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Canadian success likely for Lenovo’s x86 server business: IDC

InfrastructureLenovo, IBM, x86 server, integration, canada

The odds of success are in Lenovo’s favour in integrating IBM’s x86 server business, especially in Canada, where HP, Dell and Cisco should start looking over their shoulder, according to research firm IDC.

“I think it was a good deal for Lenovo globally,” said David Senf, VP of infrastructure solutions and cloud at IDC.  He made reference to Lenovo’s $2.1B acquisition of IBM’s x86 server back in September.  “I think in Canada they’ll do even better.”

This is primarily thanks to IBM’s market share north of the border, which according to Senf, is over 50 per cent higher than in the United States, as well as being favourably perceived by vendors.

He explained that in IDC’s research, the top three criteria that businesses look at when considering a vendor are “mean time between failures” (MTBF) or low failure rates and performance, both of which IBM is perceived to excel at, and price, which is Lenovo’s specialty.

Combined, “they now own the top three criteria,” Senf said.

However, maintaining this perception will not come without effort, and Lenovo has to work to support IBM’s values in both the minds of the customer and the channel, Senf added.

Lenovo will also have to train its sales team to broaden their reach, which so far has been limited to downmarket businesses whereas IBM’s has been selling to the upper end of the enterprise.

“It’s bringing those pieces together,” Senf said.  “While it’s great that [Lenovo] has the ability to move between selling an $1,800 server to an $8,000 server, the sales motion for that is very different.  And how the channel sells it as well is going to be different.”

According to Senf, observers will have to wait a couple more months see concrete results of Lenovo’s integration efforts in North America.  In the meantime, it has its work cut out in reaching out to resellers that used to partner with IBM such as Avnet, formerly IBM’s largest worldwide x86 distributor, which made a deal with Lenovo in October.

While there are many variables that make this acquisition “less of a slam dunk” than when Lenovo took over IBM’s PC division, with the right momentum, Lenovo could even win over a few HP and Dell partners, he added.

“All the things are in place for them to succeed,” Senf said.