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New Thrust In Blade Development

IBM and Intel have signed a two-year deal to develop blade servers using Intel's Xeon chips. Blade servers, which house multiple boards on one chassis, promise to cut the power, cooling, and hardware costs of computing. The first products of the new partnership are expected to ship this month. Investment and staffing details were withheld.

Market research firm IDC forecasts the market for blade servers will rise to $3.7 billion in 2006, from $133 million this year.

David Freund, an analyst at research firm Illuminata, says IBM's deal with Intel will help the computer maker lower the price of the blade servers, which range from $3,000 to $5,000. Lower prices are "inevitable, and even desirable" for IBM, Freund says, because they keep development costs down while helping IBM move other blade products and services.

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