HP Out to Rescue IBM Partners From Lenovo

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Hewlett-Packard has launched “Project Smart Choice,” a global rescue effort to save IBM x86 server resellers from the fate of being relegated to Lenovo and a limited technology and capabilities portfolio once the sale of the hardware unit closes.

Life PreserverHewlett-Packard Co. is launching a full-court press to “rescue” thousands of affected solution providers from being transferred to Lenovo when the sale of IBM Corp.’s x86 server unit closes later this year.

From HP’s perspective, it’s a better home for true solution providers than Lenovo, which has a limited technology and solution capabilities portfolio.

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Under the moniker “Project Smart Choice,” HP is giving IBM partners information and resources to transfer their business before being forced to move to Lenovo. The program also provides HP partners with guidance on how to capture business from affected IBM x86 customers that would prefer working with a vendor with a better-rounded portfolio and technical depth.

In January, IBM announced the sale of its x86 server business -- including System x, BladeCenter and Flex System blade servers and switches, x86-based Flex integrated systems, NeXtScale and iDataPlex servers and associated software, blade networking and maintenance operations -- to Lenovo for $2.3 billion. The deal is under regulatory review and isn’t expected to close until later this year.

HP has criticized the transference of the IBM x86 server business to Lenovo, saying it will leave solution-oriented enterprise and SMB partners without options to fulfill the needs of their customers. Lenovo doesn’t have the certifications or technical support to demonstrate competencies in the way HP or IBM can.

“You need the skills and technical certifications to do sales and advocate solutions,” says Patrick Eitenbichler, HP director of PartnerOne strategy. “Lenovo doesn’t have the skills or the certifications the customers need.”

Beyond the technical certifications, Eitenbichler says Lenovo lacks product depth to solve enterprise needs. Resellers could source products from multiple vendors to create enterprise systems, but that adds complexity and costs that must be absorbed by the partner or customers. Moreover, Lenovo doesn’t have enterprise-class relationships with software vendors such as SAP and Oracle, which will limit their ability to address enterprise operational needs.

On the SMB side, HP sees more businesses adopting cloud services rather than buying commodity, on-premises hardware. HP recently announced a $1 billion effort to create cloud services and has the PartnerOne for Cloud program, in which it provides partners the resources for helping customers select the right cloud solution. Lenovo, Eitenbichler says, has no equivalent.

The big problem HP is trumpeting in Project Smart Choice is the uncertainty that will come with the acquisition.

Lenovo’s takeover of the IBM server business is raising questions about how it will integrate with its existing line of ThinkServers. In storage, questions are rising over the future of Lenovo’s joint-venture with EMC Corp. now that it’s also agreed to work with IBM on storage solutions. And HP is questioning how the Lenovo’s acquisition of Motorola Mobility from Google and its push into the smartphone market will affect commercial programs.

For partners, HP says it offers stability through the clear, global PartnerOne channel program. Lenovo, Eitenbichler says, has three regional partner programs, each operating differently. Eventually, Lenovo will have to realign and consolidate channel operations, which will cause further disruptions.

“The lack of a global program means changes and disruptions will come,” Eitenbichler tells Channelnomics.

Some of HP’s critiques of the IBM-Lenovo deal are fair. Some are not. HP is raising questions about how much and how long IBM will support Lenovo with maintenance. HP believes IBM will become less interested in providing repair and logistical support to Lenovo. It’s an empty charge, as IBM continues to provide Lenovo with maintenance support for its ThinkPad PCs nearly a decade after selling the division.

The cloud concerns, especially on the SMB level, are real, but not exclusive to Lenovo. HP doesn’t have a good answer for the cloud challenge, which is why it launched a cloud infrastructure program. IBM believes it can retain many affected server partners by converting them to resellers of its SoftLayer program. But Lenovo is banking on customers wanting to retain some on-premises hardware, which is one of the possible outcomes of the HP PartnerOne for Cloud program.

Objectively, all server vendors face serious challenges as the market moves from heavy on-premises infrastructure to optimized virtual environments and cloud services. An argument could be made that Lenovo is simply filling a void vacated by IBM, HP and, increasingly, Dell, which are moving up the stack to enterprise solutions.

In situations such as these, share-shift of partners and customers always happens. HP says it has little overlap with IBM’s server partners, and that’s an opportunity to capture business. On the other hand, there’s a high overlap between IBM and Lenovo partners, which means shift is less likely as they’re already familiar with the vendors, products and programs.

IBM recognizes the potential for disruption resulting from the sale. It's launched an online resource center for partners to help them understand how the server unit sale will affect them and guide their decision making.

Project Smart Choice comes as Lenovo holds its annual Accelerate partner conference in Orlando, where it’s announced new products and profitability enhancements, and laying the foundation for future expansion into the server and mobility markets.

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