IBM is to launch a range of blade servers based not on Intel's latest range of dual-core Xeons, aka Paxville, but on the next generation, codenamed Dempsey.

IBM has revamped both its chassis and blades while retaining backwards compatibility with existing BladeCenter chassis. The new system does not replace but complement today's products, according to IBM's blade server VP Doug Balog. Both the new servers and Intel's chip are due near the start of next year.

There are two main reasons why IBM would have chosen to go with the newer processor. The first is that independent benchtests suggest that Paxville runs very hot, chewing up 200W per CPU. Given that most run in dual-CPU configurations, some argue that this is close to the heat limit that IBM's blade server chassis design is capable of dispersing.

The second is that Intel has admitted Paxville is a stop-gap until Dempsey arrives.

Intel said that Paxville DP is "targeted at early adopters and evaluators". The next generation of dual-core server processors, codenamed Dempsey, together with a chipset codenamed Blackford, will constitute the platform codenamed Bensley. This uses 65nm technology compared to Paxville's 90nm, and includes improved memory-addressing technology, plus faster processor and bus speeds. It will be capable of working of quad-CPU servers, as well as being produced in a range of configurations.

In other words, Paxville is a short-term expedient to get a product to market so that Intel can meet the competition in the form of AMD's Opterons.

IBM's biggest competitor in the blade server market is HP, which with 34 per cent of the market, sits second to IBM's top spot of 42 per cent, according to Gartner. Sun dropped out of blades last year, although it said it plans to re-enter the market next year, while Dell's market share is small.

Both IBM and HP argue about the various merits and demerits of each others' products, citing issues such as server density and I/O support in the form of Fibre Channel. Power management also raises hackles, with HP reportedly claiming that IBM is to launch a system that fixes its cooling problems, a charge IBM rebutted.

What does it all mean for the industry? HP will continue to batter away at IBM, while Dell is likely to hoover up sales at the low end, although this area does not play to its strengths. Sun's re-entry with Opteron-based systems next year may muddy the waters.

However, IBM's portfolio remains the broadest, with Unix, Power and x86-based systems on sale. And if you look at the blade server business not as a means of selling individual pieces but a way of incrementally growing the data centre, IBM has the longest track record by far. And when you throw in virtualisation technologies, a series of blade server-packed racks become just a mainframe by another name.

IBM knows how to sell those.