Lenovo and IBM x86: what to expect in the near future?
Lenovo’s purchase of part of the IBM server division has become one of the biggest news on the IT market in recent years. Well, for us, this is exactly the number one event in 2015. As promised earlier, we are in a hurry to share all the relevant information - under the cut is a FAQ with answers to your questions .
IBM's x86 server business is not Lenovo's first major purchase. This is part of our global strategy, which is very transparent: we consistently achieve goals by strengthening the brand and making it more global. For example, let us recall the year 2011, when the goal was to increase our presence in Western European retail: then Medion was bought. We needed to strengthen the direction of smartphones - we made a deal with Motorola. The story of the same IBM and ThinkPad laptops, of course, is also known to all.
But back to the main topic. Along with part of IBM's x86 server business, Lenovo has added many new employees. IBM specialists immediately received an offer to switch to work with us while retaining their positions and salaries. As a result, Lenovo's team has increased by 6,500 people. We carefully took part of the IBM server division and integrated it into Lenovo with a minimum of changes.
We are well aware that it takes time to implement projects on server hardware. A lot of time. This is long-term planning and careful calculations on the part of customers, so we simply do not have the right to take IBM's achievements and immediately begin to do things differently.
Our position on this issue is as follows: no drastic changes so as not to disrupt customers' plans. That is why the two lines of Lenovo ThinkServer and System x servers will go in parallel in the product portfolio until the beginning of 2016.
It will be possible to speak about real changes only after 9 months, but we do not plan to remain silent all this time. We will definitely share our plans to create a single balanced line of servers from the initial to the senior level. This is exactly the brand reinforcement mentioned above: many of our customers were very enthusiastic about the news about expanding the server business. Lenovo got a valuable opportunity to work with customers who previously could not cooperate with us because of the insufficiently wide range - we could offer only entry-level servers. Now Lenovo has a complete portfolio of server hardware, which significantly increases the competitiveness of the brand. The indicator of the server equipment market share is also interesting here: according to IDC, after a deal with IBM Lenovo occupies 13% of it.
By the way, the purchase of part of IBM’s business is not only directly the servers and employees in R&D (which is already a lot), but also sales. Those people who sold IBM servers around the world also became part of our team. For example, in Russia and the CIS alone it is more than 60 people with a huge number of established ties. It turns out that nothing changes for our customers - they just continue to work with the same sales managers. For us, these connections are very important. Well, we can say that the integration process is fast and efficient. If only because, for example, that the sales channel of the first level at Lenovo and IBM is largely the same.
Moreover, if we talk about the business of IBM, it was previously managed globally - at the head office level in the EMEA region. We are going to transfer all processes to the local level in order to respond more quickly to the changing requests of our customers.
Many probably care about how the deal will affect the value of products. We answer: market share is an important indicator for Lenovo, so we will focus on an aggressive pricing policy. You can even talk about a potential reduction in prices, but this in no way will be achieved by lowering the quality. We have many other effective levers: desire and ability to plan, an excellent logistics network and, of course, long-standing partnerships with component manufacturers. The latter allows you to influence prices due to the very serious volumes of components that we order.
And finally, the question of service. Everything is quite simple here: over the next five years, under the global contract, IBM will provide service support for all Lenovo products. This also applies to previously sold System x, and ThinkServer, and those devices that we will release in the future. It turns out that here our partners and clients will not feel any negative changes. It will not get worse for sure, while we have thoughts on how to refine and improve the service.
And finally, as they say, one more thing . The purchase of part of the IBM server business is not only an expansion of the product portfolio, a step towards leadership in the server hardware market and a ready-made pool of customers that has been formed over the years. This is an infrastructure approach. Judge for yourself: we have smartphones , tablets and computers that are used as means to access the Web. Now we have our own servers of all possible levels in order to provide support for ordinary users and corporate clients with any necessary services. And practice shows that an integrated approach is always good.
»Are you planning to create a line of compact budget servers similar to ProLiant MicroServer?
There are such servers in the ThinkServer line - this is TS140 . The model appeared a little over a year ago and is still selling well.
Most likely, we will not go to any completely new directions. Now the challenge is with a new portfolio to strengthen its position in the market. It seems to us that the available products are enough for this.
»Why is VMware ESXi hardware distribution so rarely updated?
It was really updated with some delay, but here it was more important to bring a high-quality product to the market, and not to release a raw version as soon as possible. However, many processes at Lenovo are faster than at IBM. Now we will become faster and more flexible.
»Why is there no repository for VMware Update Manager?
We’ll try to do it, but it’s difficult to give exact dates yet.
»Why did the cost of the 8852 chassis, calculated in the public.presalesadvisor.com configurator, easily and naturally increase by $ 5,000 when changing the logo from IBM System x to the Lenovo System x logo?
Please try to do the calculation again. Such a change should not occur. We did not change the prices. If the problem persists, then please note in the comments on this post - we will continue to find out the details and respond to you personally.
»When will you switch to open BIOS implementations?
Opening the BIOS will decrease security, and security is one of our priorities. This issue can be discussed with customers in individual projects, but in general there are no such plans.
»What will happen to the blades on Power if you and BladeCenter now deal with them? Or does this apply to the x86 part, and will IBM continue to release blade models on Power?
Power will continue to be released by IBM.
That's all. Thank you for your attention and are ready to answer additional questions in the comments.
Our previous blog posts:
IBM's x86 server business is not Lenovo's first major purchase. This is part of our global strategy, which is very transparent: we consistently achieve goals by strengthening the brand and making it more global. For example, let us recall the year 2011, when the goal was to increase our presence in Western European retail: then Medion was bought. We needed to strengthen the direction of smartphones - we made a deal with Motorola. The story of the same IBM and ThinkPad laptops, of course, is also known to all.
