IBM on Sunday announced a new computer server using its Power5 microprocessor tuned for the popular Linux operating system, as the No. 1 computer maker aims to broaden the adoption of Linux in broader corporate computing markets.

The OpenPower server, starting at $5,000 with one Power5 chip, can run either Novell Inc.'s (NOVL.O: Quote, Profile, Research) SuSe version of Linux or Red Hat Inc.'s (RHAT.O: Quote, Profile, Research) , IBM said.

The Armonk, New York-based company had already ported Linux to the previous generation of its Power chips. The new server is not only an attempt to broaden the adoption of Linux but is also a way for IBM to boost returns from its investment in the Power5 chip, analysts said.

The Power5 chip, like Advanced Micro Devices Inc.'s (AMD.N: Quote, Profile, Research) Opteron and Intel Corp.'s (INTC.O: Quote, Profile, Research) Itanium processors, are so-called 64-bit, meaning they crunch data 64 bits at a time compared with the 32-bit x86 processors made by Intel and AMD used in personal computers and low-end servers.

"IBM is trying to become the 64-bit Linux platform or at least become one of the choices in 64-bit Linux," said Dan Olds, an analyst at Gabriel Consulting. "This is also aimed squarely at Microsoft."

Linux is a small but gathering threat to Microsoft Corp.'s Windows operating system, Olds said, noting that servers using Linux have been embraced by the science and technical computing market and at the edges of company's computer networks to serve up Web pages and such.

"IBM has had success with Linux in the mainframe market, but that's not the mass market," said Gordon Haff, a senior analyst at market research firm Illuminata.

Brian Connors, vice president, Linux on Power for IBM, said that the Linux server market is about $4 billion a year and that the market for Linux servers costing $10,000 and less is about $1.6 billion this year.

"Linux is still in its infancy but growing very rapidly," Connors said.

IBM already sells Linux servers using x86 chips, as do IBM rivals Dell Inc. (DELL.O: Quote, Profile, Research) , Hewlett-Packard Co. (HPQ.N: Quote, Profile, Research) and Sun Microsystems Inc. (SUNW.O: Quote, Profile, Research) , in addition to servers using Power chips and its own version of the Unix operating system, AIX.

The OpenPower 720 server will be available Sept. 24 and can be powered by as many as four Power5 chips, IBM said. In the first half of next year, the company will start selling OpenPower servers using two Power5 processors.

From Reuters