HP hammers ‘uncertainty’ message to partners on Lenovo’s x86 purchase

Regulatory approval of Lenovo’s acquisition of IBM’s x86 server business is still pending but the world’s second largest server vendor has lost no time in warning channel partners of the uncertainties associated with the transition.

Earlier, HP’s CEO Meg Whitman already indicated that she aims to take advantage of the purchase saying in a recent financial conference that “we look like the paragon of stability in the industry right now and we aim to capitalize on it.”

Yesterday, Patrick Eitenbichler, lead for HP’s worldwide PartnerOne Strategy, announced changes to HP’s partner program aimed IBM premium partners who may or may not be working with HP as well. Eitenbichler said announced that it is making it easier for such partners to become Silver and Gold HP partners.

For instance, he said, while it takes about seven days to obtain an IBM certification, the accelerated HP program makes a HP Gold certification obtainable in roughly four days. Silver certification can be obtained in three days.

HP has also streamlined certification requirements and extended requirement completion date to six months.

The message to channel partner being – no need to pursue X86 which is in Lenovo’s hands because there’s still a lot of big questions there and revenue streams may be at risk, the HP partner programs are a better deal.

While Lenovo has acquired IBM’s x 86 businesses, the company lacks experience in the enterprise server space and cannot at the moment offer partners adequate training and certificate programs, Eitenbichler also pointed out.

Lenovo only has two high level sales training courses to offer partners, he said.
“The key message is that Lenovo is caught in the middle, they are now enterprise ready,” he told CDN. “…Lenovo now has a storage agent with IBM…but what is their strategy going forward?”

While it has continually downplayed Lenovo’s capabilities, HP’s recent pronouncements also signify that it has some grounds for worry.

With its purchase of IBM’s low-end server business Lenovo stands to gain an 11 per cent market share of the $9-billion global x86 market, according to IDC estimates. This positions Lenovo as the world’s third largest x86 server maker behind HP and Dell.

Analyst David Senf, vice-president of IDC Canada‘s infrastructure solutions group, notes that Lenovo is picking up a well-maintained division. In Canada IBM has a 19 per cent share of the x86 server market, compared to nine per cent in the U.S.

Lenovo already sells x86 servers, he noted, of the one socket and low-end two socket variety with an average price of $1,800. By comparison the IBM’s x86 servers it’s picking up have an average selling price of $8,000. HP is the number one x86 server vendor by revenue in Canada with 36 per cent of sales, followed by Dell with 26 per cent, IBM, Cisco with eight per cent, Oracle with five per cent and Lenovo with one per cent.

However, at the moment Lenovo itself appears to have come up short in assuring its partners about its x86 strategy. At Lenovo’s recent Accelerate channel conference in Orlando, the company’s president, Jay Parker failed to provide any definitive answer to the question.

“We can’t freely share what the other is doing. After day one we do need to have a crisp, clear strategy for what it means to the channel,” Parker told attendees.

It appears that Lenovo’s strategy is focused on growth opportunity for the X86 market.

“We are working towards day one,” Parker said. “That is when we really can become the PC plus company in this geography. We do sell servers, but we want to accelerate that and we want to be a player now.”



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