ARMONK, N.Y. - IBM is beefing up capacity and adding advanced network features to its blade server  family, which the computer giant envisions could change the way companies assemble, provision and manage their data center resources.

On tap this year from IBM is an embedded Layer 4/Layer 7 LAN switch module; four-way blades based on Intel processors and IBM's own Power technology; and faster Intel chips for IBM's existing two-way blade products.

Blade servers pack more computing power into smaller containers than their traditional rack-mounted server brethren, letting companies save precious data center space. They share resources such as power supplies and cooling fans, and consolidate server cabling requirements for components such as a mouse, keyboard and printer.

Blade servers also enable multiserver management capabilities, which is something customers have sought for years, says David Freund, an analyst at Illuminata.

RLX Technologies and Egenera  were the first to market blade servers, followed by the major server players HP, Dell, IBM and Sun.

IBM, which began shipping blade servers in December, expects 2003 will be the year of the blade server, says Jeff Benck, director of IBM's eServer line. Already IBM has sold 5,000 blades, Benck says. According to The Yankee Group, the worldwide market for blade servers will explode from $95 million in 2002 to $3.78 billion by 2006.

IBM's current eServer BladeCenter chassis can accommodate up to 14 two-way Intel Xeon processor-based blades in a 7U-high enclosure and features an integrated Ethernet LAN switch. The chassis also includes a 2G bit/sec Fibre Channel switch and offers optional Fibre Channel connections to external storage-area networks (SAN). The chassis is designed to accommodate future InfiniBand  connections, IBM says.

Big Blue planned ahead when designing its chassis, Freund says. "IBM overengineered BladeCenter and gave it incredibly beefy power supplies and airflow characteristics that were just massive overkill for the servers they were first shipping. But what they had in mind was to come out with even more powerful things," Freund says.

Later this year, IBM plans to unveil a third-party-built Layer 4/ Layer 7 switch module. IBM has been working with switch vendors such as Nortel and Cisco to create a module with more advanced network capabilities than those in its current LAN switch module, which is a basic Layer 2 switch for handling connectivity of the 14-server chassis, Benck says.