Lenovo Partners Cheer IBM Server Buy

IBM's blockbuster $2.3 billion sale of its x86 server business to Lenovo will be a "game changer" for partners giving them the firepower to go head-to-head with Dell and Hewlett-Packard in the SMB market and significantly grow their enterprise business, partners tell CRN.

"There is no question Lenovo is going to be able to turn IBM's server business around. IBM struggled to gain traction in the SMB market because it was perceived as an expensive alternative. 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," said Lou Giovanetti, co-founder of Woburn, Mass.-based CPU Sales and Service, a longtime Lenovo partner that serves SMB and enterprise customers.

Pending regulatory approval, the deal inked Thursday will add 7,500 IBM employees to the China-based PC maker's headcount along with new product skews that include Big Blue's System x, BladeCenter and Flex System blade servers and switches, x86-based Flex integrated systems, NeXtScale and associated software, blade networking and maintenance operations.

[Related: How We Got Here: Lenovo's Blockbuster IBM Server Deal ]

For Lenovo's 25,000 North American partners it will significantly increase their upstream reach into the enterprise allowing them to rely less on commodity PC hardware sales and expand their portfolio to include a full range of end-to-end data center solutions, said Jamie Shepard, regional vice president for Dallas-based solution provider Lumenate.

"This acquisition is bigger news than people think. It's not about Lenovo spending over a billion dollars to bang it out with Dell and HP for server sales. It's a game changer for me and my Lenovo customers. Now we can start talking about the data center, services, and more complex solutions that add up to more lucrative deals. For smart Lenovo partners that want to sell more than hardware, this is huge."

NEXT: Server Battle Looms Between HP, Dell And Lenovo

En Pointe Technologies partners with both IBM and Lenovo. Andrew Hertenstein, manager of Microsoft Data Center and Azure Professional Services for the San Francisco-based solution provider, said the deal is a win for both Lenovo and its partner.

"Lenovo proved itself with what it's done with IBM's PC business. I think they can do the same with servers," Hertenstein said. "It's going to take some time, but overall I think this is a positive for Lenovo and the channel."

Hertenstein said the x86 server deal is especially important in the wake of Lenovo's SMB storage move; last year Lenovo formed a joint venture with EMC around its Iomega storage line, which was rebranded LenovoEMC. "They have the storage, and now they have the servers," Hertenstein said. "I think Lenovo is clearly moving upstream and building up their offerings the way the HP of old did many years ago."

While the acquisition allows IBM to exit from a bruising server battle with HP and Dell and focus on products and services that have higher margins, it means the opposite for Lenovo. Joe Lore, sales director of at Sunnytech, a Lenovo partner based in Woburn, Mass., said the acquisition puts Lenovo on the path to ultimately unseat HP and Dell as leading server makers.

"If Lenovo can do for IBM's x86 servers business what it did for IBM's sagging ThinkPad business, it's going to be real game changer. Give it a year; Dell and HP will feel Lenovo breathing down the back of their necks. My business could grow 15 percent thanks to Lenovo. Those gains will come directly at HP and Dell's business," Lore said.

CRN's Rob Wright contributed to this report

PUBLISHED JAN. 23, 2014