Welcome!

Agile Computing Authors: Elizabeth White, Liz McMillan, Sanjay Zalavadia, Xenia von Wedel, Dana Gardner

Blog Feed Post

Lenovo buys IBM's xSeries aka x86 server business, what about EMC?

Lenovo buys IBM's xSeries aka x86 server business, what about EMC?

By Greg Schulz

Storage I/O trends

Lenovo buys IBM's xSeries x86 server business for $2.3B USD, what about EMC?

Once again Lenovo is new owner of some IBM computer technology, this time by acquiring the x86 (e.g. xSeries) server business unit from big blue. Today Lenovo announced its plan to acquire the IBM x86 server storage business unit for $2.3B USD.

Research Triangle Park, North Carolina, and Armonk, New York January 23, 2014

Lenovo (HKSE: 992) (ADR: LNVGY) and IBM (NYSE: IBM) have entered into a definitive agreement in which Lenovo plans to acquire IBMs x86 server business. This includes System x, BladeCenter and Flex System blade servers and switches, x86-based Flex integrated systems, NeXtScale and iDataPlex servers and associated software, blade networking and maintenance operations. The purchase price is approximately US$2.3 billion, approximately two billion of which will be paid in cash and the balance in Lenovo stock.

IBM will retain its System z mainframes, Power Systems, Storage Systems, Power-based Flex servers, and PureApplication and PureData appliances.

Read more here

If you recall (or didn't’t know) around a decade or so ago IBM also spun off its Laptop (e.g. Thinkpads) and workstation business unit to Lenovo after being one of the early PC players (I still have a model XT in my collection along with Mac SE and Newton).

What this means for IBM?

What this means is that IBM is selling off a portion of its systems technology group which is where the servers, storage and related hardware, software technologies report into. Note however that IBM is not selling off its entire server portfolio, only the x86 e.g. Intel/AMD based products that make up the xSeries as well as companion Blade and related systems. This means that IBM is retaining its Power based systems (and processors) that include the pSeries, iSeries and of course the zSeries mainframes  in addition to the storage hardware/software portfolio.

However as part of this announcement, Lenovo is also licensing from IBM the Storwize/V7000 technology as well as Tape, GPFS based scale out file systems used in SONAS and related products that are part of solution bundles tied to the x86 business.

Again to be clear, IBM is not selling off (or at least at this time) Storwize, tape or other technology to Lenovo other than x86 server business. By server business, this means the technology, patents, people, processes, products, sales, marketing, manufacturing, R&D along with other entities that form the business unit, not all that different from when IBM divested the workstation/laptop aka PC business in the past.

Storage I/O trends

What this means for Lenovo?

What Lenovo gets are an immediate (once the deal closes) expansion of their server portfolio including high-density systems for cloud, HPC as well as regular enterprise, not to mention also for SME and SMB. Lenovo also gets blade systems as well as converged systems (server, storage, networking, hardware, software) hence why IBM is also licensing some technology to Lenovo that it is not selling. Lenovo also gets the sales, marketing, design, support and other aspects to also expand their server business. By gaining the server business unit, Lenovo will now be in a place to take on Dell (who was also rumored to be in the market for the IBM servers), as well as HP, Oracle and other x86 system based suppliers.

What about EMC and Lenovo?

Yes, EMC, that storage company who is also a primary owner of VMware, as well as partner with Cisco and Intel in the VCE initiatives, not to mention who also entered into a partnership with Lenovo a year or so ago.

In case you forgot or didn't’t know, EMC after breaking up with Dell, entered into a partnership with Lenovo back in 2012.

This partnership and initiatives included developing servers that in turn EMC could use for their various storage and data appliances which continue to leverage x86 type technology. In addition, that agreement found the EMC Iomega brand transitioning over into the Lenovo line-up for both domestic North America, as well as international including the chinese market. Hence I have an older Iomega IX4 that says EMC, and a newer one that says EMC/Lenovo, also note that at CES a few weeks ago, some new Iomega products were announced.

In checking with Lenovo today, they indicated that it is business as usual and no changes with or to the EMC partnership.

Via email from Lenovo spokesperson today:

A key piece to Lenovo's Enterprise strategy has always included strong partnerships. In fact today's announcements reinforce that strategy very clearly.

Given the new scale, footprint and Enterprise credibility that this server acquisition affords Lenovo, we see great opportunity in offering complimentary storage offerings to new and existing customers.

