IBM's PC business sell-off to Lenovo

Company assures business as usual; partners display optimism

Big Blue has finally shed off its load—giving away its PC business to Chinese group Lenovo for nearly $1.25 billion. While such a move is likely to have significant consequences on the dynamics of global PC market, IBM India has initiated a comprehensive messaging strategy assuring its partners that nothing in the short-term will change.

According to company spokesperson Varsha Chainani, between now and when the deal closes in three-four months, IBM’s business partners will see no changes in product line or availability and no change in the support team. “There also will be no change to the current product roadmap for next 18 months. However, in long-term, one worldwide product portfolio will evolve based on the strongest product offerings from each company (IBM and Lenovo),” adds she.

In a communication sent out by IBM India to its partners, it has also assured that the people interfacing currently with the channel community will remain the same and that the ‘new Lenovo will be a part of the IBM PartnerWorld program’.

IBM partners across the country have expressed ‘cautious optimism’ at this development. “The biggest advantage we feel that will be accrued out of this deal is in terms of price-competitiveness. Lenovo by virtue of its large scale of PC business will be able to bring down the prices even lower, thereby giving us an edge over players like HP or Dell,” remarks Ravi Verdes, Director, Frontier Business Systems. A similar
sentiment is shared by G Balakrishnan, Director, Ontrack Solutions, who feels that at least in the short-term nothing much will change. “Even in the long run, True Blue partners like us may not get to directly procure from the company. But the change should largely be in terms of our billing point and the pricing,” adds he.

Pravin Jalan, Director of Jalan Infotech believes that Lenovo would rely more on channel for its sales and so such a move should only increase their business. “Also there are possibilities of the product portfolio getting wider as a result of the sell-off, which in turn will help our business,” remarks he.

For Unique Infoways whose 90% business is dependant on IBM PC and notebooks, the only big concern is to convince the customers. It is to be noted here that Lenovo will work on a distinct branding and is expected to gradually make a transition to a new brand over next five years.

According to Harish Shetty, Director of Binary Systems, the challenge will be to make customers understand that the ‘new IBM PC’—since is now owned by a Chinese company—doesn’t necessarily mean a compromise on quality that IBM has been known for. Nikesh Sakaria, Director, CDP believes that the sell-off will give IBM’s competitors “a chance to make noise.”

Additionally, as per the deal arrangement, all PCD (personal computing division) employees of IBM India will move to Lenovo and a Lenovo entity for India is expected to come into existence. Even the manufacturing facility in Pondicherry will now come under Lenovo’s ownership. “However, IBM will continue to support Lenovo’s PCs with IBM’s service, support and financing,” says Varsha.

run, True Blue partners like us may not get to directly procure from the company. But the change should largely be in terms of our billing point and the pricing,” adds he.

Pravin Jalan, Director of Jalan Infotech believes that Lenovo would rely more on channel for its sales and so such a move should only increase their business. “Also there are possibilities of the product portfolio getting wider as a result of the sell-off, which in turn will help our business,” remarks he.

For Unique Infoways whose 90% business is dependant on IBM PC and notebooks, the only big concern is to convince the customers. It is to be noted here that Lenovo will work on a distinct branding and is expected to gradually make a transition to a new brand over next five years.

According to Harish Shetty, Director of Binary Systems, the challenge will be to make customers understand that the ‘new IBM PC’—since is now owned by a Chinese company—doesn’t necessarily mean a compromise on quality that IBM has been known for. Nikesh Sakaria, Director, CDP believes that the sell-off will give IBM’s competitors “a chance to make noise.”

Additionally, as per the deal arrangement, all PCD (personal computing division) employees of IBM India will move to Lenovo and a Lenovo entity for India is expected to come into existence. Even the manufacturing facility in Pondicherry will now come under Lenovo’s ownership. “However, IBM will continue to support Lenovo’s PCs with IBM’s service, support and financing,” says Varsha.

GOLDIE