WASHINGTON: Despite the acquisition of IBM’s server business, Lenovo’s server shipments dropped over 20% on year in 2015 and the company is pushing aggressively to land datacenter orders from clients such as Baidu, Alibaba and Tencent, according to sources from the upstream supply chain, adding that the China-based vendor is looking to ship one million servers in 2016, up 40% from those in 2015.
Lenovo became the third-largest server brand vendor worldwide after the acquisition of IBM and saw major increases in revenues and market share in 2015; however, its combined shipments in 2015 were lower than the previous year.
Digitimes Research’s data also showed a similar trend. Worldwide server shipments were about 9.71 million units in 2015, down 6.3% on year, while Lenovo’s shipments combining with those from IBM were 650,000-700,000, down 22-27% on year.
The sources believe Lenovo’s shipment drop was due to weakening demand from the traditional enterprise server market as the market is the main business source of both Lenovo and IBM’s server business. Despite rising datacenter server demand, Lenovo is at a disadvantage due to its late entry.
In addition, with Lenovo still integrating the two departments’ personnel and product lines, some of IBM’s original clients shifted orders to other ODMs. However, with the integration almost complete, the issue has started to diminish.
For 2016, Lenovo has upgraded its server products with Intel’s latest platform and has become more flexible over its component purchasing in order to release more price competitive products.
