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2014 Huawei Server Sales Guide
Issue 1.0
Date 2014-02-15
INTERNAL
HUAWEI TECHNOLOGIES CO., LTD.
Issue 1.0 (2014-02-15) Huawei Proprietary and Confidential
Copyright © Huawei Technologies Co., Ltd.
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Copyright © Huawei Technologies Co., Ltd. 2014. All rights reserved.
No part of this document may be reproduced or transmitted in any form or by any means without prior written
consent of Huawei Technologies Co., Ltd.
Trademark Notice
, HUAWEI, and are trademarks or registered trademarks of Huawei Technologies Co., Ltd.
Other trademarks, product, service and company names mentioned are the property of their respective owners.
General Disclaimer
The information in this document may contain predictive statements including, without limitation, statements
regarding the future financial and operating results, future product portfolio, new technology, etc. There are a
number of factors that could cause actual results and developments to differ materially from those expressed or
implied in the predictive statements. Therefore, such information is provided for reference purpose only and constitutes neither an offer nor an acceptance. Huawei may change the information at any time without notice.
2014 Huawei Server Sales Guide Contents
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Contents
1 Server Sales Overview ............................................................................................................. 3
1.1 Market Capacity of Servers .................................................................................................................................... 3
1.2 Huawei Presence in the Global Server Market ........................................................................................................ 4
2 Sales Guidance ......................................................................................................................... 6
2.1 Sales Principles ..................................................................................................................................................... 6
2.1.1 Sales Strategies in Key Regions, Customers, and Product Selection ..................................................................... 6
2.1.2 Product and Solution Sales Recommendation Principles ...................................................................................... 7
2.2 Competitiveness Analysis ...................................................................................................................................... 7
2.2.1 Competitive Server Models ................................................................................................................................. 7
2.2.2 Competitiveness Analysis for IBM Servers.......................................................................................................... 8
2.2.3 RFP Specification Guide of Huawei x86 Servers ................................................................................................ 11
2.3 Huawei Server Selling Points ................................................................................................................................13
3 Product Marketability List for Huawei Servers ................................................................. 14
4 V3 Server Launch Plan in 2014 ............................................................................................. 17
5 "Lenovo Acquired IBM x Series Servers" ............................................................................ 19
5.1 Event....................................................................................................................................................................19
5.2 Market Reaction ...................................................................................................................................................21
5.3 Opportunity Analysis ............................................................................................................................................21
5.4 Strategy Suggestion and Guidance ........................................................................................................................21
2014 Huawei Server Sales Guide 1 Server Sales Overview
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1 Server Sales Overview
1.1 Market Capacity of Servers
According to Gartner figures in 2014 Q1, Chinese x86 server market capacity will reach $5.5
billion in 2014, and the overseas x86 server market capacity will reach $33.9 billion.
Therefore, the global market capacity will total more than $39.4 billion.
The Chinese and overseas x86 server market capacities will be increasing rapidly from 2013
to 2017 and will increase to $7 billion and $43.9 billion respectively. The Chinese and
overseas compound growth rates will be 9.23% and 3.54% respectively.
Figure 1-1 Chinese and global x86 server market capacities
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1.2 Huawei Presence in the Global Server Market According to Gartner x86 server quarterly shipment statistics, Huawei server shipment had
been steadily increasing in 2013, which ranked third in the first half year and lifted to the
second. The global market share increased from 0.8% in 2012 to 2.8% in 2013, remained in
the fourth.
Figure 1-2 Huawei server shipment ranking No.2 in Chinese market in 2013
Data Source: Gartner Quarterly Statistics: Servers, AP, 4Q13 Update
The analysis result of the Gartner data statistics shows that the x86 server global market is
quietly changing. Huawei server shipment in 2013 ranked fourth in the global market, while
the market shares of HP, IBM, and Dell decline. The following figure shows that the market
shares of Huawei and Cisco have been increasing.
