Lenovo turns to software partnerships to expand server business

Lenovo says it doesn't want to be a software company just yet

Lenovo is expanding software partnerships as it tries to break into a server market dominated by Hewlett-Packard, IBM, and Dell.

Its first such partnership expansion, announced Tuesday, is with VMware on virtualization products. Lenovo will bundle ThinkServer products with VMware's vSphere with Operations Management.

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The servers with VSOM are targeted at customers of small and medium-sized businesses who want higher performance and server utilization rates, said Sean Gilbert, senior alliances manager at Lenovo.

Lenovo has been pursuing the server market for a few years now with single- and dual-socket rack and tower offerings. However, Lenovo offers only basic hardware while competitors and market leaders like HP, Dell, and IBM sell servers that combine homegrown hardware, networking, storage, and software products.

Lenovo is also gaining software competency and forging partnerships with other software makers to add value to its server products. The company already offers other VMware products and has partnered with Microsoft to bundle virtualization products in servers. Lenovo is also certified to sell servers bundled with Citrix virtualization products, though there is no official partnership with the company yet.

In the x86 server world where Lenovo is focused, virtualization is a core technology that is driving up the market right now, said Charles King, principal analyst at Pund-IT.

"It is a good way for them to go. It somewhat contradicts what the majority of tier-one server vendors are doing, which are building out their software stack," King said.

Lenovo wants to continue establishing partnerships with software makers, Gilbert said, adding that the company wants to be an open player and does not want to keep customers tied to proprietary products.

"There's no immediate plan to be a software company," Gilbert said.

Packaging VMware's operations management product with servers ensures more efficient virtualization deployment, Gilbert said. VSOM includes higher-level management functions, including root-cause analytics in which problems with virtual machines can be easily corrected. VSOM also includes a management dashboard for IT administrators to see the entire virtualization environment.

VSOM is one example of a good partnership that can cut costs for customers and Lenovo, Pund-IT's King said.

"Why be the fifth or sixth vendor with a systems management portfolio to invest in... and maintain," King said.

Lenovo is pushing VSOM to small and midsized businesses that want better control for virtualization but don't want to go into cloud computing, King said.

Lenovo is selling servers with software packages via its Enterprise Product Group, which was formed in November last year. Lenovo has also boosted its enterprise storage offerings by partnering with storage company EMC, and the partnership has been spun off into a separate company called LenovoEMC.

Agam Shah covers PCs, tablets, servers, chips and semiconductors for IDG News Service. Follow Agam on Twitter at @agamsh. Agam's e-mail address is agam_shah@idg.com

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