Later this year, Compaq Computer will jump into the nascent market for tiny servers that use less power and take up less space than current products. The computing giant plans to release "hyper-dense" servers sometime this year, Mary McDowell, general manager of Compaq's Industry Standard Server Group, said Monday at the Banc of America Securities Conference in San Francisco. These servers will be smaller than Compaq's current dense servers, which measure 1.75 inches thick. Additionally, these new computers will cut down on "cable density", the tangle of wires that stick out of the back. "We've been on a Calista Flockhart sort of trend where the servers get skinnier and skinnier," McDowell said, referring to the "Ally McBeal" star. When it comes to servers, size matters. In the recent past, large corporations would largely depend on a few bulky servers containing a multitude of processors to run their computing operations. Now, ASPs (application service providers) and e-commerce companies are installing hundreds of single- and dual-processor servers to run their businesses. Compaq's line of dense DL ProLiant servers, for instance, went from 20 percent of the company's server product mix to 40 percent in 2000, McDowell pointed out. While this makes it easier to add or subtract overall computing power, the method of "scaling out" back-end operations has created a number of logistical problems. ASPs have to lease more real estate to house their multiple server racks, while the energy required to run them has raised utility bills. Heat is also a problem. ASPs are forced to install complex cooling systems that would be more at home in a meat-packing plant. McDowell would not provide many technical details or comment on when Compaq plans to come out with its hyper-dense servers. However, she did state that the new servers would come out of her group, which focuses on Intel-based servers primarily running Windows or Linux. A number of start-ups are also working on similar server designs based on Crusoe processors from Transmeta. RLX Technologies, for instance, plans to come out with a Transmeta server in the first half of this year that will use far fewer cables than standard servers. RLX's "Razor" server weighs much less than current servers. The company has Compaq connections. Gary Stimac, a Compaq founder and the executive largely credited with creating the company's server strategy, became RLX's chief executive in December. Other RLX employees include Mike Perez, who at one time was McDowell's boss. He will serve as vice president of technology. The coming year should be fairly active for Compaq's server division, McDowell added. The company expects to sell 1.3 million to 1.4 million Intel-based servers, up from 1m in 2000. Compaq also managed to sell $1bn (£680m) worth of eight-processor servers, a product category that until recently seemed stuck in neutral. In the first half, Compaq will come out with the first servers containing "Foster", a version of the Pentium 4 for servers and workstations. Compaq will also make its own chipset, a set of companion chips for the processor, for its Foster servers. Intel is not making a Foster chipset, McDowell said. Several sources, however, have said ServerWorks, which was recently bought by Broadcom, is making a Foster chipset. This year the market will also see the first commercially available versions of servers containing Itanium, the long-delayed 64-bit chip from Intel. "Compaq is the only vendor to develop our own Itanium-based server," she said. Most other computer makers, sources have said, are using a design engineered by Intel. Itanium was originally due in the middle of 1999. Complications in the design process, however, pushed back the release. Prototype servers started to go to corporate customers in the fall of 2000. While she wouldn't commit to a release date, she said sales would be limited. "We don't anticipate a significant volume of Itanium servers this year," she said. In 2002, Compaq will release a server containing 32 "McKinley" processors, she said. McKinley, due in limited samples at the end of this year, is the second version of Intel's Itanium processor. For complete business coverage, see ZDNet UK's Enterprise Channel. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the Chip Central forum Let the editors know what you think in the Mailroom. And read other letters.