Nortel spin-off takes on switch market

Blade Network Technologies, a server switch company spun out of Nortel last year, is hoping to take on network giants such as Cisco by offering switches with twice the performance of a standard blade server switch at a fraction of the cost.
It’s a good time to be in the blade server switch game, according to Blade Network Technologies CEO Vikram Mehta. “The overall server market is a $30-billion market with very steady market growth, and blade servers are the fastest-growing segment of the server market,” he said.

Working on an OEM basis with IBM and HP, the small San Diego, Calif.-based company (whose hardware design is done out of its Ottawa research facility) claims it has captured 43 per cent of HP and IBM’s blade server systems business by offering switches that perform twice as well for half the cost of a comparable Cisco switch. Its 10GB Ethernet switches were also the first of their kind to market, according to Mehta.

“We’re trying to disrupt the market through aggressive pricing,” said Mehta, who claimed Blade Network has successfully burrowed into a market usually dominated by giants such as Cisco by using non-proprietary industry-standard technology. Cisco, in contrast, uses its own silicon and proprietary firmware), he said. Blade Network’s switches are Cisco-compatible, however. “We’ve invested a great deal in ensuring that our switches can talk seamlessly with Cisco networks,” said Mehta.

Blade servers are growing in popularity because they are a far cry from “the equipment sprawl in the data centres during the bubble years,” said Mehta. Blade servers, he said, take up less space, a benefit which is increased when you stick the switch right into the server; Blade Network’s switches are embedded right down in the chassis. By embedding it, said Mehta, you also decrease security risks, as the networking connections are less prone to threats like data sniffers.

Burton Group vice-president and research director Drue Reeves, who specializes in data centre strategy, said that network administrators have always had two main concerns: density and heat.

Now that servers can be shrunk down to very compact sizes, heat is top-of-mind. If Blade Network’s switches consumes 95 per cent less power than a comparable Cisco switch, which the company says they do, it taps right into what customers are after, he said.

Blade Network was wise to work closely with IBM and HP, Reeves added.

“By diversifying their base, they’re certainly a formidable player now, and someone to contend with,” Reeves said. Its drawbacks, he said, are its small number of big-name clients and the possibility that a company of its size might be unable to keep up with production levels in such a booming market.

“There’s plenty of market share, but entry barrier costs are very high,” he said.

“There is no standard, one-size-fits-all switch. There’s the form factor, the interconnect, and the power, so it’s not something easily done.”

Blade Network last month released its Layer 2/3 blade switch for HP BladeSystem c-Class systems, featuring “in system” switching and routing across 24 Gigabit Ethernet ports and equipped with four SFP module cages for optional fibre uplinks.

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