By Noel Randewich SAN JOSE California (Reuters) - Hewlett-Packard Co's vice president of server engineering expects new lower-power servers made with technology from ARM Holdings to make inroads in niche data centers over the next year in a market dominated by Intel Corp.
"Penetration is very low right now because we're starting from zero. But the take-up is pretty encouraging," Tom Bradicich said.
HP this week launched new servers made with chips designed by Applied Micro Circuits with intellectual property licensed from ARM, whose energy-efficient technology is ubiquitous in smartphones and tablets.
While so-called microservers have yet to be meaningfully adopted, proponents including HP say some data centers can be made more cost effective and energy efficient by using them instead of Intel's brawny server chips.
Bradicich told Reuters that HP's new 64-bit ARM-based servers are ideal for handling specialized data-center workloads like search and scientific analysis.
Sandia National Laboratories and the University of Utah plan to use HP's new servers for scientific analysis and high-performance computing, while PayPal plans to use another version of the servers.
Intel, which dominates the server market, stands to lose if server chips based on rival ARM's architecture catch on, even if only a few percentage points of market share.
With Advanced Micro Devices and other chipmakers working on their own ARM server chips, variety is a key factor for customers that have long depended on Intel, Bradicich said.
In response to the threat from ARM, Intel has launched its own line of "Atom" low-power server chips. HP offers servers made with Atom chips but they have so far not sold in significant numbers.
"We don't take any competition lightly, but we have a strong roadmap for the data center spanning a broad range of customer needs and requirements," said Intel spokesman Bill Calder.
(Reporting by Noel Randewich)