Feeds

IBM strikes panglossian license deal with Voltaire

Just buy Mellanox and get it over with

Next gen security for virtualised datacentres

Maybe IBM should just stop fooling around and buy Mellanox Technologies already.

Ahead of its own acquisition by InfiniBand and Fibre Channel networking specialist Mellanox, InfiniBand switch rival and Ethernet switch wannabe Voltaire has inked a licensing and development agreement with Big Blue.

Voltaire was cagey about exactly what IBM had licensed and what the development agreement covered, but a Voltaire spokesperson told El Reg that the deal involved licensing of Voltaire software and non-recurring engineering fees, which total approximately $17m between now and 2012. The spokesperson added that Voltaire expected to get most of the dough in 2011.

In its announcement, Voltaire said it is in line - or more precisely, Mellanox will soon be in line - to receive ongoing support fees based on IBM's sales volumes for licensed software following the integration of that software with IBM's products and the commercial rollout of it.

IBM, you will recall, bought Voltaire partner and sometime rival Blade Network Technologies, which is the blade and top-of-rack switch maker that was spun out of now-bankrupt Nortel Networks back in 2006.

IBM is rumored to have paid $400m to get its hands on Blade Network, a move that was necessary as Hewlett-Packard and Oracle have their own networking wares and networking partner Cisco Systems entered the server racket in early 2009 with its "California" Unified Computing System blade and rack servers and their converged server and storage networking. Cisco bought IBM's flagging network business back in 1999, leaving Big Blue depending on others such as Cisco, Brocade Communications, Voltaire, Juniper Networks, Blade Network, and Mellanox.

While the companies did not elaborate, IBM is probably licensing Voltaire's Unified Fabric Manager 3.0 software and embedding it on Blade Network's switches. It is not clear what Mellanox has to say about the deal, or how it might change the Voltaire acquisition, which is expected to close in the first quarter of 2011 pending regulatory and shareholder approval.

Mellanox, seeking to get more control over the InfiniBand switching racket and to expand into the Ethernet space, gobbled up Voltaire at the end of November for $218m. That was $176m net of Voltaire's cash on hand, and about an 86 per cent premium over Voltaire's market capitalization ahead of when the deal was announced.

Mellanox has a fair share of the InfiniBand switching market, and will have even more once the Voltaire deal closes; it is also one of the dominant makers of server adapter cards and chips for supporting both InfiniBand and Ethernet protocols. Adding both companies together using 2009 numbers, the combined Mellanox-Voltaire had $166m in sales, with 42 per cent coming from adapter cards, a little more than a quarter coming from switches, a little less than a quarter coming from chips, and the rest coming from software and services.

As El Reg goes to press, Mellanox has a market cap of $893.9m, up a tad since the Voltaire deal was announced three weeks ago.

If IBM wanted to throw a spanner in the networks, it would have Santa Palmisano reach into that big old bag of cash and whip out something on the order of $1.6bn or so and buy the whole Mellanox-Voltaire collective. IBM could spin out Microelectronics as an arms-length subsidiary and let it control its networking business so it could maintain the third party server customers and relationships Mellanox and Voltaire have - and get its switches and adapters at cost. This would be a PR coup over Cisco, which is burning its bridges with the server makers by entering their space. ®

The essential guide to IT transformation

More from The Register

next story
The Return of BSOD: Does ANYONE trust Microsoft patches?
Sysadmins, you're either fighting fires or seen as incompetents now
Microsoft: Azure isn't ready for biz-critical apps … yet
Microsoft will move its own IT to the cloud to avoid $200m server bill
Death by 1,000 cuts: Mainstream storage array suppliers are bleeding
Cloud, all-flash kit, object storage slicing away at titans of storage
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
Oracle reveals 32-core, 10 BEEELLION-transistor SPARC M7
New chip scales to 1024 cores, 8192 threads 64 TB RAM, at speeds over 3.6GHz
VMware vaporises vCHS hybrid cloud service
AnD yEt mOre cRazy cAps to dEal wIth
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
BYOD's dark side: Data protection
An endpoint data protection solution that adds value to the user and the organization so it can protect itself from data loss as well as leverage corporate data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?