Lenovo: Watch Out HP, Dell; 'We Are Ready To Attack'

Lenovo executives say before the ink even dries on its $2.1 billion deal to buy IBM's x86 server business it will go into attack mode to win market share and new customers. The China-based PC maker warned competitors that it's going to move fast to leverage its newly acquired server business to grab market share and drive $5 billion in revenue within the first year.

"Lenovo's priorities include integration of System X into Lenovo," Yang Yuanqing, Lenovo chairman and CEO, said during a press conference. "We will leverage our unique competitive advantage. With Lenovo’s operational excellence and efficiency, we can beat ODM/OEM competitors. Meanwhile, with IBM’s reputation, quality and innovation, we can win against top name brands."

IBM and Lenovo said Monday in a joint press release that the deal to sell IBM's x86 business to Lenovo would be finalized Wednesday. The deal has passed all regulatory hurdles, but nevertheless faces security and integration questions from partners.

[Related: Partners: Lenovo Faces Big Security, Integration Challenges]

"As we move over to Lenovo we have a huge opportunity in front of us to be a more trusted and respected member of the (enterprise) ecosystem," Adalio Sanchez, general manager of IBM's System X business, said during the press conference.

Sanchez is expected to continue to lead the Lenovo x86 team as senior vice president of Enterprise Systems.

"Today, quite frankly, we are a bit constrained," Sanchez said. "From a software perspective, we are going to be able to leverage the ecosystem of VMWare, Microsoft, Red Hat and Fedora -- because it won't be competitive. One of the cornerstones of our strategy is being a better partner for the entire ecosystem."

IBM's server market share has been in free fall since it announced the sale of its x86 commodity server business to Lenovo. IBM's x86 server revenue market share plummeted earlier this year nearly 29 percent compared with the prior year. Lenovo executives say after the deal is completed IBM will be the world's third largest server manufacturer behind HP and Dell. HP is the global market share leader for servers with 25.4 percent of the server market based on factory second quarter revenue. IBM is in second place with 23.6 market share followed by Dell with 16.6 percent market share.

"IDC has shown some slowness," said Gerry Smith, executive vice president of Lenovo Group and president of Enterprise Business Group and Americas Group. "But we are excited to rebuild the momentum and attack the marketplace. The fear, uncertainty and doubt that our competitors have spread are gone. The deal is official, we are going reconvene forces on Wednesday and we are ready to attack."

Keys to integration, Lenovo executives said, are merging cultures and leveraging Lenovo efficiencies into the System X partner community.

"We are 110 percent committed to winning in the enterprise," Smith said.

Lenovo said it was hiring a yet to be named chief security officer and was in the process of working with U.S. government officials to finalize the hire. Addressing security concerns, Smith said, that Lenovo's new CSO was an "incremental move to make Lenovo by far the most secure supply chain in the marketplace."

"As a leading IT company selling to nearly every Fortune 100 company customers demand the highest security in our products and our company," he said. "We are continually enhancing our security policies with standards practices which are based on the wildly recognized international standards including ISO-27000, NIST and EU data security policies."

PUBLISHED SEPT. 29, 2014