Lenovo Closes Infinidat Acquisition, Instantly Becomes A Top Enterprise Storage Player

It took over a year from the time Lenovo unveiled plans to acquire Infinidat to finally close the deal, but the deal is done and Lenovo finally moves from its focus on SMB storage to being able to sell high-performance enterprise storage to match its enterprise server business.

Lenovo Thursday said it has closed its acquisition of high-performance enterprise storage provider Infinidat.

Lenovo, which provides servers and PCs to customers ranging from small businesses to enterprises, has had SMB-focused storage offerings, but has not matched its enterprise server market with corresponding storage.

That will now change with Lenovo’s new Infinidat storage business.

Lenovo in last year unveiled its plan to acquire Israel-based Infinidat, a privately held developer of high-performance storage technology that was founded in 2011. Terms of the deal were not disclosed at the time the planned acquisition was unveiled or any time since.

Infinidat has raised $370 million in total funding since its founding from multiple investors including Goldman Sachs’ growth equity unit, TPG, and Israel-based ION Asset Management. At one point, in 2017, the company had a valuation of $1.6 billion.

Lenovo and Infinidat were unavailable to discuss the close of the acquisition by press time.

Lenovo, however, did state on its website that the Infinidat transaction strengthens the company’s position in enterprise storage and enhances its ability to deliver resilient, intelligent, AI-ready data infrastructure.

Infinidat’s storage business is centered on its InfiniBox SSA all-flash storage arrays, its InfiniBox high-performance hybrid flash and disk arrays, its InfiniBox high-performance hybrid storage for data protection use cases, and its InfiniGuard purpose-built backup appliances.

Infinidat CMO Eric Herzog last September told CRN that, when the acquisition closes, the Infinidat business will be part of Lenovo’s Infrastructure Solutions Group, and that the Infinidat enterprise storage technology will complement Lenovo’s SMB and midrange storage capabilities.

“Lenovo has entry and midrange storage solutions,” Herzog said at the time. “They don’t have any high-end storage. We don’t sell entry or midrange. So we fill that gap at the high end. Lenovo sells AI servers. Our Infinidat RAG AI data services matches up well. There’s a way to push that together. We didn’t have servers, and they didn’t have high-end storage with AI RAG [retrieval-augmented generation].”

Howie Evans, vice president of Dallas Digital Services, a Southlake, Texas-based solution provider and channel partner to both Lenovo and Infinidat, told CRN that he is quite positive about Lenovo’s acquisition of Infinidat, although it will impact different customers in different ways.

One place Evans worries about is certain government and commercial customers of Infinidat that may not want to deal with Lenovo because of that company’s roots in China.

“That may be a struggle for them later down the road, because Lenovo is a Chinese-owned company,” he said. “Some customers have very strict rules about working with any companies that are Chinese based. Any company like that, and I think even the government up to a point, might even have some issues with that. But that’s the only negative that I currently see.”

The biggest good that may come out of the acquisition is reduced costs, Evans said. The Infinidat technology is software-defined storage and currently is available on servers from multiple vendors.

“Since Lenovo has their own servers, you don’t have to go to any other server vendors,” he said. “That definitely would be a plus.”

The other big plus is on the channel partner side, Evans said. While Lenovo has a strong partner program for partners working with SMBs to enterprises, Infinidat did not have a real formal partner program, he said.

“They claim that they have a program,” he said. “I even think they’ve got awards for it. And I’m like, it doesn’t make much sense to me because it really doesn’t have a program. We work with one rep, and that’s about it.”

Evans said he expects a big change on the channel side as Infinidat becomes part of Lenovo.

“There’s going to be a reset,” he said. “‘Here’s your pricing. Here’s your discount. You register the deal, and this is your discount.’ And that’s it. Unfortunately today, because of the size of some of the customers we have, and especially if they’ve already bought and they don’t want to lose the business, it just becomes a pricing negotiation between our company and Infinidat. I think some of the pricing and the way things are sold and dealt with are going to get levels reset and become somewhat normal, especially for VARS.”

Not only that, but Lenovo has more feet on the street for partners, Evans said.

Prior to Infinidat, Lenovo has been a good play in the SMB storage business, Evans said.

“Infinidat is definitely enterprise,” he said. “When you buy an Infinidat, you get the whole box. A customer can choose to take the full 4.19 petabytes internally and activate all of it. Or you they just need one petabyte, then they can grow capacity as they need it.”

Lenovo said that Infinidat will operate as a business unit within the company’s Infrastructure Solutions Group.

Ashley Gorakhpurwalla, president of Lenovo’s Infrastructure Solutions Group, said in a prepared statement that Infinidat gives Lenovo a big presence in the enterprise storage market.

“This acquisition strengthens Lenovo’s position in enterprise storage at exactly the right moment. With Infinidat, we are significantly enhancing our enterprise storage capabilities and accelerating delivery of resilient, high-performance data infrastructure that powers AI, analytics, and mission-critical workloads,” Gorakhpurwalla said.