The company will make the p655 server a central part of its hardware strategy targeting the high-performance computing market.
Customers will be able to link both four-processor and eight-processor models of the p655 to form a 128-processor system that fits in a single rack, said Peter Ungaro, vice-president of high-performance computing at IBM.
Armed with IBM's Power4 processor, the p655 will challenge similar systems built with chips from Sun, Hewlett-Packard and Intel.
"This is targeted at medium-to-large customers whose workloads are best managed with clusters," said Brad Day, vice-president at Giga Information Group. "That could be high-performance computing or business intelligence types of workloads."
The p655 uses much of the same technology found in IBM's high-end p690 server, including 1.1GHz and 1.3GHz Power4 chips and the latest version of the AIX operating system. Unlike the much larger p690, however, users can link numerous p655s together via IBM's SP Switch interconnect to form a cluster or group of servers that act as one system.
These types of server clusters are often used to handle compute intensive jobs of both researchers and private companies. They handle tasks such as protein modelling or automobile design.
IBM is expected to release another version of the p655 next year, which uses Power4+ chips that run at 1.7GHz.
IBM is also selling server clusters based on Intel's Itanium 2 and Xeon processors but claims the Power4-based systems are best suited to the most demanding types of workloads.
"If our customers need the most performance they can get, it's very simple," Ungaro said. "You just go to Power4."
IBM will offer several software packages with the cluster, including its Cluster Systems Management (CSM) management suite and General Parallel File System (GPFS). Oracle's 9i Real Application Clusters (RAC) software is also likely to appear for the new server in the near future.
A four-processor p655 with 1.3GHz chips and 4Gbytes of memory will start at $73,485 (£46,600), Ungaro said.