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Figure 1-3 Huawei server shipment growth in the global market in 2013
Data Source: Gartner Annual Statistics 2013
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2 Sales Guidance
2.1 Sales Principles
2.1.1 Sales Strategies in Key Regions, Customers, and Product Selection
Learn from successful experience and cases of Chinese value industries and focus on
project purchase by government, large enterprises, power industry, energy industry,
finance, and Internet based on the key industry breakthrough in regions in 2013.
Focus on the following countries and industries by region:
− Western Europe: Select the United Kingdom and Netherlands as key countries, and
excavate sales opportunities for the new customers in 2013 in the industries of media
asset, ISP, and government; continue to participate in the centralized server
procurement and shortlist projects for large-scale enterprises, operator server reseller,
and government, striving to achieve scale breakthrough and establishing the brand
and influence in Europe in 2014; implement closer cooperation with channel partners
and empowerment, expand the number and speed of the run-rate, and provide
guidance for distributors in distribution and stockpile.
− The Middle East: Select Saudi Arabia, United Arab Emirates, and Pakistan as key
countries, and achieve scale breakthrough in the centralized procurement projects for the government and energy customers.
− Northeast Europe: Select Poland and Czech Republic as key countries, and continue
to participate in the centralized server procurement and shortlist projects for
large-scale enterprises and government in the Education, government, and healthcare,
striving to achieve scale breakthrough and establishing the brand and influence in
Europe in 2014; activate professional IT channels through promotions and other
methods, and implement closer cooperation with channels and empowerment to form channel run-rate.
− North Latin America: Select Venezuela and Mexico as key countries, and excavate
sales opportunities for the new customers in 2013 in the industries of the government,
energy, and finance to expand sales and achieve scale breakthrough; boost channel sales to gradually implement channel activation and channel run-rate.
− Developing regions such as Central Asia, Southeast Asia, and South Pacific:
Select Turkey, Hong Kong, and Indonesia as key countries, and keep close
cooperation with partners to gradually implement the market breakthrough in the industries of the government, electricity, energy, and media asset.
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Africa and South Pacific (Bangladesh): Grasp opportunities to expand server sales
with the help of data center solutions and large financing projects and accomplish the following three tasks in advance:
− Discover project opportunities (both the frontline and headquarters focus on these project opportunities).
− Involve in architecture designs (Huawei participates in server type selection and
supports based on application scenarios).
− Guide customer requirements (Huawei adds differentiated competitive strengths of Huawei servers and critical items in its tenders) and focuses on server sales splitting.
2.1.2 Product and Solution Sales Recommendation Principles
You are advised to adopt the following product sales principles based on actual customer application scenarios:
− RH1288 V2: applies to offices of small- and medium-sized enterprises or large enterprises' data centers having high-density service requirements.
− RH2288H V2/RH2285H V2: applies to scenarios of small- and medium-sized
enterprise databases, ERP, business intelligence analysis, virtualization, middleware,
and data cache.
− RH5885H V3/RH8100 V3: applies to key services including large databases,
business intelligence analysis, and ERP. It has competitive advantages in price and
technologies for high-end customers and industries and helps raise recognition of
Huawei servers.
− E9000: integrates computing, storage, and network resources and applies to data
center infrastructures integrating physical machines, virtual machines, and computing
and storage networks, business intelligence (BI) and Data Warehouses (DWs),
Hadoop and Hadoop database (Hbase), and high-performance computing (HPC).
The X6000 and ES3000 PCIe SSD are recommended for scenarios of large data centers
and differentiated competition
HPC solutions apply to the large task scenarios requiring concurrent computing in the
education, scientific research, weather, and media asset industries. Recommend solutions and products based on customer requirements.
2.2 Competitiveness Analysis IBM (Lenovo), HP and Dell x86 servers top three in shipment and profit in the world. HP is
the leader in the global server market.
2.2.1 Competitive Server Models
For details about the competitive analysis, see server competitiveness analysis How To Beat
(HTB).
