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Business News/ Companies / Lenovo looks to boost enterprise segment growth
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Lenovo looks to boost enterprise segment growth

Lenovo is banking on India's e-commerce sector to accelerate growth for its enterprise segment which sells servers and storage, catering to the networking needs of web companies

Lenovo also provides e-commerce giant Alibaba servers to build giant clouds. Photo: AFPPremium
Lenovo also provides e-commerce giant Alibaba servers to build giant clouds. Photo: AFP

New Delhi: Chinese computer technology company Lenovo Group Ltd is betting on India’s e-commerce sector to accelerate growth for its enterprise segment which sells servers and storage, catering to the networking needs of web companies. Taking on the bigger rivals including Hewlett Packard Enterprise and Dell Inc. with the renewed India strategy, the company is eyeing a bigger piece of India’s datacenter infrastructure market.

Lenovo follows “protect and attack approach", said Gerry Smith, executive vice-president, PC and enterprise group, in an interview with Mint.

“While we are protecting our strongholds in high end computing with X86 business, the company is attacking hyper converged market, which is the fastest growing market in the data infrastructure space," he said.

Hyper converge means putting storage, networking and servers onto one platform and simplifying software around that so that large networks can become scalable, flexible and easily integrated and clients can easily host cloud, databases as well as applications. In a hyper scale environment, everything is integrated—be it compute, networking or storage—and is controlled in the software defined environment.

To boost those plans, the Beijing-headquartered company partnered with San Jose, California, based enterprise virtualization and storage company Nutanix earlier this month. (Nutanix had a partnership with Dell earlier. Dell is currently in the process of merging with data storage provider EMC Corp. Last month, the company announced that it would acquire EMC for $67 billion, making it the largest-ever technology merger, once completed.)

“Nutanix has 52% market share in hyper converge space, and is the fastest growing player in the space," said Smith. “The leadership team of Nutanix and Lenovo are spending significantly to enhance the sales capability globally. This demonstrates we are well positioned to compete against the other players."

While globally, there is an increasing demand for these services from the global giants such as Amazon, Microsoft, Google, Baidu, Alibaba and Tencent, the company sees opportunity from Indian e-commerce companies and small and medium companies coming online, said Siddhesh Naik, director, enterprise business group, India and South Asia at Lenovo.

The company, which met executives at Flipkart and Snapdeal last week, said Indian e-commerce companies are reaching that critical scale and size where they may look at hosting data in-house with large scale network of servers rather than using third party cloud services.

“India is definitely getting there," said Naik. Lenovo also provides e-commerce giant Alibaba servers to build giant clouds.

Lenovo is not the only one. In December 2013, Dell won a deal with shopping portal Flipkart to deploy its servers. Dell also partnered in March 2014 with online travel firm MakeMyTrip to deploy servers and storage to help improve performance for those sites, Dell said in an email response.

Dell also recently partnered with Bengaluru-based InMobi and plans to “leverage the partnership to draw insights into the customer needs of server, networking and storage for high computing needs and big data requirements".

“These insights are expected to become key inputs to design the Dell product roadmap and help build deeper level technology solutions for next generation devices," the company said.

“Most of the e-commerce companies and start-ups are born in 3rd platform (meaning, they use third party service providers to host their data) and are aiming to reach a certain level before they can utilize traditional infrastructure to complement and hyper scale their operations," said Gaurav Sharma, research manager, enterprise computing, IDC India. “With growing consumption and increasing scale and volume, some of them are expected to reach scale in coming quarters."

According to a May report by Goldman Sachs, the e-commerce market, which currently stands at $20 billion, will account for 2.5% of the India’s GDP by 2030, growing 15 times and reaching $300 billion.

“There is transition happening at present," said Smith.

Another factor that could boost business for the providers of these server and storage services is privacy of data.

“People will not want to keep their data outside. We believe while there will be a lot of cloud companies coming in, a lot of local companies will put up infrastructure to store in their own cloud—to control security of their data," he added.

According to research firm International Data Corp.’s (IDC) July Asia-Pacific Quarterly Enterprise Storage Tracker, the external storage market in India witnessed a double-digit year-on-year growth (in vendor revenue) and stood at $70.2 million. EMC continued to lead the market with 33.5% market share due to multi-million dollar deals from the government and telecom business and HP (Hewlett-Packard Corp) displaced IBM to gain the second spot with 15% market share in the first quarter of 2015.

Another report by Gartner Inc. said the Indian datacenter infrastructure market, comprising servers, storage and networking equipment, will total $2.03 billion in 2015, marking a 5.4% increase from 2014 revenue of $1.92 billion.

India will be the second largest market for data center infrastructure within the Asia-Pacific region, the report added.

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Published: 25 Nov 2015, 01:05 AM IST
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