Lenovo, Juniper and the Value of IT Partnerships

By Charles King, Pund-IT, Inc.  March 9, 2016

Strategic partnerships have a long history in the technology industry, and for good reasons:

  1. In markets where strategic advantage is rapidly evolving, partnering can allow vendors to get up to speed more quickly and cost-effectively, and with far less risk than developing their own new products.
  2. Partnering can also be advantageous when it comes to dealing with shared customers—clients who buy into individual vendors’ ecosystems are likely to be receptive to combined solutions.
  3. Finally, though rarer, partnerships can provide an opportunity for companies to get to know one another better, eventually leading to mergers or acquisitions beneficial to both organizations and their clients.

That said, strategic partnerships are anything but a panacea. In fact, the IT industry can claim an unfortunately long and storied history of failed and/or abandoned vendor relationships that left the companies’ customers and partners hanging in the wind. But when the relationships are right and vendors commit for all the right reasons, partnerships can benefit virtually everyone involved.

Lenovo and Juniper Networks

Lenovo and Juniper Networks’ new partnership to build next generation converged, hyperconverged, and hyperscale data center infrastructure solutions for enterprise and web-scale customers is firmly positioned to take advantage of the first two points above. In essence, the deal aims to leverage the pair’s individual strengths, ecosystems and solution portfolios in order to gain better, quicker traction in new/next gen markets.

Why would they do so? For a couple of reasons. First and foremost, sales of converged and hyperconverged solutions have out-paced conventional, general purpose servers for some time now, and is likely to continue to do so. In addition, like other vendors, Lenovo hopes to pursue commercial opportunities among rapidly-growing hyperscale customers, including those delivering cloud, SaaS, PaaS, IaaS and other solutions where software-defined networking (SDN) and related technologies play critical roles.

There’s another interesting point in the companies’ announcement – the, “aim to develop joint go-to-market plans and a tailor-made resale model to address unique localization requirements in China.” That’s a natural point of strength for Lenovo which was founded in China and has one of its two home offices in Beijing (the other is in Morrisville, NC). That differentiates the company from its primary competitors but also highlights challenges that some U.S. vendors have faced when doing business in the region, partly as a result of growing political/economic uncertainties. The size and potential value of the IT market in China is a given and could pay handsome dividends to Lenovo and Juniper’s shared efforts.

Final analysis

It should also be noted that the deal with Juniper Networks is merely the latest strategic partnership inked by Lenovo. The company’s other partners, include Microsoft (for desktop to data center products), SAP (including HANA, where Lenovo’s System x appliances lead the market), VMware (for over 15 years), Red Hat (including CloudForms and OpenStack solutions launched last October) and Nutanix (a partnership announced in December with related new products launched the following month).

In other words, strategic partnerships are a subject Lenovo understands deeply and knows how to leverage for success. Given that history, the focus on high value next generation solutions and business opportunities in China, the new partnership between Lenovo and Juniper Networks looks like a rightly-defined effort with a high potential for success. That’s something that will obviously please the two companies’ respective shareholders but it should also result in significant benefits to their individual and common customers and partners.

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