Breaking from its long-standing reliance on computer chips from Intel (INTC) and AMD, Hewlett-Packard (HPQ) on Tuesday unveiled a new line of servers using energy-efficient processors based on designs from an upstart company better known for technology used in mobile phones.

The new processors take up less space and consume only a tenth of the electricity needed to power conventional servers, according to the Texas startup Calxeda, which developed the new chips from designs it licensed from the British firm ARM Holdings.

That could provide huge savings on energy bills for companies that are rapidly expanding their data centers, especially Internet server farms that provide the back-end computing for a growing army of workers and consumers who use smartphones and other mobile devices to access information online, HP executive Paul Santeler said Tuesday.

Traditional server farms use large amounts of power to run the computers and the cooling systems needed to keep them from overheating. HP — which competes with IBM, Dell and other tech giants in the $100 billion market for data center hardware — is betting its new servers will appeal to customers

who want to lower their operating costs.

While showing off the new machines at HP’s Palo Alto headquarters, Santeler said they are the first of several HP models that will use power-sipping technology initially developed to let mobile phones and other gadgets run all day on a single battery charge.

HP also designed the servers with hardware and software that take advantage of the processors’ compact size and enable them to share other system components such as memory, switching gear and cooling equipment. That further reduces their space and power requirements.

It’s unclear how popular the new servers will be, since lower-power chips have not generally been used for extremely complex, high-speed computing in the past. HP said the first machines, code-named Redstone, will be available for a limited number of customers next year.

Initial users may include companies that operate social media sites and other Web-based services, which carry out a limited number of computing tasks on a huge scale, Santeler said. At least for now, he said, “it’s not for every type of application.”

But Forrester analyst Richard Fichera said he expects the technology will evolve and be adopted for wider uses, first in large commercial data centers and later in smaller computer operations.

That could be troubling for Intel and AMD, which have been HP’s biggest chip suppliers. Intel makes the processors used in the majority of servers sold by HP and other computer-makers today.

Chips that use ARM designs have already emerged as a threat to Intel in another major segment of its business, as smartphones and tablet computers that use ARM-based processors cut into sales of personal computers, which also mostly run on Intel or AMD chips. Intel has developed its own line of energy-efficient chips for mobile computing gadgets, but it has lagged in that market.

HP executives were careful to say they don’t plan to stop making traditional machines, often referred to as “x86″ servers because of the processor designs they use. “This is in addition to, not a replacement,” Santeler said.

HP also has plans to build new servers around Intel’s power-efficient Atom chip, he added. An Intel spokesman said his company has been working on so-called microserver designs for several years and noted that startup SeaMicro is already making servers that use Atom processors.

Intel sees the market as fairly small for now, added spokesman Radoslaw Walczyk, but he said: “People are always evaluating different approaches.”

Unlike Intel, ARM does not make chips but licenses its designs to several manufacturers. Calxeda is a startup funded in part by ARM Holdings and other investors.

Source:http://www.siliconvalley.com/news/ci_19240331