HP IBM Dell CISCO Huawei
Rack
server
DL360e
Gen8
X3530 M4 R420 C22 M3 (Low-end)
DL360p
Gen8
X3550 M4 R620 C220 M3 RH1288 V2
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HP IBM Dell CISCO Huawei
DL380e
Gen8
X3630 M4 R520 C24 M3 RH2285H V2
DL380p
Gen8
X3650 M4 R720xd C240 M3 RH2288H V2
DL580
G8
X3850 X6 R920 C460 M4 RH5885H V3
DL560
G8
X3750 M4 R820 C420 M3 RH2485 V2
Blade
server
C7000
BL460c
G8,
BL420c
G7,
BL620c
G7,
BL465c
G8
PureFlex
X86:
X220/x222
(Twin node)/x240
Power:
p24L/p260
M1000e
M420 (Twin
node),
M520, M620
UCS 5108
B200
M2/B250
M2/B230
uiM2/B200M3
/B22 M3
E9000
CH121/CH140
(Twin
node)/CH221/CH222
C7000
BL680c
G7
(4-blade)
BL685c
G7(8-bla
de)
BL660c
G8
(8-blade)
PureFlex
X86: x440
Power: p460
M1000e
M820,
M910, M905
UCS 5108
B440
M2/B420 M3
E9000
CH240/CH242/
CH242 V3
High-de
nsity server
SL6000 iDataplex C6000 / X6000
X8000
2.2.2 Competitiveness Analysis for IBM Servers
Table 2-1 Comparison between Huawei rack servers and IBM rack servers
Huawei Server
Form Factor
IBM Server
Feature Advantage of Huawei Server
RH1288 V2 1U 2P x3550 M4 Standard 1U2P server,
occupying small space
and providing limited
hard disk slots and PCIe slots
1. IBM x3550 M4 supports a maximum of
three 3.5-inch hard disks, while Huawei
RH1288 V2 supports more.
2. Huawei RH1288 V2 provides seven
counter-rotating fan modules, while IBM
x3550 M4 provides six fan modules
(IBM provides another 1U2P server
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Huawei Server
Form Factor
IBM Server
Feature Advantage of Huawei Server
x3530 M4 that uses the E5-2400
platform).
RH2288H V2 2U 2P x3650 M4 Mainstream 2U2P
server, providing high
performance, large
memory capacity
(total 24 DIMMs),
more local hard disks,
and flexible PCIe
expansion
1. IBM x3650 M4 supports fewer than 12
hard disks and provides a maximum
storage capacity of 26 TB, while Huawei
RH2288H V2 provides a maximum
storage capacity of 50 TB.
2. IBM x3650 M4 does not support two
onboard GE ports and provides
low-configuration solutions at high
costs.
3. IBM x3650 M4 does not support 135 W
CPUs operating at an ambient temperature of 5°C–40°C.
RH2285H V2 2U 2P x3630 M4 Balanced 2U2P
server, providing
appropriate
performance and
supporting 12
DIMMs, more local
hard disks, and
flexible PCIe expansion
1. IBM x3630 M4 does not support
2.5-inch hard disks.
2. IBM x3630 M4 provides only four PCIe
slots (excluding the slot for a RAID controller card).
3. IBM x3630 M4 supports the same
operating temperature 5°C–40°C as
Huawei RH2285H V2, but IBM x3630
M4 does not support hot swap for the six fan modules.
RH2485 V2 2U 4P x3750 M4 High-density 4P
server, supporting
more DIMMs (48
DIMMs) and
providing high
bandwidth and high
computing performance
1. IBM x3750 M4 adopts a stacking
structure for CPUs and mezz modules,
which is inconvenient for maintenance and has low reliability.
2. IBM x3750 M4 provides two GE and
two 10GE (optional) onboard ports,
while Huawei RH2485 V2 provides a
maximum of four GE and two 10GE onboard ports.
