Lenovo, NetApp Combine Forces in Servers, All-Flash Storage

The strategic partnership will enable Lenovo to better compete with Dell EMC and HPE in the rapidly changing enterprise data center space.

data center

Officials with Lenovo, which already is seeing strong growth in its data center server and storage businesses, are looking to add stronger flash capabilities to its lineup through a partnership with NetApp and its expertise in all-flash and hybrid-flash storage.

The two companies last week announced a strategic partnership that also includes the creation of a joint venture in China that will help the vendors push new storage and data management products into that country’s massive IT market. Officials with both Lenovo and NetApp announced the partnership at Lenovo’s Transform 2.0 show in New York City.

The alliance strengthens Lenovo’s position in the data center as it competes with the likes of Dell EMC, Hewlett Packard Enterprise and Cisco Systems, while NetApp catches on with a top-tier vendor that is seeing rapid growth in its server and storage businesses. In a rapidly evolving IT space that is becoming more data-centric and is being driven by such trends as the cloud, data analytics, the internet of things (IoT) and greater mobility, a partnership like the one between Lenovo and NetApp can be beneficial to both vendors, according to Charles King, principal analyst with Pund-IT.

“Since the best and most long lasting such efforts incorporate and explore the relative strengths of the collaborating parties, parity of assets, skills and expertise can be critical to success and longevity,” King wrote in a research note. “In that sense, Lenovo and NetApp’s new global, multi-faceted partnership appears well-considered and designed. The companies are similarly robust technologically, and both are enjoying remarkably successful runs in their target markets.”

In addition, the companies’ “common interests in the discrete needs of enterprise customers are highly complementary, meaning that they should be able to capture and fully exploit synergies between their individual portfolios,” he wrote.

NetApp CEO George Kurian said in a statement that the combination of Lenovo and NetApp products will help businesses adapt their IT environments to the new demands.

“In today’s global economy, customers demand new approaches to IT infrastructures that support their digital transformation,” Kurian said. “Through this partnership, Lenovo and NetApp will offer a comprehensive portfolio of products, solutions and service that is unrivaled in the market today.”

This isn’t Lenovo’s first foray in all-flash storage. The company in 2016 announced a partnership with Nimble to develop all-flash converged infrastructure offerings. HPE bought Nimble last year for $1 billion.

Lenovo accelerated its data center efforts in 2014 when it bought IBM’s x86 system business for $2.3 billion, a deal that included not only the System x, BladeCenter and Flex System servers and switches, but also integrated systems and associated software. The acquisition propelled Lenovo into third place in the global server market. IDC analysts earlier this month said that Lenovo and IBM were tied for third in the space for the second quarter of this year, adding that Lenovo saw year-over-year revenue growth of 85.7 percent.

Overall, Lenovo’s Data Center Group saw revenues in the company’s fiscal first quarter grow 67.8 percent, reaching $1.6 billion, officials said in August.

For its part, NetApp ranked third in the global enterprise storage system space in the second quarter, according to IDC, with revenue growing 19.8 percent and trailing only Dell EMC and HPE. On the same list, Lenovo tied with Hitachi for fifth place, seeing its revenues jump 132.8 percent. The analysts also noted that revenue in the worldwide all-flash array market was more than $2 billion, a 41.7 percent jump over the second-quarter 2017, and that the hybrid-flash array space grew 20.8 percent, to just less than $2.6 billion.

At the event, Lenovo and NetApp officials introduced the first two products from the partnership, including the Lenovo ThinkSystem DM Series, a family of integrated systems that scale from two nodes to 12 arrays. There are three hybrid flash models for scale-out SAN, scale-out NAS and high-availability needs. There also are two all-flash offerings that support the same use cases as well as software from Oracle, Microsoft SQL Server, Mongo DB, virtual desktop infrastructure (VDI) and server virtualization environments. In addition, the all-flash systems include NetApp’s ONTAP data management and MetroCluster business continuity and disaster recovery software and Lenovo’s XClarity systems management offering.

The Lenovo ThinkSystem DE Series are rack-space systems that include three models with hybrid hard-disk and solid-state drives and scale from 147TB to 2.88PB of capacity. There also are 2U (3.5-inch) all-flash arrays that include one model delivering 300,000 IOPS and up to 1.47PB of capacity and another supporting up to 1 million IOPS and 1.84PB.

Both series systems are available immediately.

“The initial new ThinkSystem DE and DM Series offerings should engender immediate attention among both Lenovo’s and NetApp’s respective clients,” Pund-IT’s King wrote. “That interest is likely to expand as the effort results in new solutions and leads to explorations of new markets in China and elsewhere.”

U.S. tech companies like NetApp looking to expand their presence in the China market often will partner with Chinese companies—in this case, Lenovo—to create joint ventures that design products for that market. According to the two companies, the joint venture will focus on storage products and data management solutions for data centers and cloud environments in the country. The new company is expected to be up and running by the spring of 2019.

According to Lenovo officials, their company will own 51 percent of the joint venture, and NetApp the other 49 percent.