BLADE Network Technologies

RackonomicsHolistic Rules for the New Data Center

noreply@blogger.com (Vikram Mehta) — Tue, 20 May 2008 00:57:00 +0000

As we have been briefing various customers and industry analysts in conjunction with the recent launch of our new top-of-rack data center-class RackSwitch, it has become clear to me that there is a tremendous amount of confusion in the marketplace. This confusion seems to stem from the relative absence of holistic best practices surrounding how data centers can harness the tremendous benefits of serve/storage consolidation and virtualization without inadvertently driving hidden costs and pitfalls into the networking facilities infrastructure. Power, for example, is a huge issue, when companies
using collocation facilities can't supply their racks with more than a small KwA per rack, so end up deploying racks that are only half or one third full.

This is why I'm so passionate about the potential for "Rackonomics" – a new set of holistic rules for the data center that BLADE is defining and championing. IT departments can leverage Rackonomics to scale out their data center networks affordably and holistically at the rack level. In modern data center architecture, Rackonomics refers to the concept of rack-level provisioning--designing, deploying and replicating server/computer systems, data networks and storage area networks (SANs) rack by rack to:

decrease the total cost of ownership of data center infrastructures
reduce IT complexity
enable incremental scalability.

One of the primary tenets of Rackonomics is that putting switches into blade enclosures and server/storage racks is far more economical than using external core switches. Our customers have told us that a "put it in the rack" strategy can enable them to save tens of thousands of dollars in switch hardware, deployment and energy costs for every external switch that they can avoid deploying. And, the network switch has the ability to viritualize the network connections associated with the server/storage elements located in the rack, thus vastly simplifying the datacenter network.

What's more, every time an IT manager can make a rack-level deployment decision, they can fully understand the holistic impact of that rack on other elements of their data center infrastructure. Through Rackonomics and its rack-level approach, as requirements to grow and scale out emerge, an IT manager can understand exactly the impact of what's being added in terms of compute capacity, latency and power and cooling - without over-provisioning the expensive core network, SANs, and power and cooling capabilities to keep pace.

The fundamental concept of Rackonomics is straightforward. By linking servers/storage into localized switches that reside inside blade and/or rack enclosures, IT buyers can save money by dramatically reducing acquisition costs and eliminate network complexity by virtualizing network resources at a rack level. Operational costs can also be reduced because IT administrators are managing fewer entities (racks instead of individual elements in a rack). Furthermore, cabling costs are reduced often by as much as 80%) and cooling requirements for network equipment can be cut in half because fewer power and space hungry core switches are required.

However, as the saying goes, "the proof is in the pudding." One of the biggest benefits of Rackonomics comes from the real-world understanding of how all the elements of the rack work together in a holistic way before making the big decision to scale out using a specific rack full of components. Rackonomics offers a new set of customer-driven rules of the data center. But, how can vendors and their customers play together by those rules?

At BLADE, we're committed to overcoming confusion about how best to implement server/storage consolidation and virtualization by helping to establish shared understandings between the vendor and user communities around holistic data center best practices. Our recent demonstration in Orlando, Florida at Storage Networking World of Fibre Channel over Ethernet (FCoE) with Emulex and NetApp is one such holistic example. FCoE, with its ability to converge data and storage networks, is heralded as the wave of the future, but only to the extent that vendors can communicate its viability and value and the end-user community can understand how to make it work in the real world. That is Rackonomics at work.

One final thought for the busy IT manager grappling with a myriad of issues….think of your datacenter as a collection of racks vs. individual server, storage and networking elements. Make a rack as the smallest unit of deployment in your environment and then replicate that rack. This will make deployment, management and scaling much simpler.

Resource Links:

Virtualizing the Network Facilities (Interop 2008 Podcast I did with InfoWorld)
ZDNet Blog entry on BLADE and Rackonomics from a conversation with BLADE VP of Strategy and Product Management, Dan Tuchler

Green Networking

noreply@blogger.com (Vikram Mehta) — Thu, 06 Dec 2007 23:07:00 +0000

Earlier this year I had the opportunity to speak at a conference in Orlando to an audience of over 100 Gartner clients and IT managers about how you can lower datacenter energy costs with blade networking.

I was taken aback by the power of our message!! Truly, I managed to shock myself!!

And no, our message was not about our switches having 2x the performance at 1/2 the cost of Cisco (though that is still true).

Our message was even more controversial - "you are polluting the environment by using energy inefficient Cisco gear - that puts out carbon dioxide, monoxides, and creates acid rain, global warming, melts the polar ice caps and kills the penguins!! Is this what you want to leave back for your children and grand children?"

The message resonates.

