BLADE Network Technologies

BLADE’s 2008 Report Card: Leadership in blade server networking, 10 Gigabit Ethernet and Rackonomics have BLADE hitting on all cylinders

2008-12-17T18:51:00.000-08:00

I am extremely happy to report a record-breaking 2008 for BLADE Network Technologies with our FY08 concluding on a high note. A recent BLADE switch installation at Phorm (AIM: PHRM, PHRX) put BLADE’s total shipments past the 5 million ports milestone. An online advertising company with offices in New York, London and Moscow, Phorm has deployed BLADE’s top-of-rack RackSwitch data center switch for its innovative Open Internet Exchange (OIX), which enables its ISP partners to fully protect user privacy.

Here are some additional highlights that demonstrate that BLADE is indeed hitting on all cylinders as we prepare for the year ahead:

- During our most recent quarter, BLADE shipped more than 500,000 Ethernet ports to conclude its 2008 fiscal year with 54 percent shipment growth over the previous year. When we started BLADE, it took 19 months to ship our first 500,000 ports, so BLADE’s current rate of expansion is truly exhilarating.

- BLADE’s market share of data center switches for blade servers now stands in excess of 48.5 percent combined on HP and IBM blade servers and 66 percent on NEC blade servers. To date, BLADE's market share and Ethernet port shipments on both IBM and HP platforms are more than 2x greater than Cisco’s!

- BLADE’s new 10 Gigabit Ethernet "Virtual, Cooler and Easier" RackSwitch products, introduced in 2008, position the company to deliver the enhanced network performance required for data center consolidation, virtualization and cloud computing.

- During 2008, BLADE built up our world-class management team for more than 155 passionately committed team of “BLADErs” with the addition of Mark Verbeck as CFO, Mark Hudson as CMO, Dan Tuchler as Vice President of Strategy and Product Management, Atul Tambe as Vice President of Hardware Engineering and Tim Chao as Vice President of Software Engineering.

Today I am very fortunate to work for a very “Un-Silicon Valley” company. At BLADE Network Technologies, there are no Silicon Valley "rock stars," celebrity billionaires, or ex-Cisco executives – only the most talented and hungry people in the industry with a passion to serve our customers and produce tangible, real-word business results. While I am indeed proud of what we BLADErs continue to accomplish, here is a perspective on why BLADE continues to meet and surpass our expectations:

1. The Rise of 10 Gigabit Ethernet: Analyst firm IDC forecasts that adoption of 10 Gigabit Ethernet will accelerate due to falling prices, converged data, storage and media networks, higher density to reduce cabling and ports and other customer needs – such as for VoIP, IPTV, VOD, Surveillance, iSCSI, HPC, virtualization and backup. According to Dell’Oro Group’s Five-Year Ethernet Forecast (July 2008), 10 Gigabit Ethernet is expected to reach 15.1 million ports and will represent one quarter of all switch market revenue in 2012.

2. Servers, Consolidation and Virtualization: Data centers that are consolidating operations and equipping their infrastructures for virtualization are ideal for blade servers. In fact, according to IDC, blades were the only server form-factor to experience positive growth in the most recent quarter, with all major vendors exhibiting double-digit growth in blade volumes.

3. Rackonomics for the New Data Center Frugality: To aid data center managers seeking to consolidate and virtualize vital IT systems despite today’s tight economy, BLADE champions a new set of rules for the data center known as Rackonomics – an economical formula that empowers data centers to control costs and contain sprawl while realizing massive scale-out economies.

Our industry-leading data center networking products enable enterprise data centers to equip their infrastructures for the increased network loads introduced by consolidation and virtualization.

Our talented team continues to build BLADE’s trusted partnerships with industry leaders such as HP, IBM, NEC and Verari Systems.

And our approach to Rackonomics makes sound business sense in today’s economic environment.

I am excited about the year ahead and welcome your continued interest in and support for BLADE’s endeavor.

Data Center Virtualization, BLADE’s RackSwitch and HP Virtual Connect

2008-11-17T09:10:00.000-08:00

Data center virtualization is clearly on the rise as more than 50% all enterprises are now employing server virtualization for production applications. At BLADE Network Technologies, we are committed to being at the forefront in the rapidly emerging arena of network virtualization. Today, we are proud to report that our top-of-rack RackSwitch data center switch products and our open network virtualization software are fully interoperable with HP’s new Virtual Connect Flex10 technology for HP BladeSystem.

As our trusted partner HP advises, virtualizing the connection between servers and networks provides real benefits to all users. For example, as HP points out, Virtual Connect used in combination with BLADE’s RackSwitch cuts network equipment costs up to 63% per virtual server and reduces complexity by consolidating network equipment 4 to 1. What’s more, this powerful combination enables a converged “single-wire” fabric for networking and storage based on 10 Gigabit Ethernet.

BLADE’s 10 and 1:10 Gigabit Ethernet RackSwitch products can aggregate network traffic and connections across multiple HP BladeSystem enclosures, each with HP Virtual Connect 10Gb Flex-10 modules, so that an entire data center network can be operated as one large virtual switch. Bandwidth, VLANs, security policies and other network parameters can be set once for an entire rack of servers, regardless of the number or type of servers. Additionally, network settings and security policies move as machines are added or moved to meet changes in demand without introducing security vulnerabilities.

BLADE’s RackSwitch enables IT departments to leverage a new set of rules called Rackonomics to scale out their data center networks affordably and holistically at the rack level to decrease the total cost of ownership of data center infrastructures, reduce IT complexity and enable incremental scalability. For example, the powerful combination of HP Virtual Connect Flex-10, with its ability to allocate and fine tune NIC bandwidth, and BLADE’s RackSwitch provide IT managers an ideal data center virtualization platform for consolidating LAN connections and simplifying server administration in today’s wire-once virtual machines environments.

BLADE’s RackSwitch products are designed to be “Virtual, Cooler and Easier”. They consume just six watts per 10 GE port compared with 20 watts per 10 GE port for conventional chassis-based switches, and offer powerful virtualization capabilities. BLADE’s SmartConnect software, running on the BLADE Ethernet switches, decouples server provisioning and network configuration tasks. Server capacity can be scaled by server administrators without requiring configuration of VLANs, spanning tree, routing protocols, or other network details via an intuitive drag-and-drop GUI interface. This allows server administrators the flexibility to reconfigure servers without involving network administrators. On the other side of the Ethernet switch, virtual interfaces to applications within the servers are presented as single attachment points for whole groups of servers. BLADE’s SmartConnect is designed to simplify administrative tasks, such as deployment, control, and policy administration, thus reducing the TCO associated with blade server systems.

We’re delighted that HP choose BLADE as one of the first partners to be recognized as a valuable contributor for extending the ecosystem for HP Virtual Connect.

The Virtualization Effect and the Rise of 10 Gigabit Ethernet: Part II

2008-11-05T12:59:00.000-08:00

I’d like to make you aware of IDC’s recently published research: “Virtualization 2.0: Opportunities and Challenges for Next Generation Datacenter Networks.” Among other important guidance, IDC’s spotlight illustrates how enterprises using virtualization technology to improve business operations and mobility can leverage the capabilities provided by widespread adoption of 10 Gigabit Ethernet as a single, converged network fabric.

Perhaps the greatest challenge that organizations will face when moving to what IDC calls “Virtualization 2.0” will be networking related. As IDC’s John Humphreys writes, “With the initial uses of virtualization technology in which multiple images are consolidated into a single server, Virtualization 2.0 will require the consolidation of network traffic and will also increase the need for more bandwidth to the server, both of which will be possible as enterprises make the move to converge and consolidate data, storage and inter-process traffic on 10Gb Ethernet networks.”

What IDC calls the “Virtualization Effect” is accelerating the enterprise migration to 10Gb Ethernet. And as Humphreys points out, with virtual machines moving from host-to-host in Virtualization 2.0, it is critical that the network identity, quality of service and security policies associated with virtual machine move along with the VMs, IDC observes that a virtual machine aware and virtual mobility ready network requires a highly flexible and open 10Gb Ethernet network topology.

And this is what BLADE is working to refine and deliver with coming enhancements to our network virtualization software offerings. As I mentioned in my previous blog posting, BLADE is aggressively working on advanced network virtualization solutions to equip data center networks for virtual machine environments. Our advances in open network virtualization, combined with the higher speeds, lower latency and emerging standards-based lossless capabilities of 10Gb Ethernet, will enable organizations to create converged, single-fabric, multi-connection networks that offer the flexibility, speed and expandability required by virtual machine environments.

Unlike Cisco’s propriety VN-Link for the Nexus 1000V, BLADE’s solution will work and interoperate with all major virtualization platforms – without forcing any software upgrades or firmware updates. BLADE is working to equip our customers’ 10 Gigabit Ethernet network infrastructures to ensure that the “Virtualization Effect” our customers experience in their data centers does indeed deliver the requisite combination of high performance, low latency, and virtual machine awareness they require to fully harness the tremendous potential of Virtualization 2.0.

