Lenovo sees strong momentum in its server business, with its core server business showing signs of beginning to scale growth, and its roster of hyperconverged partners offering significant potential in that space.
Not very long ago, Lenovo, among all the major hardware OEMs, had a recognizable position as far as their hyperconverged business was concerned – dead last. Things have changed however, as the company has entered into a flurry of strategic hyperconverged partnerships, which will see them offer product in collaboration with Nutanix, SimpliVity, StorMagic and DataCore.
“Hyperconverged is the way of the future, because it’s the most cost-effective way for customers to manage their data center,” said Chris Frey, VP of Lenovo’s North American Commercial Business.
Frey acknowledged that Lenovo’s aim is to become the top dog in hyperconverged among the big OEMs, and pointed to their multi-faceted partnering strategy,
“We will partner strongly with all four, even though Nutanix is the more strategic partner,” Frey said. – “We won’t walk away from anyone because we can partner with them all. We don’t compete with any of them.”
Lenovo’s short term plan – demonstrated when it signed ROBO-focused StorMagic and SMB-focused SimpliVity within a week of each other – was to first establish itself as a dominant player at the low end of the market, although the longer term plan is to move up to the midmarket and enterprise as well. However, while Nutanix started in the mid-market, they are doing more and more enterprise deals, Lenovo suggested when that agreement was announced little more than a week ago that it would be primarily SMB-focused to start, but Frey seemed to kick that idea to the curb.
“I recently met with the CEO of Nutanix and we talked about going to customers across all markers,” Frey said. “We want to get in front of hyperconverged customers with what we both think are strong synergies for midmarket and larger accounts. We both have good SMB and midmarket play, but we are going to be able to serve all customers through both companies. We will both have dedicated sales people selling the products to customers in all segments.”
Frey also noted Lenovo’s recent announcement where the companies expanded their existing relationship by collaborating on OpenStack and jointly producing a reference architecture for deploying the Red Hat Enterprise Linux OpenStack Platform on Lenovo x3650 M5 and x3550 M5 servers.
“Another way we will attack this market through this channel, addressing customers who want to do this through an OpenStack solution,” Frey said. “So we have choices for this besides hyperconverged.”
While the Americas as a business unit saw its revenue remain flat year-over-year at $USD $2.1 billion, Frey said the server numbers were very positive.
“In servers, we showed year on year revenue growth, which shows that we are starting to scale that business,” he said. “Every quarter since the System X acquisition we have had a profit with System X and ThinkServer combined, but last quarter was the first one with revenue growth.”