The chips' improved energy consumption relative to performance gives users a reason to upgrade, said Dean McCarron, principal analyst at Mercury Research

"The idea of saving power is more pervasive in Nehalem. You're seeing a much more fine-grained level of power control across [switches] on the chip," McCarron said. The current Xserve servers run chips belonging to Intel's earlier Penryn family.

One of the major improvements involves Intel integrating the memory controller on the CPU, which helps processors communicate faster with memory. It removes the memory latency affecting earlier Intel processors, which should translate to better server performance.

Data-intensive applications like video processing frequently require processors to fetch information from memory, and Intel's earlier chips had to go through a bus called the front-side bus (FSB). After years of criticism, Intel removed the FSB and integrated the memory controller into the CPU with Nehalem chips.

Nehalem also offers a faster pipe for a CPU to communicate with other processors and system components. That helps servers execute more tasks in parallel and tackle larger workloads. The faster communication improvements are bundled under a technology Intel calls QuickPath InterConnect, or QPI.