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. Last Updated: 07/27/2016

IBM, Intel Join to Develop New Server

SAN FRANCISCO -- International Business Machines Corp. and Intel Corp. said Tuesday they will collaborate on "blade" computer servers that fit onto cards and stand like books on a shelf, linking the world's biggest computer maker and chipmaker in the nascent market.

The two companies each plan to contribute research and development spending and engineers to jointly design and develop blade servers, which IBM and Intel both think will make deep inroads into corporate networks.

Blade servers have been touted as replacements for the racks of machines and tangles of cable now standard for many corporations. The systems could also be cheaper to run and manage than current servers.

While Dell Computer Corp. and Hewlett-Packard Co. have already announced their own blade servers, Intel and IBM said that they were designed more for use at the "edge" of computer networks, serving up web pages and running e-mail, for example.

However, IBM and Intel argue that blade servers are on the cusp of making a big splash deeper inside computer networks, where they could handle tasks such as gluing together disparate computer servers, as well as running business management software programs from firms such as Siebel Systems Inc., SAP AG and others.

IBM and Intel declined to discuss specific financial and staffing details of the collaboration, which the two said would last for at least two years. IBM said it expects to introduce blade servers with Intel's latest Xeon server chips later this month.

Intel would use knowledge from the collaboration in its "building blocks" server products that it sells to computer makers. Intel, which has an in-house business of selling pre-built motherboards and chipsets, said to expect such products sometime in the fourth quarter.

"The issue is managing this whole bunch of very heterogeneous computers of various ages and figuring out how best to maximize what they do," said Tim Dougherty, director of blade server strategy for Armonk, New York-based IBM. "This is where blade servers really make sense."

IBM had earlier collaborated with blade server-computer start-up RLX Technologies Inc., which is based in Houston. That contractual relationship ended in April and the two companies decided not to extend it, Dougherty said.

"This allows Intel and IBM to have a broader range of products and to get into the market much more quickly," said Phil Brace, director of marketing for Intel's enterprise products group, which operates with its server group.

Research firm International Data Corp. has forecast that the market for blade servers in 2002 will be $133 million, rising to $3.7 billion by 2006, as the number of blade servers grows in the middle tier of corporate networks.