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Blades to Cut Deeper

By David Needle (Send Email)
Posted May 11, 2006


Looking to extend its sizable lead in the server blade market, IBM Wednesday unveiled new products and services designed to appeal to small and midsize businesses (SMBs). With an eye on SMBs, IBM introduced new BladeCenter price points and service offerings.

The OEM  trotted out the Server Connectivity Module for IBM BladeCenter, an entry-level networking switch priced at $999. Big Blue plans to further boost the value of BladeCenter by offering a standard iSCSI  connection to the IBM System i business computing platform, as well as Windows server management tools.

"System i has a huge installed based and this lets those customers integrate network and system management with BladeCenter," Matt Wineberg, IBM's worldwide product manager for BladeCenter, told internetnews.com.

"It's a big plus for our customers to be able to use both simultaneously and not have to rip up the infrastructure."

Although blades offer the advantage of consolidating computer resources more efficiently than traditional servers, IBM has found many SMBs reluctuant to make the switch.

"The task of migrating [to blades] is daunting to many of them because they have limited IT resources," said Wineberg.

Enter IBM's new "Implementation Services Servicepac for BladeCenter," priced at $6,999. For that price, IBM will send a team of specialists on a three-day mission to get the blade system up and running, and will train the customer in how to maintain it.

IBM also is expanding its financing options, with the Blade chassis now available for purchase with a 60-month term.

"We expect the chassis to last over five years so this is designed to match the technology as we see it," said Wineberg.

The blades can be leased for up to 36 months and renewed or refreshed depending on customer preference.

The blade market is one of the hottest areas of computing. The latest IDC estimates for blade server sales revealed that shipments increased 49.3 percent year-over-year, and factory revenue increased 56.9 percent. However, blade servers represent a small fraction of the overall market. For example, IDC said the $667 million blades reaped was a scant 4.6 percent of total quarterly revenue in fourth-quarter 2005.

IBM has maintained the number one ranking in sales for several years, closely followed by HP. In the fourth quarter, IDC said IBM had a 42.7 percent share in blade revenue, HP had 35.1, and Dell trailed in third with 11.2 percent.

IDC Senior Research Analyst Kelly Quinn said IT managers are increasingly adopting blades as a standard building block in their "virtual IT infrastructures."

This article was originally published on internetnews.com.

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