RH5885H V3 4U 4P x3850 X5 Mainstream 4P server,
providing a platform
of high reliability and
slightly lower
performance than the E5-4600 platform
1. The RH5885H V3 supports four
dual-slot GPUs while the X3850 supports two dual-slot GPUs.
2. The RH5885H V3 provides 16 PCIe
slots while the X3850 provides 11 PCIe slots.
3. Four PCIe cards on the RH5885H V3
support hot swap and maintenance
without opening the chassis cover. The
X3850 supports hot swap of a PCIe card
group that consists of three PCIe cards,
which lacks flexibility.
4. The RH5885H V3 can stably operate at
40°C while the X3850 can operate at
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Huawei Server
Form Factor
IBM Server
Feature Advantage of Huawei Server
35°C.
Table 2-2 Comparison between Huawei Tecal E9000 and IBM blade servers
Item Platform Huawei E9000
IBM Flex System
Advantage of Huawei Server
Chassis New-gene
ration
blade system
12U 8/16/32
blades
10U 7/14 blades Advantages:
1. Huawei server provides a
backplane switching
bandwidth of 15.6 Tbit/s,
while IBM server
provides 7.168 Tbit/s.
2. Huawei E9000 supports
240 V HV DC power supply.
3. Huawei E9000 provides a
built-in LCD for basic
maintenance configuration.
Disadvantages:
1. Huawei server does not
support 16G FC
switching and provides
no 40GE uplink ports.
Therefore, Huawei server
may be ruled out by IBM.
2. IBM often emphasizes
the redundant backplane of the Flex System.
Compute
node
(x86
only)
Super
high-densi
ty node
CH140/Half-
width
twin-node,
independently pluggable
X222/Half-width
twin-node, not
independently
pluggable,
E5-2400
processor
The CH140 uses the
E5-2600 processors that
provide higher performance
than the E5-2400 processors
used by the X222. E5-2600
processors support independent plug.
Two
E5-2400 processors
None X220/Half-width A low-performance platform.
Persuade the customer to
require a blade that uses two
E5-2600 processors.
Two
E5-2600 processors
CH121/Half-
width
X250/Half-width The CH121 supports
standard PCIe card
expansion and DIMMs at 1.5 times the usual height.
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Item Platform Huawei E9000
IBM Flex System
Advantage of Huawei Server
Four
E5-4600
processors
CH240/Full-
width
X440/Full-width Advantages: The CH240
provides eight local hard
disk slots and supports
DIMMs at 1.5 times the usual height.
Disadvantage: The X440
supports four mezz modules
and four onboard XG ports.
The CH240 supports two
mezz modules and no LOM.
Four
E7-4800/
E7-4800
v2
processors
CH242/
CH242
V3/Full-width
X880/Full-width The X880 is recently
launched, and product documents are not released.
The CH242 is the only E7 4P
server blade that provides the
most hard disk slots and
standard PCIe slots among all E7 4P blades.
Expansi
on node
PCIe
expansion
CH220&CH2
21
/Full-width
PCIe expansion
node/Half-width
(working with
the X220/X240))
The E9000 provides PCIe
expansion nodes that are
directly connected to the
CPUs, which provide a
higher speed than the Flex
System PCIe expansion
nodes provided through a switch.
Storage
expansion
CH222/Full-
width
Storage
expansion node/Half-width
(working with
the X220/X240))
The CH222 provides 15 hard
disk slots that support hot
swap, while the Flex System
storage expansion node provides 12 hard disk slots.
2.2.3 RFP Specification Guide of Huawei x86 Servers
The following table lists typical RFP specifications of each server. For details, see the RFP
specification guide of each server.
x86 Server Recommended Specifications
RH2288H
Support 26 hard disks, which rules out all competitors.
Support integrated 10GE, which rules out all competitive products using the E5-2400 platform.
Operate stably at an ambient temperature of 40ºC for a long time (the indicator serves as a supplement for Huawei).
The RH2288H V2 supports at least seven PCIe slots and
PCIe x16 signals, which rules out all competitive products
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x86 Server Recommended Specifications
V2/RH2285H V2 except Dell R720.
