Fujitsu Siemens to sell Egenera blade servers

Fujitsu Siemens will distribute the dual-branded Primergy BladeFrame server

European computer manufacturer Fujitsu Siemens Computers has forged an alliance with Egenera to become the sole provider of the U.S. company's blade servers in Europe, the Middle East, and Africa, the companies announced Wednesday.

Under the deal Fujitsu Siemens will distribute the dual-branded Primergy BladeFrame server developed by Egenera, which is based in Marlboro, Massachusetts. The companies expect the partnership to generate about €240 million ($295 million) in additional sales over three years, they said.

Primergy is the name of Fujitsu Siemens' server family, and BladeFrame the name given to Egenera's blade server product.

Blade servers, which have become popular among enterprises seeking to lower their data center operating costs and increase flexibility, are full-powered computers mounted on a single circuit board that can be plugged into racks.

The Primergy BladeFrame server will be available next month in five European markets: Belgium, Germany, Italy, Switzerland, and the U.K. The product will become available in other markets in the first quarter of 2006.

Pricing will depend on the number of blade servers and additional features, but an average price per system will be around $400,000, Egenera President and Chief Executive Officer Bob Dutkowsky said in a telephone interview.

The product is aimed at companies operating data centers with 50 servers and more, he said.

The alliance between Fujitsu Siemens and Egenera is designed to mutually help each company, said Joseph Reger, chief technology officer at Fujitsu Siemens.

Until now, the European manufacturer, a joint venture between Japan's Fujitsu and Germany's Siemens, has primarily offered its FlexFrame, a blade server optimized to run mySAP Business Suite technology from business application vendor SAP, according to Reger. "We needed a meaningful extension of our blade server product line to penetrate entire data centers," he said. "Some data centers are not wall-to-wall SAP."

The FlexFrame product will continue to be available.

Reger said it would have taken Fujitsu Siemens two to three years to develop a blade server product similar to Egenera's, which can support nearly any business application and includes software to enable virtualization, provisioning and other functions.

For Egenera, the deal with Fujitsu Siemens means expansion beyond its core U.S. market. "The alliance with Fujitsu Siemens is a great growth opportunity for us, considering the company's strong position in the EMEA (Europe, Middle East, and Africa) region," Dutkowsky said.

Egenera blade servers were previously available in Europe. The company had a sales office in the U.K.

The agreement between the two manufacturers is not meant to begin and end with the Primergy BladeFrame product, according to Reger. It is also intended to serve as a framework for future joint research and development, and joint testing, he said. The German company will have a seat on Egenera's technology advisory board.

The companies face considerable competition on the blade server front from the likes of Dell, IBM, and Hewlett-Packard.

Two primary reasons why enterprises should be interested in buying the Primergy BladeFrame are to make more cost-efficient use of their computing power and to increase flexibility and speed when adding new applications or making changes, according to Dutkowsky. "For every dollar that most enterprises spend on servers today, they only get 20 cents of utilization in return," he said.

As for flexibility, many companies with data centers typically need around 90 days to set up servers for new tasks, according to Dutkowsky. "With our technology, they can point and click and manage this process in minutes," he said.

In addition to supporting Microsoft Windows and the Linux operating system, Egenera plans to include Solaris 10 from Sun Microsystems Inc. this year, according to Dutkowsky. "This will be one of the few blade servers to support all three operating systems," he said.

The Primergy BladeFrame will be based on Intel's Xeon and Advanced Micro Devices' Opteron processors.

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