And the reason we can blow our own horn here is the fact that our BLADE switches not only make it possible for you to consolidate your datacenter into a more efficient use of space and equipment--but they also consume between 25 watts and 65 watts compared with external switches that typically begin consumption at 300 watts. Multiply that out by the number of Ethernet connections a business needs to purchase and provide power and cooling for and the cost savings and environmental benefits are tremendous.

What does this really mean? If a 100 watt light bulb, powered from a coal-fired power plant runs continuously for one year, it consumes:

876 kWh

714 pounds of coal

5 lb of Sulfur Dioxide

5.1 pounds of Nitrogen Oxides

1852 pounds of Carbon Dioxide

I had people come up and tell me they are going to go back and examine their network architecture decisions - truly.

In September BLADE Network Technologies was recognized as the first IT networking vendor to win the GoingGreen 100 award.

Today, my article, "A Holistic Solution to the IT Energy Crisis" was featured in GreenerComputing.com. Please have a read and let me know what you think.

-Vikram

Blade Server Adoption Accelerating, Fueled by Convergence of Virtualization, Consolidation & 10 Gig

noreply@blogger.com (Vikram Mehta) — Thu, 22 Nov 2007 10:09:00 +0000

My good friend Jeffrey Birnbaum may live on the east coast, and I on the west coast, but on many things it's like we're both sitting in the same room. Especially when it comes to where we think the server market is going.

The other day he told me that he's convinced blade servers will garner the lion's share of new server deployments once IT managers realize the tremendous benefits they bring to the datacenter.

In fact, he said, blade servers do a better job at desktop and server virtualization, and deliver better TCO than standalone servers.

When you combine blades with newer technologies such as 10 Gigabit Ethernet, which has reached the critical $500 per port price point on blades well ahead of conventional chassis-based switches, blades now make economic sense for even applications that need the most throughput and bandwidth, combined with the lowest latency.

I couldn't agree more. So I wrote an article about this for the Data Center Journal.

As a matter of fact, it was the brilliant engineers here at BLADE who gave the blade server industry its first taste of the power of 10 Gigabit Ethernet way back in June 2006, and we haven't slowed down since.

Here is our current list of 10G offerings for blade server systems:

Nortel 10Gb Ethernet Switch Module for IBM BladeCenter

Nortel 10Gb Uplink Ethernet Switch Module for IBM BladeCenter

HP 10Gb Ethernet BL-c Switch for HP BladeSystem c-Class

HP 1:10Gb Ethernet BL-c Switch for HP BladeSystem

BNT’s 10Gb XFP modules

Blade Network Technologies Looses a Champion, Mentor, and Great Friend to Cancer

noreply@blogger.com (Vikram Mehta) — Sun, 01 Apr 2007 22:32:00 +0000

On Saturday, March 31st,2007, at 6:40 p.m. EDT, Harry Cheselka, who made many contributions during his distinguished 37+ year career at IBM, passed away after a very hard fought battle with cancer.

I first met Harry in early 2002, in Raleigh, N.C when we (as part of Nortel) commenced discussions with IBM to build what would become the industry’s very first Layer 2-7 blade server switch.

My fellow employees and I were extremely fortunate to have the opportunity to work with such a talented and accomplished engineer.

On many an occasion, with every blade server switch product we built for the IBM BladeCenter – we faced immense engineering challenges. On more than one occasion with each of these projects, our engineers ran into what appeared to be insurmountable challenges.

On every one of these occasions Harry sat us down and said “We’re not going to give up now are we? There is a solution to every problem; we must find it”. And every single time Harry held our hand and guided us toward the solution.

Harry was a true champion with a penchant for solving the most difficult problems; a true fighter who never gave up – at work and in his personal life. He was an extremely genuine person who took great joy in helping others overcome their obstacles and achieve success. He was a very humble man who never spoke of his many accomplishments, yet never missed to recognize and complement others for their accomplishments and contributions.

A truly caring person, Harry made time to tackle his own challenges only after he had helped others overcome theirs – both at work and on the home front.

Harry battled a very aggressive form of cancer with the same admirable qualities - extremely positive attitude; never losing hope; always seeking a solution; always concerned about how his friends were doing; and very concerned about the well being and comfort of his parents both of who are well into their eighties.

Harry’s friends at IBM and BLADE will miss him dearly.

And, at BLADE, we will never forget what this great IBM engineer taught us – “never give up no matter how difficult the problem”.

March 2007: NO BARRIERS; ONLY SOLUTIONS

noreply@blogger.com (Vikram Mehta) — Tue, 20 Mar 2007 15:00:00 +0000

On February 11th, 2007 Blade Network Technologies, Inc. (BLADE in short) completed 12 months as a standalone company.

It has been a tremendous twelve months and we’ve come an incredibly long way, in a very short period of time.

