IBM vows smooth Lenovo transition

IBM general manager of global business partners Donn Atkins has vowed there will be minimal disruption in the channel in the wake of the blockbuster sale of IBM's US $11.5 billion PC business to China-based computer giant Lenovo.

Atkins said IBM was working hard to ensure no disruption in business for partners or customers.

"We are working to make sure nothing stays frozen," said Atkins in an interview with CRN, noting IBM was working with individual partners to ensure sales forecasts were met and any issues that could lead to a disruption in business were addressed quickly.

"What we are doing now is very proactively reaching out to ensure the engine runs and continues to run," Atkins said. "I don't really anticipate there is going to be any need for any major adjustment or anything else."

Atkins said he broke the news about the sale of the PC division to an IBM partner advisory council Tuesday night, US time. He said the initial reaction from partners was they liked the fact there would be "no disruption, transparency and continued operations".

Atkins also spoke with IBM Asia-Pacific team about the deal and then with IBM's worldwide partner team the following morning.

Under the terms of the deal,  IBM branded PCs and ThinkPads would still be sold through existing IBM channels, including about 7,000 IBM PC business partners in the United States.

Despite the attempt to ease fears, many partners said the deal has the potential to freeze millions of dollars in sales of IBM PCs and ThinkPads.

Also, as part of the deal, Lenovo will have access to the IBM brand name for five years. The current IBM branding will remain on the ThinkPad and IBM desktop products for the next 18 months. Then, the company will move to an IBM-Lenovo co-branding model from 18 months to 40 months.

That will be followed by Lenovo branding with an IBM tagline from 40 months to 60 months.

 John Marks, CEO of JDM Infrastructure, a US reseller that does millions of dollars in IBM business, said the five-year branding limit could hurt Lenovo.

"ThinkPad without the IBM brand is like Happy Meal without McDonald's," he said. "A Lenovo ThinkPad doesn't have the same meat as an IBM ThinkPad. It just doesn't."

IBM has advised resellers in letters that they should see no changes while the transaction is being completed over the next few months. In fact, IBM has said, in most cases the PC specialists on their combined IBM/Lenovo team will be the same people they work with now.

That said, IBM partners privately said their IBM reps were not happy about the deal. "Any time you have a change like this, you are going to have people thinking and looking at alternatives," said one reseller who requested anonymity.

"That is what is happening right now. I know [HP] is very happy about it, and they should be. It gives them an opportunity to keep an established name on the top of the hill."

Atkins, however, maintained that competitors were worried about the new combined IBM/Lenovo team. "I personally feel like [IBM competitors] are worried about this," Atkins said. "I think it has lot of positives, and I can't find the negatives."

Distributors said IBM also communicated to them that they should see little disruption in their current relationships.

Ken Lamneck, president of the Americas at US-based Tech Data, received calls from IBM's Stephen Ward, who was named CEO of Lenovo, Marc Lautenbach, IBM general manager of Global Small and Medium Business, and Frank Vitagliano, vice-president of IBM global distribution channels, Tuesday night, he said.

"They told us it will be business as usual and that we should see very little difference in the programs and teams flowing over [to Lenovo]," Lamneck said. "I think they're looking to do more business with the channel. Our message [to customers] is also business as usual. We continue to forge ahead. We expect no disruption of the product flow."

Peter Larocque, executive vice-president of Synnex in the US, believed IBM would make every effort to satisfy reseller concerns.

"They have the people to make it happen. The folks we're dealing with will be the folks we have been dealing with. IBM has built enough credibility with us that we will bust our hump and do a good job for them," Larocque said. "I don't have any reason to [panic]. Our IBM business has been good. I don't think you'll all of a sudden see a crazy, knee-jerk reaction."