IBM has unveiled a range of low-priced servers for the SME market.
Its new line starts with the xSeries 100, which has a list price of £350 when equipped with an Intel Celeron processor.
The x100 can run higher performance chips up to the Intel dual-core Pentium 4, and supports Microsoft's Windows Small Business Server 2003 and Windows Server 2003.
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The machine also supports Linux distributions from Red Hat and Novell. The range also includes higher spec xSeries 206m and xSeries 306m.
The machines will be sold under IBM's Express brand aimed at small businesses. Sun launched its own range of entry-level servers last month.