Why: Its technology can reduce the cost of computing in data centers.

Key innovation: Runs servers with cell-phone chips rather than processors built on industry-­standard designs, which are more power-hungry.

Technology:

Calxeda is using low-power ARM processors developed for mobile phones to run servers, which could make data centers much more energy-efficient. Although individually the chips do not perform as well as those used in today's servers, they can be linked together in a network of thousands of nodes to do the same work using less power.

Market:

Energy consumption is a major cost of operating the data centers that have sprung up to meet the processing demands created by the increasing popularity of cloud computing and social networking.

Strategy:

Calxeda has received funding from ARM, whose basic architecture was used to develop the company's "server-on-chip" technology. The company will begin testing its server platform with major vendors later this year.

Challenges and Next Steps:

The server industry has spent decades developing specialized software for the Intel and AMD chips—software that Calxeda's ARM-based chips won't be able to run. This means the open-source community must step in to develop new programs.