Armed with a new form factor and its clustering management software, Penguin Computing Inc. on Wednesday launched an aggressively priced Linux-based blade server targeted at the lower end of the market -- a market recently entered into by Dell Inc.

The company"s BladeRunner server will come packaged with its Scyld Beowulf clustering software and designed for users looking to implement either their first cluster or an entry-level clustered environment. The company will market the bundle as "a cluster in a box."

"With this system we are trying to be at the forefront of the market not only in terms of software but in terms of emerging form factors that can change the game. We think we have hit on something interesting here in terms of density and capabilities," said Enrico Pesatore, chairman and CEO of Penguin Computing.

With a new chassis design, BladeRunner can handle as many as 12 dual-processor blades on a 4U chassis. The product also has an integrated switch, which company officials said serves to reduce space and cabling. They claim that competitive products require a 7U chassis to generate the same level of processing power. With the new design a rack can support as many as 240 Intel Xeon LV processors, company officials said.

In addition to more chips, the new chassis design essentially allows for all the other hardware pieces necessary for clustering to be fit in, such as high-speed interconnects and gigabit-level Ethernet, which allows the server to live up to the "cluster in a box" billing.

Besides accommodating two 2.4GHz Xeon processors per blade, each blade can also handle as much as 4GB of memory. Users have the option of adding an expansion port in the front of the unit to which they can attach either a Fibre Channel or InfiniBand communications product, or another Ethernet NIC for each blade.

The blade server market gained even more momentum last month, in the view of some observers, when Dell decided to re-launch its blade server business with new systems. Those systems, to no one"s surprise, are aggressively priced and targeted at the low end of the market. Dell"s servers, however, will be bundled with Windows and Windows-based management software, compared with Penguin"s Linux-based focus.

In its annual Top 10 Predictions for the upcoming year, IDC executives last week forecasted that the blade server market "will heat up in 2005," with Dell"s re-entry adding more legitimacy to the market as well as forcing pricing down on not only blade servers but also the rest of the traditional server market.

Penguin officials said they expect pricing on their products to be "at or below that" of competing Dell blade servers.

"We have the utmost respect for Dell as a competitor, but Dell basically moves hardware. But I think we are offering more complete solutions that literally allow users to turn the system on and just go," Pesatore said. "If you were to call Dell looking for answers on a second-level support question, you might have a few surprises waiting for you. We can give an answer right away," he said.