Will VARs Make the Cut In Blade Servers?

Last month, Intel signed deals with Arrow Electronics, Bell Microproducts and Avnet to distribute its blade technology to some 40,000 North American system builders. Intel will provide system chassis and chassis infrastructure, components and power supplies to system builders through the distribution partners, said Patrick Buddenbaum, blade server product line manager at the company.

However, system builders point out that the blade market is more targeted at data center-type applications and enterprises, and it is not yet ready for the small to midsize businesses that are the domain of most white-box solution providers.

Blades are more attractive to enterprises that need to quickly add capacity, one VAR says.

"We're not really interested in the blade market right now," said Mike Carbone, vice president of operations at MicroNet Associates, a white-box solution provider in Hopkinton, Mass. "Most of our customers are government and education accounts, and they tend to buy stand-alone systems or rack-mounted servers."

Carbone pointed out that blades are more attractive to enterprises who quickly need to add capacity. He said he might consider blades in the future if Intel's offerings remain generic and there is a clear upgrade path.

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Another problem that Intel will face in convincing system builders to sell blade systems is the domination of the market by major vendors.

"The market is already fairly established among [Hewlett-Packard] and IBM and to a lesser extent, Dell," Carbone said.

According to research firm Gartner, HP, IBM, Dell and Sun Microsystems held some 92 percent of the blade server market at the end of the third quarter of 2003.

Still, system builders are increasingly eyeing the market after seeing the success achieved by solution providers selling branded offerings.

Kevin Gruneisen, senior sales representative for the IBM xSeries at Solution Technology, said the Indianapolis-based solution provider's IBM blade server sales are growing dramatically. In the first quarter, 15 percent of its xSeries server sales were blades, he said. But in the second quarter ending June 30, he expects xSeries sales numbers to grow to 41 percent. "Blade servers are the hottest [IBM server] technology since the iSeries was introduced."

EdWARD F. Moltzen contributed to this story.