Dell-EMC merger could leave Lenovo out in the cold – analysts
Reselling deal for the bin?
Lenovo’s storage product lines include:
- PX2-300D and PX4-400D NVR video surveillance arrays, basically RAID-protected filers with Atom-powered processors and LifeLine SW providing small office NAS functionality,
- ThinkServer SA120 Direct-attach storage 12-bay, 3.5-inch drive, rack enclosures with four optional 2.5-inch SSD bays, and up to two controllers
- Lenovo-EMC desktop and network (rack enclosure/tower) storage NAS via EMC Lenovo Iomega deal in 2013,
- Lenovo VNX arrays,
- SimpliVity’s OmniStack hyper-converged data virtualisation platform available with Lenovo System x3650 servers through Arrow Electronics,
- Lenovo and StorMagic low-cost hyper-converged products available for remote-office/branch office (ROBO) markets, available through Arrow Electronics and
- Lenovo’s S2200 and S3200 SAN arrays with dual and single controllers in 2U-12 (96 drives max) and 24 drive (192 drives max) configurations, featuring flash and disk drives and real-time tiering.
Two of EMC’s VSPEX systems use Lenovo ThinkServer processors. They’ll probably move over to Dell servers.
Lenovo also has an IBM Storwize array reselling deal.
The basic strategy looks to be to resell existing popular products while building up its in-house storage capability, as with the S2200/3200 arrays. These overlap entry-level/mid-range VNX capabilities at best.
TBR analyst Krista Macomber writes about the deal’s effect on Lenovo:
TBR expects EMC’s merger with Dell to dissolve the storage giant’s reselling relationship with Lenovo in China, through which Lenovo has augmented its presence in SMB accounts in the country with more complete solutions. This will force Lenovo to work even more quickly to partner with others, acquire or build its storage practice.
Macomber notes: “Lenovo is working aggressively to gain data centre market share, but it faces a strategic challenge in the form of its limited in-house competencies around storage, networking and outcomes-focused line-of-business sales models. [It] is filling out hardware portfolio gaps steadily, launching its first Lenovo-developed storage arrays in May of this year, but work remains for Lenovo to be able to compete organically against an end-to-end Dell and EMC stack.”
Lenovo could look to simply replace the VNX component in its storage product line or do something larger than that.
An extreme reaction would be for Lenovo to buy some of IBM’s storage hardware business, capitalising on the Storwize resale deal. That has been steadily declining in revenues for many quarters. There is a pleasing symmetry in the idea of Lenovo buying some of IBM’s storage assets after having already bought its PC and x86 server product lines in 2005 and 2014 respectively.
As the apocryphal Chinese curse goes, may you live in interesting times. ®