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Lenovo, EMC Team Up to Take on China, World

Lenovo, EMC Team Up to Take on China, World
August 1, 2012 10:29AM

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The position of both Lenovo and EMC in the world market increases the possible impact of the partnership. Lenovo is the second-largest personal computer maker in the world and is already the top maker in its home country of China. EMC is the largest seller in the world of external disks and networked storage systems. It is looking to China to boost its sales.

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Lenovo is teaming up with EMC to take on the global enterprise market. On Wednesday, the computer maker announced the strategic partnership in Beijing.

The partnership will include combined server development, Lenovo's OEMing and resale of EMC storage products, and a joint venture for network-attached storage systems designed for small-to-medium businesses and large companies' branch offices.

Resale Agreement with Dell

The x86 servers will be integrated into EMC's line of storage systems and sold to global enterprise customers. Last month, Lenovo announced a ThinkServer line, and the new partnership is expected to accelerate its efforts to move them into the world market.

Lenovo's reselling of EMC products will be offered through the computer maker's enterprise sales, initially in mainland China and then out to the rest of the world. EMC previously had a resale agreement with Dell, which ended last year after Dell began to sell competing storage products.

The joint venture will include EMC's Iomega division, and will be 51 percent owned by Lenovo and the rest by EMC.

EMC will be able to increase its Chinese operations, Lenovo will grow its server and storage offerings, and both companies will test their joint efforts in China before rolling them out globally.

Companies' Positions

Peter Hortensius, who leads Lenovo's product group, told the Boston Globe that his company has "been looking for an opportunity to grow our server business outside of China as well as get into more commercial products than just our PCs."

The position of both companies in the world market increases the possible impact of the partnership. Lenovo is the second-largest personal computer maker in the world, is already the top maker in its home country of China with more than a third of the market, and is shooting to become the top computer vendor in the world. In 2011, Lenovo's share of the x86 server market in China was about 10 percent, fourth behind Dell, IBM and Hewlett-Packard.

EMC is the largest seller in the world of external disks and networked storage systems. It is looking to China to boost its sales, as other regions, such as Europe, begin to slump. Most of EMC's sales in China are to large companies, and it is looking to increase sales to SMBs.

'Pretty Interesting Deal'

We asked Charles King, an analyst with Pund-IT, about the significance of this partnership.

He called it a "pretty interesting deal." King said that, for Lenovo, it will help them to expand their server line, and the partnership with EMC will help them "leverage the global market leader in storage."

He also noted that EMC "has integrated its products with VMware's virtual solutions," in addition to supporting all other major hypervisor systems. "Not only is Lenovo getting a top storage vendor," he said, they will also get access to "products that are already optimized for virtual environments."

EMC gets access to the top computer maker in China, King noted, and pointed out the Chinese government "encourages buyers in its country to do business with Chinese companies."

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