RH2485 V2
Supports highly-efficient Platinum PSUs with at least 94%
power conversion efficiency, which rules out all Chinese competitive products.
Supports integrated 4GE ports, which rules out IBM and Cisco servers.
Operates stably at an ambient temperature of 40ºC for a long
time, while competitive products support 35ºC.
RH5885H V3
Supports DIMMs at 1.5 times the usual height, which rules
out all competitors.
Supports twenty-three 2.5-inch hard disks, which rules out all competitors except Dell.
Supports PCIe card hot swap and maintenance without
opening the chassis cover, which rules out all competitors
except IBM.
Supports a maximum of four dual-slot GPUs, which rules out all competitors except HP.
Supports stable operating at 40°C, which rules out all competitors.
E9000
Uses a passive backplane, while competitive products use
active components on the backplane.
Supports 14 fan modules, which rules out all competitive
products.
Supports GE/10GE/FC/IB ports, which rules out all
competitive products except IBM PureFlex.
Supports 128 I/O ports, which rules out all competitive products.
Supports 135 W E5-2690 2.9 GHz processors, which rules out all competitive products.
Supports DIMMs at 1.5 times the usual height, which
increases competitors' quotation.
X6000
Adopts an innovation structure that supports E3-1200 V2 1P
server nodes, E5-2400 2P server nodes, and E5-2600 2P
server nodes (full-width). No competitive product has been released by now.
The XH621 V2 supports more PCIe slots than a node server,
better than all competitive products.
The XH621 V2 supports eight 2.5-inch hard disks, better than most of competitive products.
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2.3 Huawei Server Selling Points The following table describes general server selling points and the E9000 selling points. For
details about the selling point data and materials, see the Five Selling Points for Huawei
Servers and Huawei Blade Server Selling Points.
General server selling points
Low failure rate: More than 500,000 servers are delivered and used
on a large scale with the failure rate 15% lower than the average
industrial level.
Excellent performance: Huawei servers have shattered 109 world records for computing performance and energy efficiency.
High security and controllability: Huawei is the only vendor that
supports one-stop R&D, production, and delivery and uses Huawei
proprietary core chips.
High availability: With rich RAS features, Huawei servers can stably operate at a temperature of 40°C for a long term.
Continuous innovation: Huawei has strong R&D capability and uses
Huawei proprietary core chips for accelerating applications and improving service performance.
E9000 selling points
Industry-leading reliability: Huawei E9000 supports continuous
operating at the high temperature of 40°C and a failure rate of 15% lower than competitive products.
Industry-leading computing density: The E9000 chassis supports
thirty-two 2P nodes and 64 Romley EP 130 W CPUs. The
maximum floating point computing performance of each chassis
reaches 16.2TFlops.
Industry-leading storage density: The E9000 CH222 (full-width)
supports fifteen 2.5-inch hard disks, which provide a leading
storage capacity per slot. Each E9000 chassis supports a maximum
of one hundred and twenty 2.5-inch hard disks.
Industry-leading switching capabilities: The E9000 switch
modules use industry-leading Huawei DC switch technologies,
which provide a backplane switching capacity of 15.6 Tbit/s, and
supports the evolution from 10GE to 40GE and 100GE to maximize
the ROI. Each E9000 chassis provides one hundred and
twenty-eight 10GE ports to support flexible network configurations.
Industry-leading energy efficiency: Huawei E9000 ranks first in
multiple comparison tests of China Mobile and China Unicom and
has passed the China Energy Conservation and Environmentally-Friendly Certification.
Convenient O&M: Huawei E9000 supports plug-and-play for
boards and cards and requires no configuration for the new devices,
and supports automatic configuration and transfers for BIOS, NIC, and RAID parameters.
2014 Huawei Server Sales Guide 3 Product Marketability List for Huawei Servers
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3 Product Marketability List for Huawei Servers
The product marketability list in this chapter is for reference only. Prepare an actual
marketability list for Huawei servers using the quotation tool.
