Erwin said by March he expects to announce a deal with a major hardware vendor, which will put aside some of the management software it is offering now and instead sell Control Tower. The hope is that once that deal is announced, other vendors will follow suit. RLX announced the strategy change to employees Wednesday and began contacting customers Thursday. The decision will mean internal changes for RLX; before the announcement, the company had about 115 employees. Erwin said some layoff notices were sent out Wednesday, but he declined to say how many jobs would be lost."Its definitely disappointing," Weschke said. "I was fond of the whole package. With Control Tower coming with the hardware, there was no finger-pointing when something went wrong, no one saying its a hardware problem and software problem." Erwin said that while the announcement represents a big change for RLX going forward, it was less risky than trying to slug it out with larger vendors in the hardware business. It also has brought investors back into the fold, he said. Some had been skeptical of RLXs ability to compete on hardware, particularly given Dells entrance into the market. When RLX spoke to them about becoming a software-only company, not only did they support the move, but other investors who had left the company began coming back, he said. Erwin said he expects to announce another round of funding next month. In 2001, the company rolled out the RLX System 324 chassis, which could hold up to 324 ServerBlades, which at the time were powered by Transmeta Corp.s Crusoe chip. Like most initial blades, RLXs offering was targeted at ISPs and other companies with large server farms that wanted to conserve space. However, over the past couple of years, vendors such as IBM and HP have expanded their offerings, seeing blade servers as a key component of their utility computing strategies. IBM not only offers Intel-based blades, but this year rolled out the first blade running on its Power chips. HP not only offers Intel-based blades, but also is planning for systems running on Advanced Micro Devices Inc.s Opteron processor. Check out eWEEK.coms for the latest news, views and analysis on servers, switches and networking protocols for the enterprise and small businesses.
For some customers, RLX getting out the hardware business was disappointing but not surprising. ECI Conference Call Services LLC, in Wayne, N.J., has been using ServerBlades for about a year and runs about 100 of them currently, said Chief Technology Officer B.J. Weschke.