If you would like to dive deeper into Virtualization 2.0, send an email to bladenews@bladenetwork.net to subscribe to our informational newsletter, BLADENews, as January’s issue will focus on this topic.

HPC Comes To Main Street as High Productivity Computing

2008-10-29T17:46:00.000-07:00

I particularly savor it when our friends on the analyst and editorial sides of the industry agree with us at BLADE that advanced data center technologies such as blade servers and10 Gigabit Ethernet are ready to bring the high productivity of High Performance Computing (HPC) to the mainstream enterprise.

Debra Goldfarb and Michael Feldman at Tabor Research and its media outlet HPCwire.com, are spot on in the realization that what we know as high performance computing on Wall Street, science and academia is coming to Main Street, will be known as High Productivity Computing. That stands to reason, especially in today’s frugal economy.

As Michael astutely observed a while back , the lines between traditional HPC and Main Street computing are increasingly blurred. Today, server OEMs can build commodity-based blade server and rack-level systems with all the characteristics associated with HPC and sell their wares into a vast range of markets -- financial, entertainment, oil & gas, biotechnology, manufacturing, and others. The same holds true for HPC storage and network component vendors, such as BLADE’s own bladed and top-of-rack data center-class switches.

We BLADErs agree with Debra and Michael that HPC coming to Main Street sounds like good news -- and it is even if it creates some initial confusion in the industry. We applaud their evangelism of the term “High Productivity Computing” instead of “High Performance Computing” to describe the new Main Street HPC.

Debra correctly asserts that due to the democratization of HPC, the market is rapidly maturing. Instead of being focused on flops or even flops/dollar, users -- practical creatures that they are -- are demanding return on investment (ROI). So rather than fixating only on the server hardware, the environment must be looked at from what a holistic perspective that includes the network and storage interconnects, the storage hardware, servers, applications et al.

This view of High Productivity Computing for Main Street is dependent upon the balanced integration of all system and subsystem-level components. And, as Debra rightfully concludes, this notion of productivity is aligned with ROI, which is what BLADE’s approach to Rackonomics is all about, and which you can read about in detail in my earlier postings.

While the conventional HPC industry will still look to the Top500 list for the fastest computers on the planet, Main Street is looking to get their HPC work done and is simply interested in getting the most computing bang for the least amount of bucks. And that’s what BLADE and our partners such as HP, IBM, NEC and now Verari Systems, are all about.

We’d be delighted to have you visit BLADE at Supercomputing '08, booth 322, 17-20 November, in Austin, Texas. BLADE’s VP of Product Strategy and Management, Dan Tuchler, will be giving a talk on “10G Ethernet – Ready for Major Breakthrough in HPC Environments in 2009,” on Wednesday, 18 November at 10:30am.

Rock Stars, Billionaires and Their "Gigs"

2008-10-27T17:47:00.000-07:00

I find it part amusing and part puzzling that companies in the technology business (particularly those based in The Silicon Valley) with an unproven track record (particularly in these trying times – when reality has hit home in more ways than one) rely on associations with rock stars, billionaires, and former SVPs from Cisco to garner instant market credibility.

Perhaps it is simply that I have just not lived in Silicon Valley long enough. Be that as it may, today I am very fortunate to work for a very “Un-Silicon Valley” company. We BLADErs are like the “Un-Cola” in a “Cola” world, and I would like to share a few things about our company with you that I think might be of interest.

At BLADE Network Technologies there are no Silicon Valley "rock stars," celebrity billionaires, or ex-Cisco executives – only the most talented and hungry people in the industry with a passion to serve our customers.

BLADE is a very meat-and-potatoes company where every employee gets up in the morning and asks him or herself one question that becomes their work guide for the day – what am I going to do today to solve a pressing customer problem?

We’ve always believed that if we do the right thing by our customers the right things will happen to BLADE. That is why Customer Satisfaction is listed ahead of the other six core values of our young company.

While we do not enjoy the privilege of being associated with billionaires that enjoy rock star like celebrity status (Sun: ~~Elvis~~ Andy has not left the building), and don’t have the ability to brag that ex-SVPs from Cisco are among our management team, this “Un-Silicon Valley” company has steadily and quietly accomplished some very meaningful things, right here in the heart of The Silicon Valley.

I want to take the opportunity to share our successes with you as this will provide you with a good perspective on how we stack up against Arista Networks.

But before we go there, here is a little trivia for you. Did you know that the name “Arista” is a record label owned by Sony Entertainment? And do you know what the word “Arista” means in Sanskrit?

BLADE’s list of accomplishments includes:

First vendor in the industry to ship Layer 2-3, Layer 2-7, 10GE uplink, all 10GE, and VMready™ blade server switches.
Close to 5,000,000 ports in production deployment.
Our switches provide connectivity to over 1 million servers in the data center.
Over half of the Fortune 500 use BLADE products.
BLADE switches are used by over 5,000 customers across 26 different industries.
The actual MTBF of our products exceeds 5 million hours vs. a goal of 400,000 hours.
BLADE’s market share of Ethernet switch options for HP and IBM blade servers is greater than 45%.
Our share of Ethernet switch options on NEC blade servers is 59%.
We’ve set the record for best price performance on 10GE switches – at less than $500/port.
While the rest of the industry is talking about network virtualization, BLADE is delivering the world’s most advanced Network Virtualization software – SmartConnect™.
Our BLADEHarmony Manager™ software was voted by CRN Magazine as one of the “12 Hot Products To See At LinuxWorld,” August 2008.
BLADE's unique concept of "Rackonomics" is the first approach that enables enterprises to design, provision and replicate servers, data network infrastructures and storage area networks (SANs) rack by rack to decrease the total cost of ownership of data center infrastructures, reduce IT complexity and enable incremental scalability.
We were the first to introduce a top-of-rack 10 Gigabit Ethernet switch (“RackSwitch”) to support the network virtualization that will be vital as enterprises make the move to virtualized data centers.
Our RackSwitch line of products is the preferred Ethernet switch offering for the IBM iDataPlex and Verari BladeRack platforms.
Our new top-of-rack RackSwitch G8000 1/10G aggregation switch offers (The Tolly Group competitive evaluation):

3x lower latency than Cisco
100% line rate on all tests compared to Cisco
30% less energy consumption compared to Cisco
2.1x better price performance

Our new top-of-rack RackSwitch G810010G low latency switch offers (The Tolly Group competitive evaluation):

12.4x lower latency than Cisco
100% line rate on all tests unlike Cisco which achieved less than 50% on 2 out of 3 tests
73% less energy consumption compared to Cisco (50% lower power consumption compared to comparable product from Arista/Arastra)
6.5x better price performance Compared to Cisco

We’ve won the following 10 prestigious industry awards:

Frost & Sullivan Product Innovation of the Year Award 2008
Network Products Guide - Hot Companies 2008
EE Times ACE Award - Startup of the Year 2008
Info Security Products Guide - Hot Companies 2008
AlwaysOn’s “Going Green 100” Award 2007 (first networking company to win)
Red Herring - 100 North America Winner 2007
Red Herring - 100 Global Winner 2007
Byte & Switch - Top 10 Startups to Watch 2007
CRN - Emerging Tech Dynamos 2007
Info Security Products Guide - Hot Companies 2007
Network and Communications Guide - "Hot Company" 2007

Most impressively, in our current and running fiscal quarter Q4 2008 (Aug-Oct), we’ve already shipped over 500,000 ports – with approximately 15% of our shipment revenues coming from our 10GE products.
BLADE is the “gold standard” among partners.

By contrast, our friends at Arastra/Arista have been in business two years longer than we have. Where is their list of what they’ve done for customers and the industry?

BLADErs are not rock stars or billionaires, and we’re not into ”gigs.” We’re just a scrappy bunch that lives to solve next generation virtualized data center problems and delight our customers.

Virtualization’s Hidden Secret

2008-10-10T19:34:00.000-07:00

It has been said that in today’s data center, virtualization changes everything. In fact, it’s how virtualization actually changes every IT “thing” that has data center mangers perplexed. The core proposition of virtualization breaks what has historically been inviolable bonds, such as the relationship between operating systems and their underlying hardware platforms. And whenever data centers shatter such enduring ties, new and sometimes unanticipated “things” happen.

These “things” are becoming increasingly pervasive in today’s data centers. In fact, IDC analyst John Humphreys observes in “The Future of Virtualization: Leveraging Mobility to Move Beyond Consolidation” , that recent IDC surveys found that over 50% of all customers are employing server virtualization for production applications, including mission-critical applications such as supply chain management and enterprise resource planning. Within the next 12 months, the survey found that these same users expect nearly half of their applications will be hosted on a virtualized server.

For example, with the introduction of virtual machine mobility through exciting new technologies such as VMware’s VMotion comes the promise of great “things.” These include greater server utilization and flexible, no-downtime migration, along with new opportunities for data center consolidation, flash crowd control and virtual disaster recovery. However, VMotion also brings other “things,” such as a feeling of uncertainty surrounding the boundaries of VLANs, the inadequacy of network security policies for virtual machine environments, and Quality of Service for network access and application performance.

