HP plans to retire its own PA-RISC processor at the end of the year, so customers who want to stay with HP's HP-UX or OpenVMS operating systems have little choice but to buy Itanium servers.

"Itanium is basically HP's high-end processor, in the same vein that Power6 is for IBM and Sparc is for Sun," said Illuminata analyst Gordon Haff. "If you look at it in that context, Itanium is doing fine. If you look at it in the context of taking over the world, it's not doing so fine."

Still, he said Tukwila should roughly match the performance of IBM's and Sun's current RISC processors. "It probably puts Itanium where it ought to be in terms of competitive performance, against Power6 in particular," Haff said. "Itanium has been a little bit on the slow side versus Power6 today."

Nathan Brookwood, principal analyst at Insight64, said there is a market for Itanium beyond HP customers. He pointed to NEC, Fujitsu, and SGI, among others, who are switching to Itanium from their proprietary mainframe platforms. The volume of sales there is small but the revenue is fairly significant, he said.

Microsoft also is throwing some weight behind Itanium. The processor is valuable for the company because it gives it a hardware platform to compete in high-end environments where RISC-based and mainframe computers are dominant, Brookwood said.

Microsoft has kicked off a program to persuade financial institutions that Windows on Itanium is a good low-cost alternative to mainframes, said Ward Ralston, technical product manager for Windows Server marketing. "These are long sales cycles, but these are the rocks we're flipping over to start moving the needle with Itanium," he said.

IDC's Josselyn said what happens on the Windows side over the next 18 months will be important for Itanium. "If they can't get a lot of additional Windows-based applications developed for the platform, it's going to stump the growth. Windows-based servers is the biggest segment of the overall server market these days," he said.

Intel is developing follow-ons to Tukwila, code-named Poulson and Kittson, although it still won't say much about them. Poulson will have more than four cores, a new microarchitecture and be manufactured on a 32-nanometer process, said Robert Shiveley, worldwide marketing manager for Intel's server group.

Most analysts agreed that Itanium is here for the long term, which wasn't always certain given its rocky start. "Like John McCain thinks we can't walk away from Iraq, Intel thinks they can't walk away from Itanium," Brookwood said. "One thing you have to give Intel credit for is that they are nothing but persistent."