Lenovo, EMC Join Forces In Server Market

The new alliance, the companies said, is three-pronged. First, Lenovo and EMC will create a server technology development program aimed at boosting the adoption of Lenovo’s enterprise server offerings, many of which will now be embedded into select EMC storage systems over time.

Secondly, Lenovo, in exchange for EMC’s support, will resell many of EMC’s networked storage solutions to its own customers in China, a market in which EMC is striving to gain new ground.

[Related: Midrange Storage, VMware Growth Drive Strong EMC Results ]

Lastly, EMC’s Iomega division, which produces external hard drives, network-attached storage (NAS), and multimedia devices, will now be jointly owned by Lenovo. EMC said it will contribute Iomega’s assets and resources to the venture, while Lenovo will contribute an unspecified amount of cash in exchange for its partial ownership.

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The Iomega venture deal, which is expected to close by the end of the year, will churn out new NAS systems to small and medium businesses, along with distributed enterprise sites.

Lenovo, the Chinese PC giant that falls second only to HP in terms of worldwide market share, has placed a new emphasis on growing its server portfolio this year, as it attempts to take on x86-based server vendors like IBM and Dell in the enterprise and SMB space.

In May, Lenovo bolstered its server offerings with the launch of its new RD530 and RD630 ThinkServers, which it dubbed as being its first "enterprise-ready" servers. Targeted at cloud-based and virtualized environments, the new RD530 and RD630 veer from Lenovo’s traditional ThinkServer products in that they deliver twice the memory bandwidth and increased scalability to accommodate larger workloads.

Lenovo said its new partnership with EMC will not only help drive adoption of its existing ThinkServer lines, but accelerate its R&D efforts to create entirely new server products as well. Lenovo refers to this new emphasis on non-PC products, including servers, as its ‘PC-plus era.’

"Today’s announcement with industry leader EMC is another solid step in our journey to build on our foundation in PCs and become a leader in the new PC-plus era," said Yuanqing Yang, Lenovo chairman and CEO, in a statement. "This partnership will help us fully deliver on our PC-plus strategy by giving us strong back-end capabilities and business foundation in servers and storage, in addition to our already strong position in devices. EMC is the perfect partner to help us fully realize the PC-plus opportunity in the long term."

EMC also stands to gain something from its new alliance. Leaning on Lenovo’s industry-leading brand in China, the Hopkinton, Mass.-based storage vendor is poised to steal more market share from rivals HP and IBM in the international server market.

"The relationship with Lenovo represents a powerful opportunity for EMC to significantly expand our presence in China, a vibrant and very important market, and extend it to other parts of the world over time," said Joe Tucci, chairman and CEO at EMC, in a statement.