We’ve achieved many important milestones in our first year of business –

Market share leader for Ethernet and IP blade server switches. Our share is 44% vs. 29% for our closest competitor; In calendar 2006 we took an astonishing 7.5% points in market share from our competition;
First to bring 10GE (uplink) connectivity to a blade server chassis;
# First to deliver 10GE connectivity to every server blade and, from a chassis to the outside world;
Over 100,000 switches (2.1 million+ ports) in production deployment across 26 different industry segments, making BLADE’s switch operating system the most popular and widely installed in the industry. Approximately 50% of these switches were shipped in the last twelve months;
Industry record for the highest performance and lowest latency Ethernet switch for blade server applications; http://www.tolly.com/DocDetail.aspx?DocNumber=206168;
Delivered a staggering 15x better price performance compared to the Cisco Catalyst 6500; http://www.tolly.com/DocDetail.aspx?DocNumber=206168;
Named Top 10 Networking Company for 2007 by InfoSecurity Products Guide; http://www.infosecurityproductsguide.com/hot2007/index.html
Set a new time-to-market record of under 3 months from concept to revenue. When we started life as an operating division of Nortel in 2002, our first product took us 14 months to deliver;
New precision engineering record for delivering high-speed 10GE designs in a single spin of the hardware, where 2-3 spins are commonplace in the industry; and
Actual MTBF of over 2 Million hours, where our customers expect us to achieve 400,000 hours; thus demonstrating the quality of our products and our intense focus on customer satisfaction (our #1 Corporate Objective)
Audited GAAP compliant financials; thus demonstrating the strength of our business controls and strong financial discipline – key to being a viable, credible, and trustworthy supplier. From our very first day of operations, the time tested “KAIZEN” principles have provided the underpinnings of a very disciplined approach to operating our business.

I want to emphasize that none of the above would have been possible without the support of our customers and business partners, and the efforts and dedication of our employees. I am personally very grateful to our customers, business partners, and employees for helping make BLADE a vibrant company.

Here is what our customers have to say about us –

“BLADE’s network switch technology has been a valuable component to our recently launched HP BladeSystem c-Class architecture and has contributed to the customer adoption that has exceeded our expectations. BLADE’s success as an industry leader in this space has made them valuable to our HP BladeSystem Solution Builder Program, and with them we look forward to delivering additional blade technology innovations to our customers.”

Mark Potter
Vice President, HP BladeSystem Division
HP
January 29th, 2007

“BLADE’s ability to innovate quickly to meet customer needs makes them a leading network switch provider and an ideal partner in our worldwide BladeCenter blade server business. IBM’s collaboration with BLADE has recently resulted in another IBM blade server market first—the industry’s first native 10 Gigabit Ethernet switch for blade servers—and we are confident that our continued BLADE relationship will result in more industry-leading technology innovations and solutions for customers of the world’s most popular blade computing system, IBM BladeCenter.”

Doug Balog
VP & Business Line Executive, IBM BladeCenter
IBM Corporation
Chairman, Blade.org
January 29th, 2007

BLADE’s innovation has attracted the attention of leading industry analysts –

“While external chassis-based switches from leading vendors like Cisco are commonplace in enterprise networks, these solutions do not always perform at wire speed and do not always offer low latency. At twice the throughput, and with nine times less latency than the Catalyst 6509, we expect the BLADE product will garner serious consideration by any enterprise considering blade server deployments.”

Kevin Tolly
President and CEO
The Tolly Group
January 2007

“Collapsing network access and aggregation layers in blade network topologies can help to reduce cost, space, power, and cooling while simplifying the datacenter architecture and improving performance and security. When it comes to blade server switch infrastructure, customers have many good reasons to consider Blade Network Technologies over other solutions in the market.”

Lucinda Borovick
Director, Datacenter Networks
IDC
February 2007

Our employee strength as of the date of this report is 102, with approximately 90% of the resources in engineering, sales, marketing, support, and supply chain operations – driving innovation, ensuring high product quality, and helping our server customers maximize sales of blade server systems.

In addition to the 102 BLADERs that toil around the clock to serve our customers every need, we have an additional 70 dedicated development, test, and support personnel located in the U.S, Vietnam, Romania, and India through strategic outsource relationships. These 70 incremental resources enable BLADE to provide a rapid response to the most demanding requests from our customers.

2007 and 2008 promise to be very exciting years for the industry. Enterprises (large and small), Service Providers, and Institutions (Commercial & Research) around the world are coalescing around “rack dense” platforms to meet their computation and storage requirements.

Blades and other forms of ultra-dense rack systems are going to be widely deployed for a multitude of commercial, research, entertainment, and managed service applications.

A reliable, high performance, and low latency I/O fabric based on popular standards (e.g.: Ethernet) will be a critical need for successful and large scale deployment of rack dense servers (which includes blades).

BLADE will be focused on serving this need, by building on the strengths of our blade server switch installed base and rich intellectual property.

