Lenovo, VMware Ink Virtualization Deal

The agreement looks to bring VMware's VI3 suite deeper into the Chinese market.

VMware is looking to expand the reach of its virtualization technology deeper into the Chinese IT market, and the virtualization giant has turned to Lenovo to make that happen.

The two companies announced an agreement April 23 that calls for Lenovo to support VMware's Virtual Infrastructure 3 software suite across its line of servers that the company sells in China. In addition to distribution, Lenovo also will sell the VI3 platform preinstalled in its servers.

The agreement is similar to one Lenovo signed with Citrix in March to integrate and distribute that company's XenServer suite with its servers. Citrix entered the virtualization market in 2007 with its acquisition of XenSource.

For VMware, the deal allows the company, which detailed its quarterly earnings this week, to bring its virtualization products deeper into emerging markets. The company, which is mostly owned by storage giant EMC, announced earlier this year that it will invest $100 million in India, and the deal with Lenovo will guarantee that its virtualization technology can compete against both Citrix and Microsoft's upcoming Hyper-V technology within these developing economies.

The move also allows VMware to move its product line outside the United States, where the economy continues to slow, especially in the financial sector.

In a statement, VMware President Diane Greene said many Chinese firms are looking at virtualization to help run data centers more efficiently while cutting costs and improving continuity of services.

"Virtualized architectures are gaining momentum in China as a better way to run data centers," Greene said.

The deals with Citrix and VMware also place both virtualization companies in good positions when Lenovo begins developing and selling one- and two-socket servers outside of China in 2009. Earlier this year, Lenovo announced a licensing agreement with IBM that will give it access to IBM technology to develop these new systems, which will be initially aimed at small businesses and midmarket companies.