, most network equipment makers use custom-designed chips for specific applications. But they take 18 months to develop and are expensive. Intel's network processor, designed into a network system, can be up and running in six months or less and sell for less than $200, a fraction of the cost of a custom chip. They can also be upgraded, reprogrammed and changed to meet the rapidly changing and growing needs of Internet businesses.

Merrill Lynch

analyst Joseph Osha said smaller companies over the years have tried to come up with standard products for niches within the network chip market. "No big company has tried to define a standard," he said. Intel's network processor will likely replace many application-specific chips made by such companies as

LSI Logic

(LSI) - Get Report

, he said, but more likely they will replace chips made internally by the network equipment makers themselves.

It's a sweeping plan with many pieces that have just now fallen into place. Like Omni,

Broadband Access

, a start-up that makes network equipment for digital cable systems, was nervous that Intel wouldn't be able to deliver on its grand scheme. "It worried us a bit in the beginning," said Walt Mahla, vice president of engineering for Broadband. "Would Intel sign on to this and embrace it?"

Intel was already embracing it. Mark Christensen, general manager of Intel's network communications group, said the plan for an Intel Internet Exchange architecture had been drawn in 1996, but the pieces didn't start falling into place until the last year, when it took control of StrongArm. "What fell in our laps was the realization that we had a jewel," he said.

In March, Intel strengthened its hand further buy buying

Level One Communications

for $2.7 billion in stock, a deal that closed last month. Level One added to Intel's network system architecture and offered the networking expertise needed to break into a rapidly growing market. "Level One brought 900 people," Christensen said."Level One was the foundation of the house. We had the really pretty roof you put on top."

The pieces are still falling into place. Less than two months ago, Intel bought

Softcom Micro Systems

, which has technology to configure the other pieces together with the network equipment. And the most recent piece wasn't signed until late last night:

NetBoost

of Mountain View, Calif., which develops among other things, firewalls for Internet equipment.

And bigger customers are lining up. Network equipment maker

Newbridge Networks

(NN)

, which has about $1.7 billion in annual revenue, expects to ship ATM switches using StrongArm-based network processor over the next 12 months.

"The application we designed the part into, we think will be a big application," said Gary Flack, assistant vice president for Newbridge's switching products group. "It puts Internet protocol on our ATM product lines. This is how we are going to put IP on our data services."

Mercy for Merced

Whew!

That's the word coming from Intel regarding Merced. The high-end server chip works with actual -- you heard that right -- operating systems. The 64-bit Merced, now due for release in mid-2000, has been plagued by delays. There has been speculation that its debut would be so close to the next and faster Intel product -- McKinley -- that customers would bypass it for the faster chip.

Merced is so complex that when the design was finally finished in June, barely in time for the company to announce it in its second-quarter earnings announcement, the team's co-manager, Israeli-born Gadi Singer, was so happy he led the team in a round of Israeli folk dancing.

At the Intel Forum here in this torrid desert oasis, Intel demonstrated a working system with Merced on both Windows NT and Linux operating systems -- a real feat considering that the first actual prototype chip is only two weeks old.

"In the past when they brought up a new chip they would stick it in an old box and see if it works," says Nathan Brookwood, an analyst with

Insight 64

, a technology testing and research firm. In Merced's case, the box and all its components were brand new, never before tested.

"It's mind-boggling that in two weeks they could do this," he said. "I expected they would have something with Merced working, but that it would be something rudimentary. To have the chip running at all coming right out of the oven is impressive. To have it running applications is really impressive."

Not all the work is done. There are still five versions of Unix that have yet to be proven to work on the Merced.