Table 3-1 Product application scenarios
Product Type
Product Model Sales Restriction Application Scenario
Blade server
E9000 – CH121
Half-width 2P
blade/main product
Normal sales
Applies to physical
machines, virtual
machines, and computing
and storage network
integrated architectures, BI
and DWs, Hadoop and
Hbase, and HPC in enterprise data centers.
E9000 – CH221 Full-width 2P
blade/main product
E9000 – CH222 Full-width 2P storage
blade/main product
E9000 – CH240
Full-width 4P
blade/main product E9000 – CH242
E9000 – CH242 V3
E9000 – CH140
Half-width 2P
twin-node blade
Normal sales
Rack server
RH1288 V2 1U 2P rack/main product
Applies to customers
having higher
requirements on density
and storage, and general
workloads scenarios or private scenarios.
RH2285H V2 –
8HDD
2U 2P rack, normal
sales
Applies to multiple fields,
including scenarios of web
services, e-commerce,
collaboration, distributed
databases, ERP
deployment, and virtualization.
RH2285H V2 –
12HDD+2HDD
RH2285H V2 –
26HDD
RH2288H V2 – 8HDD
2U 2P rack/main product
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Product Type
Product Model Sales Restriction Application Scenario
RH2288H V2 –
12HDD+2HDD
Normal sales
RH2288H V2 –
26HDD
RH2485 V2 – 8HDD 2U 4P rack, normal
sales
Applies to key service
fields and large virtual
consolidation scenarios
including large databases and ERP deployment.
RH5885 V2 – 4P
4U 4P rack/main
product
Normal sales
RH5885 V2 – 8P 8U 8P rack, normal
sales
RH5885H V3 – 4P 4U 4P rack/main product
RH8100 V3 – 8P 8U 8P rack/main
product
X6000 data
center
servers (2U)
X6000 - XH310 V2 1P half-width node,
normal sales
Applies to scenarios of
large datacenters, cloud
computing, Internet
search, portals,
e-commerce, network
games, and network communities.
X6000 - XH311 V2
X6000 - XH320 V2 2P half-width node,
normal sales X6000 - XH321 V2
X6000 – XH621 V2 2P full-width node,
normal sales
Applies to scenarios of
large datacenters, cloud computing, virtualization
High-perfor
mance
value-added
components
of servers
ES3000 – 800 GB
SSD cards,
complying with
standard PCIe ports
on rack servers
Applies to high-concurrent
scenarios including search
services, login
authentication services,
download server, network
video services, cache, and network acceleration.
ES3000 – 1.2 TB
ES3000 – 2.4 TB
Application
server
Exchange email
application server
Email application
server, normal sales
Applies to one-stop mail
solutions, including load balancing and firewall.
N2000 low-end NAS
application server
NAS low-end
storage, normal sales
Applies to scenarios of
NAS unified storage and
data management
simplification to improve
operation efficiency of
enterprises and their branches.
2014 Huawei Server Sales Guide 3 Product Marketability List for Huawei Servers
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Product Type
Product Model Sales Restriction Application Scenario
Solutions
HPC solution Normal sales
Education and scientific
research institutions, such
as CAE simulation,
physical chemistry, and
life sciences; petroleum
industries, such as oil
exploration; meteorology
and seismology agencies;
media asset industries,
such as animation rendering
RISC To IA Restricted sales
If the customer uses a live
network that adopts the
IBM Power system, HP
Superdome system, or
Oracle SUN system,
Huawei provides solutions
for migrating midrange
computers to the x86 platform.
Main product: Products are recommended to customers in communication with customers or project
guidance. These products have competitive advantage.
Normal sales: Products with normal sales have no regional sales restrictions. These products can be sold and delivered in batches.
Restricted sales: Products or solutions with restricted sales may involve consultation or customization. Communicate and discuss with the marketing personnel separately for specific projects to determine detailed sales strategies.
