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Blade Network Technologies is breathing a sigh of relief. Today, the Nortel spin-off launched upgrades to its blade server switches designed to automatically cope with network settings as virtual machines are live migrated around physical servers inside a blade chassis.

Created to cash in on the blade server market, BNT was spun out of Nortel in 2006 - the same Nortel that asked for bankruptcy protection in Canada, the United States, and Europe two weeks ago to ride.

So far, BNT has been able to partner with Hewlett-Packard and IBM, who account for the vast majority of blade server sales and have for years. BNT's blade switches are sold under the HP brand on BladeSystem machines and are sold under the Nortel name on IBM's BladeCenter machines. Not surprisingly, given the bankruptcy of Nortel, Dan Tuchler, vice president of product management and strategy at BNT, says that the company wants to start promoting its own brand a little as it peddles products. Not that IBM or HP are going to go bankrupt any time soon.

BNT is hoping to get in front of the use of live migration, as server virtualization continues its march into the data centers of the world. "People are sweeping up 'cats and dogs' servers into virtual machines to get efficiency, but what we haven't seen them doing is rapid provisioning and live migration," explains Tuchler.

"People are dabbling, but we are not seeing widespread adoption. And one of the inhibitors is networking. Administrators don't want VMs at the company running around the network. They get wrong security or network settings, and then there is either downtime associated with that or a potential security breach. There is a lot of hesitation because of the complexity and of all of the things that can go wrong."

The VMready features announced today by BNT are simple in concept. In a typical blade server setup, a hypverisor on a blade server abstracts virtual machines, which in turn talk to physical ports on the server through the hypervisor, which in turn look to a physical switch. VMready virtualizes the ports on the switch so the virtual ports on a VM are tied to a virtual port on the switch. As a VM migrates, the port assignments are orchestrated to move in time on both the servers and the switches involved in the live migration.

VMready will come as a software upgrade to the existing switches sold through HP and IBM and are being positioned against Cisco Systems' Nexus 1000V virtualization-aware software-based switch that was developed in conjunction with VMware. The Nexus 1000V only works with VMware's future ESX Server 4.0 hypervisor and its live migration feature. This Cisco-VMware hybrid also requires software to be resident on physical servers.

The BNT VMready extensions to its network switches obviously run right on the switches themselves, and the company says that it will support virtual network ports and live migration with ESX Server, Hyper-V, and Xen hypervisors (including Citrix, Sun, Oracle, Novell, and Red Hat flavors).

"Our customers are telling us that they want servers to run server code and networks to do networks," says Tuchler, differentiating from the approach taken by Cisco and VMware. "Customers are telling us that Cisco's approach is too heavy: They tell you how to run the VMs and then there is all of that talk about Cisco requiring you to use their blade servers too."

HP will be adding the VMready features to its 1:10Gb BL-c Ethernet switch for its BladeSystem machines through the Advanced Function Software add-on, which costs $599 per switch. IBM is selling VMready on its Nortel 1/10 Gb Uplink Ethernet switch and the VMready features will be part of the initial purchase price on new switches sold. Later this year, BNT will provide a software patch to a number of its existing blade switches that will allow them to be upgraded to support VMready, and the company's rack-based switches, which are used for rack servers, will get VMready later this year.

BNT says that it has shipped over five million Ethernet ports in total since the company was founded - and one customer has in excess of 12,000 switches. (In addition to HP and IBM, NEC and Verari Systems resell its products). The company had 54 per cent unit growth in switch shipments in 2008, according to Tuchler, and had 48 per cent market share in blade server switches. The company has grown and now has 327 employees. No word on what revenues and profits might be.

But given its niche in blades and expansion into rack switches last year, it is hard to believe that one of the server majors coveting a networking business and perhaps miffed at Cisco for coming into the server space isn't thinking about snapping up BNT. IBM, HP, Dell, and Sun Microsystems are obvious candidates. But BNT is probably keen on playing Switzerland if the tier one server makers go to war against Cisco for virtualized data centers. If nothing else, that will drive up the acquisition price of BNT. ®

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