The new p650 will be available next month with IBM's latest Power4 processors and all of the freshest software features that have been added into its AIX operating system.
With its best technology built into a system that starts at less than $30,000 (£18,860), IBM is ready to heat up the competition against midrange leader Sun, said Karl Freund, vice-president of pSeries server product management at IBM.
"Some of our competitors have done well by providing a good enough Unix server," Freund said. "We think this is the end of good enough servers."
IBM admitted that Sun had enjoyed "great success" by selling a line of low-cost midrange servers that do not have all the features of some other more expensive midrange servers. With this in mind, IBM decided to roll out the p650 at a price similar to servers from Sun but with some of the software tools its rival lacks.
The p650 will ship as an 8U (14-inch) high rack-mount server equipped with Power4+ processors. The Power4+ chips are the first Power4 chips from IBM built with a 0.13-micron fabrication process, which has helped IBM lower the power consumption and boost the performance of the chips. The chips will be available at 1.2GHz and 1.45GHz.
Like its higher end p690 server, IBM's new system will also support dynamic partitions that can run either AIX or Linux. This allows customers to run a number of applications on the same server, providing an option for server consolidation.
Freund claims that dynamic partitions - which make it possible to adjust processor power and memory resources between partitions - are an example of IBM's ability to provide a feature that Sun cannot match on this class of server.
Sun was one of the first Unix vendors to roll out dynamic partitions but only provides the technology on its more expensive Sun Fire midrange server line.
Sun contends that it has built two midrange Unix server lines for a reason. Its Sun Fire servers cater to those users that need cutting-edge technology but also want investment protection.
The Sun Fire servers allow users to rip out old processors and replace them with the latest, fastest chips Sun has to offer, said Pertti Manner, director of product marketing at Sun.
Users can also upgrade many of the components in Sun's higher end servers without shutting the system down and use processors that run at different speeds in their systems.
"This is an accomplishment you will not see from other vendors any time soon," Manner said.
IBM will sell the p650 with two, four and eight processors. A system with two 1.2GHz chips, 4Gbytes of memory and two 148Gbyte discs will start at $31,495. A larger p650 with eight 1.45GHz processors, 16Gbytes of memory and two 148Gbyte discs will start at $129,995.