Overloaded Server, what's the best option?

I am just wondering what people think is the best way to alleviate the problem of a server that has the processor always pinned. The situation is this:

1 server

a) 1 web app for people to view reports
b) 1 program processes incoming data constantly, sometimes when load is high, the processor is pinned at 100% for long periods of time which makes app A unresponsive.

So the question is which is better?

1) is it better to have 2 servers, one processing, one for accessing the reports (if this is your choice, which server should the database reside on)
2) Or one big server with multiple processors

 

 

 

 

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