The underpinning of data center virtualization is a move away from managing devices and toward managing information. The virtual environment promises to free IT architects to focus less on hardware and more on who accesses what information and how they gain this access. However, it’s in understanding all those changes to every IT “thing,” including the underlying network, that is today’s hidden secret to successfully managing virtualization on an enterprise scale.

Yes, virtualization does change everything. But the hidden secret to successfully managing virtualization is revealed from discovering all the unanticipated “things” that come with virtualization. And, once you understand how the hidden secret can impact and even jeopardize your enterprise and its vital data, it then becomes much easier to establish IT practices for managing how virtualization actually changes every IT “thing” from the server, to the OS to the underlying network.

BLADE is working on advanced network virtualization solutions to equip data center networks for VMs. Unlike Cisco’s VN-Link for the Nexus 1000V, BLADE’s solution will work and interoperate with all major virtualization platforms – without forcing any software upgrades or firmware updates. As a VMware Technology Alliance Partner, BLADE will be delivering additional enhancements to improve our joint customers' virtualization experience in the critical areas of networking and virtual machine migration. Look for more on this to come.

Convergence, Converged Networking and Cloud Computing – The Rackonomics Imperative

2008-09-10T14:49:00.000-07:00

Today’s trends of convergence, converged networking and cloud computing mean different things to different people. To consumers, convergence means unified billing and customer service for combinations of phone, Internet access and TV on a single wire. Converged networking implies that these services come on a single wire. And, cloud computing alludes to Google Apps, Web 2.0 and VideoOnDemand.

To enterprises, convergence signifies the vital importance of always-on, high-speed access to secure telecommunications networks. In fact, enterprise IT departments name their number-one priority when building a new data center as access to telecommunications networks.

To the enterprise, converged networking points to the promise of delivering data, storage and inter-process communications across a single unified fabric – a single wire for all enterprise applications and services, including VoIP, enterprise apps, VideoOnDemand and secure access to enterprise data. Today, convergence on converged data center networks has become viable primarily due to the emergence of affordable 10 Gigabit Ethernet on mainstream servers and affordably priced blade and top-of-rack 10Gb switches, such as BLADE’s new RackSwitch and embedded blade server switches for HP, IBM and NEC.

Cloud computing, which Forrester Research defines as a “pool of abstracted, highly scalable and managed compute infrastructure capable of hosting end-customer applications and billed by consumption,” promises exciting new applications such as 3D technology that allows you to have conference calls with others and place them on the left right, front or rear. Until you have heard a conference call in 3D stereo, you have not heard a conference call. In addition, the technology allows the addition of overtones like adding a metallic sound to a speaker or group of speakers on a conference call. This is great if you are looking to find a way to discern what group a person belongs to -- the London office for example.

However, there are problems in the cloud. James Staten of Forrester Research notes that growing pains will plague cloud computing in its early stages. Staten projects that outages lengths will decrease from the eight-hour incident that took down Amazon’s S3 cloud storage service and the congestion that plagued Apple’s MobileMe service across several days beginning on July 18, ostensibly because of the failure of an email server. For this recent news about cloud computing outages, see Systems Management News With outages of hours and days – enterprise acceptance of cloud computing will clearly require the most reliable, available and high-bandwidth access to telecommunications networks underpinned by an exceptionally robust data center infrastructure.

To BLADE and its customers – literally half of the Fortune 500, convergence, converged networking and cloud computing are practical matters. Bottom line, data center networks must work right every time and all the time, around the clock and around the globe. The wave of the future is convergence on 10 Gigabit Ethernet networks, converged single-fabric networks using iSCSI or the rapidly emerging Fibre Channel over Ethernet (FCoE) technologies, and ever more productivity-enhancing and interactive applications and services in the cloud. And that wave is driving the Rackonomics imperative for non-stop, high-performance, low-latency and energy-efficient data center networks that can be scale out and replicated on a massive scale. To the enterprise, that’s what convergence, cloud computing and converged networking are all about.

NetEvents.tv has posted a new documentary about the future of convergence, converged networking and cloud computing entitled “100 Gig Ethernet - Why, How and When?” in which I am interviewed, along with other industry executives. The documentary is hosted by journalist, Manek Dubash. To view the video, go to:

The Data Center of the Future Ramps Up To Full Throttle with 10 Gigabit Ethernet

2008-07-16T17:23:00.000-07:00

Today, what IDC calls the “Data Center of the Future,” is ramping up to full throttle with 10 Gigabit Ethernet, the unifying network standard. Data centers equipped with 10 Gigabit Ethernet can enjoy a range of compelling benefits including investment protection, product flexibility, performance, and energy efficiency backed by a deep, multi-vendor ecosystem to deliver 10Gb NICs, interconnects, blade and rack-level switches, as well as conventional fixed and chassis-based switches. What’s more, one of the issues that until now has impeded the adoption of 10Gb was price, which is now becoming less of an issue as per port prices have declined below $500 per port, the price point at which the volume economics of Ethernet are expected to accelerate the move to 10Gb NICs, edge and aggregation switches.

BLADE and IDC recently teamed up with HP and IBM to air two webinars: “10G Ethernet: Overcoming Network Overload with Rackonomics—An Innovative Approach to Scaling Out Data Center Networks” and “10G Ethernet: The Future of Scalable Networks for Blade Server Virtualization." These webinars offer insights into factors that are introducing new loads and requirements for low latency to the network. For example, IDC’s Cindy Borovick explains the impact on the network from “Dynamic Datacenters” that are equipped to manage workloads based on business priorities, provide virtual I/O and virtual network services and deliver SOA-based applications.

Cindy’s “Essential Guidance” is fivefold:
1. The “Datacenter of the Future“ will require performance, availability and scale.
2. Virtualization changes network requirements.
3. Asset consolidation drives the need for high bandwidth and low latency.
4. Ethernet is on a path to be the unifying network standard in the datacenter.
5. 10 Gigabit Ethernet will be the foundation of the future datacenter network.

If you’re like me, you’ll come away from these webinars as time well spent with some fresh insights into why 10 Gigabit Ethernet is the best choice for the dynamic and highly virtualized “Data Centers of the Future.”

Once again Ethernet is the de facto mainstream network topology with 10 Gigabit Ethernet today’s best choice for massive scale-out enterprise networks, emerging converged networking/storage networks and virtually everywhere and anywhere a server or bank of servers requires high bandwidth, low latency, advanced energy efficiency and the affordability of Ethernet’s volume economics. Even High Performance Computing (HPC) clusters, which have been the domain of Infiniband and other proprietary server I/O interconnects, show growing use of Ethernet – see the TOP500 List of the world’s most powerful supercomputers.

The technology blogosphere is paying attention to the coming widespread migration to 10 Gigabit Ethernet as the mainstream standard. I encourage you to visit Stephen Brown’s informative blog about all things 10GbE.

Also, it’s worthwhile to read what Chris Mellor for Blocks and Files in the U.K has to say in his view about BLADE’s groundbreaking solutions for implementing the lossless 10Gb Ethernet required for converged Fibre Channel over Ethernet (FCoE) storage networks. “No need to wait,” writes Mellor, because BLADE can implement a loss-less, low-latency FC0E network now.”

At BLADE, our embedded 1Gb/10Gb Ethernet switches and new 10Gb top-of-rack data center-class RackSwitch are the flagships of our product line and the mainstays of our Rackonomics concept for provisioning massive-scale out networks at the rack level. BLADE 10Gb switches are being deployed across our customer base in more than two dozen market segments, including finance, automotive, defense, and academia to name a few.

For example, a leading academic computer center one of the largest supercomputing and networking centers in Eastern Europe, recently installed BLADE’s 10 Gigabit Ethernet switches an HPC solution using IBM BladeCenter. After evaluating other vendors and fabrics such as Infiniband and Myrinet, the computer center chose BLADE’s 10GB solution primarily because Ethernet is a well-known technology that is easier and more affordable to deploy, configure, install and manage. Using 10Gb Ethernet interconnects within the IBM BladeCenter chassis also delivers significant price-performance advantages along with high bandwidth and low latency. You can download BLADE’s Solution Brief about 10 Gigabit Ethernet High Performance Computing Clusters on IBM BladeCenter at

Just as 10 Gigabit Ethernet is now growing through widespread deployment in the data center, the discussion has not shifted to consider tomorrow’s even higher-speed interconnects – namely 40Gb and 100Gb Ethernet. Coming in September 2008 to a Web browser near you, I will be appearing on NetEvents.tv to speak about the future of Ethernet – specifically “100Gb Ethernet - why, how and when?” Stay tuned to NetEvents.tv’s Telco Channel. For now, hold on to your hats because 10 Gigabit Ethernet is ready to help your dynamic data center ramp up to full throttle.

Advanced Energy Efficiency – Networking Gear Goes Green without a Penalty

2008-07-01T13:31:00.000-07:00

A significant sea change of awareness is underway around how networking impacts the energy efficiency of blade servers, containers and other rack-level infrastructures. The recent Blade.org Technology Symposium in New York highlighted Advanced Energy Efficiency as one of the Mega Trends that will characterize the data center of the future. (Converged Networking and Hyper Consolidation are the other two Mega Trends.)

