RLX Technologies drops blade server hardware business

Computerworld - Faced with intense competition from IBM, Dell Inc., Hewlett-Packard Co. and others, blade server vendor RLX Technologies Inc. is dropping its hardware lineup and will focus on developing and marketing its RLX Control Tower 6G blade server management software suite.
In an announcement today, RLX said it will work with resellers and customers to expand the hardware compatibility of its Control Tower software in the future.
Scott Farrand, vice president of software engineering at The Woodlands, Texas-based RLX, said the move was made because the blade server market has become overcrowded since RLX unveiled what it believed was the first ultradense blade back in 2001.
"The blade market is commoditized, which is only advantageous to the big players," Farrand said. "There are economies of scale that a small company can't achieve."
Rather than trying to compete with the huge IT vendors in a crowded marketplace, RLX decided to leave the hardware end of the business and focus on its potent blade management software, which it plans to eventually offer for more blade brands. "Typically, as markets mature like this, the first movers need to reinvent themselves in the markets they make," he said.
By focusing on the Control Tower software, RLX will be able to go after the installed base of other blade server makers and plug in its software for customers to help make the systems easier to use and more efficient.
RLX said it will continue to provide hardware support to customers through the end of their extended warranties and provide Control Tower suite extensions to customers under existing support agreements. "We have a big commitment to our customers out there," Farrand said.
The strategy change for RLX has meant a number of layoffs, but Farrand wouldn't discuss the number of jobs lost or how many workers remain in the company.
Chris Stettler, director of IT at AHC Inc., a Manassas, Va.-based health care receivables management vendor, said the RLX decision took him by surprise. Stettler said he's been comparing blade server vendors for the past month and had recently decided to recommend bringing in RLX for some needed projects, but now that plan is scuttled.
"Too bad," he said. "I was going to make a pretty significant purchase from them. But it's better to happen before we purchased than after."
RLX had come highly recommended by an IT consultant, Stettler said, but he will now regroup and seek alternatives.
Just last month, RLX unveiled its latest SB6400, a blade server based on dual Intel Corp. Xeon processors(See story).