Leaked Lenovo Memo Aims To Quell F.U.D. Over IBM Server Acquisition


A leaked memo to Lenovo's server sales team Tuesday told its staff to dismiss industry trash talk its rivals are spinning over the pending acquisition of IBM's low-end x86 server business. The memo, written by Gerry Smith, executive vice president of the Lenovo Enterprise Business Group, said the real uncertainty and doubt in the server market is being created by companies that are dealing with genuine upheaval themselves.

"Ever since we made the exciting announcement to acquire IBM's x86 server business back in January, some of our competitors have tried to slow Lenovo's momentum by spreading uncertainty and doubt about Lenovo among our customers, suppliers and other third parties. As the old saying goes, those who live in glass houses, shouldn't throw stones," Smith wrote in the memo obtained by CRN.

The leaked Lenovo memo comes weeks after Hewlett-Packard's CEO Meg Whitman publicly stated her company was set to pounce on a bid to grab server share from IBM Lenovo in the wake of the instability caused by IBM's $2.3 billion sale of its x86 server business to Chinese computer giant Lenovo.

Related: 30 Questions For HP CEO Meg Whitman

"Our competitors in the enterprise space are both in the midst of major corporate transitions. As their customers try to avoid the real uncertainty and doubt created by those upheavals, you should feel very confident in presenting Lenovo and the great products and services we offer," Smith wrote.

Smith's memo avoids calling out specific companies, but both Dell and HP are both dealing with huge business transformations of their own. HP is in the midst of a five-year turnaround plan expected to be complete in 2015. Last year, Dell completed a $24.9 billion leveraged buyout to go private in an effort to burn its image as a low-cost hardware supplier and convince the world it is a full-solutions player.

"Most important, we are committed to IBM's product roadmap and will extend support to end-of-life for any current product offerings. We bought this business with the promise of continuity to customers, both ours and IBM's," Smith wrote.

Messaging from Lenovo's top executives to its sales team is echoed to channel partners via emails. Lenovo resellers said that since Lenovo announced a deal to buy IBM's x86 server business, it has amped up promotions for back- and front-end rebates, new customer acquisition bonuses and upped incentives for volume sales.

Douglas Grosfield, CEO of Xylotek Solutions, an Ontario-based solution provider, and Lenovo and IBM partner, said, "Lenovo is stepping up its game. It's understandable. This is an incredibly volatile market, and Lenovo can't afford to lose one single point of server market share. There is a lot on the line for Lenovo and IBM."

Smith told its server sales force that: "We have always said we would not be distracted by our competitors financial maneuvering or strategic flip flops and I do not intend to change this course today. This has served us well as we became the number 1 PC maker in the world, and even now, as we prepare to accelerate our x86 server and handset businesses. The truth is, the competition should be less focused on us, and more focused on themselves and the value they bring to customers. So, to the degree our success distracts them, we should be happy."

George Brown, CEO of Brown Enterprise Solutions, and Dublin, Ohio-based Lenovo partner, said he is unfazed by the industry trash talk. "Fear uncertainty and doubt has always created an opportunity for us to talk to our customers more about what's going on. It can actually be an opportunity to build a stronger relationship with our customers."

"At the end of the day HP, Lenovo, IBM and Dell need to stop putting the other down," Grosfield said. "Ultimately, you need to focus on what you can do and not on what your competition can't do."

NEXT: Full Version Of Lenovo's Memo To Its Server Sales Team