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Soz Europe: IBM to delay System X Lenovo switchover for a month

Big Blue moves to avoid potential calamity

IBM says it has delayed the European switchover of the outgoing x86 business to Lenovo by one month in a bid to side-step sales disruption in its busiest quarter of the year.

Under the duo's original plan, the changeover was due to take place on the 1st of next month but IBM didn't want to risk switching systems during the run-up to its year-end.

"Following a full review of the situation it has been decided to delay the transition of the IBM x86 business to Lenovo until 1 January 2015 to minimise the impact on our mutual Q4 business," Big Blue stated in a note distributed to channel partners.

Initially IBM told the Business Partners it would stop taking orders for x86 products from this month, but has since postponed proceedings, revealing new timings in a separate note.

“We have moved our last order date for x86 from November 23 to December 31 2014. We are making every effort to best optimise our client experience through the transition,” said Robert Belden, IBM veep of business development.

He added Lenovo had agreed to honour quotes received by IBM prior to 26 December rather than the previous 26 November date given. The last order for System Storage has been moved to 17 December for V3700 instead of the 17th of this month, as was originally communicated.

The switch-over involves IBM plants in China transferring work to Lenovo, halting order taking and profiling, shifting invoice systems, and work on the configuration tools which are different and need to be linked.

A source close to IBM told us that if systems are out of sync the “knock-on effect could be significant”.

He added IBM wanted to avoid disruption seen during the system transition in North America that happened on 1 October when the $2.1bn transaction completed.

Things took longer to roll out in Europe due to the myriad of country specific employment laws, said a source close to IBM.

The cynical view in the channel is that IBM announced the 1 December handover to “pull Q4 business in early” but that it had “no intention to go missing out on their traditional end of quarter business by handing the business over before 1 January”.

IBM’s move to close off the year-end made “sense” because it may “lessen potential disruption”, said Errol Rasit, research director at Gartner.

Martin Hellawell, CEO at Softcat, agreed: “It doesn’t make much difference to us, we’d rather IBM do it when they are good and ready than in haste.”

Not everyone shares that viewpoint, with some complaining they will have to suffer another month of IBM's “poor logistics”.

“We’ve seen for the whole of this year distributors holding less IBM stock, they’ve been disinclined to take a risk and IBM’s logistics machine has not been able to deliver the shortfall in an efficient and manageable way,” said a Big Blue Business Partner.

“Lead times became longer so we missed opportunities because we couldn’t fulfil orders in a reasonable timeframe,” he added.

A Lenovo spokesman said, “We are still on track to close the transaction before the end of this fiscal year (which runs to March).” ®

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