2014 Huawei Server Sales Guide 4 V3 Server Launch Plan in 2014
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4 V3 Server Launch Plan in 2014
Product Type
Product Model Release Date Application Scenario
Blade server
E9000 – CH121V3 Half-width 2P blade
2014-10-14 Applies to physical
machines, virtual
machines, and computing
and storage network
integrated architectures, BI
and DWs, Hadoop and
Hbase, and HPC in enterprise data centers.
E9000 – CH220V3 Full-width 2P blade
2014-10-14
E9000 – CH222V3 Full-width 2P blade
2014-10-14
E9000 – CH242V3 Full-width 4P blade
2014-03-14
Rack server
RH1288 V3 1U 2P rack server
2014-10-14
Applies to customers
having higher
requirements on density
and storage, and general
workloads scenarios or private scenarios.
RH2285 V3 2U 2P rack server
2014-10-14
Applies to multiple fields,
including scenarios of web
services, e-commerce,
collaboration, distributed
databases, ERP
deployment, and virtualization.
RH2288 V3 2U 2P rack server
2014-10-14
RH5885H V3 – 4P 4U 4P rack server
2014-03-14
RH5885 V3 – 4P 4U 4P rack server
2014-03-14
RH8100 V3 – 8P 8U 8P rack server
2014-09-14
High-perfor
mance ES3000 V2 SSD cards,
complying with
Applies to high-concurrent
scenarios including search
2014 Huawei Server Sales Guide 4 V3 Server Launch Plan in 2014
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Product Type
Product Model Release Date Application Scenario
value-added
components of servers
standard PCIe ports
on rack servers
2014-08-30
services, login
authentication services,
download server, network
video services, cache, and
network acceleration.
2014 Huawei Server Sales Guide 5 "Lenovo Acquired IBM x Series Servers"
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5 "Lenovo Acquired IBM x Series Servers"
5.1 Event
At the afternoon of 23 January 2014, Lenovo announced that:
Lenovo acquired IBM's x86 server business for about $2.3 billion. The computer maker will
take control of IBM's system network products such as System x products, BladeCenter,
blades, Flex System, Pure Flex, and blade network technology, and some IPR.
The purchase is for $2.3 billion, of which $2.07 billion will be paid in cash and the rest in 182
million shares of Lenovo stocks issued to IBM.
7500 IBM employees will join in Lenovo. After the completion of the deal, Lenovo will be
responsible for the relevant customer service and maintenance service, and IBM will provide
maintenance service for customers on behalf of Lenovo for a period of time in the future.
$2.07 billion in cash 182 million shares of Lenovo stock
IBM stock price fell by 0.2% after the acquisition
was disclosed.
The acquisition including:
IBM's System x products, BladeCenter, Flex System blade servers and switches, x86 Flex
integrated system, NeXtScale and iDataPlex servers, and related software
IBM kept high-valued server business
System z large hosts, PowerSystems servers, Storage Systems, Power Flex server,
PureApplication, and PureData applications
Lenovo acquired IBM's x86 server assets for about $2.3 billion
2014 Huawei Server Sales Guide 5 "Lenovo Acquired IBM x Series Servers"
Issue 1.0 (2014-02-15) Huawei Proprietary and Confidential
Copyright © Huawei Technologies Co., Ltd.
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IBM claimed that:
IBM would continue to develop and improve Windows- and Linux-based
software product combination designed for the x86 platform.
7500 IBM employees will be transferred to Lenovo.
In Chinese market, the x86 server market share in the first three quarters in
2013 are as follows (by shipment):
Lenovo will take 15.81%
Estimation based on the same-phase
global market: HP 32.05%
DELL 27.28%
Lenovo 14%
IBM market share of the x86 servers in the global and Chinese markets fell
12.7% and 19% respectively.
After the acquisition, Lenovo has at least 14% share of the x86 server in the global market.
It is estimated that the acquried x86 servers will generate$300–500 million profit, so that Lenovo will earn back the cost in
six to seven years.