The tide that’s rising is the increasing concern for the role that networking places in the overall energy efficiency of the datacenter environment. And with at least 10% of all data center real estate and power and cooling systems devoted to networking, it’s a relevant, bottom-line concern.

IDC analyst Cindy Borovick commented recently, “How networking fits into the overall data center environment changes the rules. The fact that vendors of data networking gear were not concerned with overall energy efficiency until now is notable.”

Look for IDC and other industry heavyweights to help educate the marketplace about this issue. However, even with the rise of notable groups such as The Green Grid consortium, and Climate Savers Computing Initiative, both of which BLADE recently joined, metrics and specification that rank the energy of networking are in their infancy. For example, as yet, there are no Energy Star ratings for blade servers, networking gear, or rack-level infrastructure – so far, Energy Star standards will only apply to 1U and 2U servers.

Heather Clancy writes in ZDnet’s always-insightful GreenTech Pastures, “So, should your company get all cynical about the green tech movement. I really don’t think so. But the arc of the economic downturn is going to accelerate the downward price pressure that someone might be able to charge as a green tech specialist. Better, instead, to focus on how to differentiate your value proposition with the green tech message WITHOUT looking like a luxury item.”
Link to: http://blogs.zdnet.com/green/?p=1163

BLADE agrees that companies should not have to pay a penalty to go green and run their data centers more efficiently. In fact, on July 1, BLADE Network Technologies will introduce the first hybrid 1G/10G Ethernet “green blade” switch for IBM BladeCenter. The new BLADE switch provides 50 percent greater bandwidth and up to 50 percent better energy efficiency and, priced at $4,999, is up to 50 percent less expensive than comparable Cisco blade switches.

But, today, there are still no standards for the energy efficiency of networking gear. That needs to change, and BLADE intends to champion and lead that charge.

The Rackonomic Data Center: It’s all about Racks, Rows and even Containers

2008-06-16T10:14:00.000-07:00

The data center of the future will comprise replicated racks, rows and even containers with massive processing, I/O and storage capabilities.

We’ve coined the term Rackonomics to describe this datacenter of the future that comprises replicated racks of servers, storage and network elements, organized into rows and even containers.

Rackonomics can drastically reduce facilities and support costs and drive down total cost of ownership. It can also improve energy efficiency through high-density packaging and unique cooling designs that do not require the construction of a brand new data center facility. It is the way of the future.

Google pioneered the container data center concept with the intent to distribute Google data centers to every network peering point in self-contained shipping containers. Today, massive scale-out containers can house thousands of processors, tens of petabytes of disk storage, and hundreds of Gigabits of I/O, and can be dropped-off overnight by a tractor-trailer rig. Google’s idea is to place one of these containers anywhere Google owns access to fiber, primarily at one of the 300 major Internet peering points, in effect transforming the Internet into a massive processing and storage grid.

At BLADE, we are designing and building the top-of-rack and blade-based data center-class networking products that make the ideal, standardized networking components for the rack, row, and container-based data center. And we’re partnering with companies like IBM, whose iDataPlex platform is amongst the most innovative solutions for building out the Rackonomic datacenter.

Rackonomic data centers have tremendous potential, for example, enabling Internet TV to scale to the same level as broadcast and cable TV with latency and system response as low as they can possibly be made for a networked application using Ethernet as its essential network backbone. We’re proud to be playing a leading role in an industry-wide effort to redefine how enterprises build out their datacenters.

Making Green a Reality

2008-05-29T19:23:00.000-07:00

This morning, I awoke to read in the San Jose Mercury News that San Jose has been recognized by the Brookings Institute as the nation’s 7th- greenest city, with sunny Honolulu at number 1 and Lexington, Kentucky at the bottom of the list. I believe, very strongly, that:
- our society’s energy consciousness and environmental awareness need to become a way of life, and
- our business community must work harder to justify the economic value proposition associated with going, doing and being “green”.

At BLADE, we’ve made it part of our daily best practices to be the most environmentally friendly network equipment vendor in the industry. We are proud to have been recognized as the first network equipment vendor named to AlwaysOn’s GoingGreen 100 list of the world’s foremost “green” companies and the pioneering leader of energy-efficient data center networking.

However, we have heard from customers, analysts, partners and technical visionaries throughout the data center world that companies will not actively consider so-called “green” technologies unless they can actually achieve demonstrable savings and realizable efficiencies across factors such as power consumption, cooling requirements, facilities space and costs and data center virtualization and consolidation. Further, we realize that packing ever-more blade servers and rack-mounted servers and storage systems into the least possible space with the tightest energy footprint is creating serious heat, power and cooling issues.

At the crossroads where data center economics and energy efficiency converge, BLADE is capturing the attention of data center managers with a concept becoming known as Rackonomics. To put it simply, this is the idea that a data center should be made up of replicated racks that have standard configurations of servers, storage and network. This matters for ongoing support and total cost of ownership. It also improves energy efficiency.

The twin inspirations of Rackonomics (see my previous post) and the “green” movement have hit the ground running at BLADE. The power profile of our Ethernet blade switch family and new top-of-rack data center-class RackSwitch and their carbon footprints are among the lowest in the industry.

In addition, BLADE products are manufactured in an environmentally responsible ISO 14001 certified manufacturing facility. We are also proud to note that all of the materials used to package this product (with the exception of the anti-static bag) contain post-consumer recycled content and are fully recyclable. Meanwhile, we are working with the industry to find an environmentally friendly substitute for the anti-static bag that will accomplish the same objective without compromising product reliability.

BLADE takes its environmental responsibilities very seriously. We not only design and manufacture “green” products, but we practice “green” policies internally and encourage our employees and customers to do the same. The future of our planet depends on it.

I am gratified that BLADE’s approach to Rackonomics and our “green” leadership is getting noticed. Recently ZDNet’s Heather Clancy observed that, “Simply put, Blade Networks has developed a truly innovative new product in the network virtualization category, one that promises to reduce power consumption through its unique cooling design.”

One thing that made Heather sit up and take notice about BLADE’s approach is something that actually is pretty simple. “One reason that Blade Networks can claim better power consumption metrics than some competitive technologies is that it has designed its technology to cool like a blade server would — with a front to back airflow,” writes Heather. “Many other switches are configured the opposite of blades, which means they would create a hot loop within the rack. Not ideal.”

Well, at BLADE, we are actually idealists when it comes to the transformative potential of Rackonomics for energy-efficient data centers combined with today’s interest in economically sensible “green” business values. However, the information technology industry’s and society as a whole’s “green” consciousness is in its infancy. As Marilyn Brown, one of the authors of the Brookings’ “green cities” report calls out, "It’s rather astonishing that this type of data has never been pulled together before.”

What the Brookings Institute’s “green cities” report will not track until its 2009 rankings are the emissions from commercial buildings, factories and transportation systems – most every one of which has a data center at the heart of its operations as a significant consumer of increasingly precious energy resources. However, the Brookings’ report does call for national renewable energy standards. We second this recommendation in terms of the increasingly urgent need for energy efficiency standards for data center infrastructure and networking gear and facilities, which contribute significantly to the carbon footprint of today’s businesses.

At a time when such data center standards are not yet clearly identified, understood or adopted – particularly when it comes to networking equipment – BLADE is committed to leading the charge towards recognized industry best practices for energy efficiency and economically-sound environmental value as realized through Rackonomics.

Our entire team at BLADE welcomes your input about how we can make our products and services even more responsive to your concerns about power consumption, energy efficiency and the environmental impact of today’s and tomorrow’s data centers. If you would like to reach BLADE’s Chief Green Officer André Luthard with any ideas, recommendations or guidance, please click on this link to send him an email.

RackonomicsHolistic Rules for the New Data Center

2008-05-19T17:57:00.000-07:00

As we have been briefing various customers and industry analysts in conjunction with the recent launch of our new top-of-rack data center-class RackSwitch, it has become clear to me that there is a tremendous amount of confusion in the marketplace. This confusion seems to stem from the relative absence of holistic best practices surrounding how data centers can harness the tremendous benefits of serve/storage consolidation and virtualization without inadvertently driving hidden costs and pitfalls into the networking facilities infrastructure. Power, for example, is a huge issue, when companies
using collocation facilities can't supply their racks with more than a small KwA per rack, so end up deploying racks that are only half or one third full.

This is why I'm so passionate about the potential for "Rackonomics" – a new set of holistic rules for the data center that BLADE is defining and championing. IT departments can leverage Rackonomics to scale out their data center networks affordably and holistically at the rack level. In modern data center architecture, Rackonomics refers to the concept of rack-level provisioning--designing, deploying and replicating server/computer systems, data networks and storage area networks (SANs) rack by rack to:

decrease the total cost of ownership of data center infrastructures
reduce IT complexity
enable incremental scalability.