Lenovo's partnership with EMC is multifaceted and stays in-tact as an important part of Lenovo's overall strategy to offer customers compelling solutions built on world-class technology.

Lenovo will continue to offer Lenovo/EMC NAS products from our joint venture as well as resell EMC stand-alone storage platforms.

IBM Storwize storage and other products are integral to the in-scope platforms and solutions we acquired. In order to ensure continuity of business and the best customer experience we will partner with IBM for storage products as well.

We believe this is a great opportunity for all three companies, but most importantly these partnerships are in place and will remain healthy for the benefit for our customers.

Hence it is my opinion that for now it is business as usual, the IBM x8x business unit has a new home, those people will be getting new email addresses and business cards similar to how some of their associates did when the PC group was sold off a few years ago.

Otoh, there may also be new products that might become opportunities to be placed into he Lenovo EMC partnership, however that is just my speculation at this time. Likewise while there will be some groups within Lenovo focused on selling the converged Lenovo solutions coming from IBM that may in fact compete with EMC (among others) in some scenarios, that should be no more and hopefully less than what IBM has with their server groups at times competing with themselves.

Storage I/O trends

What does this mean for Cisco, Dell, HP and others?

For Cisco, instead of competing with one of their OEMs (e.g. IBM) for networking equipment (note IBM also owns some of its own networking), the server competition shifts to Lenovo who is also a Cisco partner (its called coopitition), and perhaps business as usual in many areas. For Dell, in the mid-market space, things could get interesting and the Round Rock folks need to get creative and beyond VRTX.

For HP, this is where IMHO it's going to get really interesting as Lenovo gets things transitioned. Near-term, HP could have a disruptive upper hand, however longer-term, HP has to get their A-Game on. Oracle is in the game as are a bunch of others from Fujitsu to SuperMicro to outside of North America and in particular china there is also Huawei. Back to EMC and VCE, while I expect the Cisco partnership to stay, I also see a wild card where EMC can leverage their Lenovo partnership into more markets, while Cisco continues to move into storage and other adjacent areas (e.g. more coopitition).

What this means now and going forward?

Thus this is as much about enterprise, SME, SMB as it is HPC, cloud and high-density where the game is about volume. Likewise there is also the convergence or data infrastructure angle combing server, storage, networking hardware, software and services.

One of the things I have noticed about Lenovo as a customer using ThinkPads for over 13 years now (not the same one) is that while they are affordable, instead of simply cutting cost and quality, they seem to have found ways to remove cost which is different then simply cutting to go cheap.

Lenovo X1

Case in point about a year and a half ago I dropped my iPhone on my Lenovo X1 keyboard that is back-lit and broke a key. Calling Lenovo after trying to find a replacement key on the web, they said no worries and next morning a new keyboard for the laptop was on my doorstep by 10:30Am with instructions on how to remove the old, put in the new, and do the RMA, no questions asked (read more about this here).

The reason I mention that story about my X1 laptop is that it ties to what I'm curious and watching with their soon to be expanded new server business.

Will they go in and simply look to reduce cost by making cuts from design to manufacturing to part quality, service and support, or, find ways to remove complexity and cost while providing more value?

Now I wonder whose technology will join my HP and Dell systems to fill some empty rack space in the not so distant future to support growth?

Time will tell, congratulations to Lenovo and the IBMers who now have a new home best wishes.

Ok, nuff said

Cheers gs

Greg Schulz - Author Cloud and Virtual Data Storage Networking (CRC Press), The Green and Virtual Data Center (CRC Press) and Resilient Storage Networks (Elsevier)
twitter @storageio

All Comments, (C) and (TM) belong to their owners/posters, Other content (C) Copyright 2006-2014

Read the original blog entry...

More Stories By Greg Schulz

Greg Schulz is founder of the Server and StorageIO (StorageIO) Group, an IT industry analyst and consultancy firm. Greg has worked with various server operating systems along with storage and networking software tools, hardware and services. Greg has worked as a programmer, systems administrator, disaster recovery consultant, and storage and capacity planner for various IT organizations. He has worked for various vendors before joining an industry analyst firm and later forming StorageIO.

