IBM postpones UK switchover of x86 arm to Lenovo

Resellers hope baseline costs could plunge by a fifth when business transfers to Lenovo on new date of 1 January

UK IBM x86 partners keyed up by the prospect of cheaper pricing - and higher margins - from new owner Lenovo will have to wait a month longer.

IBM wrote to partners last week informing them it had postponed the date of the UK and European switchover for the business from 1 December to 1 January, CRN has learned.

The first phase of the global rollout, which took in 23 countries including the US, Australia and Japan, occurred on 1 October when Lenovo closed the $2.1bn (£1.3bn) transaction. All European countries featured in the second phase.

The postponement means partners will have to buy their x86 kit from IBM for a month longer than originally anticipated, denying them access to what most expect will be better pricing under Lenovo's new regime.

Paul Bromelow, group commercial director at IBM partner APSU, said he expected the baseline cost of IBM's servers to fall dramatically under Lenovo's tutelage.

"We have done some experimental pricing with a number of standard configurations and we expect the baseline cost to go down by around 20 per cent for the VAR," he said.

"We've also had a commitment from Lenovo that it will be delivering very competitive win-back pricing in order to win against HP and Dell, so we see this as a significant opportunity."

Bromelow said the delay made sense as it means IBM no longer has to rush the European rollout and can make a clean break with the business at the start of its fiscal 2015 beginning 1 January. Others believed Big Blue had more cynical motives and always intended to move the original 30 November cut-off back a month to claw in maximum sales.

Chris Roche, managing director of IBM partner Celerity, also expected the ownership change to be good for partners.

"We do £3m-£4m of IBM x86 business [annually] and I think that will become a lot more profitable under Lenovo," he said. "The only issue we have with some customers is with the kit being manufactured in China. Lenovo did a fantastic job with the PC brand and will come at it a lot more aggressively than IBM has been."

Rob Tomlin, IBM business unit director at distributor Azlan (pictured), welcomed the decision to delay.

"It's a positive move as it means we can get the year end out of the way," Tomlin said.

"Lenovo will absolutely give HP and Dell a run for their money and our plan is to double business with them in the next two years. Lenovo is extremely good at commodity business and at keeping the quality in commodity."

IBM declined to comment.

Since this story was published, Lenovo sent us the following statement:

"The transition of IBM x86 business in EMEA remains on track for completion by the end of our fiscal year."