One of the primary tenets of Rackonomics is that putting switches into blade enclosures and server/storage racks is far more economical than using external core switches. Our customers have told us that a "put it in the rack" strategy can enable them to save tens of thousands of dollars in switch hardware, deployment and energy costs for every external switch that they can avoid deploying. And, the network switch has the ability to viritualize the network connections associated with the server/storage elements located in the rack, thus vastly simplifying the datacenter network.

What's more, every time an IT manager can make a rack-level deployment decision, they can fully understand the holistic impact of that rack on other elements of their data center infrastructure. Through Rackonomics and its rack-level approach, as requirements to grow and scale out emerge, an IT manager can understand exactly the impact of what's being added in terms of compute capacity, latency and power and cooling - without over-provisioning the expensive core network, SANs, and power and cooling capabilities to keep pace.

The fundamental concept of Rackonomics is straightforward. By linking servers/storage into localized switches that reside inside blade and/or rack enclosures, IT buyers can save money by dramatically reducing acquisition costs and eliminate network complexity by virtualizing network resources at a rack level. Operational costs can also be reduced because IT administrators are managing fewer entities (racks instead of individual elements in a rack). Furthermore, cabling costs are reduced often by as much as 80%) and cooling requirements for network equipment can be cut in half because fewer power and space hungry core switches are required.

However, as the saying goes, "the proof is in the pudding." One of the biggest benefits of Rackonomics comes from the real-world understanding of how all the elements of the rack work together in a holistic way before making the big decision to scale out using a specific rack full of components. Rackonomics offers a new set of customer-driven rules of the data center. But, how can vendors and their customers play together by those rules?

At BLADE, we're committed to overcoming confusion about how best to implement server/storage consolidation and virtualization by helping to establish shared understandings between the vendor and user communities around holistic data center best practices. Our recent demonstration in Orlando, Florida at Storage Networking World of Fibre Channel over Ethernet (FCoE) with Emulex and NetApp is one such holistic example. FCoE, with its ability to converge data and storage networks, is heralded as the wave of the future, but only to the extent that vendors can communicate its viability and value and the end-user community can understand how to make it work in the real world. That is Rackonomics at work.

One final thought for the busy IT manager grappling with a myriad of issues….think of your datacenter as a collection of racks vs. individual server, storage and networking elements. Make a rack as the smallest unit of deployment in your environment and then replicate that rack. This will make deployment, management and scaling much simpler.

Resource Links:

Virtualizing the Network Facilities (Interop 2008 Podcast I did with InfoWorld)
ZDNet Blog entry on BLADE and Rackonomics from a conversation with BLADE VP of Strategy and Product Management, Dan Tuchler

Green Networking

2007-12-06T15:07:00.001-08:00

Earlier this year I had the opportunity to speak at a conference in Orlando to an audience of over 100 Gartner clients and IT managers about how you can lower datacenter energy costs with blade networking.

I was taken aback by the power of our message!! Truly, I managed to shock myself!!

And no, our message was not about our switches having 2x the performance at 1/2 the cost of Cisco (though that is still true).

Our message was even more controversial - "you are polluting the environment by using energy inefficient Cisco gear - that puts out carbon dioxide, monoxides, and creates acid rain, global warming, melts the polar ice caps and kills the penguins!! Is this what you want to leave back for your children and grand children?"

The message resonates.

And the reason we can blow our own horn here is the fact that our BLADE switches not only make it possible for you to consolidate your datacenter into a more efficient use of space and equipment--but they also consume between 25 watts and 65 watts compared with external switches that typically begin consumption at 300 watts. Multiply that out by the number of Ethernet connections a business needs to purchase and provide power and cooling for and the cost savings and environmental benefits are tremendous.

What does this really mean? If a 100 watt light bulb, powered from a coal-fired power plant runs continuously for one year, it consumes:

876 kWh

714 pounds of coal

5 lb of Sulfur Dioxide

5.1 pounds of Nitrogen Oxides

1852 pounds of Carbon Dioxide

I had people come up and tell me they are going to go back and examine their network architecture decisions - truly.

In September BLADE Network Technologies was recognized as the first IT networking vendor to win the GoingGreen 100 award.

Today, my article, "A Holistic Solution to the IT Energy Crisis" was featured in GreenerComputing.com. Please have a read and let me know what you think.

-Vikram

Blade Server Adoption Accelerating, Fueled by Convergence of Virtualization, Consolidation & 10 Gig

2007-11-22T02:09:00.000-08:00

My good friend Jeffrey Birnbaum may live on the east coast, and I on the west coast, but on many things it's like we're both sitting in the same room. Especially when it comes to where we think the server market is going.

The other day he told me that he's convinced blade servers will garner the lion's share of new server deployments once IT managers realize the tremendous benefits they bring to the datacenter.

In fact, he said, blade servers do a better job at desktop and server virtualization, and deliver better TCO than standalone servers.

When you combine blades with newer technologies such as 10 Gigabit Ethernet, which has reached the critical $500 per port price point on blades well ahead of conventional chassis-based switches, blades now make economic sense for even applications that need the most throughput and bandwidth, combined with the lowest latency.

I couldn't agree more. So I wrote an article about this for the Data Center Journal.

As a matter of fact, it was the brilliant engineers here at BLADE who gave the blade server industry its first taste of the power of 10 Gigabit Ethernet way back in June 2006, and we haven't slowed down since.

Here is our current list of 10G offerings for blade server systems:

Nortel 10Gb Ethernet Switch Module for IBM BladeCenter

Nortel 10Gb Uplink Ethernet Switch Module for IBM BladeCenter

HP 10Gb Ethernet BL-c Switch for HP BladeSystem c-Class

HP 1:10Gb Ethernet BL-c Switch for HP BladeSystem

BNT’s 10Gb XFP modules

Blade Network Technologies Looses a Champion, Mentor, and Great Friend to Cancer

2007-04-01T15:32:00.000-07:00

On Saturday, March 31st,2007, at 6:40 p.m. EDT, Harry Cheselka, who made many contributions during his distinguished 37+ year career at IBM, passed away after a very hard fought battle with cancer.

I first met Harry in early 2002, in Raleigh, N.C when we (as part of Nortel) commenced discussions with IBM to build what would become the industry’s very first Layer 2-7 blade server switch.

My fellow employees and I were extremely fortunate to have the opportunity to work with such a talented and accomplished engineer.

On many an occasion, with every blade server switch product we built for the IBM BladeCenter – we faced immense engineering challenges. On more than one occasion with each of these projects, our engineers ran into what appeared to be insurmountable challenges.

On every one of these occasions Harry sat us down and said “We’re not going to give up now are we? There is a solution to every problem; we must find it”. And every single time Harry held our hand and guided us toward the solution.

Harry was a true champion with a penchant for solving the most difficult problems; a true fighter who never gave up – at work and in his personal life. He was an extremely genuine person who took great joy in helping others overcome their obstacles and achieve success. He was a very humble man who never spoke of his many accomplishments, yet never missed to recognize and complement others for their accomplishments and contributions.

A truly caring person, Harry made time to tackle his own challenges only after he had helped others overcome theirs – both at work and on the home front.

Harry battled a very aggressive form of cancer with the same admirable qualities - extremely positive attitude; never losing hope; always seeking a solution; always concerned about how his friends were doing; and very concerned about the well being and comfort of his parents both of who are well into their eighties.

Harry’s friends at IBM and BLADE will miss him dearly.

And, at BLADE, we will never forget what this great IBM engineer taught us – “never give up no matter how difficult the problem”.

March 2007: NO BARRIERS; ONLY SOLUTIONS

2007-03-20T08:00:00.000-07:00

On February 11th, 2007 Blade Network Technologies, Inc. (BLADE in short) completed 12 months as a standalone company.

It has been a tremendous twelve months and we’ve come an incredibly long way, in a very short period of time.

We’ve achieved many important milestones in our first year of business –

Market share leader for Ethernet and IP blade server switches. Our share is 44% vs. 29% for our closest competitor; In calendar 2006 we took an astonishing 7.5% points in market share from our competition;
First to bring 10GE (uplink) connectivity to a blade server chassis;
# First to deliver 10GE connectivity to every server blade and, from a chassis to the outside world;
Over 100,000 switches (2.1 million+ ports) in production deployment across 26 different industry segments, making BLADE’s switch operating system the most popular and widely installed in the industry. Approximately 50% of these switches were shipped in the last twelve months;
Industry record for the highest performance and lowest latency Ethernet switch for blade server applications; http://www.tolly.com/DocDetail.aspx?DocNumber=206168;
Delivered a staggering 15x better price performance compared to the Cisco Catalyst 6500; http://www.tolly.com/DocDetail.aspx?DocNumber=206168;
Named Top 10 Networking Company for 2007 by InfoSecurity Products Guide; http://www.infosecurityproductsguide.com/hot2007/index.html
Set a new time-to-market record of under 3 months from concept to revenue. When we started life as an operating division of Nortel in 2002, our first product took us 14 months to deliver;
New precision engineering record for delivering high-speed 10GE designs in a single spin of the hardware, where 2-3 spins are commonplace in the industry; and
Actual MTBF of over 2 Million hours, where our customers expect us to achieve 400,000 hours; thus demonstrating the quality of our products and our intense focus on customer satisfaction (our #1 Corporate Objective)
Audited GAAP compliant financials; thus demonstrating the strength of our business controls and strong financial discipline – key to being a viable, credible, and trustworthy supplier. From our very first day of operations, the time tested “KAIZEN” principles have provided the underpinnings of a very disciplined approach to operating our business.

