IBM has released a new low-end server for under $4,000.

The eServer p5 510 is by IBM's Power5 processor and the company hopes will attract first-time users looking to blend existing Unix and Linux-based environments.

It can be configured as either a one- or two-way rack mount system, and is capable of supporting IBM's Virtualization Engine technology and its Micro Partitioning capabilities. As such, it has an advantage over competitive prdoucts from HP and Sun, particularly where companies want to run and manage replicated branch applications in areas such as retail, banking, financial services, and health care, Big Blue claims.

"The banking industry typically demands that applications run with excellent performance and security. With our applications on this system, I think we can offer both small and larger customers a 64-bit platform that will help to advance banking solutions with new levels of speed and performance," said Mark Gunning, general manager at Temenos North America.

IBM officials believe the system makes it easier to carry out consolidation strategies across Unix- and Linux-based environments.

"If a user with lots of Linux systems wants to consolidate them under one system and/or combine them with an industrial strength Unix system, we think this system lets them do that more affordably and at their own pace," said Jeff Howard, program director for IBM's pSeries offerings.

During the past two or three years, IBM has focused hard on the middle and higher end of the server market, but is now increasingly turning its attention to the low end where its chief competitors, HP and Sun, have also been getting more aggressive.

"This is our sixth Power5-based system under $10,000 to be introduced in the last six months. It is really a statement about how serious we are about the low end of the market, and how serious we are about taking share from Sun and HP in this space," Howard said.

Company officials said the p5 510 will be sold as part of their Express Program, which specifically targets midsize IT shops.

In its base configuration the p5 510 contains a 1.5GHz Power5 chip, 512MB of memory, 4GB hard drive that runs at 10,000 rpm, and carries a three-year warranty. That system supports IBM's AIX versions 5.2 and 5.3, Novell SuSE's Linux Enterprise Server 9, and Red Hat Enterprise Linux AS 3.

It will be available on 18 February, starting at $3,967.