After some delays, HP has now launched based on Itanium 2, and Oracle is finally for Sun's hardware business. That puts them in a better position competitively. Still, Bozman said, "IBM is in a very strong position."

Even IBM doesn't know exactly how customers will respond to the 256-core system. 'This is the first time we've gone from 64 cores to 256, so it will be interesting to see the demand," Sibley said. A handful of customers have applications that are large enough to run across a entire system, "but we do see hundreds of partitions being the norm," he said.

The company offers a "capacity on demand" payment model, so customers can order a fully loaded system and pay for the processors as they are activated.

IBM didn't provide a price for the 795, except to say it starts at $500,000. Sibley said customers end up getting about twice the number of processor cores on a Power7 system as they would for a Power 6 system of the same price.

For low-end servers, IBM disables some of the Power7 cores to offer four- and six-core chips. Those processors are offered in the Power 710, 720, 730 and 740 systems, which were also launched Tuesday in one- and two-socket rackmount and tower formats. The servers start from $6,385, Sibley said.