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IBM To Acquire Networking Specialist

Blade Network Technologies bid shows Big Blue is stocking up on edge offerings as rivals also round out their portfolios.

IBM said Monday it has reached a definitive agreement to acquire Blade Network Technologies, a Santa Clara, Calif.-based developer of networking switches and related hardware and software.

IBM said it expects the deal to close in the fourth quarter, subject to regulatory reviews. Financial terms of the agreement were not disclosed.

Blade primarily offers Ethernet switches for datacenter servers, with a primary focus on switches for blade and rack-style systems. IBM officials said that, with the acquisition, the company's enterprise customers would not have to turn to third parties for such technology.

"Blade will help IBM better integrate networks with its systems, optimizing them for workloads that require high-speed and low-latency performance such as cloud computing and business analytics," said Brian Truskowski, IBM's general manager for Storage and Networking, in a statement.

"Blade will increase IBM's System Networking development, sales, support, skills, and awareness and help IBM build smarter systems that are optimized for client requirements," said Truskowksi.

For their part, Blade officials said the deal will give their organization access to a significantly larger sales and distribution network. "Blade views this as a great opportunity to continue working with the ecosystem of technology providers that have helped make our company successful while allowing our technology to become a more central part of the datacenter," said Blade CEO Vikram Mehta, in a statement.

Blade's products are found in more than half of all Fortune 500 companies, including those in the automotive, telecom, education, government, and healthcare markets, according to IBM.

IBM appears to be bulking up on edge offerings that add value to its main server and software lines, perhaps with an eye on rival HP and Oracle's own campaigns to round out their offerings through buyouts. HP has announced six acquisitions so far this year, including a $2.35 billion pact to acquire storage specialist 3Par. Oracle has announced five deals to date this year, including a $685 million bid for healthcare software provider Phase Forward.

IBM has disclosed ten deals thus far in 2010. The largest was last week's agreement to acquire data warehouse appliance vendor Netezza for $27 per share, or about $1.7 billion. IBM shares were up .57%, to $134.87, in midday trading Monday.

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