Intel’s touting its latest Nehalem EP-based quad-core processors as the biggest platform advancement in 10 years, aiming to provide organizations with enhanced virtualization and cloud computing capabilities.

Analysts say virtualization and cloud computing are major drivers for future server demand, and Gartner predicts virtualization will be the top technology initiative customers undertake this year.

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To that end, Intel’s also introduced the Nehalem EP platform, which includes the chip set that contains the new 82599 10 Gigabit Ethernet Controller. The new technology is geared specifically at virtualization environments and will greatly improve network performance, according to Intel.

The processors introduced Monday include 14 Xeon 5500 series chips, which are for two-socket servers; and three Xeon 3500 series CPUs for single-socket servers and workstations. Prices in quantities of 1,000 range from $188 to $1,600 each for the 5500 series, and $284 to $999 for the 3500 series.

For higher-end servers, Intel also said it has plans to introduce a six-core Nehalem processor and an eight-core design, called Nehalem EX, by the end of the year.

Intel claims a Xeon 5500-based server provides nine times the performance of a single-socket server running the previous-generation Xeon processor. The power boost means as many as 21 software servers can be consolidated from older systems into a single Nehalem EP-based server, reducing power consumption and space in a data center. Organizations that use the new products can expect to see a return on their investment within eight months.

Intel believes Nehalem EP, officially called the Xeon 3500 and 5500 series, will offer increased performance and address weaknesses that have allowed competitor Advanced Micro Devices (AMD) to gain market share and, in some ways, bypass Intel technologically.

By introducing an integrated memory controller (IMC) onto the processor, Intel has eliminated the front-side bus that hampered performance of Intel’s previous platform. AMD has used IMC technology in its Opteron processors since 2003, analysts say.

While Nehalem EP gives Intel a performance lead over AMD, the gain is only expected to last for six months or so, analysts say, as AMD is sure to catch up with its future products.

Along with the IMC, Intel includes hyper-threading technology along with what the company calls "turbo mode," or firmware that tailors multicore processors to the workload. The technology can ramp up individual cores when needed while shutting down others to reduce power consumption.

Dell, Hewlett-Packard and IBM already have more than 230 products in the works powered by the new Xeon processors, Intel says.