The newly crowned server king hopes to continue its success over IBM and Dell with a new two-in-one server aimed for the cloud.

After seeing the growing demand for cloud computing, Hewlett-Packard has thrown its hat into the ring with the announcement of the company's first two-in-one blade server, touting power reduction by pairing two servers in each blade.

HP's new ProLiant BL2x220c G5 enclosure features higher server densities the company hopes will make it ideal for cloud computing, Web 2.0, and high-performance computing technologies. The new HP server can scale up to 128 servers, 1,024 CPU cores, and 2 TB of RAM in a 10U blade chassis using four enclosures.

The new ProLiant is able to use two Intel Xeon 5200 series dual core chips, or two Intel Xeon 5400 quad core chips, depending on a customer's budget. Starting price is set at $6,349, but it too can scale up: well past the $20,000 point.

HP's new line will directly compete with the IBM iDataPlex line of servers, which launched last month specifically for the Web 2.0 and cloud markets. Using Intel Xeon processors, the iDataPlex line features 1U or 2U servers with up to 84 servers per rack.

With more data anticipated to be stored in "the cloud" -- that ubiquitous storage space in the Internet being parceled out to customers gigabyte-at-a-time -- someone has to be the cloud. The demand for higher speed plus greater storage on the server side is the catalyst behind HP's new "Scalable Computing and Infrastructure" business division, with scale-out hardware its main focus. Even though smaller companies have utilized blade servers in the past, the Scalable Computing and Infrastructure division will focus mainly on companies that have hundreds or thousands of servers in their farms.

HP is widely perceived as holding its lead over Dell as the global leader in PC sales in Q1 2008, and is now focused on keeping its top spot of server king after recently beating out IBM. Gartner industry numbers indicate HP now has 29.6% of the server market while IBM has a very close 28.9%, and Dell may be on the comeback trail with 12.1%

The ProLiant BL2x200c G5 will be the first of multiple new servers designed specifically for Web 2.0 and cloud computing features, although HP has not announced launch plans for similar server products.