An ugly war between Intel and three of the largest server vendors is brewing over the specifications of the bus architecture that figures to be at the heart of next-generation servers.
Talks between Intel and the triumvirate of Compaq, Hewlett-Packard, and IBM broke down last week, reportedly over Intel's unwillingness to compromise on its proposed Next Generation I/O (NGIO) specification, sources close to the negotiations said.
A second sticking point was the chipmaker's stance on not paying royalties to the three OEMs for the technical contributions each is willing to make toward the new architecture.
The big three are reportedly willing to craft their own alternative bus, which could set the stage for a major war over who gets control of a key hardware standard.
"The rub here is that the NGIO spec just isn't robust enough and does not allow for enough innovation within the standard," one source close to the negotiations claims. "Intel is also refusing to pay us back any royalties. We have some valuable intellectual property to contribute, and it is only fair we should be paid for it."
If a settlement cannot be reached expeditiously, the big three plan to issue a statement within two weeks making clear their intentions to foster their own standard, sources said.
Recently, however, Intel was showing signs it might be willing to back off on its insistence to not pay royalties, according to sources. But both parties had yet to come to a final agreement on how that would be worked out.
Some observers speculate that the ability to innovate -- or more importantly, the lack of ability to do so -- was a more important issue than money.
"Innovation means differentiation and what Intel wants is to have exactly the same product, which commoditises the hell out of the hardware," Kimball Brown, a Dataquest analyst, said. "This is so important in terms of getting future Intel chips up and running like Foster and McKinley."
Brown and others said they also believe the big three do not want to see their technical contributions commoditised and given away to competitors who are not investing heavily in technology, most notably Dell.
"A lot of this sounds like it's about Dell," one analyst, who did not want to be identified, said.
The proposed NGIO standard is the successor to the PCI and PCI X bus, to which all major hardware makers ascribe.
Most industry observers agree that the existing PCI bus architecture will not have the horsepower to adequately run higher-powered applications, such as for electronic commerce, which many corporations will want to deploy by the year 2000 and beyond.
"By 2001 or so it will become clear you'll need a richer I/O standard and it will not be [the traditional] bus, which is out of steam," said an executive from one of the big three.
The data throughput capability on an existing Intel Xeon chip is about 800Mbps, the forthcoming 32-bit Foster chip has a 3.2Gbps throughput, and performance on the higher-end McKinley processor could be substantially higher than that.
"This means two years from now you are looking at real server-based systems on a throughput basis that can match much more expensive Unix machines," Brown said. "None of those three guys want to see that happen, and Dell can't wait."