IBM, Lenovo Get Cozy; SMBs Should Feel the Warmth

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An already cozy relationship between IBM and Lenovo just got a little cozier.


Lenovo bought IBM's PC division in 2005. It was a smart move for Lenovo, which saw its PC profits grow strongly, largely based on the popularity of IBM's ThinkPad laptops with SMBs. Its financial results were strong enough that Lenovo felt confident in dropping the IBM logo from the PCs sooner than planned.


The two companies inked a deal last spring in which IBM agreed to provide 24/7 technical support for Lenovo's customers. Thus Lenovo could focus on hardware, and let IBM handle service.


IBM made a flurry of acquisitions last year, most of which centered around software and services. The latest deal between IBM and Lenovo, in which Big Blue will license its x86 technology to Lenovo to be used in a line of SMB-oriented servers, further reinforces the idea that IBM is downplaying hardware in favor of software and services.


Under the agreement, the Chinese PC manufacturer will build one-processor and two-processor servers based on the IBM System x technology, reports The Register. IBM will continue to produce similar servers under its own brand, and will provide financing, maintenance and service contracts for both IBM and Lenovo servers.


The deal could help IBM strengthen its position in the SMB market -- albeit in an indirect way. While IBM has struggled to please its reseller partners, that doesn't appear to be the case with Lenovo. According to a reseller quoted in the Register article, sales of ThinkPads grew strongly after Lenovo's acquisition of the division thanks to Lenovo's "slick supply chain."