April 14, 2011
Egenera, arguably THE pioneer in what the industry is now calling converged infrastructure, has had a hard life. Early to market in 2000 with a solution that was approximately a decade ahead of its time, it offered an elegant abstraction of physical servers into what chief architect Maxim Smith described as “fungible and anonymous” resources connected by software defined virtual networks. Its interface was easy to use, allowing the definition of virtualized networks, NICs, servers with optional failover and pools of spare resources with a fluidity that has taken the rest of the industry almost 10 years to catch up to. Unfortunately this elegant presentation was chained to a completely proprietary hardware architecture, which encumbered the economics of x86 servers with an obsolete network fabric, expensive system controller and physical architecture (but it was the first vendor to include blue lights on its servers). The power of the PanManager software was enough to keep the company alive, but not enough to overcome the economics of the solution and put them on a fast revenue path, especially as emerging competitors began to offer partial equivalents at lower costs. The company is privately held and does not disclose revenues, but Forrester estimates it is still less than $100 M in annual revenues.
In approximately 2006, Egenera began the process of converting its product to a pure software offering capable of running on commodity server hardware and standard Ethernet switches. In subsequent years they have announced distribution arrangements with Fujitsu (an existing partner for their earlier products) and an OEM partnership with Dell, which apparently was not successful, since Dell subsequently purchased Scalent, an emerging software competitor. Despite this, Egenera claims that its software business is growing and has been a factor in the company’s first full year of profitability.
The vindication of Egenera and its CEO Peter Manca’s vision may have come last month, when they announced that their PanManager software product is fully supported on HP’s blade server product line. With HP’s cooperation and support, Egenera offers full support of HP’s Virtual Connect FlexFabric technology under their PanManager software product.
For Egenera the win is very clear – they are now supported on the overwhelming volume leader in the blade segment, making it that much easier for them to sell into new and established HP accounts. But why would HP, with its Virtual Connect and Blade System Matrix offerings which were arguably positioned against PanManager, want to cooperate with Egenera? The answer is probably one word – “Cisco.”
Cisco has been taking a significant and public bite out of HP’s hide with its UCS offering, which is less complex and overall less comprehensive than Matrix, but more powerful than the basic Virtual connect family, with superior ease of use. Egenera’s product offers a software overlay for the HP hardware that is a very good match, and in some aspects, such as built-in failover and DR, a major superset of Cisco’s UCS capabilities. HP now has a partner to which it can turn when it is competing with UCS, and one that is not immediately in a position to offer its product on any other major tier-one competitor except Fujitsu.
All in all, a major win for both parties, and potentially capable of putting Egenera on a solid growth path as they transition to a software-led business model.
Disclosure – The author is a former Egenera employee and still holds Egenera stock.