Hewlett-Packard launched a server based on Intel's new Tigerton quad-core Xeon processor Thursday, battling IBM for customers who run data-intensive business applications like enterprise resource planning and virtualization software.

HP announced the rack-based ProLiant DL580 G5 and the blade-shaped ProLiant BL680c G5, each using four of Intel's Xeon 7300-series chips.

Compared to HP's current ProLiant servers with dual-core versions of the Xeon or AMD's Opteron chips, both new servers are designed to better support virtualization, allowing users to handle their applications with a smaller number of servers than they need today, the company said.

The announcement comes less than a week before AMD is expected to launch its own quad-core server chip, called Barcelona. HP, Sun and other vendors are expected to use that processor in a range of new platforms for similar markets.

In the meantime, Intel is enjoying increased popularity for its Tigerton chip. IBM also chose the Xeon 7300 chip to upgrade its server lineup, combining the processor with its own X4 chipset instead of Intel's Clarksboro chipset. IBM announced the System x3950 M2 server on Wednesday, also touting its virtualization abilities.

IBM designed the server for fast-growing businesses so it can easily scale up for larger deployments, such as data centers and ERP or CRM applications from providers like SAP and Oracle, said Jay Bretzmann, manager of product marketing for IBM. Compared to systems based on its X3 chipset, IBM will add memory and an internal USB interface for loading embedded virtualization software.

"As cores started multiplying, the need for memory started growing, particularly in the virtualization space. So we offered a low entry price point and head room to grow," Bretzmann said. Together, those improvements will allow users to get greater utilization out of their servers instead of having the computers sit idle while waiting for new jobs, he said.

"There are so many applications that really scale. Databases are the flagship; if you write a database that doesn't scale well, you're not going to be in business for long. But virtualization allows you to load multiple OSes and achieve the flexibility and utilization that are key for quad-core technology," he said.

IBM intends to keep its X4 chipset in the market through 2009, then offer a fifth-generation version by 2010, he said. IBM plans to launch the System x3950 M2 server at high volume in the fourth quarter.

HP is selling the DL580 for $9,219 and the BL680c for $9,669. IBM will announce pricing for the System x3950 M2 when it is shipped, in the fourth quarter.