After a long search for an OEM agreement, Microsoft will start bundling its Live Windows products with Lenovos desktops and notebooks.
The two companies announced their joint agreement on March 14, and Lenovo executives said that the first PCs to come with these preloaded features will roll off the assembly line later this month.
As previously reported, the initial bundling will include the Windows Live homepage and the Windows Live Toolbar. These preloaded features will include Microsoft Live Search and other Live services.
Lenovo will bundle Microsofts Live products with its ThinkPad notebooks, ThinkCentre desktops and its own Lenovo line of PCs. The Raleigh, N.C., company purchased IBMs personal computing division in May 2005 and still uses the ThinkPad and ThinkCentre names on its high-end, enterprise products.
"The end goal of this allows us to create a communications channel with our customers and add more value to our products," said Peter Gaucher, executive director of strategic alliances for Lenovo. "This also allows our customers to better communicate with us, in addition to giving them additional services."
The first Lenovo PCs with the Live bundle will appear in the United States before hitting the worldwide market, Gaucher said. Although the Live products will be bundled with all the companys PCs, Gaucher said he expects the new offerings will find a home with Lenovos consumer customers and SMB (small and midsize business) users.
Lenovo is the worlds third largest PC manufacturer. Hewlett-Packard and Dell hold the top two spots, according to reports by Gartner and IDC.
The move by Microsoft to find an OEM partner to bundle its Live products has been seen by some analysts as way to counter a 2006 deal between Google and Dell.
The reportedly $1 billion agreement allowed Google to bundle its software and services with Dells PCs.
It is standard industry practice for software and service vendors to pay PC makers to bundle features onto desktops and laptops. Gaucher declined to provide financial details of the agreement between Microsoft and Lenovo, but said the two companies have forged a strong bond as of late and this is just another example of the two working together.
"This is just another example of what this company and Microsoft have been doing lately to expand our partnership," Gaucher said. "We have been a champion of the genuine Windows experience, and Microsoft has done a lot of work in promoting the ThinkPad tablet."
Microsoft originally launched its Live offerings in November 2005.
The problem since these Live products first launched has been branding and Microsofts ability to market these tools to consumers, said Roger Kay, president of Endpoint Technologies Associates.
With Lenovo as its OEM partner, Kay said Microsoft should benefit from the PC makers presence in Asia, especially China. Kay added that Microsofts MSN tools are popular with consumers in Asia and the deal with Lenovo could prove to be a good fit for Live.
"By launching this through Lenovo, Microsoft is going where a lot of these other companies do not have a strong presence, namely emerging markets," Kay said, adding that Lenovo has also tried to expand into the emerging markets of India, Russia and Brazil.
"For Lenovo, its good because the company is searching for differentiators and features that separate them from other companies," Kay said. "It is a good add-on for them."