Hewlett-Packard Blade Servers: Cost Cutter

By Brian P. Watson Print this article Print

Hewlett-Packard's experience in the blade server market dates back to 2001, further than other technology giants like Dell and IBM. And customers say that expertise—and the tools that come with it, like the BladeSystem line of servers and enclosures—has helped them save money and time in operating their blade environments.

When Tim Myers, group vice president of distributed server solutions for SunTrust Banks, found $1 million in reduced costs with blades in February 2003, he quickly made a believer out of his boss, who worried that blades were over-hyped. The savings were spread across reductions in maintenance and hardware, including cabling. According to Myers, 40 blades in a rack could share 10 strands of fiber, but 40 traditional servers needed 120 strands. At $200 per cable, it cost SunTrust about $2,000 to wire up a rack of 40 blades, as opposed to $24,000 for 40 traditional servers. (Myers did not specify the total number of blades or traditional servers he was using.)

And Myers says the blades kept delivering. Instead of running Microsoft Exchange on three separate servers with a standalone switch, Myers put three blades together in the same chassis, sharing an integrated Cisco Gigabit Ethernet switch.

Using the separate servers and switch, each mailbox request would put three requests into the local-area network. The integrated switch consolidated the requests from the blades into a single query, cutting out a logjam of 20,000 message requests Myers says his old servers used to handle.

Energy provider Cinergy gave HP blades high marks for helping the company reach two goals: conserve space and save money, according to senior systems administrator Terry Eshom. About six months before the Cincinnati-based energy provider was acquired by Duke Energy in May 2005, Cinergy consolidated approximately 650 rack-mount HP servers onto blades. The merged company now has about 100 blades and 800 rack-mount servers; Eshom says he'll replace the rack-mount units with blades once their service contracts expire.

How did Cinergy meet its goals? While testing the blades, Eshom put 32 blades into a single rack, a 2-to-1 space savings versus the 16 old servers per rack. And HP's BL20p blades, including enclosures and power and network modules, at the time cost about $1,400 less each than HP's rack-mount DL380 servers and infrastructure. With 100 blades, Eshom puts his hardware cost reductions at $140,000, not counting money and time savings for management of blades and cables, which he says are difficult to quantify.

HP's Enterprise Storage and Servers group, which includes the BladeSystem products, brought in $16.7 billion in revenue in 2005, a 10.6% increase over the previous year, when it netted $15.07 billion. In 2005, the group accounted for 19.3% of HP's overall revenue compared to 18.7% in 2004.

Myers' quibble: HP's newest blades, the c-Class, are available with a 72- or 146-gigabyte hard drive, instead of a 300-gigabyte drive. That means Myers will have to attach some client/server applications to his storage-area network instead of using local drives, depending on the total storage requirements for a particular application. He says that situation varies case by case, and did not name applications.

Mark Potter, HP's vice president of industry standard servers, says the industry's move to smaller drives has slowed availability of the 300-gigabyte hard drives. Until the higher-capacity drives are shipped, Potter says c-Class users can add an equivalent amount of storage through attachable hard disk devices called "hot-plug" drives.

HP can't ship the larger drives until its partners manufacture them, Myers says. And not every customer uses storage-area networks, he adds: "They're trying to market a product to the entire world—and not everyone has the same needs."

Hewlett-Packard: At A Glance

3000 Hanover St. / Palo Alto, Ca 94304 /(650) 857-1501 / Www.Hp.Com

Ticker: Hpq (Nyse) Employees: 150,000

Mark Hurd
President & CEO

Ann Livermore
EVP, Technology Solutions Group

Bladesystem C-Class Servers, Supporting Dual-Core Processors From Intel and AMD, are Housed in a 17-Inch Enclosure and Feature Remote Provisioning, Configuration and Monitoring Software.
Reference Checks

Duke Energy
Terry Eshom
Sr. Sys. Admin.

Polaris Industries
Nathan Myrold
Sys. Admin.

CBE Technologies
Randy Becker

Suntrust Banks
Tim Myers
VP, Distributed Server Solutions

Rock County, Wisc.
Mickey Crittenden
Dir., I.T.

New Balance
Pierre Baudet
Mgr., Business Systems


Net income$3.13B$2.40B$3.50B
R&D spending$1.80B$$3.49B$3.56B

* Fiscal year ends Oct. 31; FYTD represents six months ended April 30, 2006
+ Retained earnings represents accumulated net income to date not paid as dividends

This article was originally published on 2006-09-07
Associate Editor

Brian joined Baseline in March 2006. In addition to previous stints at Inter@ctive Week and The Net Economy, he's written for The News-Press in Fort Myers, Fla., as well as The Sunday Tribune in Dublin, Ireland. Brian has a B.A. from Bucknell University and a master's degree from Northwestern University's Medill School of Journalism.

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