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Lenovo promises seamless transition for IBM x86 server customers

Lenovo has promised a seamless transition for IBM x86 server customers, following the former’s recent acquisition of the business from Big Blue.

In an interview with a select group of technology journalists, Abraham Lim, Country Manager, Enterprise Business Group at Lenovo Philippines, said IBM will continue supporting current customers. Thus, the contact and hotline numbers for maintenance and support remain the same, likewise with IBM’s service level agreement with customers.

Michael Ngan, Country General Manager at Lenovo Philippines

Michael Ngan, Country General Manager at Lenovo Philippines

Lenovo’s acquisition of IBM’s x86 server business places the company in third position in the x86 server hardware, software and service segment, cornering approximately 14% shares of the $42.1-billion x86 market. Prior to the acquisition, Hewlett-Packard led with 29.6% of the revenue generated in the worldwide x86 server market. Dell in second place at 22% and IBM in third at 11%, according to research firm International Data Corp.

The acquisition, which was officially approved by the US government, was completed last October 1, and marks the union of the entire System x official team with the Lenovo family. With the closed deal, the company now offers its customers a complete end-to-end set of enterprise- and PC- targeted offerings spanning the data center, branch office, remote office and desktop environments.

“The IBM x86 acquisition builds upon the excellent momentum in our enterprise business, which grew by more than 30% last quarter organically. With the successful close of the 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,” said Michael Ngan, Country General Manager at Lenovo Philippines.

The closed deal makes Lenovo the owner of IBM x86 server business in its entirety, including IBM’s server manufacturing facility in Shenzhen, China. Assets acquired by Lenovo include all IBM’s x86 server product lines including towers, racks, and blades; all IBM System Networking technology hardware; Flex System and x86-based PureFlex integrated system; and a highly skilled x86 sales force, key labs and other facilities supporting these products. All relevant intellectual property is also included in the deal.

Contracts to assemble x86 servers from manufacturers in Sao Paulo, Brazil; Szekesfehervar, Hungary and Guadalajara, Mexico have also been assigned to Lenovo as part of the deal.

The acquisition, which serves as a complementary fit to Lenovo’s Think PC business, also makes the company a reseller of IBM Storwize and Tape storage products and IBM GPFS software, Platform Computing software, and Software-Defined Networking products to ensure continuity of x86-based solutions.

“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 Lim.

Ngan adds Lenovo will still run after the same set of customers. “The company will operate vertically, that is, from global all the way down to the country at present time, under the Lenovo umbrella,” he said.

Lim said one of the key areas that they would focus forward with the synergy, aside from finance, banking, telecommunications, manufacturing, and the government as their key clients, will be the business processing outsourcing (BPO), which has reported a year-on-year growth of 20%.

In terms of requirements of both small and medium businesses (SMBs) all the way to the enterprise, Lim said “we will still position System x in the Philippines.”

As for branding, Lim said that they will continue to use the IBM brand on System x products for about a year. They have not made any branding decisions beyond that.

In line with the acquisition of the x86 server business, Ngan said the company’s roadmap positions Lenovo well with three growth areas: Enterprise, Mobile and Ecosystem/Cloud, all supported by a strong PC business.

Part of its expansion plan is to continue to add “best of breed” partners to Lenovo’s enterprise ecosystem, including strategic partnerships with EMC, VMware, Oracle and Extreme Networks.

The company will offer “the best channel program in the industry” and collaborate with extensive lineup of leading channel partners who often resell or integrate Lenovo enterprise hardware into their own client solutions.

Lim said that with the acquisition closed, they will implement the IBM x86 product roadmap, including Flex System and x86-based PureFlex integrated systems, and will continue to drive innovation across these products. “We expect this to be a $5-billion business within one year.”

To obtain this goal, Lim revealed three sets of plans. First, they will ensure a smooth integration of IBM employees and a continued execution on their plans. Second, they will make sure that their customers have a seamless transition, while providing great solutions and becoming the easiest company in the industry to do business with. Third, they will expand their geographical reach, delivering innovation and improving efficiency in the design, sale and manufacture of servers.

“We are dead set to be No. 1,” a determined Ngan said. “We have proven track records and it is backed up by the fact that Lenovo has very efficient operations. We have rich portfolio of products and solutions from mobility to enterprise. We have talents that we acquired from IBM which will be integrated with the Lenovo’s team. There’s no way to go but up.”

Lim said that they are committed to the roadmap of all product lines by mid-December. Although the main models are already available, the general availability of the full line will be on January 2015.

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