IBM execs, and their counterparts in Lenovo, have been out in force this week at IBM's annual PartnerWorld conference trying to reassure partners there will be no disruptions when the Chinese company's $1.75 billion acquisition of Big Blue's PC group is completed.
Lenovo and the IBM PC group have close to 100 employees at PartnerWorld this year, five times the number that have attended in the past between the two. Calming channel concerns is their number one priority. "How successful we will be together for the next 24 months will be determined in the next four months," said Steve Ward, general manager of IBM's Personal Systems Group.
IBM will be stepping up its PC marketing over the next year, and Ward announced plans to spend $200 million on PC advertising and demand generation over the next year. The company has also lined up 320 reference customers who are willing to endorse Lenovo and IBM's PC division in marketing materials, Ward said, in an address to conference attendees Wednesday.
Ward clearly was looking to respond to criticism from Dell of the planned merger. When reports of the deal first surfaced in December, Michael Dell gave it a low chance of succeeding. "When was the last time you saw a successful merger or acquisition in the computer industry? It hasn't happened, at least not in a long, long time," Dell's chairman said.
Ward was, well, not in agreement: "The bad guys are using what's happened at Hewlett-Packard to say that their model is right. We can't let that happen."
IBM execs have stressed that following the merger, channel partners would see virtually no changes in the way they deal with the PC division. Virtually everything, including product numbers, sales representatives and financing options will remain unchanged, they said.
The merged company will be much smaller than IBM and more nimble at responding to channel demands, Ward aruged. "Something that we need to change is that in IBM we have the tremendous power of all these products," he said. "The difficulty is sometimes it's a little bit difficult to do business with us because of that breadth. That's not the case with Lenovo."
Some show attendees remained sceptical though. "How are they going to be more agile with a company like Lenovo?" said Daniel Fortin, business development VP with Mensa Solutions. Over time, it will be more difficult for Lenovo to keep its products aligned with IBM's, and other changes are an inevitable part of the merger, he said. Still, he added, the combined company will probably be able to offer lower prices.
Bob Venero, CEO of system integrator FutureTech Enterprises, had questions about the deal when it was first announced. "Like everyone, we were concerned right out of the gate because we didn't have much information at that time," he said. But after learning about IBM's strategy, he said he became convinced that the acquisition would be good for business. And he joined Ward onstage to endorse the merger, which he now believes will give IBM an edge in competing with Dell.
Venero gave his own interpretation of Dell's December comments. "When somebody talks too much about something, they're scared. And if I'm sitting in Michael Dell's chair right now, I'm scared," he said with apparent conviction.
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