diff --git a/discoverd.py b/discoverd.py
index e6e9e7730..e72a44b9d 100644
--- a/discoverd.py
+++ b/discoverd.py
@@ -1,31 +1,139 @@
 import logging
 import os
+import re
 import threading
 
 from flask import Flask, request
-from ironicclient import client
+from ironicclient import client, exceptions
 
 
 app = Flask(__name__)
-log = logging.getLogger("discoverd")
-os_args = dict((k.lower(), v)
+
+LOG = logging.getLogger("discoverd")
+OS_ARGS = dict((k.lower(), v)
                for (k, v) in os.environ.items()
                if k.startswith('OS_'))
+ALLOW_SEARCH_BY_MAC = True
 
 
-def process(data):
-    ironic = client.get_client(1, **os_args)
+def is_valid_mac(address):
+    m = "[0-9a-f]{2}(:[0-9a-f]{2}){5}$"
+    return (isinstance(address, (str, unicode))
+            and re.match(m, address.lower()))
+
+
+def process(node_info):
+    if node_info.get('error'):
+        LOG.error('Error happened during discovery: %s',
+                  node_info['error'])
+        return
+
+    keys = ('cpus', 'cpu_arch', 'memory_mb', 'local_gb', 'macs')
+    missing = [key for key in keys if not node_info.get(key)]
+    if missing:
+        LOG.error('The following required parameters are missing: %s',
+                  missing)
+        return
+
+    valid_macs = [mac.lower() for mac in node_info['macs']
+                  if is_valid_mac(mac)]
+    if valid_macs != node_info['macs']:
+        LOG.warn('The following MACs were invalid in discovery data '
+                 'for node with BMC %(ipmi_address)s and were '
+                 'excluded: %(invalid)s',
+                 {'invalid': set(node_info['macs']) - set(valid_macs),
+                  'ipmi_address': node_info.get('ipmi_address')})
+
+    LOG.info('Discovery data received from node with BMC '
+             '%(ipmi_address)s: CPUs: %(cpus)s %(cpu_arch)s, '
+             'memory %(memory_mb)s MiB, disk %(local_gb)s GiB, '
+             'macs %(macs)s',
+             dict((key, node_info.get(key))
+                  for key in keys + ('ipmi_address',)))
+
+    ironic = client.get_client(1, **OS_ARGS)
+    bmc_known = bool(node_info.get('ipmi_address'))
+    if bmc_known:
+        node = _get_node_by_ipmi_address(ironic, node_info['ipmi_address'])
+        if node is None:
+            LOG.error('Unable to find node with ipmi_address %s',
+                      node_info['ipmi_address'])
+            return
+    elif ALLOW_SEARCH_BY_MAC:
+        # In case of testing with vms and pxe_ssh driver
+        LOG.warn('No BMC address provided, trying to use MAC '
+                 'addresses for finding node')
+        node = _get_node_by_macs(ironic, valid_macs)
+        if node is None:
+            LOG.error('Unable to find node with macs %s',
+                      valid_macs)
+            return
+    else:
+        LOG.error('No ipmi_address provided and searching by MAC is not '
+                  'allowed')
+        return
+
+    if not node.maintenance:
+        LOG.error('Refusing to apply discovered data to node %s '
+                  'which is not in maintenance state', node.uuid)
+        return
+
+    patch = [{'op': 'add', 'path': '/extra/newly_discovered', 'value': 'true'}]
+    existing = node.properties
+    for key in ('cpus', 'cpu_arch', 'memory_mb', 'local_gb'):
+        if not existing.get(key):
+            patch.append({'op': 'add', 'path': '/properties/%s' % key,
+                          'value': str(node_info[key])})
+    ironic.node.update(node.uuid, patch)
+
+    for mac in valid_macs:
+        try:
+            ironic.port.create(node_uuid=node.uuid, address=mac)
+        except exceptions.Conflict:
+            LOG.warning('MAC %(mac)s appeared in discovery data for '
+                        'node %(node)s, but already exists in '
+                        'database for another node - skipping',
+                        {'mac': mac, 'node': node.uuid})
+
+    LOG.info('Node %s was updated with data from discovery process',
+             node.uuid)
+
+
+def _get_node_by_ipmi_address(ironic, address):
+    # TODO(dtantsur): bulk loading
+    nodes = ironic.node.list(maintenance=True, limit=0, sort_key='created_at',
+                             sort_dir='desc', detail=True)
+    for node in nodes:
+        if node.driver_info.get('ipmi_address') == address:
+            return node
+
+
+def _get_node_by_macs(ironic, macs):
+    port = None
+    for mac in macs:
+        try:
+            port = ironic.port.get_by_address(mac)
+        except exceptions.NotFound:
+            continue
+        else:
+            break
+
+    if port is not None:
+        try:
+            return ironic.node.get(port.node_uuid)
+        except exceptions.NotFound:
+            return None
 
 
 @app.route('/', methods=['POST'])
 def post():
     data = request.get_json(force=True)
-    log.debug("Got JSON %s, going into processing thread", data)
+    LOG.debug("Got JSON %s, going into processing thread", data)
     threading.Thread(target=process, args=(data,)).start()
     return "{}", 202, {"content-type": "application/json"}
 
 
 if __name__ == '__main__':
-    logging.basicConfig(level=logging.DEBUG)
-    client.get_client(1, **os_args)
-    app.run(debug=True, host='0.0.0.0')
+    logging.basicConfig(level=logging.INFO)
+    client.get_client(1, **OS_ARGS)
+    app.run(debug=True, host='0.0.0.0', port=5050)