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Summary:

BLADE Network Technologies today said it raised $10 million in Series B funding from NEC Corp., Juniper Networks, Garnett & Helfrich Capital and an anonymous server maker, bringing its total valuation to $230 million. The startup switch provider also reported record revenue in its last quarter, […]

BLADEBLADE Network Technologies today said it raised $10 million in Series B funding from NEC Corp., Juniper Networks, Garnett & Helfrich Capital and an anonymous server maker, bringing its total valuation to $230 million. The startup switch provider also reported record revenue in its last quarter, during which time many IT vendors — including networking rival Cisco — saw sales plummet. Sure, BLADE Network’s sharp focus providing switches only for blade servers (themselves a bright spot in the IT industry) ensures it won’t be matching even a recession-era Cisco in revenue anytime soon, but its relative success does speak volumes about the blade market and the wisdom of doing one thing well.

Customers are trying to achieve more flexibility in smaller server footprints, with the hopes of both improving performance and saving on operational expenses. While virtualization technologies have been leading the charge on these fronts, blade servers have quietly been contributing, too, by packing a lot of power into a small space. In fact, IDC considers blade server revenue a bright spot in an otherwise dismal server market, with blades actually increasing market share. The market should grow as cloud and cloud-like computing start to take hold in data centers. Cisco’s UCS servers come in blade form, as does IBM’s CloudBurst solution.

And, as its name implies, blade servers are where BLADE Network makes its money. The company spun off from Nortel Networks in 2006, and has experienced impressive results since, with large server vendors placing their names on BLADE’s products. It is a switch provider for HP BladeSystem servers, IBM BladeCenter servers and NEC SIGMABLADE systems. It also developed a special switch for Verari’s BladeRack 2 platform. HP and IBM are particularly sweet deals, as IDC estimates their combined market share at 80.1 percent of the multibillion-dollar blade server industry (with HP itself boasting 52.9 percent).

If we accept the company’s claim of market leadership in blade server networking as true, BLADE Network has accomplished a lot in its short existence, and its valuation makes sense. As its products make their way into more data centers, however, BLADE Networks likely will move to expand its presence beyond the blade, where it will compete with incumbent networking leaders at a much higher level. Given its increasing competition with Cisco, though, it wouldn’t be too surprising to see new investor Juniper make a play for BLADE Network’s portfolio.

  1. Just ended up looking at their presentations on slideshare while looking at network isolation best practices in the cloud. I think Blade Networks has a bright future if they can get into the cloud ready network isolation solutions.
    -Tarun

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  2. [...] 9. September 2009 BLADE Network Rides OEM Deals to $230M Valuation var addthis_pub = ''; var addthis_language = 'en';var addthis_options = 'email, favorites, digg, [...]

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  3. [...] wondering what the fates, or investors, have in store for other specialty hardware players such as BLADE Networks or Liquid Computing or some of the newer, stealthier specialty hardware companies such as SeaMicro [...]

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  4. [...] appear, since Juniper is an investor in Blade. Indeed, the networking company participated in a $10 million funding round last year that gave Blade a $230 million valuation. With the deal, IBM gets a major player for the converged [...]

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