LenovoEMC initial focus on China, then rest of Asia

• New JV to bring co-branded network attached storage (NAS) solutions to distributed enterprises, remote branches and SMBs
• Focus will be on China first, with global and regional rollouts in the pipeline

THE joint venture (JV) between Lenovo and EMC, first announced in August 2012, is beginning to take shape this year with plans to focus on China first, with the rest of Asia to soon follow.
 
The newly-formed entity LenovoEMC Ltd, with Lenovo listed as the majority partner (by a 51 to 49 ratio), is aimed at enhancing Lenovo’s position in industry standard servers and networked storage solutions (NAS), while significantly expanding EMC’s reach in China and other key high-growth markets.

In an email interview with Digital News Asia, Koh Kong Meng (pic), vice president and general manager of Lenovo Asean, said the JV agreement is worldwide in nature but will initially focus on China, where Lenovo has a more established server business and a strong, mature channel to market.
 
“Right now, the market conditions are ideal for EMC to help Lenovo accelerate its industry-standard server market business, and for Lenovo to help EMC expand its presence in the China market and other emerging markets around the world,” he said.

The agreement is initially focused on EMC VNXe and EMC VNX in China, and the company expects to phase in these products outside of China as Lenovo’s server portfolio is brought to market over time.
 
“We will make additional announcements as the relationship expands and Lenovo discloses its plans to bring servers to market in the worldwide theater. The relationship expansion will closely follow Lenovo’s go-to-market investments in its various geographies as its servers are launched,” said Koh.
 
The joint venture had its formal debut during this year’s Consumer Electronics Show hosted in Las Vegas, building up channel partners under Lenovo’s banner.
 
In an interview with Rachel King for ZDNet during the event, Jay Krone, managing director of product marketing for LenovoEMC said: “The thing about CES is the channel is here… Lenovo, however, gives us a much bigger platform to stand on. It gets back to that brand recognition."
 
While EMC stands to gain a bigger international footprint courtesy of Lenovo, Krone admitted, “Lenovo probably has the most to gain in the short term."
 
The LenovoEMC venture continues the growing trend of IT vendors seeking to aggressively address the potentially lucrative and growing market segment of servicing small and medium-sized businesses (SMBs).
 
Last December, HP also announced its HP 3PAR StoreServ 7000 Storage offering, specifically aimed at the midrange market.
 
David Scott, senior vice president and general manager of Storage for HP, said the addition to the portfolio significantly expands 3PAR's addressable market, allowing HP to tap into what is a global market worth US$11 billion.
 
Joint venture breakdown
 
Finalized and launched in January of this year, the LenovoEMC JV is expected to spark innovation and additional research and development in the server and storage markets by maximizing the product development talents and resources at both companies, while driving scale and efficiency in the partners' respective supply chains.
 
The move saw Lenovo end a long-term partnership with Dell for storage arrays, and replacing its portfolio with offerings from EMC.
 
Dell and EMC signed a 10-year partnership in 2003; however a change in Dell’s business model from reseller to maker of storageware to compete with other vendors such as EMC and NetApp led to the end of the deal two years early, in 2011.
 
In a press statement, Eric Arcese, president and general manager of LenovoEMC, said Lenovo’s growth record and Iomega's heritage in network storage solutions enables the joint venture to pursue growth opportunities and drive innovation in NAS market for SMBs.
 
“With the joint venture now underway, there’s a real sense of opportunity and excitement as we work with our partners and customers to firmly establish LenovoEMC Ltd as a leader in the fast-growing global SMB storage market,” he added.
 
The joint venture incorporates the core assets of EMC’s Iomega business and will bring co-branded NAS solutions to distributed enterprises, remote branches, and SMBS.
 
The Iomega networked storage portfolio includes desktop, tower and rackmount array products ranging in capacity from diskless versions (0TB) up to 48TB. 
 
Iomega NAS solutions include the EMC LifeLine operating system, which the company claims combines industry-leading features and benefits with an ease-of-use tailored to small business users, remote enterprise offices, departmental data centers and others.
 
The partnership will leverage the two companies’ respective strengths, across three main areas:

• A server technology development program that will accelerate and extend Lenovo’s capabilities in the x86 industry-standard server segment. These servers will be brought to market by Lenovo and embedded into selected EMC storage systems over time.

• An OEM and reseller relationship in which Lenovo will provide EMC’s industry-leading networked storage solutions to its customers, initially in China and expanding into other global markets in step with the ongoing development of its server business.

• To bring certain assets and resources from EMC’s Iomega business into a new JV which will provide NAS systems to SMBs and distributed enterprise sites.

Koh described the partnership with EMC as “a solid first step in Lenovo’s aspiration to be a leading provider of servers with a suite of complementary storage products both of which are the backend enterprise IT infrastructure that powers the post-PC era.”

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