IBM said yesterday that it plans to build a blade server system for small to medium-sized businesses (SMB). For IBM, that means customers with fewer than 1,000 employees.

IBM BladeCenter product manager Scott Tease said that IBM plans to start selling a new, smaller blade product into smaller businesses later in 2007. IBM currently sells BladeCenter chassis to large enterprises, with each chassis capable of housing up to 14 servers. In addition, the systems house modules for management, and for connecting to the network and external storage systems.

Among the key benefits of blades, according to IBM, are that the enterprise doesn't have to manage the same volume of cabling that it would if the servers were discrete, that management is centralised, and that space in data centres is saved.

Tease said that SMBs wanted the same benefits as bigger companies but at a lower price, since they usually only had one person managing the IT infrastructure. And while he wouldn't provide details, he agreed that SMBs would need fewer blade slots and that a half-sized box would be more appropriate. In other words, he hinted that a seven-slot chassis could be what a new product offers.

Vendors of blade servers operate using a similar business model as printer vendors. So IBM's chassis sells at a relatively low price - about $2,700 - but adding server blades and modules can see a fully configured system costing upwards of $50,000. Tease said that the same model would apply in the SMB space. "They will be equally sticky," he said.

By the same token, you can expect however that the SMB system will accept the same blade servers and plug-in modules, which provide management and connectivity options, as its larger brethren. IBM makes much of the fact that the BladeCenter chassis has remained almost unchanged since it launched the original product in 2002, so new blades and modules still work in the old chassis. To do otherwise in the SMB market, or to prevent a seamless upgrade path for businesses that outgrow the SMB product, would upset customers and technology partners alike.

Tease neither confirmed nor denied any details of the likely product.