Lenovo buys NEC to find ways to quickly improve cloud computing capabilities

Recently, Silicon Valley myth, "mergers and Acquisitions Mad" Cisco announced the global layoffs 6500 people. How can companies that are keen on mergers and acquisitions find their own sustainable development models after mergers and acquisitions? It is not only the topic of foreign companies to discuss the operation of mergers and acquisitions, but also the overseas mergers and acquisitions of large enterprises in China in recent years. One recent concern is Lenovo's acquisition of NEC.

At the beginning of this century, mainland Chinese companies had to turn to foreign companies to help them when they began cross-border mergers and acquisitions of Japanese companies. However, ten years later, the internationalization of Chinese enterprises has improved, not only the number of mergers and acquisitions in the top, but also operational operations are aplomb, increasingly mature. Through Cross-border mergers and acquisitions, Chinese enterprises have entered a stage of exploring the new model of Chinese enterprises ' operation and development.

Mature mergers and acquisitions skills

This year's Lenovo Group is a joyous occasion, May Lenovo Group chairman Liu announced that, after 6 years, Lenovo Group finally successfully acquired IBM's PC department. It is based on Lenovo Group's 2010-year series of record Zhongdi. The success has boosted Lenovo's confidence, and in July Lenovo announced the acquisition of the PC business of NEC, Japan's largest PC company.

Lenovo's merger case with IBM has long been criticized. However, this time the acquisition of NEC is not as green as it was, but a consummate, very sophisticated. Although the integration after the merger is still in the initial stage, we do not know whether it will take another 6 years to judge the success of the merger, but in terms of the approach of the merger, Lenovo is commendable, and through this approach we also see Lenovo Group's possible future direction.

Chinese media have largely used Lenovo's eye-catching title to buy NEC, but there is no such headline for Japanese reports, and Japan's reports have been titled with Lenovo and NEC. The reason for this different story is that Lenovo's acquisition of NEC's PC business, instead of using direct acquisitions such as how much directly, how much equity to buy, or how much to receive directed additional capital, has taken the form of a joint holding company with NEC, Then put the NEC's PC business into one of the ways in which it was actually acquired. In this way, it gave NEC face, reduced the difficulty of mergers and acquisitions, but also for Lenovo Group Integration in Japan's PC business paved the way.

According to the published information, the Lenovo Group and NEC jointly formed NEC Lenovo Japan Group consists of a holding company and two entity companies, in the holding company Lenovo Group Holding 51% of the remaining 49% per cent owned by NEC. This allocation of equity shows that Lenovo is the actual controller. Lenovo Japan and NEC PC, the two entities affiliated with Lenovo and NEC, all placed the holding company as a wholly owned subsidiary of NEC Lenovo Holdings. Lenovo Japan is in fact the Lenovo Group's sales arm in Japan, and NEC's PC is a new company from NEC's PC division, which is actually the NEC PC Department. In other words, by setting up a joint-venture holding company, NEC stripped the PC division to Lenovo Group.

We say this association is sophisticated in this place. The face of Japan's biggest PC company could not be put down by how much it costs directly to get a stake, and the loss of its customers, as it did when it bought IBM's PC business. At a press conference in which Lenovo and NEC announced joint ventures to establish holding companies, NEC cautiously denied the idea of selling PC assets to Lenovo, and that the NEC's computer brand would be retained under the joint venture holding company. This face-saving approach does not affect Lenovo's control of NEC's PC business, and does not affect the original marketing of NEC's PC company.

At the same time, Lenovo Group has a wholly owned subsidiary in Japan, and NEC's PC business is a competitive relationship. If Lenovo became a major shareholder in NEC's personal computer company, it would be extremely tricky to deal with Lenovo's Japanese company. The two companies are peers, each with an influential brand, and if Lenovo's acquisition of NEC's PC company does not integrate with Lenovo Japan, it means Lenovo has two rival subsidiaries in Japan. This kind of competition relationship will bring difficulties to Lenovo Group's PC business in Japan in the future. And the two peer enterprises are placed into the holding company, in a company's overall planning under the sustainable development of the protection. The two industrial companies will share strategic resources under the unified planning of holding companies, conduct business exchanges, and use their respective strengths to target 30% of the Japanese PC market.

Lenovo "Liang Jian" sword or refers to the cloud

Once upon a time, Lenovo Group was among the world's top three PC industries after acquiring IBM's PC business, but soon lost the crown. So it is thought that Lenovo will regain third place in world market share in the timing of the acquisition of NEC's PC business. This view is not unreasonable, now, the PC market is undoubtedly a scale advantage of the market, size also means the strength of competitiveness.

But depending on the scale of production, it means that the technology is not high. As a giant of China's IT industry, Lenovo Group cannot always pursue those products with low technical content, so I think the Lenovo Group is not the only picture. Since the acquisition of NEC's PC business does not actually capture much of the core technology, NEC, as a veteran Japanese IT company, has many Chinese companies that are struggling to reach the development and production technology that Lenovo Group is more concerned about.

That year, IBM to the PC business to Lenovo Group, the management resources to focus on IT services, business success. Lenovo Group can only look at IBM dust away from the back, but can not replicate the latest IBM strategy, but only slow and difficult to integrate the huge PC business. Today, however, Lenovo has succeeded in consolidating the baggage that IBM has left behind, and they should have learned and learned that they should have a better way to sum up when faced with the integration of NEC, one of Japan's leading it sectors.

