At Linux World 2006 in San Francisco, AMD flexed its muscle in the four and eight socket server market in the IBM and HP booths in addition to its own booth. Both HP and IBM were showing off their AMD Opteron blade products with 2 and 4 socket configurations. The 2 socket configurations used up 1 blade unit and the 4 socket configurations used up 2 blade units with up to 16 memory socket that supported up to 64 GBs of RAM. Sun Microsystems was in the AMD booth showing off an 8 socket configuration that supports 8 dual-core processors for a massive 16-core (AKA 16-way) server in a 4U chassis. When AMD goes to quad-core processors in mid-2007, the same 4U Sun Opteron server will effectively be a 32-way server.
While Intel has completely annihilated AMD in the 1 and 2 socket market which is by far the most popular on desktop and server configurations, Intel currently has no Core 2 based solution for their XEON MP 4 socket line of products which is currently still based on their old "Netburst" technology. Intel won't be releasing Core 2 based XEON MP products until some time in 2007 and the actual release date has not been set. The bright spot for Intel is that they will have quad-core processors by the end of this year while AMD won't be going to quad-core until the middle of 2007. This will allow 2 socket Intel servers to rival 4 socket AMD servers though it remains to be seen if Intel will be able to scale their 2 socket 8-core servers to performance levels above 4 socket 8-core AMD servers.
AMD will point out that the Intel quad-core processors being released this year are not true quad-core CPUs manufactured on a single die while AMD's quad-core processor being released mid-next year will be single die. But if the power consumption is roughly equal and you're getting four cores on a single CPU package that fits in to a single CPU socket, it won't really matter. If Intel is able to pull off relatively low power consumption (I heard 110 watt TDP range) along with great performance, they will move ahead in the 8-core server race. If the power consumption ends up being much higher than 120 watt TDP and the performance doesn't scale all that well because of the lack of on-chip memory controllers, then AMD will maintain the lead in the 8-core server race.
On the bright side for Intel, they have compensated for their front side bus technology in their 2 socket configuration by doubling their memory bandwidth to quad-channel 4 x 667 MHz FB (Fully Buffered) DDR2 memory. Since Intel already has 2.4 GHz dual-core processors running at 40 watts TDP, it's reasonable to guess that they will be able to build a quad-core CPU in the 110 watt TDP range. No one (outside of Intel engineering) really knows how this will pan out until we see some solid independent benchmarking results and power consumption measurements.
Cutting sockets while maintaining the same number of CPU cores is extremely valuable in the server market because it can cut your software licensing in half while maintaining the same performance. Microsoft SQL and IBM DB2 (on x86 platform) for example charge their licenses based on the number of CPU sockets and not based on the number of CPU cores. Quad-core computing can cut server hardware costs and software licensing in half but the software savings is far more significant because software often costs 2 to 10 times more than the hardware it's running on. While AMD is able to dominate 4 and 8 socket configurations for the next year, Intel might pull off a major victory by getting to quad-core first if they can execute well. Since cutting sockets is extremely desirable for cutting hardware and software costs, Intel may gain a huge advantage by getting to quad-core first.