I want to emphasize that none of the above would have been possible without the support of our customers and business partners, and the efforts and dedication of our employees. I am personally very grateful to our customers, business partners, and employees for helping make BLADE a vibrant company.

Here is what our customers have to say about us –

“BLADE’s network switch technology has been a valuable component to our recently launched HP BladeSystem c-Class architecture and has contributed to the customer adoption that has exceeded our expectations. BLADE’s success as an industry leader in this space has made them valuable to our HP BladeSystem Solution Builder Program, and with them we look forward to delivering additional blade technology innovations to our customers.”

Mark Potter
Vice President, HP BladeSystem Division
HP
January 29th, 2007

“BLADE’s ability to innovate quickly to meet customer needs makes them a leading network switch provider and an ideal partner in our worldwide BladeCenter blade server business. IBM’s collaboration with BLADE has recently resulted in another IBM blade server market first—the industry’s first native 10 Gigabit Ethernet switch for blade servers—and we are confident that our continued BLADE relationship will result in more industry-leading technology innovations and solutions for customers of the world’s most popular blade computing system, IBM BladeCenter.”

Doug Balog
VP & Business Line Executive, IBM BladeCenter
IBM Corporation
Chairman, Blade.org
January 29th, 2007

BLADE’s innovation has attracted the attention of leading industry analysts –

“While external chassis-based switches from leading vendors like Cisco are commonplace in enterprise networks, these solutions do not always perform at wire speed and do not always offer low latency. At twice the throughput, and with nine times less latency than the Catalyst 6509, we expect the BLADE product will garner serious consideration by any enterprise considering blade server deployments.”

Kevin Tolly
President and CEO
The Tolly Group
January 2007

“Collapsing network access and aggregation layers in blade network topologies can help to reduce cost, space, power, and cooling while simplifying the datacenter architecture and improving performance and security. When it comes to blade server switch infrastructure, customers have many good reasons to consider Blade Network Technologies over other solutions in the market.”

Lucinda Borovick
Director, Datacenter Networks
IDC
February 2007

Our employee strength as of the date of this report is 102, with approximately 90% of the resources in engineering, sales, marketing, support, and supply chain operations – driving innovation, ensuring high product quality, and helping our server customers maximize sales of blade server systems.

In addition to the 102 BLADERs that toil around the clock to serve our customers every need, we have an additional 70 dedicated development, test, and support personnel located in the U.S, Vietnam, Romania, and India through strategic outsource relationships. These 70 incremental resources enable BLADE to provide a rapid response to the most demanding requests from our customers.

2007 and 2008 promise to be very exciting years for the industry. Enterprises (large and small), Service Providers, and Institutions (Commercial & Research) around the world are coalescing around “rack dense” platforms to meet their computation and storage requirements.

Blades and other forms of ultra-dense rack systems are going to be widely deployed for a multitude of commercial, research, entertainment, and managed service applications.

A reliable, high performance, and low latency I/O fabric based on popular standards (e.g.: Ethernet) will be a critical need for successful and large scale deployment of rack dense servers (which includes blades).

BLADE will be focused on serving this need, by building on the strengths of our blade server switch installed base and rich intellectual property.

We’ve spent many long months over the last year talking to customers to understand how we can improve our existing products and what new products we can build to serve their needs. This has resulted in what the Chairman of our Technical Advisory Board, Mr. Jeff Birnbaum, has described as “the most comprehensive I/O roadmap the industry has seen in over a decade.”

We’re not going to go it alone. We will work with our server customers, and reputable companies in the ecosystems of our customers to provide the most comprehensive communications gateway (I/O infrastructure) solutions for rack dense compute and storage farms. Our existing and future products will have a material impact on the Performance, Security, Manageability, Scalability, Availability, and Total Cost-of-Ownership of an Enterprises rack dense compute and storage infrastructure.

On February 23rd, 2007, at the Carnelian Room on the 52nd floor of the Bank of America building in San Francisco, our employees and their partners heard the incredible story of a man, Neal Petersen, who overcame significant barriers in his personal and professional life to become the first black man to race solo around the world – a daunting 27,000 miles! http://www.bladenetwork.net/pages/about_us_photos.html

Neal has been the silent force of inspiration behind this business when we operated as BSSBU (Blade Server Switch Business Unit) within Nortel.

The mantra at BLADE for 2007 - “No Barriers; Only Solutions” is inspired by Neal’s amazing story. You can download this as a screensaver at: www.bladenetwork.net/media/EXEs/BLADEscreensaver.exe.

We’re a focused company with finite resources competing against fierce competitors. Our biggest asset is the employees of BLADE and their penchant to overcome all barriers and find the solution to our customer’s problems.

Thank you for your support in our first year of operating as an independent company. You have my personal commitment that we will continue to improve the way we serve you and the way we partner with you.

4Q06 Progress Report

2006-11-13T20:00:00.000-08:00

On February 11th, 2006 Blade Network Technologies, Inc. (BLADE in short) came into being thanks to the efforts of Nortel and Garnett & Helfrich Capital, to serve the growing need for sophisticated network infrastructure for the rapidly growing Blade Server market.

October 31st, 2006 marked the end of our 2006 fiscal year (Nov 1 – Oct 31).

When we began our journey at 00:01 hrs on February 11th this year, there was a healthy dose of skepticism in the industry about BLADE and what might happen to this young company in the months immediately following our incorporation.

The task of building an infrastructure to serve the company’s only two customers - HP and IBM (the world’s top two Information Technology companies that collectively generate a staggering $200 Billion in annual sales), whilst being required to make our entire portfolio of products (comprising 12 discreet products) RoHS compliant, bringing 12 new products (3 hardware platforms and 9 new software releases) to market in record time, relocating 100 racks housing 300 Tons of equipment over a weekend from Nortel’s campus to BLADE’s new home, and most importantly swiftly correcting technical issues encountered with our products by end customers and thus ensuring “customer delight”, seemed like a lot to take on for a brand new company with measured resources.

A dear friend, close confidant, and fellow BLADER jokingly said to me as our American Airlines Flight from Dallas on February 11th, 2006 touched down at San Jose International - “What a fine mess you’ve gotten us all into”.

And a fine mess we would have found ourselves in, had it not been for the exceptional support, patience, and encouragement from our customers and business partners, the empathy and understanding of our suppliers, and the dedication and hard work of the employees of BLADE.

I want to thank our customers, business partners, suppliers, and employees of BLADE for helping us become not just a viable but a thriving business with growing credibility in the market place.

BLADE has come a long way since February 11th, 2006 and made considerable progress since I last wrote you on July 12th, 2006.

Below are some highlights:

- Shipments for our Fiscal Q3, 2006 (which began on May 1 and ended on July 31) were up 81% over the same period in the previous year. Shipments for our Fiscal Q4, 2006 (August 1 – October 31) were up 32% over the same period in 2005; and shipments for our Fiscal 2006 (Nov 1, 2005 – Oct 31, 2006) were up 36% over Fiscal 2005.

- As of October 31st, 2006, BLADE has over 88,000 blade server switches (representing over 1.9 million ports) in production deployment at over 1,700 major enterprises around the globe across 26 different industry segments. These switches provide network connectivity for over 400,000 server blades running mission critical applications.

- “Shipments” and “Cash” are important considerations for a young company our size. Here is how we performed against these two important metrics in our fiscal 2006:

o Shipments for fiscal 2006 were 133% of plan .

o Net cash balance on 10/31/06 was up 11% from our starting cash balance on 2/11/06 despite the fact that the company has more than doubled payroll during this period and has had to make significant one-time infrastructure investments in building infrastructure, equipment, and machinery.

We believe that strong financial discipline is key to being a viable, credible, and trustworthy supplier.

- In 2006, BLADE became the industry’s #1 supplier of blade server switches as measured by our share of the total blade server switch shipments. BLADE’s share of this market is 43% while our closest competitor is at 32%.

- We are credited with a number of other firsts by the industry, including:
• 1st to ship integrated Layer 2-3 switching for blade servers
• 1st to ship integrated Layer 2-7 switch for blade servers
• 1st to bring 10GE connectivity to blade server chassis
• Industry’s best price-performance for blade server switches
• Industry’s record holder for highest throughput and lowest latency blade server switch

- Our employee strength as of the date of this report is 88 (up from 42 on Feb 11, 2006). 47% of our employees are in the Engineering function (Hardware, Software, and Test), emphasizing our continued focus on innovation and building world-class networking solutions for the rapidly growing blade server market.