Japanese media have realised that Lenovo's collaboration with NEC may not be limited to PCs, but more likely to involve IT services. In fact, NEC has seen Lenovo Group has a huge customer base in China, these are the world's it giants coveted. In particular, currently surging cloud services, NEC has a strong desire for cooperation, and Lenovo Group also has a strong willingness to cooperate. Indeed, Lenovo's chief executive, Yang, has stressed that future strategic cooperation between Lenovo and NEC will also extend beyond PCs.

Lenovo Group is developing cloud computing technology, but there is still a lack of real cloud computing service platform in our market, China needs to build and operate a series of specialized cloud service platform as soon as possible. Lenovo Group has a good understanding of this, and is grasping the input. In March this year, Lenovo Group and Shanghai Oriental Media Joint venture set up Shanghai Cloud Network Technology Co., Ltd. Hope to be able to support through a strong "cloud computing", the emergence of a more convenient and comfortable "cross-screen" service. Coincidentally, Lenovo Group and the Eastern Media joint venture ratio and Lenovo Group and NEC's joint venture ratio, is also 51:49. It is only in this joint venture that Lenovo Group's stake is 49%, which means that the company's dominance is not in the hands of Lenovo Group.

Lenovo needs to quickly improve its cloud computing technology and work with NEC to find a way to quickly improve its cloud computing capabilities.

NEC, which is phasing out the PC business, has concentrated more of its business resources on IT services, with cloud services as their main focus. NEC from the transformation of the company's internal network began, has accumulated a wealth of cloud services platform construction and operation experience. In order to achieve a rapid response to international accounting standards, reduce TCO, operating visualization, etc. for the purpose of the business system, carried out business process reform and IT system reform, the NEC Group about 120,000 people can be used to build a large-scale corporate internal cloud service platform. NEC has a sophisticated technology and experience in cloud services that provide a complete cloud service platform by providing a range of products such as data centers, servers, OS, middleware, and application software. Their medium-term target is 100 billion yen sales, NEC not only in the Japanese market is vigorously promoted, but also aimed at the international market. They also plan to increase the 20% (2009) Sales of cloud services on the international market to 50% (2017). To achieve this goal, NEC has cooperated with China's Neusoft group, and Lenovo Group, which has a huge corporate customer base, should be a partner of NEC.

In the area of cloud services, we can see that Lenovo and NEC have a strong desire to cooperate. But how will this cooperation be conducted? The collaboration of Lenovo Group and NEC in the PC World is highly likely to be replicated in the cloud services field. This is because the model is an acceptable and fruitful form of mergers and acquisitions by Japanese companies. If this approach is true, Lenovo's acquisition of NEC's PC business in the form of a joint-venture holding company will once again demonstrate its brilliance and foresight.

Mature mergers and acquisitions lead to new ways of cooperation

For many Chinese companies, technological research and development capabilities are still weak, but Chinese companies have the world's most likely market for growth. We can only hope that the market for technology, with the strengthening of China's economic strength, Chinese enterprises began to use enterprise mergers and acquisitions of the way, and get the things they want. In this respect, Japanese enterprises also began to have a sober understanding. For Japanese companies, Japan's domestic market began to shrink as the population shrank, and in the international market for many reasons such as cost, and how to cooperate with Chinese companies is a problem many Japanese companies are considering.

Some Japanese business operators to the author that the future Japanese enterprises still want to play the expertise of Japanese enterprises, in product research and development focus on resources, and constantly develop the world's leading products, this is the survival of Japanese enterprises. On the contrary, Chinese enterprises have the conditions and ability to pursue large-scale production, if the Sino-Japanese enterprises can put their own advantages such a combination, there can be a real market to form a strong competitive power. This may be the future of Chinese and Japanese enterprises to develop a road.

The author basically agrees with this view, but it is far from enough to achieve such cooperation only by desire. The author thinks that China-Japan cross-border mergers and acquisitions is an effective way to achieve this cooperation. At the same time, because Chinese enterprises in such cross-border mergers and acquisitions have the dominant power, naturally will produce a need to improve the new business model. Lenovo is groping for a model that has been acquiring NEC's PC business.

Although Chinese enterprises also have a lot of technological progress, but the difference of technology efficiency basically offset the results of technological progress, some of the Chinese enterprises can not get the continuous technological progress to cut costs, and finally have to Jerry, thereby ruining the market advantage, while some Japanese enterprises can develop a lot of new products, But the cost of high, in the market can only be highbrow, and gradually eliminated. Therefore, there is a great deal of complementarity between Chinese and Japanese enterprises, and there is a great willingness to cooperate. However, the previous period of Sino-Japanese cooperation between enterprises is not successful, there are many reasons, but there is a basic reason is the ownership of property rights scattered, people are not aligned. Chinese companies should use the advantages of existing economic strength to adopt cross-border mergers and acquisitions between China and Japan to solve these problems.

China-Japan cross-border mergers and acquisitions may bring a new business model. This new business model is in the context of the ownership of a clear case of Japanese enterprises Research and development, Chinese enterprises, the mode of production cooperation. This model may be the ideal mode of cooperation for some time in the future. The merger of Chinese enterprises with Japan is actually promoting the continuous development of this mode of cooperation.

(Responsible editor: admin)