Lenovo and EMC Corporation recently announced a broad partnership that enhances Lenovo’s position in industry standard servers and networked storage solutions, while significantly expanding EMC’s reach in China and other key, high-growth markets. The new partnership is expected to spark innovation and additional R&D 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 partnership is a strong strategic fit, leveraging the two leading companies’ respective strengths, across three main areas:
- First, Lenovo and EMC have formed 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.
- Second, the companies have forged 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.
- Finally, EMC and Lenovo plan to bring certain assets and resources from EMC’s Iomega business into a new joint venture which will provide Network Attached Storage (NAS) systems to small/medium businesses (SMB) and distributed enterprise sites.
“Today’s announcement with industry leader EMC is another solid step in our journey to build on our foundation in PCs and become a leader in the new PC-plus era,” said Yuanqing Yang, Lenovo chairman and CEO. “This partnership will help us fully deliver on our PC-plus strategy by giving us strong back-end capabilities and business foundation in servers and storage, in addition to our already strong position in devices. EMC is the perfect partner to help us fully realize the PC-plus opportunity in the long term.”
Joe Tucci, chairman and CEO of EMC, said, “The relationship with Lenovo represents a powerful opportunity for EMC to significantly expand our presence in China, a vibrant and very important market, and extend it to other parts of the world over time. Lenovo has clearly demonstrated its ability to apply its considerable resources and expertise not only to enter, but to lead major market segments. We’re excited to partner with Lenovo as we focus our combined energies serving a broader range of customers with industry-leading storage and server solutions.”
In the joint venture, Lenovo will contribute cash, while EMC will contribute certain assets and resources of Iomega. Upon closing, Lenovo will hold a majority interest in the new joint venture. During and after the transition from independent operations to the joint venture, customers will experience continuity of service, product delivery and warranty fulfillment. The joint venture is subject to customary closing procedures including regulatory approvals and is expected to close by the end of 2012.
The partnership described here is not considered material to either company’s current fiscal year earnings.