Megadistributor Avnet said it has been appointed as a global Lenovo route to market.
This follows Lenovo’s acquisition of IBM’s System x (X86) server business early in the month.
Avnet said it will sell Lenovo servers in over 40 different countries around the world.
As well as Lenovo System x systems, Avnet will sell BladeCenter and Flex System blades and switches, X86 integrated system, NextScale and iDataplex servers, software and maintenance.
But this does not mean Avnet is waving goodbye to IBM. It’s worked with Big Blue for nearly 30 years and will continue to distribute IBM Power Systems, Storage Systems, Power Flex servers, training, software and services.
Tony Madden, a senior VP at Avnet Global said: “Avnet is working closely with Lenovo to ensure a seamless transition for existing System x channel partners and their customers.”
Lenovo’s offer to buy the remainder of IBM’s X86 business is likely to be concluded this Wednesday.
IBM is disposing of the deal to the Chinese manufacturer for $1.8 billion and when the acquisition is complete, it will finally have washed its hands of all of its X86 business.
That doesn’t mean its out of the hardware business completely, of course. It will carry on selling its mainframes and a number of other high profit and enterprise standard appliances.
It was the first to launch an X86 personal computer back in the 1980s but its exclusive hold in the market was swiftly dented by competition from clone makers such as Dell and Compaq.
The deal will be completed because it waited approval from the European Union, China and the USA. But authorities in these territories have raised no objections to the sale.
When the deal is complete, it will catapult Lenovo into the major league of X86 players and will let it diversify its business by targeting the lucrative high end of the market.
In a sign that things wont be what they were in the past, HP said it has announced two servers based on ARM architecture, rather than the old fashioned Intel stuff.
The two enterprise class servers use 64-bit ARM microprocessors which it said “offer value choice in their compute strategy”. Translated out of marketing speak, this means ARM based chips are much cheaper than Intel X86 chips.
HP is also offering a production platform letting software developers create, test and port applications to the ARM server.
The servers belong to HP’s Proliant Moonshot family – the company claims that they will let companies scale to any workload, and are specifically aimed at datacentres.
The HP Proliant m400 server is part of a strategy the company has developed over some years to fit high engineering standards.
“ARM technology will change the dynamics of how enterprises build IT solutions to quickly address customer challenges,” said Antonio Neri, senior vice president and general manager, Servers and Networking, HP. “HP’s history, culture of innovation and proven leadership in server technology position us as the most qualified player to empower customers with greater choice in the server marketplace.”
The servers will support Ubuntu, Metal as a Service (MAAS) software preinstalled, and also offers IBM Informix.
HP customers already include Sandia National Labs, the University of Utah and Paypal. The servers are available today.
A report from Gartner today suggested that original design manufacturers (ODMs) are set to cut out brand vendors in the global X86 server market.
It estimates that sales of servers by ODMs directly to customers will be worth $4.6 billion by 2018, representing 16 percent or so of the market.
The traditional route to market had OEMs hiring ODMs and selling branded goods. But Gartner reckons that the manufacturers are changing their business models to directly target “hyperscale” customers, that is to say to data centres.
Data centre operators prefer ODM supplied kit because the machines are cheaper and they can customise systems.
Naveen Mishra, a research director at Gartner, said: “Direct engagement with hyperscale data centres is the biggest contributor to ODM growth.” He said that ODM success is right now restricted to server but he thinks that similar technologies, such as storage, will follow suit.
The ODMs are largely based in China and Taiwan so can make cost efficiencies that can’t be replicated in other geographies. They are also aggressive on pricing.
In one of those strange twists of fate that dog the semiconductor industry, it appears X86 giant Intel is now one of the biggest licensees of ARM tech on the planet, now it is a foundry business. ARM, of course, offers an advantage over X86 servers in terms of both functionality and heat. Intel is considerably boosting ARM revenues, according to well informed sources close to the facts.
Actually, INTC has always had a lot of foundry business. It was forced by American authorities to guarantee that production of DEC’s Alpha microprocessor continued until the end of the decade, as we reported earlier at the INQster and the Rogister years back. Intel also had and probably still has a StrongARM licence – an opportunity Chipzilla signally missed back in the days.
