Hewlett-Packard (NYSE: HPQ) may be gearing up to sell servers based on the ARM processor, according a new report from Bloomberg. According to two people familiar with the matter, HP is said to be currently working with a company called Calxeda to implement microprocessors more commonly used in smartphones today into cheaper servers with the promise of substantially lower power consumption.

The market for server processors has been pegged by IDC at $9 billion this year, with Intel (NASDAQ: INTC) accounting for about 90 percent of the processors used in servers. UK-based ARM is clearly gunning for a slice of the pie, even as it continues to lead the tablet and smartphone space with its power-efficient chips. And despite being Intel's customer, HP would get leverage over competitors when selling into data centers where power consumption is a key factor.

ARM Vice President Michael Inglis had said that ARM-based chips will first appear in machines used to support basic access to websites. More powerful machines will eventually appear though, and "as we move forward into 2014 you'll begin to see systems emerging," said Inglis. 

The key challenge in creating an ARM-based server is not hardware-related, but pertains to operating system support. Inglis appears to be alluding to the creation of specialized appliances based on the ARM processor as an opening move, before moving onto larger systems once support for ARM from server operating systems and other datacenter software materializes or improves.

For more on this story:
- check out this article at Bloomberg
- check out this article at CRN
- check out this article at eWeek

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