According to sources, the Armonk, N.Y., company plans to take on Sun Microsystems Inc. and Hewlett-Packard Co. with Linux servers priced at the "enterprise entry level," which IBM defines as less than $25,000. Although the current share of Linux servers running on Power processors is marginal, IBM reportedly projects nearly a 20-fold increase—to almost half-a-million units—by 2006.

In pursuit of this goal, IBM is poised to introduce two tiers of products: a low-end blade server and an "ultra -low-end" (ULE) rack/deskside model. The initial blade server will be based on the Power PC 970 processor (known internally as the GPUL), which made its debut this month in Apple Computer Inc.'s Power Mac G5 line. A mid-2004 replacement for the blade as well as the ULE products will run on an updated version of that chip, known as the GPUL2.

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