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IBM Buys Blade Network Technologies

Blade has a blade server, some top-of-rack switches and software to virtualize and manage cloud computing and other workloads

If this is Monday then - according to the latest consolidation timetable -some big company somewhere must be buying something cloudy.

And what do you know IBM says it's buying privately held Blade Network Technologies, a data center switching outfit it's worked with since 2002, for some unrevealed price rumored to be around $400 million. Last Monday IBM bought the publicly traded Netezza for $1.7 billion.

Blade started out in 2002 as a Nortel unit spun out four years later as Nortel went down the tubes, a private company backed by Garnett & Helfrich, Terry Garnett having been a Larry Ellison lieutenant.

Blade has a blade server, some top-of-rack switches and software to virtualize and manage cloud computing and other workloads. Its devices route data and transactions to and from servers. The widgetry can improve systems performance, deliver information faster, optimize virtual environments and lower energy use.

Blade claims half the Fortune 500 as customers, many of them joint clients with Big Blue. IBM says actually upwards of 50% of its System x BladeCenters currently attach to or use Blade products.

IBM expects to close on the deal in Q4. It wants to be able to manage the new, more demanding workloads. It says that with Blade, it can drive innovation at the systems networking level to speed the delivery of key information from system to system - for workloads such as analytics (an IBM favorite) and cloud computing - while reducing data center costs.

Since Cisco got into the server business last year, IBM has been expanding its network offerings through relationships with other networking companies. Now, without abandoning the others, it's bringing one in-house.

Brian Truskowski, the general manager of IBM's system storage and networking unit, said in a statement that "Blade will help IBM better integrate networks with its systems, optimizing them for workloads that require high-speed and low-latency performance."

IBM said Blade's software helps address the massive virtualization requirements of cloud computing environments. With servers more closely integrated with the network users can deploy thousands of virtual machines to run large application workloads in the cloud and reduce complexity through simplified management.

Blade's got nine million ports installed. It also has its own Unified Fabric Architecture, an interoperable converged fabric for "Ethernet Everywhere."

Blade, which has around 200 people, said last September when it picked up a B round of undisclosed size that it was valued at $230 million. The money came from NEC, Juniper, its original backer Garnett & Helfrich Capital and a "silent investor" only identified as an "industry leader." It said then that it had passed six-million Ethernet switch ports. NEC, which got a board seat, uses Blade's Ethernet switches for the network infrastructure for its SIGMABLADE blade servers.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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