Please Note: Editorial views expressed herein are the views of the author and may not represent the official views of any of the parties listed.
It never ceases to amaze me the fascination people have in manufacturing drama. It is also amazing how easily people accept what they read or are told, without verifying the “facts” stated. Such is the case with any acquisition, but the Lenovo acquisition of IBM’s x86 server business provides a particularly juicy opportunity for competitors and others with their own agendas to spread Fear, Uncertainty and Doubt (FUD). It is my intention to ensure the facts are brought to light as much as I can and let you draw your own conclusions.
Consider the following three stakeholder groups:
Most of IBM’s and Lenovo’s competitors are obviously using this change as a way to try and disrupt IBM’s customer base and sway opinion using the age old tactics of Fear, Uncertainty and Doubt, also known as FUD. FUD is something we should ALL be able to recognize and use our cognitive filter (combined with a massive dose of salt) to understand the difference between reality and the agenda behind the message.
Case in Point: some organizations have been clever in combining a political topic with this business action in an attempt to create fear and mistrust in their customers. The story told is basically as follows in its “logic”: “IBM is selling its x86 business to Lenovo; Lenovo is a Chinese company; the Chinese government has been accused of electronic espionage against the US; therefore, once the deal closes, the Chinese government will use the firmware and software of Lenovo systems to spy on you; so, don’t buy from them – buy from us now!”
Let’s start with ownership FACTS. Lenovo is not owned by the Chinese government, it is a global company over 60% publically owned and therefore subject to significant independent inspection of operations, as are most major corporations. In addition, Lenovo does have significant investment from individuals and corporations based in China, but not controlling interest nor government control. It’s interesting to note that Lenovo has supplied, and continues to supply, systems to the U.S. government (e.g. there are Lenovo systems in most branches of the U.S. Armed Forces), and many of the U.S. based Fortune 500 purchase Lenovo products as their standard.
With respect to Lenovo products being manufactured in China, a conservative estimate is that over 80% off all motherboards for all computer manufacturers (HP, Dell, Cisco, Apple, IBM, etc.) are made in China. Also, over 50% of all server and client devices from all manufacturers are made in China. Interestingly, Lenovo is the only global PC company with a manufacturing plant in the U.S. It should also be noted that Lenovo owns their factories and thus has rigid security and controls in place. Other’s like HP, Cisco, Dell and IBM use contract manufacturers in China. Personally, that would make me more concerned.
Most of the customers we have dealt with realize this transition makes sense for IBM and Lenovo, clearly. But they also realize it provides potential benefits for them as well. The potential for combining IBM’s technical prowess and innovation with Lenovo’s proven execution and efficiencies could provide a powerhouse in the x86 server space. The only ones who would lose in that situation would be competitors – they’d have to up their game – which is also good for customers.
Candidly, some customers dislike change of any kind. But we live in a world of change, and change for the better is a good thing. This seems to be a change for the better – based on the FACTS. And there are always those who use change as an opportunity to advance personal agendas, exert influence or exercise hidden prejudice, but I would hope business acumen, checks and balances minimize those factors. We ALL need to keep our eyes on serving our customers as the driving force behind our decisions.
3. Press and Analysts
Thankfully, I think the press has been reasonably objective in their analysis. Certainly there is moderate drama in some of the headlines – after all, drama sells; but as a whole the media has seen the objective analysis of the transition as benefiting all parties, increasing competitiveness and not significantly impacting world security as some would have you believe. When it comes to “Lenovo Acquisition of IBM x86 Business – Addressing the FUD Factor”, the question is, will reality win or hype?
What are the real concerns this transition should bring to the forefront?
Well, after seeing this proposed business transaction for what it is: beneficial to both companies involved, likely to provide better products and execution for customers, and increased innovation and competitiveness for the largest server market in existence; what more should we look to understand?
For customers and partners, I think the main concerns are around speed of execution on the transition, smooth integration of corporate cultures (I’m glad they have done this integration before), and clear communication soon after the transition.
For competitors I think the main concerns are: when this goes ahead, they will have a new, much more formidable competitor who is potentially more attractive to Intel and ISVs – more so than most server manufacturers today.
If nothing else, the months ahead should be interesting.
Now available for viewing, IBM Edge2014: Panel Discussion: The Lenovo Opportunity, featuring Adalio Sanchez, Worldwide GM for x86 businesses; Christian Teismann, Lenovo VP Global Accounts; and Charlie Cox, President of Datatrend – Technology Infrastructure Solutions.
See time 18:45 through the end for comments addressing FUD.
At the IBM Edge Conference, Stuart Miniman, Analyst with Wikibon, moderated a panel discussion on “The Lenovo Opportunity,” featuring:
– Adalio Sanchez, General Manager, System x and PureSystems Solutions, IBM Systems & Technology Group
– Christian Teismann, VP of Global Accounts, Lenovo
– Charlie Cox, President of Datatrend’s Technology Infrastructure Solutions business.
Visit the Datatrend IBM – Lenovo x86 Server Business Transition Hub page for latest updates and resource links from Datatrend, Lenovo, IBM, industry analysts and the media.