We’ve spent many long months over the last year talking to customers to understand how we can improve our existing products and what new products we can build to serve their needs. This has resulted in what the Chairman of our Technical Advisory Board, Mr. Jeff Birnbaum, has described as “the most comprehensive I/O roadmap the industry has seen in over a decade.”

We’re not going to go it alone. We will work with our server customers, and reputable companies in the ecosystems of our customers to provide the most comprehensive communications gateway (I/O infrastructure) solutions for rack dense compute and storage farms. Our existing and future products will have a material impact on the Performance, Security, Manageability, Scalability, Availability, and Total Cost-of-Ownership of an Enterprises rack dense compute and storage infrastructure.

On February 23rd, 2007, at the Carnelian Room on the 52nd floor of the Bank of America building in San Francisco, our employees and their partners heard the incredible story of a man, Neal Petersen, who overcame significant barriers in his personal and professional life to become the first black man to race solo around the world – a daunting 27,000 miles! http://www.bladenetwork.net/pages/about_us_photos.html

Neal has been the silent force of inspiration behind this business when we operated as BSSBU (Blade Server Switch Business Unit) within Nortel.

The mantra at BLADE for 2007 - “No Barriers; Only Solutions” is inspired by Neal’s amazing story. You can download this as a screensaver at: www.bladenetwork.net/media/EXEs/BLADEscreensaver.exe.

We’re a focused company with finite resources competing against fierce competitors. Our biggest asset is the employees of BLADE and their penchant to overcome all barriers and find the solution to our customer’s problems.

Thank you for your support in our first year of operating as an independent company. You have my personal commitment that we will continue to improve the way we serve you and the way we partner with you.

4Q06 Progress Report

noreply@blogger.com (Vikram Mehta) — Tue, 14 Nov 2006 04:00:00 +0000

On February 11th, 2006 Blade Network Technologies, Inc. (BLADE in short) came into being thanks to the efforts of Nortel and Garnett & Helfrich Capital, to serve the growing need for sophisticated network infrastructure for the rapidly growing Blade Server market.

October 31st, 2006 marked the end of our 2006 fiscal year (Nov 1 – Oct 31).

When we began our journey at 00:01 hrs on February 11th this year, there was a healthy dose of skepticism in the industry about BLADE and what might happen to this young company in the months immediately following our incorporation.

The task of building an infrastructure to serve the company’s only two customers - HP and IBM (the world’s top two Information Technology companies that collectively generate a staggering $200 Billion in annual sales), whilst being required to make our entire portfolio of products (comprising 12 discreet products) RoHS compliant, bringing 12 new products (3 hardware platforms and 9 new software releases) to market in record time, relocating 100 racks housing 300 Tons of equipment over a weekend from Nortel’s campus to BLADE’s new home, and most importantly swiftly correcting technical issues encountered with our products by end customers and thus ensuring “customer delight”, seemed like a lot to take on for a brand new company with measured resources.

A dear friend, close confidant, and fellow BLADER jokingly said to me as our American Airlines Flight from Dallas on February 11th, 2006 touched down at San Jose International - “What a fine mess you’ve gotten us all into”.

And a fine mess we would have found ourselves in, had it not been for the exceptional support, patience, and encouragement from our customers and business partners, the empathy and understanding of our suppliers, and the dedication and hard work of the employees of BLADE.

I want to thank our customers, business partners, suppliers, and employees of BLADE for helping us become not just a viable but a thriving business with growing credibility in the market place.

BLADE has come a long way since February 11th, 2006 and made considerable progress since I last wrote you on July 12th, 2006.

Below are some highlights:

- Shipments for our Fiscal Q3, 2006 (which began on May 1 and ended on July 31) were up 81% over the same period in the previous year. Shipments for our Fiscal Q4, 2006 (August 1 – October 31) were up 32% over the same period in 2005; and shipments for our Fiscal 2006 (Nov 1, 2005 – Oct 31, 2006) were up 36% over Fiscal 2005.

- As of October 31st, 2006, BLADE has over 88,000 blade server switches (representing over 1.9 million ports) in production deployment at over 1,700 major enterprises around the globe across 26 different industry segments. These switches provide network connectivity for over 400,000 server blades running mission critical applications.

- “Shipments” and “Cash” are important considerations for a young company our size. Here is how we performed against these two important metrics in our fiscal 2006:

o Shipments for fiscal 2006 were 133% of plan .

o Net cash balance on 10/31/06 was up 11% from our starting cash balance on 2/11/06 despite the fact that the company has more than doubled payroll during this period and has had to make significant one-time infrastructure investments in building infrastructure, equipment, and machinery.

We believe that strong financial discipline is key to being a viable, credible, and trustworthy supplier.

- In 2006, BLADE became the industry’s #1 supplier of blade server switches as measured by our share of the total blade server switch shipments. BLADE’s share of this market is 43% while our closest competitor is at 32%.

