Lenovo: Red Dragon Rising


The Red Dragon of IT has awoken.

With two back-to-back blockbuster deals, Lenovo, the Chinese PC juggernaut, hopes to forever change the IT landscape's balance of power. Over the last two weeks Lenovo revealed its post-PC blueprint for IT domination that includes doubling down on mobile, client and the data center.

Lenovo's $2.91 billion purchase of Google's Motorola Mobility smartphone business, following its $2.3 billion acquisition of IBM's x86 server business the week before, opens the door to lucrative new opportunities to grow business, channel partners said.

"Buying IBM's server business and Motorola Mobility hints at how Lenovo is going to innovate and compete with Hewlett-Packard and Samsung. They are building an impressive ecosystem between their sales operations and their ability to meet the global needs of SMBs and the enterprise. It's a strategy that can only mean good things for channel partners, the enterprise and their customers," said Sean Hobday, executive vice president of sales at Zones, an Auburn, Wash.-based solution provider.

Partners said Lenovo, which is widely seen as extremely channel friendly with over 80 percent of its $5.5 billion in North American commercial sales led by partners, is lining up its IT ducks and is poised to be a channel giant empowering partners to go head-to-head with HP, Dell, Samsung and Apple.

A fortified Lenovo means trouble for its competitors, said Frank Gillett, an analyst at Forrester Research. "This is a critical step for Lenovo to make good on a promise to build an ecosystem and cloud platform with a complimentary product portfolio. Lenovo is the first IT company to rise to offer a full range of IT solutions from the smartphone, tablet, laptop and data center. Dell is not there, HP is not there, and neither is Samsung," Gillett said.

If both deals are approved, overnight the world's No. 1 PC maker becomes the third largest smartphone maker, behind Samsung and Apple, according to Counterpoint Technology Market Research, and the third largest x86 server maker, behind HP and Dell, according IDC.

Lou Giovanetti, co-founder of Woburn, Mass.-based CPU Sales and Service, a longtime Lenovo partner that serves SMB and enterprise customers, said Lenovo's purchase of IBM's x86 server business will be a game changer for his business.

"The Lenovo channel has been aggressive, price-conscious and a friend of SMB. Not only will IBM's cachet help us win in SMB, it will allow me to crack my enterprise business open and make more money," Giovanetti said.

NEXT: Challenges Aplenty