FlickrLenovo’s recent bid to buy IBM’s low-end server business fizzled, but Lenovo is still looking to acquire servers and storage to fill out its enterprise tech portfolio.
“Servers and storage is the business we want to expand and develop,” Lenovo CEO said Thursday at a conference in Chengdu, China, as reported by The Wall Street Journal. “If there is an acquisition opportunity, we will take it.”
Lenovo sells some servers in China but only sell two kinds to US enterprises. Buying IBM’s x86 servers would have instantly made Lenovo the number three server vendor in the US behind Dell and HP.
Reports surfaced in April that Lenovo was looking to buy IBM’s x86 server business—the kind that run on Intel chips and are the cheapest type vendors sell. Although x86 servers aren’t very profitable, they’re still widely used in enterprises.
The talks reportedly fell apart because Lenovo thought IBM’s price was too high. The Wall Street Journal wasn’t able to coax Yang into commenting on what happened.
Lenovo doesn’t break out enterprise revenue but says it’s serious about taking on companies like HP and Dell in this space. “The enterprise server market is a strategic area for us to develop,” Lenovo CFO Wong Wai-ming told Bien Perez of The South China Morning Post last month.
Last August, Lenovo inked a server and storage deal with EMC that could help. Lenovo also bought part of EMC’s Iomega consumer storage unit, but enterprise storage is way more profitable. For example, HP’s 3PAR storage is one of its fastest growing businesses right now.
Lenovo can afford to make server and storage acquisitions because its PC and mobile business is going like gangbusters.
In its most recent quarter, Lenovo’s profit jumped 90 per cent and revenue was $7.8 billion. Lenovo is the lone PC vendor that isn’t seeing declining sales, and it’s close to overtaking HP for the top spot worldwide because sales are still strong in China.
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