Maybe a company like IBM isnt the innovator, but they certainly can take over a market. Give me an example.Its interesting, because you havent heard me say the word blade once. I dont think that we do blades. We deliver the value out of a blade platform, but we dont have to use blades to deliver value. Thats critical in this conversation. Youre exactly right. What did IBM and HP do? They came into the market and said, Were going to change the game. Were going to sell you a blade architecture. Whats their blade? Its a PC in a different form factor. It has a disk. It has a state to it. Our blades have no disks. Theyre stateless. Theyre a radically different architecture than what the HPs and the Dell [Inc.s] and the IBMs call their blades. If you take an IBM blade and an IBM PC, its just a different form factor. You take an Egenera blade, it has no disk. Its just a processor and memory, and it gets its personality based on the workload. Its the virtualization concept. Its a very different way to deploy the technology, only it is a game-changer. IBM cant do it today, HP cannot do it that way, Sun cannot deliver a diskless blade today, because they have to retrofit their old technology to the new requirements of the customer. Click here to read a review of Sun Microsystems Sun Fire B1600 Blade Platform. When Cisco [Systems Inc.] came into the marketplace with routers, they changed the game. When EMC came into the marketplace with low-cost storage, the changed the game again. IBM adjusts, HP adjusts, Dell adjusts, it takes them years. And in that time, they lost the market. Cisco dominated the networking market. EMC dominated the storage market. Microsoft dominated the desktop market. I think the same opportunity exists for Egenera. Egenera can get itself into the dominant position in the Linux virtualization space to change the way customers view computing in their enterprise. And we have the architecture and the technologyand the hardware and softwareto deliver on that promise. Whats the size of that market? I dont know. [International Data Corp.] would say its in the $40 billion-a-year range. Its a huge market. So, is there enough room there for HP to continue to sell and IBM to continue to sell and Dell to continue to sell and Egenera to come into that space? Absolutely. Right now, Egenera seems to be focused on the high end and such verticals as financial institutions. In what directions do you see the company growing? Youre right, weve started out in financial services, because our founder was the CTO of Goldman Sachs. Thats where he internalized this problem statement of the complexity of cobbling together all the hardware and software components. He hired a team of engineers, and they built the Egenera architecture and solved the problems. So, the way that we started was with a knowledge of financial services. Also, financial services was one of the earlier adopters of Linux. It was the logical place for Egenera to go. But today, four years later, our largest customer is not a financial-services customerits actually AOL. Weve had success outside the financial servicesin telcos [telephone companies], in the Internet service providers, in health care, in government. And if you look, all of those are early adopters of Linux. Those are places where Egenera has been successful and will continue to stay focused. When the Linux adoption begins to take place, then Egeneras value proposition becomes much more obvious. The other place where we do very well is where network-attached storage is being deployed. And storage area networks [SANs]. When we attach into those environments, we dramatically reduce the cost the customer sees. The customer has an SAN attached, he puts a server in, he has to buy a host-bus adapter to attach the storage [and] to attach the server. And each server requires more hardware. When you put in an Egenera BladeFrame in, you only attach one time. All of that infrastructure hardware cost comes down dramatically, and a customers challenges of managing all that hardware and managing all those connections are reduced because youve merely attached that SAN to the BladeFrame. Our virtualization software takes over from there and makes it very simple for the customer to add multiple servers attached to their storage environment. So, if you find a customer that has this advanced storage deployment and is moving toward Linux, Egenera has a resounding value proposition in that environment over a Sun server or an HP Unix [system]. Next Page: Ive never heard a customer say Egenera is proprietary, Dutkowsky says.
Blades. RLX Technologies Inc. came out with the first blade servers more than two years ago, but now IBM and HP are one and two in the blade-server market. So, if Egenera is ahead of them, how do you stay ahead of them?