By Charles King, Pund-IT, Inc. June 28, 2017
The TRANSFORM launch event hosted last week in New York City by Lenovo’s Data Center Group (DCG) was both intriguing and odd. Intriguing because the strategic and practical shape of DCG’s brand and enterprise solutions is finally clear and odd because the timing of the event inhibited DCG representatives from fully discussing many of their new products.
In the end, the former issue was more important to both Lenovo and its customers than the latter, but both are worthy of a closer look.
The ongoing evolution of x86-based systems
A decade and a half ago, sorting through system vendors’ offerings was relatively easy. That was mainly because of clear delineations between high-end and midrange enterprise-class products based on proprietary silicon, including IBM’s POWER and mainframe processors/co-processors, HP’s PA-RISC, Alpha and Tandem Non-Stop (as well as a few emerging Intel Itanium-based systems) and Sun’s UltraSPARC.
Those offerings constituted a large majority of server sales while Intel x86-based systems offered by those companies and most everyone else made up the lower end of the spectrum. Today’s situation is both easier to understand and more complex. IBM essentially owns the high end of the market, but that is now a minority position (though with very high margins). Intel Xeon-based solutions inhabit the vast majority of other servers sold globally.
However, the apparent simplicity of a market largely supported by a single vendor and chip architecture masks other complexities. For example, if most vendors are developing and delivering products that use the same core processing, memory and storage components, how can they successfully differentiate their products? Toss in other factors, including some of the largest cloud computing players designing their own x86 systems and outsourcing production to ODMs, thus sidestepping server vendors, and specialty firms whose solutions run complex software on commodity x86 servers.
As a result, life is becoming increasingly challenging for traditional system vendors. That makes it vitally important for them to speak clearly about their solutions, aim precisely at the markets and sectors likely to do them the most good and deliver products that benefit their customers and partners.
Which brings us back to Lenovo DCG’s TRANSFORM.
The value of proactive transformation
After an energetic introduction by Rod Lappin, SVP of Lenovo sales and marketing, the main tent kicked off with a keynote by company CEO, Yang Yuanquing.
Yang discussed the economic and societal importance of business transformation, then switched gears to focus on three past industrial revolutions: the original that mechanized production; the second that utilized electrical power and communications to organize businesses, and; the third that digitized enterprise processes with computing technologies.
Yang rhapsodized about what he called a fourth “intelligence revolution that is already here” in which the massive growth of information, along with advanced big data analytics and artificial intelligence (AI) will enable businesses to gain insights into customers, suppliers, partners and competitors.
It also provides the foundation for what Yang called “device + cloud transformation” in which smart devices constantly sense events and share data with cloud-based services, as well as a related “infrastructure + cloud transformation” that optimizes data center resources and processes to maximally enhance device end users’ and businesses’ experience.
That revolution is one where Lenovo DCG intends to play a central role in helping customers transform their organizations for the better.
Highlighting Lenovo’s new ThinkSystem and ThinkAgile solutions was handled by DCG president and Lenovo EVP Kirk Skaugen, and augmented by Rupal Shah, Intel’s corporate vice president and GM of Global Data Center Sales. Skaugen focused on the company holistically, noting the parallels between Lenovo’s 2005 acquisition of IBM’s PC/Thinkpad organization, and its purchase a decade later of IBM’s System x Intel server group.
In fact, TRANSFORM celebrated two somewhat related watershed events; the 25th anniversary of the Thinkpad and Lenovo shipping its 20 millionth server next month. Interestingly, the company’s competitors attempted to discredit Lenovo following both its IBM deals by claiming that the reputation for quality and customer service established by IBM would wither under the ownership of what they dismissed as a discount PC/server vendor.
Of course, neither attempt at FUD came to pass. Lenovo maintained the Thinkpad’s central value proposition, found enthusiastic enterprise buyers and stormed to a lead in global PC sales. Along the way it also sold 4X more Thinkpads in its decade of ownership than IBM did in its entire fifteen years in the PC business.
