IBM Flashes Blade Acquisition

IBM continues to throw money round like confetti, snapping up Blade Network Technologies for a rumored $400 million.
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This story has been updated with comment from Juniper.

ARMONK, N.Y. (

TheStreet

) -- Another day, another

IBM

(IBM) - Get Report

acquisition.

Just a week after the tech giant's $1.7 billion

purchase of data warehousing specialist Netezza (NZ)

, IBM continues to throw money round like confetti, snapping up privately-held

Blade Network Technologies

for a rumored $400 million.

A rising star in the data center market, Blade makes blade servers, switches and software. The Santa Clara, Calif.-based firm already counts

Morgan Stanley

(MS) - Get Report

, software maker

Comverse

and

King's College London

among its customers and partners with

Hewlett-Packard

(HPQ) - Get Report

,

Broadcom

(BRCM)

and

Emulex

(ELX)

, as well as IBM itself.

IBM did not disclose the terms of the deal, although

Barrons

, citing an unnamed source, reports that the acquisition was valued at around $400 million. The purchase, however, was not completely out of the blue. Over 50% of IBM's System x BladeCenter servers either attach to or use products from the privately-traded firm.

"Blade

Network Technologies will increase IBM's System Networking development, sales, support, skills and awareness and help IBM build smarter systems," explained Brian Truskowski, general manager of IBM's system storage and networking division, in a statement released on Monday.

The acquisition of Blade Network Technologies also makes an IBM bid for

Juniper

(JNPR) - Get Report

much less likely. A longstanding IBM networking partner, there has been

speculation linking the two companies

at a time of heightened tech sector consolidation.

Juniper, which is one of Blade Network Technologies' financial backers, sees IBM's acquisition as a positive. "This deal is beneficial for Juniper," explained a Juniper spokesman, in an email to

TheStreet

. "As an investor in Blade Network Technologies and a strategic alliance partner with IBM, this will enable us to collaborate more closely when our products and services are deployed together."

Increasingly, tech giants such as IBM, HP and

Cisco

(CSCO) - Get Report

are attempting to bolster their data center stories by selling a mix of storage, server and networking gear.

HP, for example, recently out-muscled

Dell

(DELL) - Get Report

to acquire storage maker

3Par

(PAR) - Get Report

and

also grabbed security company ArcSight (ARST) for $1.5 billion.

Last year HP also bought networking specialist

3Com

, which was seen as a direct reaction to

Cisco's decision to enter the server space

.

In addition to challenging HP, IBM is also jostling for position against fierce database rival

Oracle

(ORCL) - Get Report

, which has ramped up its own data center strategy via its acquisition of

Sun Microsystems.

There has already been chatter that

security firm Fortinet (FTNT) - Get Report could be IBM's next acquisition

, although Big Blue recently

warned of a regulatory threat to its broader M&A strategy.

IBM shares rose 20 cents, or 0.15%, to $134.41 on Monday, despite a modest dip in tech stocks that saw the Nasdaq slip 0.42%.

--Written by James Rogers in New York.

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