In a move designed to push cloud and digital transformation into a higher gear, Lenovo and NetApp recently announced a joint partnership, bringing each companies’ individual strengths to the job of assisting their customers as they move to upgrade and modernize their IT infrastructures.
Announced at the recent Lenovo Transform 2.0 conference, this new partnership will combine NetApp’s software technology with Lenovo’s data center hardware in a move designed to support digital transformation from inside the enterprise to the cloud, including all the interim steps involved in that process.
This Lenovo/NetApp combination also includes the formation of a joint venture in China, targeting the local storage market in that country.
“Lenovo and NetApp are uniquely positioned to deliver the next-generation of high performance data management solutions across the globe offering customers unprecedented new performance, value and choice,” said Kirk Skaugen, head of Lenovo’s Data Center Group, in a statement.
DATA CENTER ADVANCEMENT
The partnership may be seen by some as the next step in the logical extension of Lenovo’s corporate strategy of building and growing its data center business. The building blocks for this strategy were put in place in 2014, when Lenovo acquired much of IBM’s server business, including IBM System x and IBM BladeCenter.
On a recent earnings call, Lenovo emphasized the importance of its data center strategy to overall corporate growth.
Lenovo CEO Yuanqing Yang announces the Lenovo NetApp partnership in New York City
“We will continue executing our current strategy to improve our hyperscale business model by further expanding our in-house design and manufacturing capability, strengthen our leadership in high-performance computing and AI, grow storage and networking and continue to drive service attach and revenue growth” said Yang Yuanqing, Lenovo chairman and CEO.
Kirk Skaugen said Lenovo’s lack of a legacy network or storage business in the data center was an advantage in allowing Lenovo to “aggressively” move to the next generation of hyperconverged infrastructure.
“We’re basically seeing a move from a traditional infrastructure to a software-defined one,” he remarked. “We’re seeing us grow our share either 2x or 3x in that move.”
Skaugen insisted on the need to broaden Lenovo’s client portfolio in the data center. His team was focused on growing its customer base beyond the largest hyperscalers, such as Amazon, Google, and Microsoft, he said.
“We’ve diversified the customer base beyond the top 10 to the next 50 or so, because about 40% of the volume in hyperscale is beyond the super 7.”
CHINA STRATEGY
The Chinese joint venture between NetApp and Hong Kong-based Lenovo comes as the tariffs war between the United States and China kicks up a gear, with the Trump administration launching a fresh round of 10% duties on an additional $200 billion of Chinese imports into the U.S. China has retaliated with further tariffs on $60 billion of U.S imports into China.
In spite of the uncertainty in the global trade environment, the partnership between Lenovo and NetApp looks set to give both companies a strengthened foothold in China.
“Details about how the joint venture will operate are still being rolled out, but the net result will be an independent company that can deliver a product suite spanning the complete storage offering of Lenovo and NetApp storage,” remarked Steve McDowell, senior analyst at Moor Insights & Strategy, in an article for Forbes.
“The joint venture will deliver and market both Lenovo and NetApp branded products to the customer in China. As most Western companies know, to do meaningful business in China to government-funded entities, they must create JVs with Chinese ownership.”
NetApp CEO George Kurian said the Lenovo partnership would “establish a new standard to accelerate our customers’ success.”
The joint venture will be 51% owned by Lenovo and 49% owned by NetApp, McDowell said.
DRIVING DATA CENTER SERVICES
The partnership makes sense from NetApp’s side of the coin as well, since NetApp offers software solutions that encompass cloud data backup and recovery services in addition to the data security and analytics necessary for all organizations today.
The initial offerings from the collaboration are the Lenovo DE and DM series. The DE Series Storage Arrays are SAN storage systems designed to provide performance, simplicity, capacity, security, and high availability for medium to large businesses, while the DM series are unified storage systems that offer a similar level of benefit to customers. Both series are available for immediate shipping.
To further strengthen its cloud data portfolio, NetApp recently acquired StackPointCloud, which will allow its customers to manage data and applications in and across various cloud services.
“In today’s global economy, customers demand new approaches to IT infrastructures that support their digital transformation.” – George Kurian, NetApp CEO