How about Lenovo’s stewardship of System x? A recent ITIC survey on server reliability ranked Lenovo #1 for the fourth year in a row among mainstream server hardware vendors. Similarly, a 2H 2016 TBR study ranked Lenovo #1 in 21 of 22 customer satisfaction attributes.
ThinkSystems and ThinkAgile
Skaugen outlined Lenovo’s new ThinkSystem and ThinkAgile portfolios. The former incorporates the fourteen new servers (mission critical, rack, tower, dense-optimized and blade solutions), seven new mid-range and AFA storage systems and four new Fibre Channel and Ethernet network switches announced. These focus on conventional data center infrastructure applications, as well as supporting workloads like real-time analytics, DevOps application services, and software-defined storage.
In contrast, the new ThinkAgile offerings spotlight Lenovo’s efforts in software-defined applications, hyperconverged appliances and systems and cloud-optimized offerings. These include a new highly scalable version of the Lenovo HX Series appliance that supports Nutanix’s cloud software stack and the new ThinkAgile SX for Microsoft Azure Stack for hybrid cloud implementations.
The company also underscored its efforts in supercomputing and high-performance computing (HPC) with details on the 4th gen update of the Mare Nostrum instillation in Barcelona which can now deliver 11.4 Pflops/s of peak performance. That earned Lenovo the #13 position in the just released Top500.org list of best global supercomputers.
However, it shouldn’t overshadow the company’s broader efforts in the HPC space. When Lenovo completed the acquisition of System x acquisition, the group was responsible for just 23 systems on the Top500 list. Since then, Lenovo has more than quadrupled its position to 92 Top500 listed systems, including two in the Top 20 and four in the Top 50.
Shah noted that due to this success, Lenovo is recognized as the fastest growing vendor in the supercomputing market. She also dug further into DCG’s other target markets, and the company’s reasoning behind those efforts. Like other vendors, Lenovo believes that the market for low margin, general purpose servers is shrinking markedly.
In turn, it is making a notable shift toward higher margin sectors, including HPC (to support AI and related machine learning and deep learning processes), hyperscale infrastructure offerings (for public cloud providers) and software-defined infrastructure appliances and systems. Those efforts are reflected in Lenovo’s new portfolio, particularly the new ThinkAgile offerings. Plus, the company is developing a host of new “white glove” services supporting customers’ efforts in those markets.
What was odd about TRANSFORM? Like other x86 system vendors, Lenovo’s newest offerings will make the most out of Intel’s next generation “Purley” server platform and associated “Skylake” Xeon processors. Thing is, though, the Purley launch is still a few weeks away, meaning that Lenovo executives and other representatives in New York were unable to share the technical and performance details of their new solutions.
While obviously awkward, it wasn’t any different than what HPE went through at its recent Discover event, or what Cisco is contending with this week at Live, its annual user conference. How did TRANSFORM and Lenovo DCG’s new portfolio deliver in terms of corporate and market vision? I’d say that the company hit all the proper notes in both its existing markets and strategic targets, with nary a one being off tempo or out of tune.
If there are similarities between Lenovo’s vision and that of its competitors, attribute that, at least partly, to the common technological components and system architectures they all use, and target markets they pursue. Within those conventional strictures, Lenovo did a good job of refining its messaging around points of differentiation, including its strong position in China and the strength of its manufacturing and supply chain capabilities.
As TRANSFORM concluded, three things came clear. First, the complexities and challenges the company faced with the System x acquisition are over and the group is now fully integrated. Second, after some hiccups, Lenovo DCG has the leadership, vision, products and service offerings necessary to compete in any and every global systems market.
In other words, Lenovo is doing with IBM’s x86 server business what it did with the Thinkpad; running with it rather than running it into the ground. That should bring comfort to the company’s customers and partners, and concern to Lenovo’s competitors.
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