IBM will ship a new 32 Xeon-processor server in first half of next year, and may begin selling its first high-density blade based on AMD's Opteron processor.

The new server, which will be able to run a single operating system on as many as 32 processors, will be a successor to IBM's eServer xSeries 445 server.

"In the beginning of next year, we'll scale all the way up to a 32-way system using the Intel 64-bit architecture," said Susan Whitney, IBM's general manager of xSeries, referring to the 64-bit extensions of the x86 instruction set that Intel began including in its Xeon chips earlier this year.

The new system, which will be the third generation of high-end Intel systems based on the company's X Architecture design, will be introduced at the same time that Intel is scheduled to ship a new Xeon chip, codenamed Potomac, which is designed for multi-processor systems. Also expected in the same time frame are new 64-bit versions of Windows.

The fact that low-cost Intel hardware has been making in-roads in the data centre will make the server more attractive to customers, Whitney said. "It's like the perfect storm. You have the software capabilities emerging, you have the hardware processors, but also the architecture, and then the economic realities, and it's all helping to fuel this scale-up demand."

X Architecture draws on technologies used for IBM's mainframe and Unix server products. Because it uses a modular design in which processors can be added or taken away without much difficulty, the move to a 32-processor system did not present a major technical challenge, Whitney said.

Two issues that had been hampering IBM's move to very large Xeon systems were the availability of processors and software that supported 64-bit applications, she said. "Our technology could scale to 32-way, but with only 32 bits there wasn’t the market demand," she said. "Now that we have the 64-bit capability, there is market demand and, yes, we do have customers who are waiting in line for it."

The major area of interest is among customers looking to run enterprise resource planning applications on very large Windows systems, Whitney said. She declined to provide specific details of the new system.

On another note, she did, however, hint that IBM may soon begin selling its first blade system based on the Opteron.

According to analysts, AMD is approximately six months ahead of Intel in the race to bring dual-core processors to the x86 market. These processors, which will have two processor "cores" on a single microchip, are designed to use less power and deliver higher performance than their single-core equivalents.

"There are clearly customers who have asked for AMD blades," Whitney said. "AMD has their own product road map for dual-core. That that might be a good time to bring a new product to market." AMD's first dual-core server processors are expected in the second half of 2005.

HP has announced plans to ship its first Opteron blade systems in the first half of 2005, and this may be putting some pressure on IBM to follow suit, said Nathan Brookwood an analyst with Insight64. "An Opteron blade from IBM would make a lot of sense, primarily because all of these blade suppliers are trying to get their blade design to become an industry standard, so the other guys will have to copy them," he said.

Because the Opteron was designed with dual-core capabilities in mind, AMD's design stands a good chance of outperforming the Intel alternative, Brookwood added.