This makes a lot of sense especially for things like a GPS server or directional internet appliance for a large network. This would even be great for schools which have large networks. This would be attractive for any location with a lot of users, and especially make sense when using thin clients or something of the like (HTPC's etc) which would even add to the energy efficiency! I think this would also make sense for things like 4G where you have a lot of users using data on smart phones as the applications generally used are less demanding.
This reminds me of that "personal super computer" design from a few years ago. If I remember right, it was 128 VIA Nano chips, each with up to 2GB (256GB total) of ram in something that looked very much like one of those mini fridges. Actually, Dell makes a less powerful rack version of this called the XS11-VX8.
VIA is currently offering a 64bit server version of their Nano processor which would be perfectly suited for this type of design. Actually, unless all those Atom chips are dual core, it would be faster (Nano is a faster chip per clock).
No matter who makes it or who's tech they use, I think this is the right path to take for web servers and other low stress/high thread systems.
Smooth Creations LANShark "Blue Flame" + ASUS G73JH-A2 + ASUS EeePC S101H
"I frag therefore I am!"
Google has a 'stacked and packed' approach to their servers too. They're built into metal storage units in clusters. 1600 per box.
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