Lenovo Making Steady Push Into x86 Server Market

By Jeffrey Burt  |  Posted 2013-09-13 Print this article Print

Lenovo also will leverage its partnership with storage giant EMC, which was announced last year and led to the creation of a new company, LenovoEMC, launched in January. The business—which incorporates what used to be EMC’s Iomega storage line—gives Lenovo a solid business to sell with the server pitch. It also doesn’t hurt Lenovo’s credibility with potential server customers to be partnered with a company like EMC.

“It’s another part of increasing credibility,” Kendall said. “They figure, ‘You can’t be all that bad if EMC is using your stuff.’”

Currently the bulk of what Lenovo sells is lower-end systems. At IDF, the two systems the company announced—the ThinkServer TS140 and TS440—fall into that category. They’re powered by the latest Xeon E3-1200 v3 chips from Intel and are aimed at small and midsized companies. However, the upcoming ThinkServer rack systems, which will run the new Xeon E5-2600 v2 processors and be introduced later this fall, will move up the ladder and target companies running such workloads as Web, virtualization and databases.

It’s a part of the market that is getting a lot of attention by most server vendors, which will pose a challenge to Lenovo. IBM will also be a challenge, Kendall said. Big Blue sold its PC business to Lenovo in 2004, enabling Lenovo to move steadily up the global PC rankings. Recent speculation about whether Lenovo would buy IBM’s System x x86 server also is feeding into the perceived link between the two companies.

“I still get [the questions], ‘Aren’t you IBM? Are these IBM servers?’” Kendall said. However, the percentage of those kinds of questions is dwindling, and now people know that Lenovo is also a server company, he said.

How far the company can go in the x86 server market remains to be seen. According to IDC analyst numbers, in the second quarter, market revenues fell 1.3 percent and shipments stayed flat at a loss of 0.1 percent. However, there is some volatility in the market—while Dell and Cisco both saw their revenues grow, sales for HP and IBM declined.

Now Lenovo needs to take advantage of that. Among the key tasks Kendall has for Lenovo’s Enterprise Systems Group are to grow Lenovo’s brand as an enterprise server vendor, increase its sales capabilities internally and via partners, expand what he calls a “modest” product lineup of six servers—including offering a four-socket server—and grow the partnership with EMC.


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