IBM, Hewlett-Packard and Dell said their new low-end and midrange servers will be their fastest to date, dwarfing earlier products that ran on Intel-based chips. The servers will include Intel's latest Xeon 5500 quad-core series chips, which boosts overall server performance while drawing much less power.

"This is the largest increase in performance in the history of Xeon product line," said Kirk Skaugen, vice president and general manager, server platforms group at Intel.

HP and Dell said the chips double server performance while consuming 50 percent less power than their predecessors. Nehalem's microarchitecture design improves data throughput by cutting bottlenecks that plagued older chips.

The new servers reflect a trend of cutting data-center costs while delivering performance gains via faster chips and virtualization, said Charles King, principal analyst at Pund-IT.

"These issues line up pretty well with enterprise customers' overriding concerns about the fragile economy and needing to quantify the economic value of the IT products they plan to buy," he said.