The design uses Athlon and Phenom desktop CPUs from Advanced Micro Devices and allows for highly dense servers that can be priced under US$500 because they are based on commodity PC parts, said Saeed Atashie, director of server products at Rackable.

The servers use AMD's small form-factor MiniITX and MiniATX motherboards to cram as much processing power as possible into each system. They can house up to 264 compute nodes per cabinet and draw as little as 72 watts per node, using a new server design that Rackable calls .

The idea is to provide a simple, low-cost system that includes only the components needed to run busy Web applications, such as an e-commerce or social networking site, Atashie said. Most entry-level servers today start at $1,000 or more, though they include more powerful processors and other advanced features.

Rackable released four servers Wednesday based on the new design. They lack some of the management features found in more traditional servers, such as Remote KVM, and come with a maximum of 8GB of main memory, so they're not suitable for large database or enterprise resource planning applications.

But Rackable says their energy- and cost-efficiency make them highly suitable for cloud computing applications that scale well over a high number of server nodes. Based on internal tests it claims to offer a 51 percent improvement in price/performance running an Apache Web server benchmark compared with a more traditional rackmount server, though those figures have not been verified independently.