Global Economics

Lenovo Goes Global with Servers


With its new ThinkServer brand, Lenovo is extending its reach outside China for the first time—looking to Japan, India, and Southeast Asia

The company, which announced in January its plans to enter the server market, will debut four core systems, Chris Kelly, Lenovo's director of enterprise systems group for the Asia-Pacific region, told ZDNet Asia Tuesday in a phone interview.

Built on IBM's one- and two-socket x86 server technology, the new systems will address about 80 percent to 85 percent of the total market in the Asia-Pacific region, noted Kelly. Lenovo, he added, is not ruling out adding new products such as blade servers in the long-term.

"We're going to go out and execute in a bigger segment first, address the low-hanging fruit...build up our capabilities and expertise and take customer feedback along the way to find out where they would like to see us operating, and then we'd work directly with them to build up the portfolio as and when it's required," said Kelly.

Officially launched at the InterOp event in New York, the new offerings under the ThinkServer family include three tower and two rack servers, based on Intel Core 2 Duo, Xeon 3000 or Xeon 5000 series of processors. Lenovo will avail the systems on Microsoft Windows Server, as well as two Linux distributions—Novell's Suse Linux Enterprise Server and Red Hat Enterprise Linux. General availability of the ThinkServer products will commence Sep. 30, with a starting price of US$799.

According to Kelly, the TS 100 tower and RS100 rack servers are targeted at smaller businesses for use as file and Web servers and to run applications such as e-mail and messaging. The TD 100 tower and RD120 rack models are suited for medium-sized businesses that demand additional capabilities such as virtualization and data center deployment. The TD 100 also has a version—TD 100X—that is equipped with greater memory and hard drive capacity, said Kelly.

The servers come with software tools designed to help SMB customers without dedicated IT departments to set up, update and manage their servers, he added. In addition, the ThinkServer family also comes with ThinkPlus Priority Support as a 90-day trial, which includes next business day warranty service, and 24/7 hardware and software phone support.

Japan, India key server markets for Lenovo in Asia

Despite the existence of established players in the SMB server market, Kelly noted that the competition have "not adequately addressed the SMB and mid-market space", with products typically scaled-down from enterprise versions.

Lenovo's strategy, he added, includes making it easy for customers to buy its products by allowing flexibility for channel partners to customize configurations, and constantly updating its product range with new products from core components partners like Intel.

"We're not the first server vendor out there, but we're certainly going to make sure that we're one of the best server vendors out there, and as new technology becomes available, we'll be delivering that to our customers in a timely fashion," he said.

Excluding China, Japan is the largest market for Lenovo and will continue to be key within the region, said Kelly. India is also a fast growing and large market, in which Lenovo has "existing strengths with Think brand products". Within Southeast Asia, Malaysia, Singapore and Thailand have significant growth potential, he added.

Raju Chellam, vice president for Asia-Pacific at Access Markets International (AMI) Partners, told ZDNet Asia in an e-mail interview Tuesday that a "huge opportunity" exists in the entry-level server market in Asia. Small businesses, which AMI defines as companies with up to 99 employees, "are looking for a robust infrastructure for their business needs and are investing in technology solutions", he added.

"The x86 and x86-64 are emerging as the ideal server platforms for Asian SMBs (small and midsize businesses) running enterprise applications," Singapore-based Chellam noted. "Server virtualization is also catching up among SMBs and the impact of virtualization is more [visible] on x86 servers. This is more so with medium businesses—companies with 100 to 999 staff."

Pointing to an AMI study released earlier this year, Chellam noted that over 35 percent of Indian small businesses with between 20 and 99 employees, are planning to purchase servers for the first time this year.

He said: "Apart from traditional vertical markets like BFSI (banking and financial services), telecom and manufacturing, businesses in the construction and media/entertainment verticals will have a significant impact on server market growth. These businesses may consider Lenovo if the price is right and the performance is bright."

Uko Tian, principal research analyst for server markets at Gartner, added in an e-mail that to appeal to SMBs, Lenovo needs to "prove their competitiveness" by providing easy to use products and good technical support. The research house earlier this month reported that the Asia-Pacific server market posted a year-on-year growth of 15.6 percent during the second quarter, with server revenues crossing the US$2 billion mark.

Lenovo, said Kelly, has "aggressive goals" to win over the market. "The [server] market is still expected to grow...we'd be expecting to grow a lot faster than the market, given that we've got zero market share.

"At this point, we're going to target growing at multiples to the market, and within a not too distant period of future, I expect we'd be able to achieve double-digit market share," he added.

Provided by ZDNet Asia—Where Technology Means Business

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