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Lenovo winding down IBM server deal, rationalising SKUs

Microscope contributor

Lenovo has vowed not to give up on the server market - despite little success since it launched in the sector - as it winds down an OEM deal with IBM to concentrate on further developing its own range.

The Chinese giant made waves in the PC market during 2010, posting healthy double digit growth after overhauling its channel organisation and significantly ramping rebates for distributors and resellers.

However, it has found the server market harder to penetrate since penning its OEM agreement with Big Blue three years ago today.

Neil Berville, Lenovo executive director for the UK, Ireland & Benelux, confirmed Lenovo was selling through the last of the rebadged IBM kit and was rationalising SKUs across Europe from 60 to 20.

"We are not huge [in the server market] but we are not going to give up on it," he told MicroScope.

By forging ahead with one server range he reckoned it could build greater economies of scale to compete with the big three - HP, IBM and Dell - but said Lenovo would not "invest huge piles of cash to get instant market share".

Berville said the majority of server sales were transacted through 20 to 30 partners and while it was open to more resellers climbing on board, the major short term focus was on Thinkpad and workstations.

Resellers at the recent Lenovo partner event in Amsterdam were surprised not to hear of any developments in the server space.

"I guess that sums up the current situation," said one.

In Q3, Lenovo shipped 2,000 servers across EMEA according to IDC - 60 more than a year ago so progress has been slow.

"Very few new vendors manage to penetrate the server market," said Nathaniel Martinez, IDC programme director for European server research,

"Acer tried to focus country by country but has not done well. Cisco is having a crack at it but volumes are low, it's about brand and go to market strategy," he added.

Related Topics: Desktop PCs, VIEW ALL TOPICS

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