IBM looks to reassure channel over Lenovo

With the Lenovo acquisition just months away, IBM announced plans to spend US$200 million marketing its PCs over the next year.

Executives from IBM's PC division and Lenovo Group were out in force this week at IBM's annual PartnerWorld conference looking to reassure the company's channel partners that there will be no disruptions when the Chinese company's landmark $US1.75 billion acquisition of Big Blue's PC group is completed, probably later in the second quarter.

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, and assuaging channel concerns over the acquisition clearly is a priority for IBM.

"How successful we will be together for the next 24 months ... will be determined in the next four months," senior vice-president and general manager of IBM's Personal Systems Group, Steve Ward, said.

IBM will be stepping up its PC marketing over the next year, and Ward announced plans to spend $US200 million on PC advertising and demand generation over the next year. The company had also lined up 320 reference customers who are willing to endorse Lenovo and IBM's PC division in marketing materials, Ward said.

He was 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.

"The bad guys are using what's happened at HP ... to say that their model is right, " Ward said. "We can't let that happen."

IBM executives have stressed that following the merger, channel partners would see virtually no changes in the way they dealt with the PC division. Virtually everything, including product numbers, sales representatives and financing options would remained unchanged, they said.

But the merged company would be much smaller than IBM and more nimble at responding to channel demands, Ward said. "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 is a little bit difficult to do business with us because of that breadth. That's not the case with Lenovo."

Still, some show attendees were skeptical that the merger of two such different companies could make the combined entity more responsive.

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