- We are credited with a number of other firsts by the industry, including:
• 1st to ship integrated Layer 2-3 switching for blade servers
• 1st to ship integrated Layer 2-7 switch for blade servers
• 1st to bring 10GE connectivity to blade server chassis
• Industry’s best price-performance for blade server switches
• Industry’s record holder for highest throughput and lowest latency blade server switch

- Our employee strength as of the date of this report is 88 (up from 42 on Feb 11, 2006). 47% of our employees are in the Engineering function (Hardware, Software, and Test), emphasizing our continued focus on innovation and building world-class networking solutions for the rapidly growing blade server market.

- Our Supply Chain Operation has been acknowledged by our customers as amongst the best in the business given how we’ve responded to upside demand and helped our customers make the RoHS transition while minimizing their exposure of excess and obsolete inventory.

- It has been 29 weeks since we first implemented “Kaizen” at BLADE and it continues to provide the foundation of every decision and every action at BLADE. This rigorous, but time-tested and proven methodology has been key to our strong results for our fiscal 2006 (ended October 31st, 2006). “Kaizen” is a permanent part of BLADE as we believe very strongly that it will help us achieve operational excellence. This time tested system is a key part of our efforts to become the industry’s most trusted supplier of network infrastructure for blade server systems.

- Our Marketing and Engineering teams have finalized their product roadmap for 2007 and beyond and I am pleased to report that the rich and innovative products and features planned over the coming 24 months will help accelerate the adoption of blade servers and address major customer pain points including – performance, throughput, latency, price-performance, manageability, rack-level aggregation, etc. In the month of November a few of us are spending considerable time on the road sharing this roadmap with end customers around the world.

- Our global team of Network Architects have worked tirelessly to help customers design and deploy the best blade server network topologies. In addition to providing highly valued technical pre-sales support to our server customers and their business partners, these road warriors have recently received a lot of accolades from many end customers who view them as “Trusted Advisors”.

Please visit our new on-line picture gallery at http://www.bladenetwork.net/pages/about_us_photos.html to see the progress we’re making at BLADE.

Thank you for your support in this very important year.

Workday 100 Report

noreply@blogger.com (Vikram Mehta) — Mon, 12 Jun 2006 18:31:00 +0000

June 30th, 2006 marked the 100th workday for Blade Network Technologies (BLADE) – the industry’s #1 supplier of Ethernet, IP, and Application Switches for blade server systems.

Following is a progress report since I last wrote you:

We are two months into our Fiscal Q3 (which began on May 1 and will end on July 31). June 2006 was the biggest month in the history of the business (including the period when we operated as BSSBU within Nortel).
As of June 30th, 2006 (end of calendar Q1, 2006), our life-to-date Unit Shipments stood at 70,750 switches (1,556,554 Ethernet ports).

This is a significant milestone and I want to take this opportunity to thank our customers, employees and business partners for the continued help and support.
In May and June of 2006, we added over 64 new enterprises to the rapidly growing list of end customers who use our switches in conjunction with their HP and IBM blade server systems.
On July 10th, 2006, BLADE won Broadcom’s 2006 Technology Innovation Award in recognition of the network innovation we’ve delivered in the rapidly growing blade server market.
Our employee strength as of the date of this report is 85 (up from 42 on Feb 11, 2006 the day we came into existence). 46% of our employees are in the Engineering function (Hardware, Software, and Test), emphasizing our focus on innovation and building world-class networking solutions for the rapidly growing blade server market.
During our first 100 work days we have successfully shipped:
- 3 new hardware platforms
- 7 new software releases
- RoHS compliant versions of all existing products (12 products in all!)
- The industry’s first blade server switch to deliver 10Gbps connectivity to blade server systems
Given the magnitude of the transition we had to undertake as we carved out from Nortel to become a standalone company, and the task list associated with the complex transition, we are extremely pleased to report that we delivered on our engineering commitments to our customers.
This past month, BLADE became the industry’s first supplier of network infrastructure to ship a 10 Gigabit Layer 2-3 switch for blade server systems.
Our new labs in Santa Clara and Ottawa are fully operational. We moved over 200 tons of equipment housed in over 80 racks over the Memorial Day weekend. This move that took months of planning was executed, much to our customer’s delight, without any disruption to engineering schedules and customer commitments.
Our Customer Executive Briefing Center is complete and proudly showcases all the blade server switches we build and supply for the HP Blade System and IBM BladeCenter.
We have, in record time, successfully transferred the Bill-of-Materials (BOM) and other relevant engineering data for all of our products from the Nortel Product Data Management system to our own PLM (Product Life Cycle Management System).
In addition, BLADE engineers have completely weaned off Nortel’s development infrastructure and are using BLADE’s brand new and state-of-the-art development environment. The new development environment at BLADE has reduced the time it takes BLADE engineers to successfully compile a new release of software from 6 hours to under 10 minutes! The employees of BLADE thank Nortel for the outstanding support we received during the transition.
Our Marketing and Engineering teams have spent the last 30 days planning our roadmap for 2007 and 2008. Relevant details of this roadmap will be shared with our customers over the coming weeks. BLADE’s product strategy is to deliver innovative and functionally rich Network I/O products for blade server systems at unprecedented price-performance levels. Our customers can expect us to deliver new and innovative products in the areas of 10G connectivity, iSCSI SAN connectivity, Network Virtualization, and Blade Rack Management.
“Kaizen” continues to provide the foundation of everything we do at BLADE every day. This rigorous, but time-tested and proven methodology is key to our success. In the long run, it will help us achieve operational excellence and will have a material impact in our efforts to become the industry’s most trusted supplier of network infrastructure for blade server systems.
While it is still early days in our implementation of Kaizen as the fundamental operating philosophy at BLADE, we’re very encouraged by how Kaizen is helping us implement world-class processes, eliminate costly errors, reduce waste, and build a healthier business.

