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RLX exits blade manufacturing market

Michael Kanellos CNET News

Published: 24 Dec 2004 08:55 GMT

RLX Technologies will stop making blade servers to concentrate on management software, the company announced on Thursday. It will sell its Control Tower management software and will offer it for all major brands of blade servers. Layoffs are currently taking place as a result of the change, a spokesman said.

The company was the first to tout blades -- slim servers stacked vertically in a rack -- as a way to cut down on power consumption and real estate in server rooms. Some of the company's initial backers came from Compaq. It also received an endorsement when IBM agreed to resell its hardware.

The hardware market is notoriously difficult on start-ups, however, and RLX's sales never took flight. The company debuted during the massive downturn in IT spending. Meanwhile, well-heeled competitors like HP, IBM, Sun Microsystems and Dell began to create their own blade servers and management tools.

Sales of RLX systems were also initially hampered by the fact that it used Transmeta processors, though it subsequently shifted to Intel chips.

The decision to get out of hardware is relatively sudden. The company announced a new line of servers in November.

Although it will no longer actively sell and develop hardware, the company will continue to support existing customers and fulfill outstanding orders, a spokesman said.