Intel has officially launched its first Nehalem-based Xeon chips for servers and workstations, bringing increased performance and greater power efficiency in the biggest overhaul of the Xeon platform for years.

The first wave of the new chips consists of the Xeon 5500 series for dual-socket systems, and the Xeon 3500 targeting single-socket systems, collectively known as Nehalem EP (Efficient Performance).

Nehalem processors for desktops were launched last year under the Core i7 brand, while the Nehalem EX for servers with four or more sockets is expected later this year.

Intel said that the increased performance of the new platform will enable firms to replace up to nine older servers with a single Nehalem-based system, making a strong case for purchasing new kit despite the current economic climate.

"We reckon customers can get a 9-to-1 consolidation ratio by replacing existing servers with Nehalem. There will be a capital expenditure hit to swallow, but after that there's a lot of justification for why customers should look at this now," said Intel's enterprise marketing manager Alan Priestley.

Gordon Haff, principal IT advisor at analyst firm Illuminata, said that it is easy for vendors to make impressive comparisons with older generations of kit, but gave a cautious welcome to the announcement.

"Nehalem is a very nice upgrade for Intel in the two-socket space. It has great performance, and great performance per watt. You can see this in the amount of activity the system vendors are planning around this launch," he said.

Dell announced Nehalem products last week as part of its new enterprise line-up, while Cisco's Unified Computing System is based on Nehalem servers. Lenovo unveiled new Nehalem workstations last week, while HP and Sun are also expected to introduce Nehalam systems shortly.

In addition to offering higher performance, Nehalem systems will consume up to 20 per cent less energy which, combined with the need for fewer servers, leads to reduced operating expenditure, Intel said.

"Customers should see payback on any refresh within eight months," said Priestley.