Please visit our new on-line picture gallery at http://www.bladenetwork.net/pages/about_us_photos.html to see the progress we’re making at BLADE.

Workday 60 Report

noreply@blogger.com (Vikram Mehta) — Mon, 08 May 2006 13:11:00 +0000

May 8th, 2006
I am pleased to be writing you this report from our new HQ office located at 2350 Mission College Boulevard, Santa Clara, CA.

May 5, 2006 marked the 60th workday for Blade Network Technologies (BLADE) – the industry’s #1 supplier of Ethernet, IP, and Application Switches for blade server systems.

The pace of activity and progress continues to accelerate!

Following is progress report since I last wrote you:

For our fiscal quarter two, which ended on April 30, 2006, our shipments were well ahead of plan. I am also very pleased to report that our company generated cash from continuing operations for this fiscal period. This was a major accomplishment and I want to take this opportunity to thank our customers, employees, and business partners for helping us get off to a good start.
Our employee strength as of the date of this report is 75 (up from 42 on Feb 11, 2006). Approximately 53% of our employees are in the Engineering function (Hardware, Software, and Test), emphasizing our focus on innovation and building world-class networking solutions for the rapidly growing blade server market. Ardene Fullerton, our Director of HR has done a brilliant job of helping BLADE with its recruitment effort, and in helping the new employees settle into their new work environment.
We have successfully achieved RoHS compliance across our entire portfolio of products. Solectron’s Charlotte facility was the world’s first electronic manufacturing facility to be RoHS certified and BLADE’s products were the amongst the first RoHS products to ship from this facility. We’re very proud of the achievements of our Supply Chain Operations Team under Bob Murden’s stewardship. I also want to acknowledge the excellent support we have received from Nortel’s Supply Chain Operations team, Solectron, and Alpha Networks.
We have successfully added two new contract manufacturing facilities to support the growing requirements of our customers – in Malaysia andTaiwan. Solectron, Charlotte continues to remain our premier contract manufacturing site.
In the first calendar quarter of 2006, we added over 70 new enterprises to the rapidly growing list of end customers who use our switches in conjunction with their HP and IBM blade server systems. Our Sales Network Architects, under Shailesh Naik’s leadership, have received very encouraging and positive feedback from customers on their handling of sales situations amidst the transition of business from Nortel.
As of March 31, 2006 (end of calendar Q1, 2006), our life-to-date Unit Shipments stood at 58,643 switches (1,298,690 Gigabit Ethernet ports), clearly making us the industry’s #1 supplier of blade server switches!! We are very grateful for the support we have received from HP, IBM, and their customers to help us achieve this position.
Our website now features a brand new FLASH animation that articulates BLADE’s value proposition. Please visit us at http://www.bladenetwork.net/ and click on “Why Choose Blade Switches” to view our message.
Our new labs in Santa Clara and Ottawa will soon be ready for occupancy. All Air Conditioning, Electrical, Fire Protection, and Tiling work has been completed. We are now in the process of installing racks and pulling data communications cables through the labs.
Our Customer Executive Briefing Center is under construction and very soon we will be able to showcase our products to customers and partners who visit our HQ facility.
Every employee at BLADE has undergone a Standards of Business Conduct Training to help ensure that BLADE conducts business in a manner that is consistent with our core values and our customer’s expectations.
BLADE’s new customer support system and processes were recently put to test by a major corporation. Here is what their CIO had to say – “I want to personally thank BLADE for your professionalism in handling the escalation. You had a very short time to resolve this critical issue that was preventing the production rollout of blade servers in our new datacenter. We were very pleased with your excellent response and resolution! Thanks again to your team for a job well done.”
And here is what our customer (server OEM) had to say “I appreciate how you are representing us and our blade servers to our customers. It means a lot to have a partner that will stand up beside us and work these issues head on and professionally.”