- Our Supply Chain Operation has been acknowledged by our customers as amongst the best in the business given how we’ve responded to upside demand and helped our customers make the RoHS transition while minimizing their exposure of excess and obsolete inventory.

- It has been 29 weeks since we first implemented “Kaizen” at BLADE and it continues to provide the foundation of every decision and every action at BLADE. This rigorous, but time-tested and proven methodology has been key to our strong results for our fiscal 2006 (ended October 31st, 2006). “Kaizen” is a permanent part of BLADE as we believe very strongly that it will help us achieve operational excellence. This time tested system is a key part of our efforts to become the industry’s most trusted supplier of network infrastructure for blade server systems.

- Our Marketing and Engineering teams have finalized their product roadmap for 2007 and beyond and I am pleased to report that the rich and innovative products and features planned over the coming 24 months will help accelerate the adoption of blade servers and address major customer pain points including – performance, throughput, latency, price-performance, manageability, rack-level aggregation, etc. In the month of November a few of us are spending considerable time on the road sharing this roadmap with end customers around the world.

- Our global team of Network Architects have worked tirelessly to help customers design and deploy the best blade server network topologies. In addition to providing highly valued technical pre-sales support to our server customers and their business partners, these road warriors have recently received a lot of accolades from many end customers who view them as “Trusted Advisors”.

Please visit our new on-line picture gallery at http://www.bladenetwork.net/pages/about_us_photos.html to see the progress we’re making at BLADE.

Thank you for your support in this very important year.

Workday 100 Report

2006-06-12T11:31:00.000-07:00

June 30th, 2006 marked the 100th workday for Blade Network Technologies (BLADE) – the industry’s #1 supplier of Ethernet, IP, and Application Switches for blade server systems.

Following is a progress report since I last wrote you:

We are two months into our Fiscal Q3 (which began on May 1 and will end on July 31). June 2006 was the biggest month in the history of the business (including the period when we operated as BSSBU within Nortel).
As of June 30th, 2006 (end of calendar Q1, 2006), our life-to-date Unit Shipments stood at 70,750 switches (1,556,554 Ethernet ports).

This is a significant milestone and I want to take this opportunity to thank our customers, employees and business partners for the continued help and support.
In May and June of 2006, we added over 64 new enterprises to the rapidly growing list of end customers who use our switches in conjunction with their HP and IBM blade server systems.
On July 10th, 2006, BLADE won Broadcom’s 2006 Technology Innovation Award in recognition of the network innovation we’ve delivered in the rapidly growing blade server market.
Our employee strength as of the date of this report is 85 (up from 42 on Feb 11, 2006 the day we came into existence). 46% of our employees are in the Engineering function (Hardware, Software, and Test), emphasizing our focus on innovation and building world-class networking solutions for the rapidly growing blade server market.
During our first 100 work days we have successfully shipped:
- 3 new hardware platforms
- 7 new software releases
- RoHS compliant versions of all existing products (12 products in all!)
- The industry’s first blade server switch to deliver 10Gbps connectivity to blade server systems
Given the magnitude of the transition we had to undertake as we carved out from Nortel to become a standalone company, and the task list associated with the complex transition, we are extremely pleased to report that we delivered on our engineering commitments to our customers.
This past month, BLADE became the industry’s first supplier of network infrastructure to ship a 10 Gigabit Layer 2-3 switch for blade server systems.
Our new labs in Santa Clara and Ottawa are fully operational. We moved over 200 tons of equipment housed in over 80 racks over the Memorial Day weekend. This move that took months of planning was executed, much to our customer’s delight, without any disruption to engineering schedules and customer commitments.
Our Customer Executive Briefing Center is complete and proudly showcases all the blade server switches we build and supply for the HP Blade System and IBM BladeCenter.
We have, in record time, successfully transferred the Bill-of-Materials (BOM) and other relevant engineering data for all of our products from the Nortel Product Data Management system to our own PLM (Product Life Cycle Management System).
In addition, BLADE engineers have completely weaned off Nortel’s development infrastructure and are using BLADE’s brand new and state-of-the-art development environment. The new development environment at BLADE has reduced the time it takes BLADE engineers to successfully compile a new release of software from 6 hours to under 10 minutes! The employees of BLADE thank Nortel for the outstanding support we received during the transition.
Our Marketing and Engineering teams have spent the last 30 days planning our roadmap for 2007 and 2008. Relevant details of this roadmap will be shared with our customers over the coming weeks. BLADE’s product strategy is to deliver innovative and functionally rich Network I/O products for blade server systems at unprecedented price-performance levels. Our customers can expect us to deliver new and innovative products in the areas of 10G connectivity, iSCSI SAN connectivity, Network Virtualization, and Blade Rack Management.
“Kaizen” continues to provide the foundation of everything we do at BLADE every day. This rigorous, but time-tested and proven methodology is key to our success. In the long run, it will help us achieve operational excellence and will have a material impact in our efforts to become the industry’s most trusted supplier of network infrastructure for blade server systems.
While it is still early days in our implementation of Kaizen as the fundamental operating philosophy at BLADE, we’re very encouraged by how Kaizen is helping us implement world-class processes, eliminate costly errors, reduce waste, and build a healthier business.

Please visit our new on-line picture gallery at http://www.bladenetwork.net/pages/about_us_photos.html to see the progress we’re making at BLADE.

Workday 60 Report

2006-05-08T06:11:00.000-07:00

May 8th, 2006
I am pleased to be writing you this report from our new HQ office located at 2350 Mission College Boulevard, Santa Clara, CA.

May 5, 2006 marked the 60th workday for Blade Network Technologies (BLADE) – the industry’s #1 supplier of Ethernet, IP, and Application Switches for blade server systems.

The pace of activity and progress continues to accelerate!

Following is progress report since I last wrote you:

For our fiscal quarter two, which ended on April 30, 2006, our shipments were well ahead of plan. I am also very pleased to report that our company generated cash from continuing operations for this fiscal period. This was a major accomplishment and I want to take this opportunity to thank our customers, employees, and business partners for helping us get off to a good start.
Our employee strength as of the date of this report is 75 (up from 42 on Feb 11, 2006). Approximately 53% of our employees are in the Engineering function (Hardware, Software, and Test), emphasizing our focus on innovation and building world-class networking solutions for the rapidly growing blade server market. Ardene Fullerton, our Director of HR has done a brilliant job of helping BLADE with its recruitment effort, and in helping the new employees settle into their new work environment.
We have successfully achieved RoHS compliance across our entire portfolio of products. Solectron’s Charlotte facility was the world’s first electronic manufacturing facility to be RoHS certified and BLADE’s products were the amongst the first RoHS products to ship from this facility. We’re very proud of the achievements of our Supply Chain Operations Team under Bob Murden’s stewardship. I also want to acknowledge the excellent support we have received from Nortel’s Supply Chain Operations team, Solectron, and Alpha Networks.
We have successfully added two new contract manufacturing facilities to support the growing requirements of our customers – in Malaysia andTaiwan. Solectron, Charlotte continues to remain our premier contract manufacturing site.
In the first calendar quarter of 2006, we added over 70 new enterprises to the rapidly growing list of end customers who use our switches in conjunction with their HP and IBM blade server systems. Our Sales Network Architects, under Shailesh Naik’s leadership, have received very encouraging and positive feedback from customers on their handling of sales situations amidst the transition of business from Nortel.
As of March 31, 2006 (end of calendar Q1, 2006), our life-to-date Unit Shipments stood at 58,643 switches (1,298,690 Gigabit Ethernet ports), clearly making us the industry’s #1 supplier of blade server switches!! We are very grateful for the support we have received from HP, IBM, and their customers to help us achieve this position.
Our website now features a brand new FLASH animation that articulates BLADE’s value proposition. Please visit us at http://www.bladenetwork.net/ and click on “Why Choose Blade Switches” to view our message.
Our new labs in Santa Clara and Ottawa will soon be ready for occupancy. All Air Conditioning, Electrical, Fire Protection, and Tiling work has been completed. We are now in the process of installing racks and pulling data communications cables through the labs.
Our Customer Executive Briefing Center is under construction and very soon we will be able to showcase our products to customers and partners who visit our HQ facility.
Every employee at BLADE has undergone a Standards of Business Conduct Training to help ensure that BLADE conducts business in a manner that is consistent with our core values and our customer’s expectations.
BLADE’s new customer support system and processes were recently put to test by a major corporation. Here is what their CIO had to say – “I want to personally thank BLADE for your professionalism in handling the escalation. You had a very short time to resolve this critical issue that was preventing the production rollout of blade servers in our new datacenter. We were very pleased with your excellent response and resolution! Thanks again to your team for a job well done.”
And here is what our customer (server OEM) had to say “I appreciate how you are representing us and our blade servers to our customers. It means a lot to have a partner that will stand up beside us and work these issues head on and professionally.”

