IBM's Blade.org group attracts investors

Venture capitalists have invested US$1 billion in new companies that belong to a year-old blade center organization backed by IBM Corp., called Blade.org.

Blade.org includes 100 mostly U.S. companies, up from 40 when the group started a year ago, that sell processors, software, networking equipment and other technology that is designed for blade servers. Member companies collaborate on product and market development and in setting standards for interoperability of various blade-related products. The organization reported the investment figure as it marked its first anniversary with an event Friday in San Francisco.

Walden International, a global venture capital firm, has invested $100 million in startups or early-stage companies that are part of Blade.org, said Andrew Kau, managing director of Walden USA. Large vendors such as IBM can't provide all the components of technology and need to nurture small, innovative companies whose technology meshes with IBM's to serve a customer, Kau said.

Walden, which is a member of Blade.org, is more likely to invest in startups working in this kind of collaborative environment than in others, he said.

The blade server platform is the fastest-growing segment of the server market and is expected to account for 10 percent of global server unit sales in 2007, according to IDC. The segment will generate $11 billion in revenue by 2010, IDC said.

Blade.org member firms collaborated to design and install a video surveillance system that runs on blade servers at the Asian Art Museum in San Francisco, which houses 16,000 Asian artifacts. Partners included Avnet Inc., a system integrator; DataCom Systems, a provider of video surveillance management software; Blade Network Technologies Inc., a maker of Ethernet switches used in blade environments; and IBM.

Although the organization is built around IBM's BladeCenter product line, other server manufacturers are members. However, they don't include IBM's major competitors, Hewlett-Packard Co., Dell Inc. or Sun Microsystems Inc.

"They have chosen not to join," said Douglas Balog, vice president of IBM's BladeCenter line and chairman of Blade.org. Still, in the interests of openness, he said news about their blade products is posted on the Blade.org Web site.

Even though IBM spearheaded Blade.org, not all members are even working with the company. They can also collaborate with each other on approaches to the market that don't involve IBM. "It's not about a one-to-one relationship with IBM, its about many-to-many relationships," Balog said.

Blade.org's goal is to expand the number of technology solutions created through collaboration to 3,000 from 30 today, to expand membership into Europe and the Asia-Pacific region and to create an advisory panel made up of customers, Balog said.

The IDG News Service is a Network World affiliate.