In addition to his analyst and consulting research duties, Schulz has published over a thousand articles, tips, reports and white papers and is a sought after popular speaker at events around the world. Greg is also author of the books Resilient Storage Network (Elsevier) and The Green and Virtual Data Center (CRC). His blog is at www.storageioblog.com and he can also be found on twitter @storageio.

@ThingsExpo Stories
"delaPlex is a software development company. We do team-based outsourcing development," explained Mark Rivers, COO and Co-founder of delaPlex Software, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
IoT is rapidly changing the way enterprises are using data to improve business decision-making. In order to derive business value, organizations must unlock insights from the data gathered and then act on these. In their session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, and Peter Shashkin, Head of Development Department at EastBanc Technologies, discussed how one organization leveraged IoT, cloud technology and data analysis to improve customer experiences and effi...
The IoT is changing the way enterprises conduct business. In his session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, discussed how businesses can gain an edge over competitors by empowering consumers to take control through IoT. He cited examples such as a Washington, D.C.-based sports club that leveraged IoT and the cloud to develop a comprehensive booking system. He also highlighted how IoT can revitalize and restore outdated business models, making them profitable ...
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Bradley Holt, Developer Advocate a...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, wh...
Machine Learning helps make complex systems more efficient. By applying advanced Machine Learning techniques such as Cognitive Fingerprinting, wind project operators can utilize these tools to learn from collected data, detect regular patterns, and optimize their own operations. In his session at 18th Cloud Expo, Stuart Gillen, Director of Business Development at SparkCognition, discussed how research has demonstrated the value of Machine Learning in delivering next generation analytics to imp...
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
Connected devices and the industrial internet are growing exponentially every year with Cisco expecting 50 billion devices to be in operation by 2020. In this period of growth, location-based insights are becoming invaluable to many businesses as they adopt new connected technologies. Knowing when and where these devices connect from is critical for a number of scenarios in supply chain management, disaster management, emergency response, M2M, location marketing and more. In his session at @Th...
Basho Technologies has announced the latest release of Basho Riak TS, version 1.3. Riak TS is an enterprise-grade NoSQL database optimized for Internet of Things (IoT). The open source version enables developers to download the software for free and use it in production as well as make contributions to the code and develop applications around Riak TS. Enhancements to Riak TS make it quick, easy and cost-effective to spin up an instance to test new ideas and build IoT applications. In addition to...
When people aren’t talking about VMs and containers, they’re talking about serverless architecture. Serverless is about no maintenance. It means you are not worried about low-level infrastructural and operational details. An event-driven serverless platform is a great use case for IoT. In his session at @ThingsExpo, Animesh Singh, an STSM and Lead for IBM Cloud Platform and Infrastructure, will detail how to build a distributed serverless, polyglot, microservices framework using open source tec...
Apixio Inc. has raised $19.3 million in Series D venture capital funding led by SSM Partners with participation from First Analysis, Bain Capital Ventures and Apixio’s largest angel investor. Apixio will dedicate the proceeds toward advancing and scaling products powered by its cognitive computing platform, further enabling insights for optimal patient care. The Series D funding comes as Apixio experiences strong momentum and increasing demand for its HCC Profiler solution, which mines unstruc...
IoT offers a value of almost $4 trillion to the manufacturing industry through platforms that can improve margins, optimize operations & drive high performance work teams. By using IoT technologies as a foundation, manufacturing customers are integrating worker safety with manufacturing systems, driving deep collaboration and utilizing analytics to exponentially increased per-unit margins. However, as Benoit Lheureux, the VP for Research at Gartner points out, “IoT project implementers often ...
It is one thing to build single industrial IoT applications, but what will it take to build the Smart Cities and truly society changing applications of the future? The technology won’t be the problem, it will be the number of parties that need to work together and be aligned in their motivation to succeed. In his Day 2 Keynote at @ThingsExpo, Henrik Kenani Dahlgren, Portfolio Marketing Manager at Ericsson, discussed how to plan to cooperate, partner, and form lasting all-star teams to change t...
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
Presidio has received the 2015 EMC Partner Services Quality Award from EMC Corporation for achieving outstanding service excellence and customer satisfaction as measured by the EMC Partner Services Quality (PSQ) program. Presidio was also honored as the 2015 EMC Americas Marketing Excellence Partner of the Year and 2015 Mid-Market East Partner of the Year. The EMC PSQ program is a project-specific survey program designed for partners with Service Partner designations to solicit customer feedbac...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life sett...
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...