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Stephen Shankland

Staff Writer, CNET

Hewlett-Packard may have transferred its last remaining Itanium processor engineers to Intel, but the server maker is standing by the technology to the tune of $3 billion.

The funds will help HP design systems and encourage software companies during the next three years, the computer maker plans to announce Thursday. HP will spend money to recruit software companies to Itanium and help them optimize and market their products for Itanium.

HP and Intel, which co-developed the Itanium chip family for more than a decade, initially declined to comment on the agreement to transfer HP’s chip designers to Intel, but late Wednesday HP confirmed and detailed the plan.

“Several hundred” engineers in HP’s Fort Collins, Colo., operation will move to Intel, “bolstering the development of multicore, multithreaded processors.” Those technologies let a single processor perform more tasks simultaneously. The companies with the prime Itanium rivals–Sun Microsystems, IBM, Advanced Micro Devices–all are headed that direction as well.

HP isn’t shedding all its Itanium expertise. It will continue to design chipsets, the crucial chips that connect processors to memory, network, storage and other subsystems.

HP is in midst of a years-long process of phasing out its own PA-RISC processor design in favor of Itanium, with which the Palo Alto, Calif.-based company employs a fundamental design that will outlast rivals. However, HP and Itanium have faced tough challenges getting Itanium to catch on.

The Itanium allies once hoped Itanium would conquer the server landscape, but have scaled back ambitions to the relatively modest goal of competing against IBM’s Power and Sun’s UltraSparc that employ the reduced instruction set computing (RISC) approach.

HP’s investment is designed to “vault Intel Itanium 2-based HP Integrity servers to the leadership position in the $20 billion market currently served by RISC processors,” HP said in a statement. “As HP and Intel continue to invest in server innovation and Itanium, Integrity servers become a ‘must have’ competitive weapon to drive customer value for the next decade and beyond,” Chief Executive Carly Fiorina said in the statement.

One of the chief stumbling blocks in Intel’s Itanium plans has been the popularity of its Xeon processors, close cousins of the Pentium line. These x86 chips, unlike Itanium, are able to easily run a vast collection of software.

AMD threw another wrench in the Itanium works with 64-bit x86 memory extensions in 2003, which along with a similar move by Intel in 2004 undermined one of the advantages Itanium had over x86 chips.