Blade servers are handy things, medium and large frames into which vendors can stuff numerous blades. Within such a server each blade performs either as an independent server or works in concert with the other blades to perform some particular task. Blades can be designed to perform a wide variety of disparate functions, including processing, storage and providing power.
Both vendors and IT personnel often love these things. Vendors like the design efficiency, and the fact that such boxes provide them with a relatively flexible offering that lets customers start small and grow more or less on an as-needed basis. Of course, that first blade is pretty expensive - you have to buy the server to put it in.
The blade server allows vendors to slide a large number of server boards - each essentially an individual computer - into the frame of the server, where they operate in a manner that is loosely similar to the way embedded processors work. Efficiency comes from the fact that the server provides a central set of "services" - network connectivity, power, etc. - that minister to all the blades.
Because of this design, a much smaller set of general-purpose hardware is needed than would be necessary if the blades were operating in more traditional architectures such as stand-alone servers, appliances, and so forth. Moreover, the cost of the basic componentry in the server for those "central services" is spread across all the blades. This offers the vendors opportunity for cost efficiency as they build their products. The degree to which they pass that savings along to you is of course open to conjecture.
IT teams tend to like blades for other reasons.
First, there is only one box to manage. Second, the change in power requirements that occurs whenever a new blade is added should be predictable. With both IT floor space and power at an increasing premium, these have often become significant issues. Beyond this, because blades are integral to the chassis, in many cases managing the server means managing all the blades as well, simplifying the management environment. Everything within the chassis can typically be managed from a single console. Given the cost of management these days, this should be viewed as more than just a convenience.
Blades and their servers thus form a cost-efficient topology that can often serve IT shops with great efficiency.