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EMC Drops Out Dell for Lenovo for Making Servers for Its Storage Arrays
Wednesday, 01 August 2012 02:33

The new agreement with Lenovo specifies that the two companies will form a server technology development initiative for new x86-based server products.

 

EMC, which over the last two years has dissolved a partnership with Quantum for tape storage hardware and is in the process of divorcing the now-competitive Dell on servers and disk-based storage arrays, has been shopping around for another hardware cohort.

On Aug. 1, the storage and data security giant revealed it has selected Beijing-based Lenovo, maker of notebook PCs for its dreaded marketplace enemy, IBM.

EMC, by far the world's largest storage software and hardware vendor, produces its own storage arrays and storage-related appliances, but it does not make servers. The new agreement with Lenovo specifies that the two companies will form a server technology development program for new x86-based server products. 

Likely to Use ThinkServer Branding

Lenovo will develop these servers, which are likely to use its own ThinkServer branding. EMC then will offer them as options alongside its rebuilt frontline storage array line, VMAX, which it launched in January 2011.

As Dell did for eight years previously, Lenovo will resell the EMC arrays as part of its own enterprise portfolio.

Dell and EMC signed a 10-year partnership in 2003 that the companies ended two years early, in 2011, because Dell changed its business model to stop being a reseller and make its own storageware to compete with EMC, NetApp and other companies.

Sales of the new data center equipment will start in the mainland China market and gradually extend to the global market as part of Lenovo’s enterprise strategy, Forrester Research analyst Bryan Wang said in his blog.

What This Means to Both Companies

"The partnership provides a boost that will help Lenovo develop X86 server products targeting the global market," Wang said. "Lenovo’s existing server business is mostly based in China. With the new ThinkServer brand, it is looking to enter the global market. In the past 12 months, EMC has accumulated experience from the previous partnership with Dell and recruited server talent from IBM."

EMC may use this new relationship to create an EMC-branded appliance, Wang said.

"The current arrangement only shows that EMC will integrate Lenovo server products to complement its storage product portfolio. But considering that major competitors IBM, Oracle, and HP are all announcing appliance products in the market, EMC may use the JV to follow suit," Wang said.

Iomega Gets Into the Lenovo Act

Lenovo and EMC are also engaging on a joint venture to make lower-end network-attached storage arrays. EMC’s Iomega division will be the principal in this project.

Iomega, which built its reputation making portable 100MB Zip and 1GB Jaz hard drives in the 1990s, is a consumer-oriented storage provider (making small desktop and other portable drives) that has been moving up the storage food chain into the small and midsize business (SMB) and midrange market in the last two years. But it is not yet equipped to build data center equipment.

Lenovo will own 51 percent and EMC 49 percent of the NAS initiative, Wang said. The joint venture will use the Iomega brand to produce NAS systems targeting SMBs and branch offices for large enterprises.

"The partnership seems to give both Lenovo and EMC what they want: Lenovo gets a boost as it eyes the global enterprise market, and EMC gains a stronger footprint in China as well as a new partner at the lower end of the storage and server market," Wang wrote.

"I believe that the partnership makes sense for both vendors, but recent history shows that it takes time to evaluate the outcome of any partnership between a Chinese vendor and a multinational corporation." 

 

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