Blade Acquisition Gives IBM Networking Tech To Compete With HP, Cisco

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IBM's proposed acquisition of networking blade switch vendor Blade Network Technologies, while not nearly as dramatic a move as HP's acquisition of 3Com, nevertheless shows that IBM is serious about being a player in the nascent converged infrastructure market.

With that acquisition, once completed, IBM puts itself in a better position to compete with Hewlett-Packard and Cisco in the converged infrastructure market.

However, the move could also adversely impact IBM's relationship with Brocade while pushing Brocade into a closer relationship with Dell.

IBM on Monday said it plans to acquire Blade Network Technologies, or BNT, a developer of blade and top-of-rack networking switches, for an undisclosed sum.

The acquisition, expected to close in the fourth quarter of 2010, gives IBM control of the third leg of the technological troika of servers, storage, and networking required to develop a credible converged infrastructure offering.

Converged infrastructure is the tight integration of server, storage, networking, virtualization, and other resources tied together as part of a single-vendor data center solution.

Such a solution can be managed as a single system. Its resources can be dynamically allocated as needed, providing higher resource utilization and availability than possible with static infrastructures.

With BNT, IBM gains the ability to more closely tie is blade server, storage, and networking technologies into a single architecture, making it only the second major IT vendor to do so after arch-rival HP and its Matrix converged infrastructure offering.

The other current significant converged infrastructure vendor Cisco, is combining its own blade server and networking technologies with storage from partners such as EMC and NetApp as part of its Unified Computing System (UCS).

BNT is a fairly significant vendor in the networking switch market. According to analyst firm Gartner, BNT in 2009 was the world's second-largest data center switch vendor after Cisco in terms of units shipped, with a 17 percent market share. That was higher than HP's 8 percent share of worldwide data center switch shipments.

However, in terms of revenue, BNT ranked a distant number four, after Cisco, HP, and Juniper. BNT had only a 4 percent market share in revenue terms, while Juniper had a 5 percent share. Both paled compared to Cisco's 48 percent share and HP's 33 percent share.

An IBM spokesperson said that IBM has been selling both system networking solutions with its server and storage products for decades. In addition, IBM also sells non-system networking solutions such as routers and other communications infrastructure that control data exchange through reseller and OEM relationships with Brocade, Cisco, Juniper, and other vendors.


Next: Potential Game Changer For Brocade

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