After winning the IBM X86 server, what does Lenovo plan to do?

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Recently, sharp observation exclusive disclosed Lenovo will be completed this month for IBM X86 acquisition work. Indeed, since the US regulator approved the deal, there has been no doubt about whether it can be completed. Now, what is worth pondering is, what is the significance of this cross-border merger for Lenovo and the competitive landscape of the server industry?

Exclusive: Lenovo merger details

In this adjustment, sharp observation through friends in the United States to inquire about, get the following key information. It should be noted that this information may not be all correct, but should not be biased.

1, the new acquisition to the business, by the original IBM Systems and Technology department x86 and Puresystems Solutions Global general manager Adalio Sanchez Trader. Its specific position should be Lenovo Group senior vice president, the object of its report, is Lenovo Group executive vice president Gerry.

2, not just IBM X86 business, Adalio Sanchez will take over part of the original Lenovo server business. For example, Lenovo's think series of servers, will also be classified as the handsome.

3, involved in China, related business by Lenovo Group vice President Dongfuyau. Dongfuyau is reporting to Chen Xudong, senior vice president of Lenovo Group, President of China and emerging markets.

The 4,IBM X86 business future will have some sort of intersection with He Zhiqiang's responsible Lenovo cloud service group. In the future, there is great room for cooperation between the two sides.

Why does Lenovo have to eat X86?

Unconfirmed sources say not all Lenovo executives are bullish on the merger. So why should we spare no effort to promote this merger? The analysis shows that the most intuitive embodiment of this merger is the substantial improvement in revenue and net profit. And these figures will determine Lenovo in the world's top 500 rankings, which is a kind of accumulation of soft power.

1, Revenue

We use numbers to compare. August 2014, Lenovo Group's latest earnings show that Lenovo Group's first quarter revenue 10.395 billion U.S. dollars, net profit of 214 million U.S. dollars. In the new merger, Lenovo paid 2.3 billion of dollars for a 5 billion dollar revenue a year.

2, Profit margin

With regard to profit margins, this is one of the common criticisms of Lenovo Group. Data show that IBM X86 's gross margin of more than 20%, this figure far beyond Lenovo's PC business. It helps to improve profit margins for Lenovo in the transition.

Forecast: Future global Server Competition pattern evolution

What needs to be pointed out is that so much has been discussed before, in fact it is only a class of servers, the X86 server. As we all know, Wall Street evaluates a business not just for revenue and profit, but for the future of the market. So, to determine whether Lenovo's business is cost-effective, there are actually 2 questions to consider, 1 is the X86 server will be the mainstream of the future? 2 is the competition pattern of X86 market?

According to the architecture to differentiate, the server is divided into two main categories: X86 server and X86 server. Non-x86 servers include mainframes, minicomputer, and UNIX servers that represent the company's power and PowerPC processors. As for the x86 server is better understood, it is generally speaking PC server, mainly used in small and medium enterprises and non-critical business.

There have been many battles over the history of X86 and X86 servers. Because of the different positioning, the following data are based on revenue for comparison. The following data is from IDC:

2000 Q4,x86 Server relies on price/performance advantage, for the first time in revenue over the X86 system server.

2008 Q2, is another inflection point in the server market, X86 server revenue to achieve the X86 server.

After this round of the go-ahead, X86 soon completed the revenue on the X86 server again to overtake, and has been leading.

To sum up, we are not difficult to see, from the point of view of revenue, X86 server in the server industry accounted for more and more high, of course, in some core key areas, X86 still inaccessible. So, let's take a look at the changes in the X86 market.

For the global server market structure, a new round of washing is inevitable, this can be from the IDC digital Diego Gary get the answer. IDC data showed that in the fourth quarter of 2012 to the third quarter of 2013, IBM X86 revenue of 5.512 billion U.S. dollars, its market share of 13.9%, ranked third. After the merger, Lenovo's global share will break 14%, after HP and Dell.

Of course, here also give Lenovo poured some cold water, mergers and acquisitions does not mean that Lenovo in the server market with the full force of the server Peer challenge. As mentioned above, for some of the performance, parameter requirements of the very high application scenarios, such as finance, national information security, this is a X86 server world, this business IBM did not sell. Lenovo, to become a server domain versatile, but also to find ways to complement this short board.