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IBM switches on Power5 servers

Big Blue unveils its new high-powered server line, which features the company's latest 64-bit processor and is seen as a possible threat to Intel, Sun and HP.

IBM officially introduced its heavily expected Power5 server line on Monday.

As previously reported, the servers are the first generation of boxes using IBM's new Power5 processor, a 64-bit chip meant to compete with high-end technology from Intel, Sun Microsystems and Hewlett-Packard. The introduction of the servers is believed to be the last step in IBM's convergence of its two server product lines, the iSeries and pSeries, which use identical hardware and are differentiated only by their operating system and other software.

The company said the Power5 servers will officially go on sale June 11 and will be available in two eServer models, the i5 520, with one or two processors, and the i5 570, with one to four processors.

An entry-level version of the i5 520 model will cost $9,995. Meanwhile, an i5 570 starts at $85,200.

The servers, which run on the latest version of IBM's OS/400 operating system known as i5/OS, are aimed at small and midsize businesses. The servers are designed to appeal to customers who want systems with a good deal of software built in, including IBM's WebSphere and DB2 and third-party packages from companies such as SAP.

The introduction of the two models marks the first step in IBM's "Squadron" server strategy. Later models are expected to feature as many as 64 processors, with each processor able to execute simultaneously two instruction sequences. During the third quarter, IBM is expected to introduce a midrange server, the i5 550, with up to four processors. Also at that time, the stacking of four-processor modules used in the i5 570 will move that system to a 16-processor size.

While the new servers are expected to give IBM's rivals a run for their money in the midmarket arena, the company's closest competitors are betting on new technology of their own. Sun is hoping to steal back market share from IBM with new servers based on its UltraSparc IV and its Solaris version of Unix. HP is known to be working with Intel to use the Itanium processor for its servers, which can run Linux and Windows as well as the HP-UX version of Unix.

CNET's Stephen Shankland contributed to this report.