IBM Flashes Blade Acquisition
This story has been updated with comment from Juniper.
ARMONK, N.Y. (
) -- 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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