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IBM / Lenovo deal: What partners need to know...

13 Jun 2014

Why is IBM transitioning x86 to Lenovo? That's million-dollar question on the lips of the company's Business Partners.

Reported in January by The Channel, Lenovo and IBM have entered into a definitive agreement in which Lenovo plans to acquire IBM’s x86 server business for US$2.3 billion.

With the sale nearing completion, IBM believes that Lenovo’s proven strengths in scalability, operational efficiency and a broad channel presence will "deliver a win for IBM’s x86 clients and Business Partners."

IBM’s strategic alliance with Lenovo spans decades, and to keep Business Partners from jumping ship amidst the transformation, the company has released a full breakdown of the deal for partners to scrutinise, as provided below:

How does this announcement affect my business with IBM in the near-term?

Until the transaction is closed, it is business as usual. Both companies expect no change in their independent, existing server operations, including customer service and product availability.

What IBM products will Lenovo acquire with this agreement?

The scope of the agreement includes IBM System x, IBM BladeCenter and IBM Flex System servers, x86-based IBM Flex System integrated systems, IBM NeXtScale and IBM iDataPlex servers, along with IBM x86 options, system networking switches, and maintenance offerings.

System software that uniquely supports the x86 server business also will be acquired, including FastSetup, ToolsCenter, Upward Integration Modules, and BladeCenter Fabric Manager.

What parts of its hardware portfolio will IBM retain?

IBM will retain its non-x86 enterprise systems portfolio, including IBM System z mainframes, IBM Power Systems, IBM System Storage, and IBM POWER processor-based IBM Flex System and BladeCenter servers.

IBM also will retain such products as IBM PureApplication System and IBM PureData System appliances, IBM WebSphere DataPower SOA appliances, IBM WebSphere Cast Iron, and IBM Internet Security Systems (ISS) appliances.

What system software will IBM retain?

IBM will retain ownership of the system software that supports both the x86 and IBM Power server businesses (cross-brand), including IBM Systems Director and IBM Flex System Manager.

Additionally, IBM is retaining System Networking Switch Center. Lenovo will secure a broad license to these products through a strategic relationship with IBM in which Lenovo will market and sell these products for x86 environments and IBM will provide support and services to existing and new clients.

In addition, IBM will continue to develop and evolve its Windows and Linux software portfolio for the x86 platform. IBM is a leading developer of software products for x86 servers with thousands of products and many software developers and services professionals.

Does IBM remain committed to the rest of its Systems portfolio?

Yes. IBM will continue its focus and investment on high-value enterprise systems to continually evolve the unique and innovative capabilities of IBM System z, IBM Power Systems and IBM System Storage offerings.

This commitment is demonstrated by recent systems and software announcements, including:

• More than $1 billion investment in the new IBM Watson Group

• Continued innovation on IBM’s family of Power Systems and POWER processors

• $1 billion investment in research and development for flash storage

• $1.2 billion to expand our global cloud computing footprint to 40 datacenters worldwide in 15 countries across 5 continents

• $2 billion investment in the SoftLayer acquisition

• Investments in emerging markets, such as Africa

What will happen to the existing contracts customers have with IBM?

After the transaction closes, eligible in-scope contracts will be assigned by IBM to Lenovo.

Specifically, what will happen with maintenance agreements I have with IBM?

Following the closing of the transaction, eligible in-scope maintenance agreements will be assigned to Lenovo. Lenovo will be responsible for related customer service and maintenance options and will sell maintenance for x86 products.

IBM will continue to provide Technical Support Services (TSS), including warranty service, hardware maintenance, software support for x86, and around-the-clock support for critical issues, as required by Lenovo’s clients, under the terms of a five-year maintenance services agreement with Lenovo.

Will IBM provide Lenovo with components required for its x86 solutions?

Lenovo and IBM plan to enter into a strategic relationship that will include a global OEM and reseller agreement for the sale of IBM's industry-leading entry and midrange IBM Storwize disk storage systems, tape storage systems, General Parallel File System (GPFS) software, IBM SmartCloud Entry offering, and elements of IBM's system software portfolio, including Systems Director and Platform Computing solutions.

What will happen to the x86 roadmap after close of the transaction?

IBM x86 server business is currently committed to a robust product roadmap needed to support long term success. Lenovo has publicly stated their commitment to follow IBM's x86 server product roadmap.

Will this announcement affect how I buy x86 offerings from IBM Business Partners?

Until the transaction is closed, it is business as usual; IBM Business Partners will continue to sell IBM x86 offerings. After the close of the transaction, IBM will assign business partner agreements for in-scope products to Lenovo.

These Business Partners will be able to continue to resell the in-scope products that Lenovo will acquire with this agreement.