InfiniBand Marriage

In what could be the first of several such InfiniBand unions, InfiniSwitch and Lane15 Software are merging.

The combined company, which will operate under the InfiniSwitch name, also announced additional funding, bringing its available cash to more than $20 million.

The merger combines InfiniSwitch switch products for high-performance computing and enterprise datacenters with Lane15’s management software for fabric computing. Alisa Nessler, CEO and president of Lane15, was named CEO of the combined company.

“InfiniSwitch has accomplished a great deal over the past three years,” said Don Zereski, former CEO of InfiniSwitch Corporation. “Today the company is poised for success with new funding and a winning solution set soon to be launched. It’s has been a privilege to lead this company to this point, and I am excited to see the company moving to the next stage of growth.”

Terry Dickson, InfiniSwitch’s vice president of marketing, said the merger will allow the combined company to provide integrated hardware and software products, including integrated host channel adapters and switches as well as a bundled product for the high-performance computing market.

Dickson said the $20 million in cash would be enough to carry the company for another 18-24 months even if it had no sales. But he said the company is “expecting a good year this year,” with substantial customer interest in second-generation products that are ready to ship and prices that have come down by 70%-80%.

Vernon Turner, IDC group vice president for Global Enterprise Server Solutions, said he was “not at all surprised” by the merger announcement. He predicted in a January report “a situation in which several of the InfiniBand start-up companies merge to create best-of-breed products (e.g., a management software company and an InfiniBand switch company). Such a combination could then later merge with a large systems vendor to present the latter with a ‘complete’ offering of a go-to market strategy and a short-term competitive advantage.”

InfiniBand has gained momentum as a server clustering interconnect, and blade technology could provide the technology with a longer-term boost, but that outlook “is a far cry from its original positioning of a universal and ubiquitous I/O Systems Area Network interconnect,” Turner wrote.

InfiniBand Market Poised for Growth

Still, Turner expects the smaller, more focused InfiniBand market to grow from $25-$75 million this year to $400-$700 million by 2006, as the core HPC and cluster market expands to include blade technology. For those companies that can survive the next year or so, the rewards could be great. And if HP gives InfiniBand the same level of commitment that IBM, Dell and Sun have, “it would not be a question of why would InfiniBand become ubiquitous in the server infrastructure market, but rather when would it happen.”

InfiniSwitch investors include: Austin Ventures, Bessemer Ventures, Columbia Capital, Convergent Ventures, Flagship Ventures, Index Ventures, Lightspeed Venture Partners, Moore Capital Management, and TL Ventures. Strategic investors include: Dell, HP-Compaq, Intel and Quanta Computer. Rob Adams of Austin Ventures and Bernard Dalle of Index Ventures were elected new members to the Board of Directors.

“InfiniSwitch’s focus on fully integrated solutions for datacenter infrastructure is a strong differentiator in an increasingly fragmented market,” said Bill Strecker, Managing Director of Flagship Ventures and former CTO of Compaq. “With industry-endorsed technology, a growing list of partnerships, and a solid balance sheet, the company is poised to turn the promise of next-generation computing into reality.”

Customers of the two companies include Compaq, IBM, Lucent, Dell and Intel, among others. Offices will be maintained in Westborough, Mass. and Austin, Texas.

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Paul Shread
eSecurity Editor Paul Shread has covered nearly every aspect of enterprise technology in his 20+ years in IT journalism, including an award-winning series on software-defined data centers. He wrote a column on small business technology for Time.com, and covered financial markets for 10 years, from the dot-com boom and bust to the 2007-2009 financial crisis. He holds a market analyst certification.

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