It also still makes HP chips. Perhaps that is because of the peculiar nature of the partnership between Intel and HP.
Intel reacted very badly to the news.
Anna Cheng, the UK spinner for Intel, sent a snottogram to the Eyes saying that the world+dog knew it made ARM chips. She said that she objected to the fact that the Eyes blank carbon copied other people at Intel – including Chuck Mulloy – asking for clarification. She scolded the Eyes for not going through proper channels.
We responded by saying that we had in our possession many Intel “confidential” emails describing me – in no uncertain terms – as an old buffer.
ARM refused to comment, but it is quids in because of Intel’s decision to fab up the unique British designs…
A report from IDC said EMEA server revenues showed a slight uptick in the first quarter of this year – up 1.5 percent compared to the same quarter last year.
The EMEA server market generated $2.8 billion in the first quarter – that’s $44 million more than the same quarter in 2013 and amounting to 537,800 units. That’s 22,000 units less than in 2013 and that’s because virtualisation and integrated systems are making their mark.
IDC said that there’s a negative trend in the market amounting to a 20.3 percent decrease in vendor revenues when you compare the 4th quarter of 2013 and the first quarter of this year.
“Despite a strong push for additional capacity in megadatacentre customers and renewed focus on tower and rack volumes by the largest OEMs, the macro trend in the X86 market continues to point to value as the only real growth opportunity,” said Giorio Nebuloni, research manager for enterprise servers at IDC Europe.
He said the blade market shows strong growth in the higher end market with higher aversage selling prices.
The X86 server market accounted for $1.72 billion in Q1 – that’s 81 percent of total values. Non X86 vendors generated $541 million, amounting to 3,810 units in EMEA. This bit of the market is showing a decline.
The top dogs in the EMEA region were HP, IBM, Dell, Fujitsu, Oracle and the ubiquitous “others” – as this IDC chart demonstrates.
An American newspaper claimed that Intel is taking advantage of its near monopolistic position by hiking microprocessor prices for servers.
The Wall Street Journal said over the bank holiday weekend that ASPs for Intel server chips soared.
Intel told the Journal that customers wanted higher end CPUs for server systems. But the Journal points out that now Intel microprocessors represent 97 percent of the server market.
AMD used to be a contender but it isn’t any more, and only has a teeny weeny three percent of the market, according to US outfit Mercury Research.
Intel’s pricing isn’t competitive any more and it needs someone to kick its butt, said the Journal, quoting a manager from Tyan, a Taiwanese server motherboard company.
Intel had no comment to make at press time. Our sister pub, TechEye, said this morning that AMD is planning some kind of response.
It continues to be bleak news on the X86 notebook front, with several original design manufacturers (ODMs) showing sales decreases last January.
According to Digitimes, Compal shipped 2.8 million units in January, down 37.8 percent sequentally. Meanwhile, Quanta shipped 3.6 million notebooks, a fall of 10 percent.
Wistron, which has a broader reach in the PC market, saw 1.4 million notebook units go in January. Along with sales of desktops, handhelds,, monitors, servers and the rest, Wistron fel by 19.08 percent in the month, but a more severe drop of 26.28 percent year on year.
The only bright spark on the ODM notebook front was Pegatron, which showed a rise of 3.54 percent in the month, said Digitimes.
In further evidence that the market for X86 notebooks is on the wane, it appears that Korean giant Samsung has decided to cut down manufacturing the beasts.
According to Digitimes, it will only ship seven million notebooks during this year – that’s a drop of over 40 percent compared to 2013.
The wire said that Samsung wanted to ship 17 million notebooks last year but only managed to sell 12 million units.
Further, it has no plans to launch new notebooks in 2015, unless they are Chromebooks, Digitimes claimed.
Samsung was unavailable for comment. Last week the giant released results that were slightly dented by a fall in demand for its range of smartphones.
Taiwanese PC maker Acer said that it lost $274 million in the fourth quarter of 2013.
That includes a chunk of money set aside to pay for depreciated stock as well as a provision of money to lay off seven percent of its staff worldwide. Executives will have to endure a 30 percent reduction in their salaries from now on.
Acer has brought in retired founder Stan Shih in a bid to turn the company around – its sales fell by 16.2 percent in 2013 compared to the year before.
