Sources: Lenovo Jumping Into Enterprise Hyper-Converged With SimpliVity Partnership

Lenovo and SimpliVity have struck a deal that will allow the Chinese hardware giant to offer hyper-converged solutions on its System X infrastructure, sources said.

Lenovo plans to offer SimpliVity's software-defined hyper-converged infrastructure on its System X servers, which it acquired from IBM in a $2.1 billion deal for Big Blue's x86 line last year, sources with knowledge of the pact said. The systems will come in small, medium and large configurations.

The two firms have agreed to split go-to-market and marketing responsibilities. The System X/SimpliVity systems will be offered in North America through select Lenovo VARs, sources told CRN.

[Related: Lenovo/StorMagic Take Aim At Dell, HP, Cisco In Drive To Be 'Lowest Cost Provider' In Hyper-Converged]

Sponsored post

SimpliVity declined to comment for this report. Lenovo did not respond to a CRN request for comment before publication time.

SimpliVity and Nutanix are the two hyper-converged players vendors want to OEM or partner with most, said Jed Scaramella, an analyst with research firm IDC who covers hyper-converged systems.

Without hyper-converged offerings of their own, the big server vendors have been forced to partner with software firms like SimpliVity and Nutanix, Scaramella told CRN.

Now, with the enterprise server market relatively flat and the hyper-converged market poised for big growth, those vendors are trying to get in on the action, he said.

"It's about share of wallet, and where pockets are growing is where you want to be, and that's converged, hyper-converged and cloud," Scaramella said.

The Lenovo deal gives SimpliVity, one of the darlings of the red-hot hyper-converged market, yet another blockbuster partnership with a top server vendor.

Currently, SimpliVity offers its hyper-converged infrastructure products on Cisco UCS servers and on x86 platforms. Cisco certifies SimpliVity to run on its servers, but Cisco does not provide any marketing support as part of the partnership.

A SimpliVity partnership gives Lenovo an enterprise-class hyper-converged offering alongside the lower-cost systems it'll sell in its newly launched partnerships with Pivot3 and StorMagic.

Brian Hamel, Lenovo vice president and general manager, North America Enterprise Business Group, said recently that the company intends to slash its way to bigger market share, telling CRN, "We're going to drive down our cost structure to be the lowest-cost provider in the market versus Dell, versus, HP, versus Cisco."

Lenovo shipped 220,379 server units in the first quarter, good for about 8.3 percent market share, and trailing Dell and HP, according to research firm Gartner.

Dell has been in a strategic partnership with Nutanix since last year.

IDC estimates the hyper-converged market will hit $806.8 million in sales this year and grow to $1.57 billion next year. Meanwhile, the server market is growing at about 3 percent to 4 percent annually, Scaramella said.

"We think Lenovo is going to grow," Christian Perry, principal analyst at research firm TBR Inc., told CRN. "They're already dropping prices on System X, and they're going to cut margins until it is the leader."

In fact, Lenovo must grow, but it's the last hardware vendor to the hyper-converged party, entering the market in July with its Pivot3 partnership, and following that with the StorMagic partnership earlier this month.

"Lenovo [is] last to partner, but the race isn't over," Scaramella said. "The race is just heating up. They're a little late, but it's not like they're way behind, because it's just getting started."