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joltsik
Contributing Writer

IBM Buys Blade Networks — An Obvious Marriage

Analysis
Sep 27, 20102 mins
Cisco SystemsData and Information SecurityIBM

Think in terms of high density blade servers for virtualization

Last week, 20-somethings on Wall Street were buzzing about self-serving rumors that IBM would buy Brocade Networks. Well that didn’t happen (and I don’t think it ever will) but IBM did make a networking acquisition when it scooped up Blade Networks today. Terms of this deal were not disclosed.Why Blade and not Brocade? Several reasons:1. IBM anticipates increasingly dense blade server sales. ESG Research indicates a general trend from rack-mounted to blade servers. Why? Today, an average server hosts between 5-10 VMs. As this ratio substantially increases over the next 2-3 years, IT managers will need blade server flexibility and manageablity to cope with scale and complexity. Blade Networks provides another piece for tight integration between blades, virtual switches, and physical switches. 2. Blade Networks runs JUNOS. I don’t think IBM cares about Blade’s top-of-rack switches. Rather than own this piece, it can now plug its dense blade servers into Juniper data center top-of-rack, aggregation, and core switches. Lots of form factors and the chance to leverage Juniper’s deep commitment toward flattening the network with its 3-2-1 initiative and the ultra-secret “Project Stratus.” 3. The price was right. With 3Com and ProCurve in tow, HP has been pretty public about its intention to push Blade Networks aside. This really left IBM as the only logical place for Blade Network investors to turn. My guess is that the acquisition price was fair but not overly generous.IBM is also probably anticipating a technology change in the HPC market as 40 and 100 gigabit Ethernet replaces Infiniband. Once again, Blade Networks will provide IBM a turnkey blade solution for scientific computing and smart planet analytics. Blade also provides port and device consolidation for the burgeoning trend toward Ethernet-based storage. I really don’t think that IBM wants a stand-alone networking business again so an acquisition of Brocade, Extreme, Force 10, or even Juniper seems unlikely. With Blade, IBM can deliver a data center unit — complete with memory, processors, and networking/storage I/O — in a tightly-integrated can. My guess is that IBM will sell a ton of these.

joltsik
Contributing Writer

Jon Oltsik is a distinguished analyst, fellow, and the founder of the ESG’s cybersecurity service. With over 35 years of technology industry experience, Jon is widely recognized as an expert in all aspects of cybersecurity and is often called upon to help customers understand a CISO's perspective and strategies. Jon focuses on areas such as cyber-risk management, security operations, and all things related to CISOs.

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