Lenovo President: X86 To Be Fully Integrated Into Business
Lenovo plans to completely integrate the x86 server business it bought from IBM into its existing coverage and distribution model, Lenovo's North American president said a day after the acquisition closed.
"We will be one Lenovo," Jay Parker told an audience of about 1,800 people during the Synnex 2014 North American Conference. "Don't think of this as two divisions -- a server division and a PC division."
The completion of the deal means Lenovo has gone from having a couple of tower, rack and server products to a full range of offerings servicing everything from the branch office to the SMB to the high-end enterprise markets, Parker said.
The x86 server offering will be made available to all existing Lenovo partners and distributors, including Synnex, Parker said, while existing x86 partners coming over from IBM will now be free to sell all of the China-owned technology giant's products and services.
"This is not about harvesting margins or protecting relationships or protecting customers," Parker said. "This is about growing our business."
Parker expects competition, market dynamics and an open distribution model to allow for a rapid scale up of the x86 business under Lenovo.
The vendor will use a single coverage model for both its x86 and PC offerings, with the same group of Lenovo staff responsible for making pricing and programming decisions, Parker said. Solution providers, therefore, won't be contacted by two sets of sales reps each selling a different piece of the company's portfolio.
"We want to grow these businesses together," Parker said. "You can expect us to push, push, push."
Solution providers can expect Lenovo to take a much more aggressive approach to pricing the x86, according to Kurt Beatty, who does business development for IO South of Marietta, Ga, which has sold the x86 for nearly a decade.
While IBM priced the x86 as a premier product, Beatty said Lenovo plans to offer the server at an amount comparable to alternatives on the market, sacrificing margins to gain market share. Yet, Beatty said he's been told margins for x86 channel partners will actually be higher under Lenovo, leaving the vendor to take it on the chin.
Synnex had offered the X series product line until roughly four years ago and, as a result, still has a fair amount of institutional knowledge of the business, said Kevin Murai, CEO of the Fremont, Calif.-based distributor.
The x86 offering should be a great enhancement to Synnex's enterprise portfolio, Murai said, though many of the distributor's channel partners already resell it through pre-existing arrangements.
The most immediate opportunity for x86 sales should come from the July 2015 end of support for Windows Server 2003, Murai said.
Ridgeline Technology of Auburn, Calif. is looking for an additional product line or two to add to its public safety vertical and is considering bringing on the x86, said regional sales manager Kevin Christopher.
Christopher said he hopes the x86 partner program will be more reseller friendly and easier to follow with Lenovo than it was under IBM. Ridgeline is an existing Lenovo partner for its mobile authorization products.
The company, according to Christopher, is intrigued by opportunities in markets ancillary to x86 sales such as storage, applications and power backup.
"There's a lot of revenue around that server," Christopher said.
With the completion of the x86 acquisition, Parker said Lenovo is the only company globally with a top three market share in the server/storage, PC and tablet/mobile markets.
"We believe this offers a huge opportunity for us together to go attack the business," Parker said. "Now we have everything we need to bring to bear to be successful," he said.
PUBLISHED OCT. 2, 2014