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IBM is looking to expand its reach into the small and midsize market with an agreement to license its x86 server technology to Lenovo.
The two vendors said that Lenovo plans to build one-processor and two-processor servers based on IBM's System x server technology.
The new agreement covers rack mount and pedestal servers, but not blade servers, said Rich Hume, general manager for modular systems in IBM's Systems & Technology Group.
Under the agreement, Lenovo, of Morrisville, N.C., will manufacture and sell Lenovo-branded servers based on the IBM technology, Hume said. IBM, of Armonk, N.Y., will continue to manufacture and sell its own similar IBM-branded servers based on the same technology. Neither company is manufacturing servers for the other, he said.
In addition, IBM will support Lenovo's server sales with financing and maintenance and other services.
Just as important as what the agreement includes is what it does not include, Hume said. IBM is not exiting the server market, and is not exiting the one-socket and two-socket server business, he said.
Instead, Hume said, the agreement is a way for IBM to extend its System x server technology to a wider part of the small and midsize business market, and focus more of its business in that part of the market.
The move follows a reorganization of IBM's Small and Midsize Business Group and a complete makeover of its PartnerWorld conference earlier this month in order to better focus its resources for customers in the SMB market.
"IBM's share in the smaller business server market is in the mid-high single digits," he said. "Lenovo has a great reach with its partner net. This deal incents Lenovo to participate in the under-500-person company market, and the midrange market."
Hume said IBM's intent is to find a way to take its technology into what he called the "white space" of the market where IBM currently does not have a significant footprint. "We chose to partner with Lenovo since they bought our PC business," he said. "We will go in the same direction with the x86 server business. The intent is to engage in a part of the business where we currently don't participate."
The deal is a win-win for both vendors, said Bob Venero, CEO of Future Tech, a Holbrook, N.Y.-based IBM and Lenovo channel partner.
"In the small business market, Lenovo has a lot more feet in the street," Venero said. "IBM has just increased its sales team with Lenovo."
Just because Lenovo comes out with servers based on IBM technology does not mean solution providers will bite.
Next:Solution Providers Weigh In On Lenovo's Prospects
