Although the debut of Intel Corp.'s Pentium III should certainly draw the attention of IT buyers, PC Week Labs' tests reveal that the sound and fury of the Pentium III's arrival will signify very little for most corporate applications.

The chip offers only marginal performance improvements over Pentium IIs--no more than 8 percent--when running most business applications. Even its controversial processor ID is less useful for managing systems than for enabling secure electronic commerce transactions. The bottom line: For most corporate users, systems based on the new chip will not be "must buys."

Surprisingly, Intel is guarded in its praise for its own product, saying that Pentium III performance will be "equivalent to Pentium II chips at the same frequency" except with software that supports the Pentium III's new parallel processing instructions. We couldn't agree more. The new Pentium III SIMD (single-instruction, multiple-data) extensions, like the MMX instruction set, provide parallel processing that will give the greatest boost to games and other entertainment software, not to business applications.

Of course, if your employees spend a great deal of time working with software packages such as "Xena: Warrior Princess" or "Battlezone 2," the Pentium III is a hot ticket. But for those more concerned with office suites and e-mail applications, the Pentium III could be difficult to justify when a less expensive Pentium II- or Celeron-based system is almost as fast. In fact, the Pentium III's most significant attribute may be that it will drive down the prices of Pentium II and Celeron systems in the short term.

Some apps take advantage

As shipments of the Pentium III began last week, there were a few business applications that could take advantage of the new chip. Dragon Systems Inc.'s NaturallySpeaking, Adobe Systems Inc.'s Photoshop and Microsoft Corp.'s NetShow Office 2000 use SIMD extensions, so the Pentium III could improve these programs' performance. More applications exploiting the SIMD extensions will arrive on the market later this year.

However, we say the chip "could" improve performance because, even if an application supports SIMD, users will not necessarily benefit. Photoshop users, for instance--will find that only some of the program's features make use of SIMD. Other areas of the program would run just as fast on a Pentium II with the same clock speed.

Intel's decision to name the new processor the Pentium III strikes us as very odd. By calling the processor the Pentium III, Intel has implied that the new chip will supersede the Pentium II in the business environment. If the new instruction set is extremely important, we wonder why the company didn't add the new instructions to the entire Pentium II and Celeron lines.

Intel is marketing the Pentium III to the wrong crowd. The company has clearly positioned the Celeron as the perfect processor for home users, whereas the Pentium III is positioned as a perfect fit for corporate desktop PCs. However, most of the benefits the Pentium III provides for applications and games will be more commonly used in home settings. The Celeron and Pentium II chips are better aligned with IT's goal of lowering desktop computing costs because they are less expensive and fast enough for running normal business applications.

Just when we thought it would be easy to write off the more expensive Pentium III in most corporate work spaces, Intel offers an interesting management feature: Each chip has a unique processor ID number.

Even before the chip shipped, the processor ID generated controversy from those with privacy concerns. As a result, Intel decided to ship the chip with the ID function disabled. Users will be able to enable it via the BIOS setup program. For corporations, however, the ID function isn't going to redefine system management. Compatible system management software can already disclose the processor type and speed on any Desktop Management Interface 2.0-compliant PC.

E-commerce is where the new ID function will be most useful. The ability to positively identify a system by its chip will aid in completing secure e-commerce transactions over unsecured networks.

Benchmarks tell all

The Pentium III's performance is close to that of a Pentium II when running applications that don't use the new SIMD extensions. Such was the case with PC Week Labs' application-based Business Winstone 98 and High-End Winstone 98 tests (see benchmark below). Neither application-based test suite makes extensive use of the new extensions, so they show little difference between the processors; the largest performance boost--from a 450MHz Pentium II to a 500MHz Pentium III--is no more than 8 percent.

To isolate the chip's performance, we used the same Compaq Computer Corp. Deskpro EN PC for all tests. Performance of the new Pentium III exceeded that of the Pentium II only when a higher clock speed was used.

The real sleeper in the Intel product line is still the 400MHz Celeron. Although the Celeron is about 15 percent slower than the 500MHz Pentium III, it costs 25 percent less. We expect that price difference to grow once the Pentium III ships.

The estimated street price for a Deskpro EN with each processor is as follows: A 400MHz Celeron costs $1,899; a 400MHz Pentium II is priced at $2,059; a 450MHz Pentium II is $2,199; a 450MHz Pentium III costs $2,299; and a 500MHz Pentium III is priced at $2,495.

During testing, we discovered that, unlike previous processors from Intel, the Pentium III cannot be clocked up or down.

Christopher Yates, product reviews coordinator for PC Week Labs, can be contacted at chris_yates@zd.com.

— Christopher Yates