At IDF, Lenovo has given more details on its plans to challenge established players in the x86 server market
The company, which has fought its way to the top of the embattled global PC market, at the IDF show in San Francisco introduced two new affordable tower servers and showed an upcoming two-socket ThinkServer system that will be armed with Intel’s new Xeon E5-2600 v2 processors, which the chip maker introduced at the show.
It’s all part of a larger effort by Lenovo to challenge established x86 server makers like Dell, Hewlett-Packard and IBM in a market that has become relatively stagnant, according to Michael Kendall, director of product marketing at Lenovo and a former longtime employee at HP.
Lenovo has been selling servers in China for some 17 years, Kendall said in an interview with eWEEK at IDF. However, over the past year, company executives have begun a campaign to sell enterprise servers throughout other regions, including Europe and North America. The effort in North America is the responsibility of the company’s Enterprise System Group, which was created in April 2012, he said. The business unit is still in the process of hiring people to help ramp up the business.
Yang Yuanqing, chairman and chief executive of Lenovo, earlier this year said the initiative to “expand this business more aggressively” outside of China “is part of our PC-Plus strategy”, according to a report last month in the South China Morning Post news site.
The company now must make inroads into a crowded and increasingly commoditised market.
“The challenge is, who we address [the market] differently,” Kendall said.
Some of that will incorporate what the company did so successfully in the PC space – making solid products and pricing them affordably. Kendall also said that most of the top vendors – which now include Cisco Systems, with branded x86 servers as part of it Unified Computing System (UCS) integrated data centre solution – are creating software stacks that tightly integrate with their hardware offerings.
Lenovo will forego building its own software stacks, focusing its money, time and efforts instead on building top-rated servers and leveraging interfaces to work with software from partners such as Microsoft, VMware and Red Hat, Kendall said. That strategy will give customers the software and interoperability they want, and let Lenovo do what it does best, he said.
“We’re just really a good computer company,” he said.
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, virtualisation 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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Originally published on eWeek.