Dell supplies servers for OnLive’s games-on-demand service

Dell is announcing today it will be the server partner for OnLive, the games-on-demand service that debuts on Thursday after eight years of development.

OnLive is launching a server-based game service, where users connect via broadband to a data center that stores and processes the games. The data center passes data back and forth to the user in real time so that the user doesn’t have to have a fancy computer to play high-end games.

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This takes a lot of good technology on the server side. Steve Perlman, chief executive of Palo Alto, Calif.-based OnLive, said that Dell took the trouble to design special servers to meet OnLive’s needs. Dell is supplying large numbers of those servers for OnLive’s multiple data centers around the country. The special part of the servers is that they have graphics chips (from vendors such as Nvidia and Advanced Micro Devices). Normally, servers don’t use graphics chips for normal internet work loads. But games require the graphics horsepower.

Dell and OnLive have been working together for several years. Dell will supply more servers as OnLive’s membership grows. The partnership shows that OnLive has been able to attract marquee partners as it tries to disrupt game retailers by offering digital game distribution. OnLive’s other partners/investors include Warner Bros., AT&T, British Telecommunications, Belgacom, Autodesk, and Maverick Capital. OnLive is also working with 25 game publishers.