You've probably heard the joke about the electronics company that was so successful it moved into smaller premises.

But it's true: electronic components, especially those used in computers, continue to get smaller, enabling vendors like Dell to put ever more processing power, storage and other functionality into tiny little boxes. Boxes like the one used to house the new PowerEdge 1950, a rack mount server which packs a surprisingly heavy punch compared to others of its size.

The term 'small', of course, is relative, with the PE1950 in fact a 1U rack mount device that requires a full length cabinet to accommodate it. Inside, however, there's an awful lot more going on than you might expect.

To start with the motherboard can be fitted with two 64-bit Intel Xeon processors, and not ordinary Xeons either but the latest dual-core (Woodcrest) implementations. These are faster and more energy efficient than previous dual-cores and effectively turn the 1U PE1950 into a super-fast four-way server.

Just how fast depends on what you're doing, but Dell claims performance gains of up to 152 percent with the new processors for 25 percent less energy. Plus with eight memory sockets the PE1950 can be equipped with up to 32GB of DDR2 fully buffered RAM with optional memory sparing and mirroring, if required.

There are then lots of choices in terms of storage, with the ability to specify either 3.5-inch internal disks or the latest 2.5-inch drives like those employed inside notebook PCs.

Go for 3.5-inch and there's space for just two, either SATA (Serial ATA) rotating at 7,200 rpm, or SAS (Serial Attached SCSI) disks at either 10,000 or 15,000 rpm. The 3.5-inch SATA disks can hold up to 500GB each while the biggest of the SAS drives can take 300GB.

Opt for 2.5-inch and it's SAS only, but you can cram four 10,000 rpm drives into the case. Unfortunately the 2.5-inch drives max out at 73GB per disk, and the controller required takes the place of the RAID adapter more usually provided as standard, although a plug-in RAID adapter can be added.

Also integrated onto the motherboard are two Broadcom NetXtreme Gigabit Ethernet interfaces. These feature an on-board TCP offload engine (Toe) to take the strain off the processors when connecting to an iSCSI SAN, although you have to pay extra for the optional hardware key needed to enable this feature.

Further expansion is via plug-in adapters with yet more choice here depending on the riser cards specified: either two x8 lane PCI-Express slots or a pair of 64-bit 133MHz PCI-X connectors.

Other features worth noting include an integrated ATI video controller, built-in server monitoring facilities and four USB 2.0 connectors, two at the front and two at the back. An optional optical drive can also be specified and there's even space for a second, redundant power supply.

On the software front Dell offers a factory install service for all editions of Windows Server 2003, plus Red Hat Enterprise Linux 4 and SUSE Linux Enterprise Server 9, all of which can take full advantage of what the hardware has to offer.

Of course, when you start to add in the optional extras you'll end up paying a lot more than the cost of the base server quoted here. Additional processors, for example, can cost up to £700 each depending on the specification and memory can quickly add thousands to what you have to pay. But as with all PowerEdge servers the prices are competitive, support is good, and you get an awful lot of server for your money.

And did I say it's in a (relatively) small box?

An impressive 2-way server that features support for the latest Woodcrest dual-core Intel Xeon processors, DDR2 FB memory, Serial Attached SCSI storage and TCP offload NICs for maximum performance and capacity from a small form factor. It's ideal as a SAN controller and for compute-intensive applications, but equally good as a general purpose file and print server.