|By Greg Schulz||
|January 23, 2014 08:23 PM EST||
Lenovo buys IBM's xSeries aka x86 server business, what about EMC?
By Greg Schulz
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.
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.
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.
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.
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
"We've discovered that after shows 80% if leads that people get, 80% of the conversations end up on the show floor, meaning people forget about it, people forget who they talk to, people forget that there are actual business opportunities to be had here so we try to help out and keep the conversations going," explained Jeff Mesnik, Founder and President of ContentMX, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jul. 23, 2016 11:45 PM EDT Reads: 1,193
Internet of @ThingsExpo has announced today that Chris Matthieu has been named tech chair of Internet of @ThingsExpo 2016 Silicon Valley. The 6thInternet of @ThingsExpo will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Jul. 23, 2016 11:15 PM EDT Reads: 1,848
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...
Jul. 23, 2016 11:00 PM EDT Reads: 2,216
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
Jul. 23, 2016 10:15 PM EDT Reads: 2,408
From wearable activity trackers to fantasy e-sports, data and technology are transforming the way athletes train for the game and fans engage with their teams. In his session at @ThingsExpo, will present key data findings from leading sports organizations San Francisco 49ers, Orlando Magic NBA team. By utilizing data analytics these sports orgs have recognized new revenue streams, doubled its fan base and streamlined costs at its stadiums. John Paul is the CEO and Founder of VenueNext. Prior ...
Jul. 23, 2016 09:30 PM EDT Reads: 1,940
A critical component of any IoT project is what to do with all the data being generated. This data needs to be captured, processed, structured, and stored in a way to facilitate different kinds of queries. Traditional data warehouse and analytical systems are mature technologies that can be used to handle certain kinds of queries, but they are not always well suited to many problems, particularly when there is a need for real-time insights.
Jul. 23, 2016 08:45 PM EDT Reads: 1,646
CenturyLink has announced that application server solutions from GENBAND are now available as part of CenturyLink’s Networx contracts. The General Services Administration (GSA)’s Networx program includes the largest telecommunications contract vehicles ever awarded by the federal government. CenturyLink recently secured an extension through spring 2020 of its offerings available to federal government agencies via GSA’s Networx Universal and Enterprise contracts. GENBAND’s EXPERiUS™ Application...
Jul. 23, 2016 08:30 PM EDT Reads: 1,767
"My role is working with customers, helping them go through this digital transformation. I spend a lot of time talking to banks, big industries, manufacturers working through how they are integrating and transforming their IT platforms and moving them forward," explained William Morrish, General Manager Product Sales at Interoute, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jul. 23, 2016 08:30 PM EDT Reads: 2,017
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 19th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo Silicon Valley Call for Papers is now open.
Jul. 23, 2016 08:00 PM EDT Reads: 2,411
Big Data engines are powering a lot of service businesses right now. Data is collected from users from wearable technologies, web behaviors, purchase behavior as well as several arbitrary data points we’d never think of. The demand for faster and bigger engines to crunch and serve up the data to services is growing exponentially. You see a LOT of correlation between “Cloud” and “Big Data” but on Big Data and “Hybrid,” where hybrid hosting is the sanest approach to the Big Data Infrastructure pro...
Jul. 23, 2016 08:00 PM EDT Reads: 1,788
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 ...
Jul. 23, 2016 07:15 PM EDT Reads: 1,867
We all know the latest numbers: Gartner, Inc. forecasts that 6.4 billion connected things will be in use worldwide in 2016, up 30 percent from last year, and will reach 20.8 billion by 2020. We're rapidly approaching a data production of 40 zettabytes a day – more than we can every physically store, and exabytes and yottabytes are just around the corner. For many that’s a good sign, as data has been proven to equal money – IF it’s ingested, integrated, and analyzed fast enough. Without real-ti...
Jul. 23, 2016 07:00 PM EDT Reads: 870
I wanted to gather all of my Internet of Things (IOT) blogs into a single blog (that I could later use with my University of San Francisco (USF) Big Data “MBA” course). However as I started to pull these blogs together, I realized that my IOT discussion lacked a vision; it lacked an end point towards which an organization could drive their IOT envisioning, proof of value, app dev, data engineering and data science efforts. And I think that the IOT end point is really quite simple…
Jul. 23, 2016 06:15 PM EDT Reads: 799
With 15% of enterprises adopting a hybrid IT strategy, you need to set a plan to integrate hybrid cloud throughout your infrastructure. In his session at 18th Cloud Expo, Steven Dreher, Director of Solutions Architecture at Green House Data, discussed how to plan for shifting resource requirements, overcome challenges, and implement hybrid IT alongside your existing data center assets. Highlights included anticipating workload, cost and resource calculations, integrating services on both sides...
Jul. 23, 2016 06:00 PM EDT Reads: 1,885
"We are a well-established player in the application life cycle management market and we also have a very strong version control product," stated Flint Brenton, CEO of CollabNet,, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jul. 23, 2016 05:30 PM EDT Reads: 1,721
The IoT has the potential to create a renaissance of manufacturing in the US and elsewhere. In his session at 18th Cloud Expo, Florent Solt, CTO and chief architect of Netvibes, discussed how the expected exponential increase in the amount of data that will be processed, transported, stored, and accessed means there will be a huge demand for smart technologies to deliver it. Florent Solt is the CTO and chief architect of Netvibes. Prior to joining Netvibes in 2007, he co-founded Rift Technologi...
Jul. 23, 2016 05:00 PM EDT Reads: 939
We're entering the post-smartphone era, where wearable gadgets from watches and fitness bands to glasses and health aids will power the next technological revolution. With mass adoption of wearable devices comes a new data ecosystem that must be protected. Wearables open new pathways that facilitate the tracking, sharing and storing of consumers’ personal health, location and daily activity data. Consumers have some idea of the data these devices capture, but most don’t realize how revealing and...
Jul. 23, 2016 04:00 PM EDT Reads: 1,982
Unless your company can spend a lot of money on new technology, re-engineering your environment and hiring a comprehensive cybersecurity team, you will most likely move to the cloud or seek external service partnerships. In his session at 18th Cloud Expo, Darren Guccione, CEO of Keeper Security, revealed what you need to know when it comes to encryption in the cloud.
Jul. 23, 2016 04:00 PM EDT Reads: 2,305
What are the successful IoT innovations from emerging markets? What are the unique challenges and opportunities from these markets? How did the constraints in connectivity among others lead to groundbreaking insights? In her session at @ThingsExpo, Carmen Feliciano, a Principal at AMDG, will answer all these questions and share how you can apply IoT best practices and frameworks from the emerging markets to your own business.
Jul. 23, 2016 03:45 PM EDT Reads: 1,508
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...
Jul. 23, 2016 03:30 PM EDT Reads: 1,841