CUSTOMER SATISFACTION IS BLADE’s #1 CORE VALUE AND THE ABOVE IS AN IMPORTANT DEMONSTRATION OF HOW WE STRIVE TO LIVE BY OUR CORE VALUES IN EVERY ACTION WE TAKE EVERY DAY.
Our voice and data infrastructure is up and running at our HQ facilities. We are a proud user of Nortel VoIP technology; and our desktop computers, laptops, printers, servers, storage, flat panel displays, and projectors are supplied by HP and IBM. Our mission critical applications run on blade servers and we make extensive use of our Blade Server Switches and their superior functionality to enhance the Performance, Scalability, Security, and High Availability of our data center infrastructure. We are proud to be an enterprise that uses blades to run our entire business. Our blade server switches are used to provide connectivity to both our LAN (Local Area Network) and SAN (Storage Area Network).
We have completed the procurement of our own development tools and very soon we shall have weaned off the development infrastructure that our parent, Nortel, has so graciously allowed us to use since our inception.
After extensive research we have selected our Product Lifecycle Management (PLM) tool. Over the coming few weeks we will be transferring the Bill-of-Materials (BOM) and other relevant engineering data for all of our products from the Nortel Product Data Management system to the BLADE PLM System. This is a very critical exercise and one that we are monitoring very carefully.
Fiscal discipline is something we’ve been very focused on from our very first day. Our Finance & Accounting Team under Jim Sladek’s leadership has put in place very robust processes to ensure that we run a tight ship. We successfully closed our books on or before workday five (5) for the months of February, March, and April as well as for the quarter that ended on April 30th, 2006. Our financial systems are fully operational and accurately reflect all on-going business transactions and activity in accordance with GAAP requirements.
In my workday 30 report I talked about instituting a new and very rigorous commitment process to help us become a better supplier and business partner to our customers. We’ve taken a significant next step in this effort. We have embraced a time tested Japanese methodology, “Kaizen” (Kai = Change; Zen = For the Better). A rigorous methodology that requires meticulous tracking of Key Performance Indicators, extreme discipline in planning, and flawless execution, “Kaizen” will help BLADE serve its customers better. Next time you’re in Santa Clara, please pay us a visit and see how we’re implementing “Kaizen” at BLADE and the impact it is having on our day-to-day operations. We’ve had some extremely encouraging results very early in the process!

Please visit our new on-line picture gallery at http://www.bladenetwork.net/pages/about_us_photos.html to meet some members of BLADE team and see the progress we’re making in our effort to become a successful enterprise and the most trusted name in blade server networking.

Workday 30 Report

2006-03-24T10:42:00.000-08:00

March 24, 2006 marked the 30th workday for Blade Network Technologies (BLADE) – the industry’s #1 supplier of Ethernet, IP, and Application Switches for blade server systems.

20 work days have passed since my workday 10 report; and I wanted to reach out and give you an update on how things are progressing at BLADE.

Our typical workday begins at 5:00 am and ends at about 9:00 pm. Despite the long workdays, the energy levels at the company are at an incredible high; and the desire to delight our customers is intense. You can feel this, quite literally, as you walk the halls and talk to the employees.

Following is a list of what we accomplished since I last wrote you:

Our employee strength is up to 62 with an additional 6 employees slated to start over the next few days. Approximately 52% of our employees are in the Engineering function (Hardware, Software, and Test).
We plan on hiring another 28 people over the next few months. 18 of the 28 open positions are in the engineering function (Hardware, Software, & Test). This would bring our total employee strength to about 96 in the not so distant future, with 52% of the employees in the Engineering function.
We’ve successfully migrated our bug database from Clarify to Bugzilla, thus demonstrating that you can indeed run your business using Open Source technology.
We’ve conducted a number of product training sessions and SE Labs around the world – launching new features and capabilities of our blade server switches. These sessions allowed us to touch thousands of sales personnel and resellers around the globe and the feedback we received was overwhelmingly positive.
Our dedicated manufacturing lines at Solectron in Charlotte, NC have moved from running 2 shifts a day to a 24*7 (3 shifts per day operation). Bob Murden, our VP of Supply Chain Operations and myself visited the plant on 3/24 and I am pleased to report that BLADE has very quickly addressed our customer’s supply capacity requirements.
Today, BLADE shipped RoHS compliant switches for the HP BladeSystem and the IBM BladeCenter, making us the industry’s first network equipment vendor to ship RoHS compliant products for the IBM BladeCenter and HP BladeSystem. We’re proud to say that BLADE’s RoHS products shipped from the Solectron Charlotte plant, the day after Solectron announced that its Charlotte facility was the First EMS Site Worldwide to Earn IPC RoHS Certification.
Remodeling work at our HQ facilities in Santa Clara is progressing to plan and I plan to be writing you my next update from our new home.
Remodeling work at our BNR (Blade Network Research) facilities in Ottawa is proceeding very well too; and very soon this facility will be equipped with our very own Thermatron Temperature Chamber, giving us the ability to perform DMT (Design Maturity Testing) on a 24*7 schedule. This we believe will have a significant and positive impact in our ability to better serve our customers.
We’ve been quietly working away in the background on a website for our company. We plan to go live very soon. Look out for an e-mail from me on this in the coming weeks.
We have defined a set of core values for the company that will guide our every action every day.
We’ve put in place a companywide “DASHBOARD” that allows us to track weekly progress on many fronts – engineering, sales, supply chain operations, finance, and human resources. We’re very proud of this dashboard and how it helps us steer our way towards becoming the industry’s most valued supplier of blade server switch.
We had the company’s first Board of Directors meeting on March 21, 2006 and here is what our Chairman, Mr. David Helfrich had to say
“We have come out of the gate on solid footing. I am extremely pleased with the focused and meticulous execution demonstrated by the BLADE team under Vikram's leadership since the closing of the transaction. The transition is ahead of plan and progress has been very steady. The bar set by our customers is high, and we have a tremendous amount of work still ahead of us. But I am confident of the ability and dedication of this team to deliver. With the continued support of our customers and continued hard work by our team, we intend to make a deep impact on this market."
Last, but not least we are instituting a new commitment process to help us ensure that we deliver on our commitments to our customers – on time, every time. This is a new and very rigorous process; but one that I am very committed to. I request our customers to please bear with us as we work towards making this process an integral part of everything we do at BLADE. In due course, as this process takes hold and sets deep roots in our company, our customer’s will see a material improvement in the quality of our work and our responsiveness.

Workday 10 Report

2006-02-24T18:14:00.000-08:00

On February 10, 2006, Nortel and Garnett & Helfrich Capital announced an agreement to transform Nortel’s BSSBU into a well capitalized and free standing private company (Blade Network Technologies, Inc.) singularly focused on serving the network infrastructure requirements of the rapidly growing blade server market.

February 24, 2006 marked the 10th workday for Blade Network Technologies; BLADE in short.
How did we fare? And, what did we accomplish?

Our first 10 days were undoubtedly very long, extremely hectic, full of challenges, and extremely productive. Following is a list of what we accomplished during this period:

Set up our legal business entities in U.S. & Canada
Completed our Tax registrations in every country where we have employees – U.S., Canada, U.K, Germany, and Australia
Obtained relevant GST/VAT permits/exemptions from Governments around the world
Successfully transferred Nortel BSSBU employees to BLADE
Obtained INS authorization to transfer the remaining employees working on H1-B visas from Nortel to BLADE
Added new employees across multiple functions (Sales, Finance, Operations, Engineering, Customer Support, General Admin)
Successfully made payroll for all our employees stationed around the world - U.S., Canada, France, Germany, UK, and Australia
Turned on benefits (Health, Vision, Dental) for all our employees
Executed a multi-year lease agreement for our New HQ facilities located at 2350 Mission College Blvd., Santa Clara, CA
Executed a multi-year lease agreement for our Canadian Subsidiary (Blade Network Research; BNR in short) located at 350 Terry Fox Drive, Kanata Technology Park, Ottawa
Successfully transferred all transactional relationships from our customer’s 9 hub locations to BLADE
Our new ERP systems handled daily shipments, invoicing and purchasing activities with 100% accuracy
Finalized design and layout of our three HQ labs (Hardware, Software, & Test) involving 75 racks of equipment and over 20 test benches
Commenced tenant improvements to our new HQ facilities
Brought up our mail servers
Provided new laptops to all our employees
Issued a new Manufacturing Planning Schedule to Solectron to allow BLADE to better serve its customers
Improved our supply commitments to our customers
Conducted a major training event for over 400 of our customer’s pre-sales engineers and partners
Completed relocation of our Level 3 Technical Support Center from California to Texas by workday 5 (a full week ahead of plan!)
Finalized our POR commitments to our customers
Executed commercial agreements with our Contract Manufacturers so as to ensure supply continuity for our customers
Placed an order for a 50 Ton Air Conditioning Plant for our HQ labs
Ordered a new Temperature Chamber for our Design Maturity Labs in Ottawa
Fixed two customer escalations in record time;

and
Prioritized our work plan for the next 10 days.

Thank you for your patience and support, as BLADE readies itself to become your most trusted supplier of Network infrastructure for blade server systems.

I look forward to sharing additional information on our progress with you in a few weeks.