Lenovo Exec Says Naysayers Attacking IBM x86 Deal Are 'Dreaming'

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Lenovo CTO Peter Hortensius says naysayers who doubt his company's ability to spin IBM's x86 business into gold are "dreaming." The Lenovo executive added, with the IBM purchase its channel partners are in the catbird seat when it comes to being free to work with cloud and service providers of their choosing -- and are not locked in with one vendor who says they are open.

CRN spoke with Hortensius on Thursday, the same week rival Hewlett-Packard held its partner conference in Las Vegas, where the company outlined its plans to tear into IBM's x86 server division and "pounce on IBM-Lenovo Instability." Hortensius, who was central to hammering out Lenovo's purchase of IBM's x86 business, discussed the genesis of the deal and what channel partners can expect once it is finalized.

As the Lenovo and IBM x86 server deal nears closing, rivals are publicly voicing doubt, charging the acquisition will create instability for IBM x86 server partners. What are you telling customers and channel partners?

What we tell customers, analysts, consultants and media is, Lenovo is buying IBM's x86 business intact. We are buying it with the executive team, the development team, sales team, engineers and all the people that drive that business. And we aren't looking to change that. The team stays the same. This is IBM's entire x86 portfolio of products. We have stated very publicly that we are committed to continuing IBM's road map. Nothing is changing or going away.

How do you respond to people like Meg Whitman, who promise to pounce on "instability" in Lenovo and IBM's x86 server business?

To be frank, I think competition is dreaming that we aren't going to have success here and is trying to transfer that dream to the marketplace. It's a dream.

We'll be there and we are going to execute really well.

This deal is a win-win. We will be introducing a lot of Lenovo partners to IBM. We will bring new business opportunities to IBM partners as well. I know there is some press out there that says, "I'm not too sure." In reality, after this deal is consummated, Lenovo and IBM partners will see a lot of incremental opportunities. There is huge upside for everybody here, and I'm sure once we work through it everybody will see that.

What is unique about Lenovo that will help you succeed where IBM has not within its x86 server business?

Lenovo has very strong scaling capabilities based on our other businesses. We can bring those advantages to bear and believe Lenovo can help on the execution end when it comes to helping partners close new business. Second, we don't just say we are a channel-focused business. We are a very channel-focused business. We have a channel that will increase our reach and opportunities in the enterprise. Customers that buy from us today are very happy. All of those things matter.

Will Lenovo's go-to-market strategy change?

The key to Lenovo's success will be focusing on what we do well in the channel now. We will continue to do those things. Where, in the context of the new business we need to make changes either to our own policies or that of the partner we are acquiring, I think we have shown we are very responsive.

Your competition argues that even with IBM's x86 business you are only offering a partial IT solution.

I think the way to look at it is when you come to the table, yes, we will have the core component of any enterprise solution, which is a server. And now the Lenovo channel community has the freedom to partner with any best-of-breed partner out there and bring a full solution to the customer. I find very few customers are top-to-bottom one supplier. Today companies have a more heterogeneous environment. For that reason Lenovo is the perfect fit. We are not locking people into one thing versus the other. We are open.

What exactly do you mean by open?

If you are talking open solutions, Lenovo is the only company that will be able to claim to be open -- open to different vendors, cloud providers and services. I say that with credibility because we are not locked into other ancillary businesses within Lenovo. Being open has been part of our business model. Other companies that say they are open can say it, but at the end of the day they are incented to keep your business in their company.

What type of changes do you see in the marketplace, and why is Lenovo the best vendor for partners and customers?

Our focus, efficiency and openness of our platform. Again, we don't have a lot of legacy and attached businesses. Lenovo gives partners and customers a lot more freedom and opportunity to take our core technology and complement it with best-of-breed solutions. It is these same type of partnerships that got us to be No. 1 in PCs. That attitude that empowers the channel is very simple to transfer into this new IBM x86 marketplace.

What is Lenovo's unique value proposition with regard to hardware, and now mobility?

Once the two deals close, we will be the only company with a No. 3 position in phones, PCs and tablets, and enterprise. And we think the scale that presents creates efficiencies. Then when you start to look at customer IT problems that need to be solved today, you realize they all have ties to one of those types of devices or more. That just gives us the opportunity to create unique solutions and opportunities and unique go-to-market capabilities that the other guys will wish they had.

What is the biggest challenge that Lenovo faces once the IBM and Motorola deals close?

The biggest headache right now is the competition trying to mess us up. Because the deal isn't closed, I can't respond. The other challenge is integrating two teams together. We think we are pretty good at those problems, but those are real problems.

We also want to win back some lost server market share since IBM announced it would sell its x86 server business. We are very confident that once we get ahold of the business, we can reverse IBM's x86 market losses and grow the business significantly. Don't forget we did this with IBM's PC business, we can do it again.

Why should partners bet on Lenovo?

Our track record speaks for itself. We aren't a company that wishes it was a good partner to the channel, had scale and was open. Lenovo is all of the above and more. We have the partners that helped us be No. 1 in PCs. Those partners are still with us. We are committed to building a new Lenovo with those same partners and expanding our relationship to IBM x86 reps. We are committed to the IBM road map and committed to making deeper collaborators out of all our partners.

Two of the biggest shifts in the IT landscape are moves by solution providers and customers toward services and cloud. How can partners succeed with Lenovo with neither a part of your core portfolio?

You have to take a look at who Lenovo is today. Lenovo today has 1 percent market share. Lenovo, the second this deal closes, is a 14 percent market share company. Obviously, my relationships with the industry will be very different overnight. And I think that's part of what people need to understand. In China, where we have a more relevant market share, you will see us engaged with the relevant cloud providers and solution providers. Mirroring that success here in the U.S. is really a matter of maturity, openness and scale of our business. The real opportunity for partners is not being locked into only one solution. If you talk with any of those other big competitors, they claim they are open, but trust me, there is only one solution that they prefer you buy.