CUSTOMER SATISFACTION IS BLADE’s #1 CORE VALUE AND THE ABOVE IS AN IMPORTANT DEMONSTRATION OF HOW WE STRIVE TO LIVE BY OUR CORE VALUES IN EVERY ACTION WE TAKE EVERY DAY.
Our voice and data infrastructure is up and running at our HQ facilities. We are a proud user of Nortel VoIP technology; and our desktop computers, laptops, printers, servers, storage, flat panel displays, and projectors are supplied by HP and IBM. Our mission critical applications run on blade servers and we make extensive use of our Blade Server Switches and their superior functionality to enhance the Performance, Scalability, Security, and High Availability of our data center infrastructure. We are proud to be an enterprise that uses blades to run our entire business. Our blade server switches are used to provide connectivity to both our LAN (Local Area Network) and SAN (Storage Area Network).
We have completed the procurement of our own development tools and very soon we shall have weaned off the development infrastructure that our parent, Nortel, has so graciously allowed us to use since our inception.
After extensive research we have selected our Product Lifecycle Management (PLM) tool. Over the coming few weeks we will be transferring the Bill-of-Materials (BOM) and other relevant engineering data for all of our products from the Nortel Product Data Management system to the BLADE PLM System. This is a very critical exercise and one that we are monitoring very carefully.
Fiscal discipline is something we’ve been very focused on from our very first day. Our Finance & Accounting Team under Jim Sladek’s leadership has put in place very robust processes to ensure that we run a tight ship. We successfully closed our books on or before workday five (5) for the months of February, March, and April as well as for the quarter that ended on April 30th, 2006. Our financial systems are fully operational and accurately reflect all on-going business transactions and activity in accordance with GAAP requirements.
In my workday 30 report I talked about instituting a new and very rigorous commitment process to help us become a better supplier and business partner to our customers. We’ve taken a significant next step in this effort. We have embraced a time tested Japanese methodology, “Kaizen” (Kai = Change; Zen = For the Better). A rigorous methodology that requires meticulous tracking of Key Performance Indicators, extreme discipline in planning, and flawless execution, “Kaizen” will help BLADE serve its customers better. Next time you’re in Santa Clara, please pay us a visit and see how we’re implementing “Kaizen” at BLADE and the impact it is having on our day-to-day operations. We’ve had some extremely encouraging results very early in the process!

Please visit our new on-line picture gallery at http://www.bladenetwork.net/pages/about_us_photos.html to meet some members of BLADE team and see the progress we’re making in our effort to become a successful enterprise and the most trusted name in blade server networking.

Workday 30 Report

noreply@blogger.com (Vikram Mehta) — Fri, 24 Mar 2006 18:42:00 +0000

March 24, 2006 marked the 30th workday for Blade Network Technologies (BLADE) – the industry’s #1 supplier of Ethernet, IP, and Application Switches for blade server systems.

20 work days have passed since my workday 10 report; and I wanted to reach out and give you an update on how things are progressing at BLADE.

Our typical workday begins at 5:00 am and ends at about 9:00 pm. Despite the long workdays, the energy levels at the company are at an incredible high; and the desire to delight our customers is intense. You can feel this, quite literally, as you walk the halls and talk to the employees.

Following is a list of what we accomplished since I last wrote you:

