HP sharpens blade business with new server division

Believing that blade servers are the new cutting edge of IT, Hewlett-Packard is giving the thin devices their own division and releasing a bundle of new lower-cost installation services partners can deliver.

“”We’re opening up the doors

for the value-added services that our partners are able to provide,”” said James Mack, industry standards servers category business manager for HP Canada.

Although the announcement doesn’t involve new product “”there’s a rejuvenation of focus showing a commitment to the blade system,”” Mack said.

Until this point HP’s blade products had been grouped in the ProLiant server division. Now the company has created what it calls the HP BladeSystem, grouping products, software and services around the hardware.

“”Whether a partner focuses on delivering hardware or solutions in the BladeSystem, that is more clearly defined now as to what the solution sets are, what the services are, what the software is,”” said Mack.

“”It enables partners to focus on those elements and improve their profitability.””

The company also announced that two new services are now available, including defined installation and startup services.

Blades are multiple servers squeezed a chassis that can be thinner than a 1U rack server. Intel and AMD-powered blades are touted by manufactures such as HP, IBM,

Sun Microsystems and Dell as an alternative to rack-mounted servers, offering advantages in saving space, power, hot-swapability and total cost of ownership savings in large numbers.

Mack said that in environments of five or more with storage area networking systems they offer cost, connectivity and power savings over rack-mount servers.

Customers think so too. According to research from Gartner Inc., blade server sales worldwide soared more than 650 per cent in 2003.

During the next five years, it says, blade servers will account for nearly 16 per cent of worldwide server shipments. The compound annual growth rate will reach 30.6 per cent by 2009.

According to Alan Freedman of IDC Canada, blades will account for just under six per cent of server sales in Canada this year, but that’s expected to rise to 23 per cent by 2008.

“”The main users right now are large businesses,”” he said. “”Until there’s more standardization in the marketplace it’s going to be harder for medium and small businesses to cost effectively implement blade solutions.””

Lou Tetsos, a senior consultant for enterprise services at Compugen Inc., which sells both HP and IBM blades, acknowledges it’s tough to sell these servers. Customers need to be educated about the differences and advantages to blades over rack mount servers. “”This is not a product sale,”” he said, “”it’s a solution sale.””

Gartner said that last year HP led vendors in worldwide market share with 31 per cent, followed by IBM and Dell.

“”Blade servers will be an important building block in redesigning future data centers to be both modular and flexible in their ability to respond to changing business conditions and be more cost efficient,”” wrote Forrester Research analyst Richard Fichera recently.

In a separate report he said IBM’s recent alliance with Cisco to develop both hardware products and new approaches to virtualizing and provisioning network capacity is a “”major coup for IBM.””

“”First, it gives both firms some unique products for their blade servers. Second, it offers a window of exclusivity within which to get a head start on developing new approaches to extending virtualization initiatives to include virtualized network technology in a manner that is compatible with and blessed by Cisco.””

However, Gartner notes that some things are inhibiting the sales of blades: At the end of last year no fewer than nine variations of U height and capacity were available from manufacturers along with different bandwidth and management offerings. That makes comparisons difficult.

Another inhibitor is that blade servers carry a premium price.

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Howard Solomon
Howard Solomon
Currently a freelance writer. Former editor of ITWorldCanada.com and Computing Canada. An IT journalist since 1997, Howard has written for several of ITWC's sister publications, including ITBusiness.ca. Before arriving at ITWC he served as a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times.

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