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Technology giant IBM announced it has entered into a definitive agreement to acquire Blade Network Technologies, a software and devices that route data and transactions to and from servers. The acquisition is anticipated to close in the fourth quarter of 2010, subject to the satisfaction of customary closing conditions and applicable regulatory reviews. Financial terms of the deal were not disclosed.

Blade provides blade server and top-of-rack switches as well as software to virtualize and manage cloud computing and other workloads. Customers include more than half of the companies on the Fortune 500 list across 26 industry verticals, including automotive, telecom services, education, government, healthcare, defense and finance. IBM and Blade have worked together since 2002; more 50 percent of IBM System x BladeCenters currently attach to or use Blade products.

"Blade will help IBM better integrate networks with its systems, optimizing them for workloads that require high-speed and low-latency performance such as cloud computing and business analytics. For example, faster data transport enables faster decisions important for analytics workloads," said Brian Truskowski, general manager of IBM system storage and networking. "Blade will increase IBM’s System Networking development, sales, support, skills and awareness and help IBM build smarter systems that are optimized for client requirements."

Blade provides software that helps address the massive virtualization requirements of cloud computing environments. According to a company release, Blade software are designed to allow servers to more closely integrate with the network so that clients can deploy thousands of virtual machines to run large application workloads in the cloud and reduce complexity through simplified management. Blade’s switches will be brought closer to IBM systems and then pass information to the core networking layer.

“Blade views this as a great opportunity to continue working with the ecosystem of technology providers that have helped make our company successful while allowing our technology to become a more central part of the data center," said Vikram Mehta, CEO of Blade. "Our very talented and hard working people are focused on building innovative system networking solutions, making Blade an ideal fit to help IBM execute on its strategy to build smarter systems that deliver more value to clients around the world."

With 9 million ports installed, Blade’s low-latency, and low-power RackSwitch and blade switches connect physical and virtual servers, storage and networks. The company’s Ethernet switches and VMready virtualization-aware networking are designed to handle dynamic demands at the network edge for private and public clouds, financial services, Web 2.0 and HPC applications, according to company information.