Rackable Systems has launched a new range of servers based on some low-cost desktop components. The company has aimed the products at companies looking for a cheap way to run web applications.

The design uses AMD's Athlon and Phenom desktop CPUs and allows for highly dense servers that can be priced under $500 (£370) because they are based on commodity PC parts, said Saeed Atashie, director of server products at Rackable.

The servers use AMD's small form-factor MiniITX and MiniATX motherboards to cram as much processing power as possible into each system. They can house up to 264 compute nodes per cabinet and draw as little as 72 watts per node, using a new server design that Rackable calls MicroSlice.

The idea is to provide a simple, low-cost system that includes only the components needed to run busy web applications, such as an e-commerce or social networking site, Atashie said. Most entry-level servers today start at $1,000 or more, though they include more powerful processors and other advanced features.

Rackable has released four servers based on the new design. They lack some of the management features found in more traditional servers, such as Remote KVM, and come with a maximum of 8GB of main memory, so they're not suitable for large database or enterprise resource planning applications.

But Rackable said that their energy- and cost-efficiency would make them highly suitable for cloud computing applications that scale well over a high number of server nodes. Based on internal tests it claims to offer a 51 percent improvement in price/performance running an Apache web server benchmark compared with a more traditional rackmount server, though those figures have not been verified independently.

Future products will have more management features, Atashie said, and the company plans to announce MicroSlice servers later this quarter based on Intel CPUs.

Rackable is marketing the servers as "a hardware-based approach to virtualisation" that it calls "physicalisation."

"Instead of paying for third-party software to break larger machines into smaller chunks, or virtual machines, we take a larger machine and divide it into much smaller physical nodes that are independent and can each be dedicated to a particular application," Atashie said.

"The benefits we're seeking are more cost-effective scaling, because the individual nodes are more granular and can grow in lower-cost chunks, and a compelling improvement in price/performance and performance per watt."

Mark Peters, a server analyst with Enterprise Strategy Group, said the "physicalisation" marketing pitch might not be very helpful. "It's one of those cases where it's being dressed up as something fancy when in fact the basic idea is very simple," he said.

"I like what they are doing," he added. "They're taking small, standard building blocks and letting you create them into the type of system you want."

The biggest challenge for Rackable will be convincing companies to try out a brand new server architecture, Peters said.

Rackable builds the systems to order and doesn't publish list prices, but Atashie said the servers start at less than $500.

Two of the servers are 1U, half-depth rack servers, the other two use Rackable's CloudRack design, which does away with fans and the top of the server box to keep costs down and leave room for more disks and processors.

"We put in an internal switch to do a lot of the inter-node cabling, so there are only three cables coming out of each tray," Atashie said. "Otherwise you'd need a cable for each node and the amount of wiring would be unmanageable."