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IBM's p670 Unix server is designed to deliver many of the high-end features introduced with the company's enterprise p690 - or Regatta - server last year.
The p690 targeted Sun's high-end Unix server domination, and IBM executives are keen to drive the p670 into Sun's mid-range Unix server market.
"I think [Sun] has a huge amount to worry about with this server," said Val Rahmani, the general manager of IBM's eServer pSeries division.
"The p670 is going to be 40% less expensive than Sun's [Sun Fire] 4800 or 6800, and have better performance," she said.
Similar to the p690, the p670 is the first IBM server in its class to host the company's Power4 processors. The Power4 chips are IBM's "server on a chip" processors that run two 1.1GHz chips on the same silicon.
With as many as four PCI slots, the p670 server will be available in four-, eight-, and 16-way processor configurations.
In addition to its price tag, IBM is touting the p670's partitioning capabilities. Partitioning allows users to run multiple, isolated applications or operating systems within the same server, maximising the systems horsepower.
With the p670, customers can create as many as 16 internal server partitions using the same partitioning capabilities found on the high-end p690, such as the ability to create single-processor partitions as small as 1GB, said Rahmani.
"The ability to have these very cost-effective minimum partitions, we think, is going to be very critical in the mid-range space," said Rahmani.
A four-way p670 with 4GB of memory and a 36GB hard drive starts at approximately £122,000 in the US, according to IBM.
According to analysts' group IDC, IBM has almost 21% of the Unix server market, while Sun has almost 29% share.