Most of its woes are caused by the decline in PC sales, and it appears from the stock write-off that applies to Windows based touch notebooks.
It’s not all bad news for Intel, which is beginning to be affected by peoples’ disinterest worldwide in buying expensive X86 notebooks.
According to IDC, the X86 server market in the middle east and Africa had significant year on year growth in the third quarter of 2013, expanding by 9.9 in volume and 10.6 percent in revenue.
The Saudi market showed year on year volume growth of 16.4 percent, but other sturdy markets included the UAE.
The Egyptian market slumped 36.6 percent because of political instability, while perhaps more surprisingly the Turkish market also showed a drop on server unit shipments of 8.8 percent compared to the same quarter in the previous year.
Morocco and Tunisia saw growth of 35.7 percent and 21.8 percent respectively and the North Africam region in toto rose by 20.4 percent in volume.
Kenya and Nigeria showed rises of 67.1 percent and 62.8 percent respectively, while South Africa saw a 6.6 percent rise year on year.
Blades were the flavour of the month in the regions surveyed, showing a market share of 30.4 percent in the overall server mix. Dual socket servers, however, dominate the sector with 75.1 percent unit share.
The CEO of ailing chip company Intel has expressed the view that now the PC is at the end of the road, if it brings wearable technology out of its capacious hat it will be saved.
Brian Krzanich, the newly fledged CEO of Intel, told Recode.net that it would show off some technology at next week’s CES show in Lost Wages that would have people spinning in the aisles.
As well as showing off some wearable stuff, Intel will also tell the world about more Quark chips which are likely to wheedle their way into wearable gadgets, and, who knows, even end up in intelligent toothbrushes or condoms.
Krzanich acknowledged in the interview that Intel was identified as the PC company over the last 20 years and said the battle was worth fighting and winning. “But the market moved.”
What he means, of course, is that the market moved but Intel forgot to move so got overtaken by a heap of tablets and smartphones far divorced from X86 technology.
Krzanich doesn’t recognise that it has lost the smartphone and tablet market and claims Intel chips will be in 40 million tablets sold in 2014.
The chips won’t even be made in Intel fabs, he told Remote.net.
It is hardly a surprise given that one in two UK households now have a swipy style tablet, but independent research shows top X86 models aren’t exactly the flavour of the month.
According to Digitimes Research, both branded notebook vendors and top original design manufacturers (ODMs), recorded month on month drops of 12 percent and 11 percent in December.
Dell and Toshiba did better than the other bunch of brand names, with the former, in particular, showing a bit of a surge because Microsoft will deck long in the tooth but reliable Windows XP this spring.
The ODMs were hit because HP was hit – Quanta and Inventec supply Hewlett Packard with most of its notebook boxes.
While the X86 mob hope that enterprises are still likely to plump for Windows based boxes, there is evidence that large corporations are seriously contemplating the bring your own device route, which will further erode Intel market share.
High street stores showed mixed results in their bids to win the hearts, souls and wallets of people over the Yuletide season.
Debenhams didn’t do at all well and that caused its chief beancounter, Simon Herrick, to fall on his sword this morning.
The John Lewis Partnership, which is a sort of cooperative, said its sales for the period were up 6.9 percent from the same Christmas period the year before. But it did particularly well on the interwibble front – in the five weeks to the 28th of December last its sales rose by over 22 percent.
Debenhams is in the slough of despond, however. It issued a profits warning for the next six months.
Obliquely, the John Lewis news is bad news for chip giant Intel too. Many people are using smartphones and tablets to buy online rather than wait for their X86 based machines to boot up.
Stan Shih, who came out of retirement to rescue Acer from its parlous state, has apparently been busy since his return.
Smartphone supremo Chen Guowei has apparently left Acer to spend more time with his family. Guowei was in charge of Acer’s business unit in mainland China.
And the net has spread wider, according to Taiwanese wire Digitimes, the head of EMEA operations, Walter Deppeler, is set to leave the company too.
The company plans to cut as many as seven percent of its global workforce. Like other PC manufacturers, Acer has been hit by a drop in demand for X86 based systems and a widespread move to smartphones and tablets that aren’t Acer tablets.