However, the revenue of IBM x86 server business is estimated as $4.6 billion in 2013, and the loss in the past 12 month
by 2013-12-31 is $26.4 million.
2014 Huawei Server Sales Guide 5 "Lenovo Acquired IBM x Series Servers"
Issue 1.0 (2014-02-15) Huawei Proprietary and Confidential
Copyright © Huawei Technologies Co., Ltd.
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5.2 Market Reaction For IBM, its x86 server business has declined. The IBM hardware business achieved a
total revenue of $4.3 billion in 2013 Q4, which is down 26% year on year, of which the
revenue of the System x midrange computers using the x86 technology fell 16%.
The news came one year ago that IBM planned to sell the x series business was disclosed
one year ago. During that period, IBM general sales agents and distributors have
stopped stocking IBM x series products, and the core channels have been waiting and
seeing.
Especially, IBM x series products are purchased by Lenovo who has been focusing on
consumer products such as PCs and terminals but are indifferent towards the enterprise market. Therefore, the original IBM channels have more misgivings about
the x series product trend, potential channel conflicts, and customer recognition.
5.3 Opportunity Analysis IBM sold only the x series hardware products that have low technical content and have
been at a loss and kept the high-valued business-critical servers and expert system.
From the perspective of the product competitiveness, this event does not pose any thread
to Huawei.
Lenovo has about 100 people for server research and development, which provides weak
R&D capability. Prospects are dimmed. The motive of Lenovo to purchase x series
products from IBM is to expand market shares. However, Lenovo may fail to ensure the
continuity of the x series product roadmap after paying the $2.1 billion in cash. The
continuous innovation for the x series is worrying.
The current overseas business market revenue of Lenovo servers accounts for less than 5%
of its total revenue. Lenovo has a strong channel system in China, which will be in fierce
clashes with IBM channel partners. For the overseas market, IBM channel faces the
challenges of replacing the brand. During the future six months to one year when the
IBM server brand disappears, original IBM customers and partners may not recognize the new vendor. This is Huawei's opportunity to get these customers.
Seize the opportunity to find out the IBM existing general agents and ISVs for the
overseas market and partner them. This will greatly enhance the breadth and depth of Huawei overseas market.
After the acquisition of IBM x series products, Lenovo may dismiss most of the 7500
employees transferred from IBM to reduce HR costs. This is Huawei's great
opportunity to expand the overseas frontline professional team.
5.4 Strategy Suggestion and Guidance The following key actions are only the basic guidance for frontline engineers to expand IBM
channels. The detailed expansion strategies and channel policies should be prepared based on
actual regional market conditions.
Determine the target channels: Review IBM channel situations in a region, including the
number of IBM channels, distribution, level (gold/silver), sales volume/mode, and customer industry. Select several IBM channels and visit and screen them one by one.
Initial visit: Introduce Huawei server products and advantages to the channels, establish
basic contact and communication to better understand channels' views on Lenovo's
2014 Huawei Server Sales Guide 5 "Lenovo Acquired IBM x Series Servers"
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acquisition of IBM x86 products, and gradually transfer the acquisition influence on their
interests.
Interim visit: Use several ways to further strengthen the relationship with the channels,
showing Huawei's willingness to cooperate, such as promote regional high-level visits,
invite channels to come to Huawei HQ in China to understand Huawei's server R&D
capability, and allow purchase orders placed by channels to show cooperation sincerity.
Late visit: Gradually conduct in-depth cooperation, including project pipeline sharing,
joint marketing activities, and market promotion at V2 and V3 switching, to make these channels become the general agents, VARs, and VAPs certified by Huawei.
HQ will fully support the frontline to expand the original IBM channels.
Personnel support: send personnel on a business trip to assist the frontline to review and
visit IBM channels.
Marketing support: provide analysis on IBM products and Lenovo products.
Business support: give business support and preference to the cooperation projects with IBM channels, related marketing activities, and product promotions.