Our employee strength is up to 62 with an additional 6 employees slated to start over the next few days. Approximately 52% of our employees are in the Engineering function (Hardware, Software, and Test).
We plan on hiring another 28 people over the next few months. 18 of the 28 open positions are in the engineering function (Hardware, Software, & Test). This would bring our total employee strength to about 96 in the not so distant future, with 52% of the employees in the Engineering function.
We’ve successfully migrated our bug database from Clarify to Bugzilla, thus demonstrating that you can indeed run your business using Open Source technology.
We’ve conducted a number of product training sessions and SE Labs around the world – launching new features and capabilities of our blade server switches. These sessions allowed us to touch thousands of sales personnel and resellers around the globe and the feedback we received was overwhelmingly positive.
Our dedicated manufacturing lines at Solectron in Charlotte, NC have moved from running 2 shifts a day to a 24*7 (3 shifts per day operation). Bob Murden, our VP of Supply Chain Operations and myself visited the plant on 3/24 and I am pleased to report that BLADE has very quickly addressed our customer’s supply capacity requirements.
Today, BLADE shipped RoHS compliant switches for the HP BladeSystem and the IBM BladeCenter, making us the industry’s first network equipment vendor to ship RoHS compliant products for the IBM BladeCenter and HP BladeSystem. We’re proud to say that BLADE’s RoHS products shipped from the Solectron Charlotte plant, the day after Solectron announced that its Charlotte facility was the First EMS Site Worldwide to Earn IPC RoHS Certification.
Remodeling work at our HQ facilities in Santa Clara is progressing to plan and I plan to be writing you my next update from our new home.
Remodeling work at our BNR (Blade Network Research) facilities in Ottawa is proceeding very well too; and very soon this facility will be equipped with our very own Thermatron Temperature Chamber, giving us the ability to perform DMT (Design Maturity Testing) on a 24*7 schedule. This we believe will have a significant and positive impact in our ability to better serve our customers.
We’ve been quietly working away in the background on a website for our company. We plan to go live very soon. Look out for an e-mail from me on this in the coming weeks.
We have defined a set of core values for the company that will guide our every action every day.
We’ve put in place a companywide “DASHBOARD” that allows us to track weekly progress on many fronts – engineering, sales, supply chain operations, finance, and human resources. We’re very proud of this dashboard and how it helps us steer our way towards becoming the industry’s most valued supplier of blade server switch.
We had the company’s first Board of Directors meeting on March 21, 2006 and here is what our Chairman, Mr. David Helfrich had to say
“We have come out of the gate on solid footing. I am extremely pleased with the focused and meticulous execution demonstrated by the BLADE team under Vikram's leadership since the closing of the transaction. The transition is ahead of plan and progress has been very steady. The bar set by our customers is high, and we have a tremendous amount of work still ahead of us. But I am confident of the ability and dedication of this team to deliver. With the continued support of our customers and continued hard work by our team, we intend to make a deep impact on this market."
Last, but not least we are instituting a new commitment process to help us ensure that we deliver on our commitments to our customers – on time, every time. This is a new and very rigorous process; but one that I am very committed to. I request our customers to please bear with us as we work towards making this process an integral part of everything we do at BLADE. In due course, as this process takes hold and sets deep roots in our company, our customer’s will see a material improvement in the quality of our work and our responsiveness.

Workday 10 Report

noreply@blogger.com (Vikram Mehta) — Sat, 25 Feb 2006 02:14:00 +0000

On February 10, 2006, Nortel and Garnett & Helfrich Capital announced an agreement to transform Nortel’s BSSBU into a well capitalized and free standing private company (Blade Network Technologies, Inc.) singularly focused on serving the network infrastructure requirements of the rapidly growing blade server market.

February 24, 2006 marked the 10th workday for Blade Network Technologies; BLADE in short.
How did we fare? And, what did we accomplish?

Our first 10 days were undoubtedly very long, extremely hectic, full of challenges, and extremely productive. Following is a list of what we accomplished during this period:

Set up our legal business entities in U.S. & Canada
Completed our Tax registrations in every country where we have employees – U.S., Canada, U.K, Germany, and Australia
Obtained relevant GST/VAT permits/exemptions from Governments around the world
Successfully transferred Nortel BSSBU employees to BLADE
Obtained INS authorization to transfer the remaining employees working on H1-B visas from Nortel to BLADE
Added new employees across multiple functions (Sales, Finance, Operations, Engineering, Customer Support, General Admin)
Successfully made payroll for all our employees stationed around the world - U.S., Canada, France, Germany, UK, and Australia
Turned on benefits (Health, Vision, Dental) for all our employees
Executed a multi-year lease agreement for our New HQ facilities located at 2350 Mission College Blvd., Santa Clara, CA
Executed a multi-year lease agreement for our Canadian Subsidiary (Blade Network Research; BNR in short) located at 350 Terry Fox Drive, Kanata Technology Park, Ottawa
Successfully transferred all transactional relationships from our customer’s 9 hub locations to BLADE
Our new ERP systems handled daily shipments, invoicing and purchasing activities with 100% accuracy
Finalized design and layout of our three HQ labs (Hardware, Software, & Test) involving 75 racks of equipment and over 20 test benches
Commenced tenant improvements to our new HQ facilities
Brought up our mail servers
Provided new laptops to all our employees
Issued a new Manufacturing Planning Schedule to Solectron to allow BLADE to better serve its customers
Improved our supply commitments to our customers
Conducted a major training event for over 400 of our customer’s pre-sales engineers and partners
Completed relocation of our Level 3 Technical Support Center from California to Texas by workday 5 (a full week ahead of plan!)
Finalized our POR commitments to our customers
Executed commercial agreements with our Contract Manufacturers so as to ensure supply continuity for our customers
Placed an order for a 50 Ton Air Conditioning Plant for our HQ labs
Ordered a new Temperature Chamber for our Design Maturity Labs in Ottawa
Fixed two customer escalations in record time;

and
Prioritized our work plan for the next 10 days.

Thank you for your patience and support, as BLADE readies itself to become your most trusted supplier of Network infrastructure for blade server systems.

I look forward to sharing additional information on our progress with you in a few weeks.