IBM's Pondy facility goes to Lenovo

MUMBAI: The acquisition of IBM's PC business gives the Chinese PC brand, Lenovo Group about 10,000 employees, globally, including the U.S. based IT giant's Pondicherry facility. The entire workforce of the personal computing division (PCD) of IBM in India is to be absorbed by Lenova. The integration of the two companies is expected to be completed in the second half of 2005. IBM India PCD Vice President Neeraj Sharma is to head the Indian operations for Lenovo.

According to IBM sources, while the Pondicherry manufacturing facility is expected to be re-christened soon, Lenovo will retain the 'Think' brand for five years. The arrangement will also enable IBM to offer a full range of personal computing solutions to its enterprise and small and medium business clients.

The deal will also enable Lenovo to acquire certain amount of IBM's patent portfolio in the PC business, as well as in ThinkVantage Technology. Sources said that while IBM will continue to market (not sell) IBM PCs, Laptops even after the sell-off, the company's India partners may gradually get to sell Lenovo consumer PCs as well.

As part of the strategic business alliance, IBM will provide marketing support and demand generation services for Lenovo through its existing enterprise sales force and through IBM.com as well. The agreement also paves way for Lenovo to have IBM Global Financing and IBM Global Services, as its preferred partners for leasing and financing services and for warranty and maintenance services, respectively.

The agreement also provides for the company to support IBM ThinkPad and IBM ThinkCentre brand product lines. These would be serviced by IBM's service and support organization, as well as technology roll-out and help-desk services.

According to available information, the PC specialists on the combined IBM-Lenovo team will remain the same as the existing IBM team. The new Lenovo will be part of the IBM PartnerWorld program, ensuring that channel partners continue to receive consistent marketing and sales resources, training, certification and technical support.

The third largest PC maker in the world sells through its distribution and channel network in the country. To dispel any concern of the channel community over its sell-off, IBM India has assured its channel partners that it would continue to support them and that nothing will change during the next few months while the transaction with Chinese PC major Lenovo is concluded.

In a mail sent to its channel partners, IBM said that the new Lenovo's PC business will have significant competitive advantages, including worldwide distribution and an extensive sales network that leverages each company's business partner (BP) networks. Further, the mail said that IBM's long-term strategic alliances with Lenovo will help create a truly global business with powerful brand names, balanced product portfolio and leading R&D capabilities.

IBM also sought to assure that channels partner will continue to be critical to the new company's go-to-market strategy for its PC offerings, which will continue to be integral to IBM's total value proposition in India.