Should we expect major changes in the x86 server product line in the near future?
No, we do not want to lose our customers and partners, so the changes will be smooth and will begin no earlier than 2016.
But back to the main topic. Along with part of IBM's x86 server business, Lenovo has added many new employees. IBM specialists immediately received an offer to switch to work with us while retaining their positions and salaries. As a result, Lenovo's team has increased by 6,500 people. We carefully took part of the IBM server division and integrated it into Lenovo with a minimum of changes.
Who will innovate now?
Lenovo will continue to work closely with IBM, with people who have worked with x86 before continuing their work at Lenovo.
We are well aware that it takes time to implement projects on server hardware. A lot of time. This is long-term planning and careful calculations on the part of customers, so we simply do not have the right to take IBM's achievements and immediately begin to do things differently. Our position on this issue is as follows: no drastic changes so as not to disrupt customers' plans. That is why the two lines of Lenovo ThinkServer and System x servers will go in parallel in the product portfolio until the beginning of 2016.
It will be possible to speak about real changes only after 9 months, but we do not plan to remain silent all this time. We will definitely share our plans to create a single balanced line of servers from the initial to the senior level. This is exactly the brand reinforcement mentioned above: many of our customers were very enthusiastic about the news about expanding the server business. Lenovo got a valuable opportunity to work with customers who previously could not cooperate with us because of the insufficiently wide range - we could offer only entry-level servers. Now Lenovo has a complete portfolio of server hardware, which significantly increases the competitiveness of the brand. The indicator of the server equipment market share is also interesting here: according to IDC, after a deal with IBM Lenovo occupies 13% of it.
What will happen to Lenovo's own line of servers?
Until 2016, the System x and ThinkServer lines will be developed in parallel. From 2016, a comprehensive lineup with servers of all levels will appear.
By the way, the purchase of part of IBM’s business is not only directly the servers and employees in R&D (which is already a lot), but also sales. Those people who sold IBM servers around the world also became part of our team. For example, in Russia and the CIS alone it is more than 60 people with a huge number of established ties. It turns out that nothing changes for our customers - they just continue to work with the same sales managers. For us, these connections are very important. Well, we can say that the integration process is fast and efficient. If only because, for example, that the sales channel of the first level at Lenovo and IBM is largely the same.
Moreover, if we talk about the business of IBM, it was previously managed globally - at the head office level in the EMEA region. We are going to transfer all processes to the local level in order to respond more quickly to the changing requests of our customers.
What will happen to redbooks.ibm.com?
It is administered by IBM, but will soon move to Lenovo. The exact dates are still unknown, but we are seriously interested in preserving it and updating the information.
Many probably care about how the deal will affect the value of products. We answer: market share is an important indicator for Lenovo, so we will focus on an aggressive pricing policy. You can even talk about a potential reduction in prices, but this in no way will be achieved by lowering the quality. We have many other effective levers: desire and ability to plan, an excellent logistics network and, of course, long-standing partnerships with component manufacturers. The latter allows you to influence prices due to the very serious volumes of components that we order.
And finally, the question of service. Everything is quite simple here: over the next five years, under the global contract, IBM will provide service support for all Lenovo products. This also applies to previously sold System x, and ThinkServer, and those devices that we will release in the future. It turns out that here our partners and clients will not feel any negative changes. It will not get worse for sure, while we have thoughts on how to refine and improve the service.
Who should extend ServicePack and whom should I contact regarding service issues?
Over the next 5 years, IBM will be servicing the servers.
And finally, as they say, one more thing . The purchase of part of the IBM server business is not only an expansion of the product portfolio, a step towards leadership in the server hardware market and a ready-made pool of customers that has been formed over the years. This is an infrastructure approach. Judge for yourself: we have smartphones , tablets and computers that are used as means to access the Web. Now we have our own servers of all possible levels in order to provide support for ordinary users and corporate clients with any necessary services. And practice shows that an integrated approach is always good.
And from your questions :
»Are you planning to create a line of compact budget servers similar to ProLiant MicroServer?
There are such servers in the ThinkServer line - this is TS140 . The model appeared a little over a year ago and is still selling well.
Most likely, we will not go to any completely new directions. Now the challenge is with a new portfolio to strengthen its position in the market. It seems to us that the available products are enough for this.
»Why is VMware ESXi hardware distribution so rarely updated?
It was really updated with some delay, but here it was more important to bring a high-quality product to the market, and not to release a raw version as soon as possible. However, many processes at Lenovo are faster than at IBM. Now we will become faster and more flexible.
»Why is there no repository for VMware Update Manager?
We’ll try to do it, but it’s difficult to give exact dates yet.
»Why did the cost of the 8852 chassis, calculated in the public.presalesadvisor.com configurator, easily and naturally increase by $ 5,000 when changing the logo from IBM System x to the Lenovo System x logo?
Please try to do the calculation again. Such a change should not occur. We did not change the prices. If the problem persists, then please note in the comments on this post - we will continue to find out the details and respond to you personally.
»When will you switch to open BIOS implementations?
Opening the BIOS will decrease security, and security is one of our priorities. This issue can be discussed with customers in individual projects, but in general there are no such plans.
»What will happen to the blades on Power if you and BladeCenter now deal with them? Or does this apply to the x86 part, and will IBM continue to release blade models on Power?
Power will continue to be released by IBM.
That's all. Thank you for your attention and are ready to answer additional questions in the comments.
Our previous blog posts: