Every so often, something unsexy and boring becomes interesting. Few people drool over console servers, even those who deal with them on a regular basis, but an announcement by Opengear, an open-source console server company, manages to make them look sexy by appealing to resellers' wallets.
By using free open-source software like Nagios and Powerman in addition to writing their own code, Opengear passes along significant price reductions compared with their competitors like Avocent, Lantronix, Perle Systems, and Digi International.
While the primary beneficiaries of lowered prices are their customers, Opengear has identified and targeted another group that benefits--their partners.
Opengear's VARs see up to 25 percent profit margins on console servers, notable because the market standard is about 3 percent to 5 percent.
I talked to Opengear representatives who told me that their numbers are going up, with a record number of sales booked in December. The console server market is about $200 million annually, and Opengear is unusually optimistic about 2009.
Part of that optimism may come from their management. CEO Bob Waldie is an open source veteran and one of the pioneers of embedded Linux who has taken a number of open-source start-ups through to acquisition (most recently, SnapGear which is now part of McAfee).
However, part of Opengear's cheery outlook might be good old-fashioned schadenfreude: Among their publicly held competitors, Digi International cut their first-quarter sales forecast by almost 15 percent and Lantronix was just delisted from the NASDAQ.
The channel often needs to sell console servers to manage their data centers, and Opengear is counting on gaining ground in what used to be a pass-through market. Is it sexy? No. But it is smart.
By keeping it simple and open source, the company is able to offer their partners something that competing products can't--high returns.
As more companies move to virtual machines and blade servers to reduce space and costs, there are few mentions of the downside or "dark side" of virtualizing hardware and operating systems. I spoke with Bob Waldie, CEO and founder of Opengear, an open-source out-of-band management services provider, about the problems associated with the adoption of blades and VMs.
Q: So why do you think that virtualization is such a problem?
Waldie: The dark side of virtualization is the complexity of the environment it creates. While server virtualization improves flexibility and asset utilization, it also adds complexity to the environment, specifically by adding an extra hypervisor layer to the operating and management load and creating complicated virtual appliances and virtualized I/O. For example, when the enterprise VPN network is routed through software VPN appliances running on virtual servers and then migrated to virtual machines, the connection of the virtual machines back to the LAN presents a new layer of management challenges.
Well, what are these new management challenges?
Waldie: For the vast majority of enterprises, virtualization coexists with physical deployments and data center managers need tools for managing both physical and virtual environments. However, in addition to needing new virtual management tools, the added network complexity means the tools that previously used to manage the physical infrastructure pre-virtualization aren't appropriate. Adding to this management issue is the increase in disaster sensitivity that comes with consolidation. While prevalence of infrastructure outages may not increase, the consequence of a hypervisor or blade failure will, so managers have to find and implement a completely new set of tools while under incredible pressure to avoid any downtime or IT issues.
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