RLX Gets First OEM Deal, More FundingBy Jeffrey Burt | Posted 2005-03-15 Email Print
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Taiwanese company Nexcom will begin shipping RLX's Control Tower server management software in its NexBlade server line in the second quarter. In addition, RLX has gained $9.1 million in funding.Three months after shedding its hardware business to focus on its server management software, RLX Technologies Inc. is announcing its first OEM partnership and another round of funding.
RLX was a pioneer in the blade server space, rolling out the System 324 in 2001. However, since then, the space has become dominated by the major vendors, such as Hewlett-Packard Co. and IBM.
In December, RLX changed direction, exiting the hardware business and instead focusing on its Control Tower server management suite, selling the software via OEM deals.
Nexcom has solid server sales in both Asia and Europe, and hopes to leverage Control Tower as a way of gaining traction in the U.S. market, Erwin said.
The two companies were talking last year about jointly developing RLX's next generation of blade servers, Erwin said. When RLX shifted gears and let go of the hardware business, the joint development talks evolved into the OEM deal.
Erwin said RLXwhich recently moved its headquarters from The Woodlands, Texas, to Old Town Spring, Texascurrently is negotiating with two major vendors interested in incorporating Control Tower modules into their management offerings, as well as a half dozen other small companies. He expects to announce other OEM deals within the next 90 days.
In addition to the OEM deal, RLX also is announcing $9.1 million in funding. Among the contributors was Ignition LLC, one of RLX's first investors, Erwin said.
Since announcing the software-only business plan in December, "things have just taken off," Erwin said. "We've had our major competitionor what used to be our major competitioncalling us and talk to us about how they can OEM our software, because our software was really a differentiator for us."
That will be a key for the company going forward. When RLX announced its shift in strategy, industry analysts said the company had little choice, given the competition in the blade server space. Erwin agreed, saying it no longer made sense for a company the size of RLX to try to compete with the major vendors, particularly once Dell Inc. got back into the space.
However, analysts also said it was important for RLX to strike a deal with a major OEM as quickly as possible. Erwin said he is pleased with the Nexcom deal, and with the prospects for more OEM agreements over the next few months.
In the two years that he has been in charge, RLX has made two key decisions that have enabled it to get to this point, Erwin said. First, the company decided to focus on implementing industry standardssuch as Intelligent Platform Management Interface, or IPMIinto Control Tower.
In addition, RLX also split up Control Tower into modules, enabling OEMs to bring whatever modules they want into their own management software. Currently there are seven modules, but Erwin said later this year more will be added to Control Tower, focusing on such areas as virtualization and power management.
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