IBM has revealed plans to acquire Blade Network Technologies, a provider of server software and switches.
Financial details were not disclosed, but the transaction is expected to close by the end of this year.
Blade makes blade server, rack switch and virtualisation management software, and numbers about half the Fortune 500 list as clients.
IBM will be hoping that the purchase helps it to beat off competition from Nortel and Cisco in the virtualisation, datacentre and server markets.
"Blade will help IBM better integrate networks with its systems, optimising them for workloads that require high-speed and low-latency performance such as cloud computing and business analytics," said Brian Truskowski, general manager of IBM system storage and networking.
"For example, faster data transport enables faster decisions that are important for analytics workloads."
The Blade software is designed to remove much of the burden of running large-scale virtualisation in the cloud, and links servers into the network.
IBM claimed that this will allow customers to deploy "thousands" of virtual machines running large application workloads with ease.
Vikram Mehta, chief executive at Blade, added: "Blade views this as a great opportunity to continue working with the technology providers that have helped make our company successful, while allowing our technology to become a more central part of the datacentre."
Blade is IBM's second acquisition in a week, following the purchase of Netezza for £1.09bn.
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