LENOVO officially announced their acquisition of IBM’s x86 server business on December 3. The acquisition was closed on October 1, 2014, following their first acquisition of PC (Personal Computer) business in 2005.
With the acquisition, Lenovo expect this to be a $5-billion business within one year. Lenovo’s acquisition of the IBM x86 server business is an expansion of their existing x86 hardware business.
As part of the deal, Lenovo acquired System x, BladeCenter and Flex System blade servers and switches, x86-based Flex integrated systems, NeXtScale and iDataPlex servers and associated software, blade networking, and maintenance operations. Apart from this, Lenovo acquired IBM’s server-manufacturing facility in Shenzhen, China. Lenovo will also provide x86 servers via contract manufacturers in São Paulo, Brazil; Szekesfehervar, Hungary; and Guadalajara, Mexico, and those contracts have also been assigned to Lenovo as part of the deal.
As part of their strategic alliance, Lenovo will serve as an Original Equipment Manufacturer (OEM) to IBM and resell select products from IBM’s industry-leading storage and software portfolio, including IBM’s entry and midrange Storwize storage product family, Linear Tape Open (LTO) products, IBM Flash storage arrays and elements of IBM’s system software portfolio, including Smart Cloud, General Parallel File System and Platform Computing solutions, allowing it to support a greater range of customer needs in data centers and to ensure continuity of x86-based solutions. The acquisition builds upon a strong history of collaboration that began in 2005, when Lenovo acquired IBM’s PC business, including the ThinkPad line of PCs.
“Lenovo actually bought the entire system x business of IBM. We actually acquired not just the people, the technology, all their facility, plans, road map, and intellectual properties” said Michael Ngan, Lenovo Philippines country general manager.
IBM will continue to provide maintenance delivery on Lenovo’s behalf for an extended period of time. Existing customers that IBM is covering back then and until now will continue. Apart from this, x86 server customers will have the same familiar sales professionals that they worked with at IBM and can expect a seamless transition.
Lenovo will still continue to use the IBM brand on System x products for at least a year. They have not made any branding decisions yet for System x products beyond that and continuously going to provide assistance to customers.
In the Philippine market, Lenovo is still positioning System x in the Philippines. On a global scale, Lenovo’s mobile, enterprise and ecosystem, and cloud business account for 15 percent of Lenovo’s total revenue, up from 4 percent 3 years ago. With the acquisition of System x, Lenovo will provide greater entry to the $42-billion x86 server hardware opportunity.
“With the successful close of our acquisition, Lenovo will add a world-class business that enhances our capabilities in enterprise hardware and services, bringing us to the No. 3 spot in the global server market, with approximately 14 percent market share.” Ngan said.
Also, Lenovo’s pending acquisition of Motorola Mobility from Google will make it the world’s third-largest smartphone maker, while further strengthening its position as a top-3 maker of smart connected devices—PCs, tablets and smartphones. Lenovo is still on the lookout for potential investments in the future, partnering with the solution providers, solution application vendors, most especially with Microsoft, which they are steadily doing business with.
Lenovo will continue to add “best of breed” partners to Lenovo’s enterprise ecosystem, including strategic partnerships with EMC, VMWare, Oracle and Extreme Networks.
“Leveraging on Lenovo’s strong business performance and System x’s strong enterprise network, the team is confident in reaching the bigger goal of becoming the No. 1 trusted brand in the market. Our manufacturing scale and operational excellence not only allow us to deliver the best solutions to our customers, but also strengthen our commitment in helping them overcome the challenges that they face today,” said Abraham Lim, country manager, Enteprise Business Group, Lenovo Philippines.
Lenovo is buying IBM’s x86 server business intact and is committed to following the IBM x86 product road map, including Flex and x86-based PureFlex integrated systems. Lenovo also recently launched its fleet of m5 servers, to address the growing demands of the market.