Lenovo admits its server sales are too low

WORKERS IN Lenovo's server division might want to be dusting off their CVs after the outfit admitted that it is not making nearly enough cash.

Red-faced Lenovo has admitted that it is reviewing its server business after current volumes generated by the unit have not been high enough.

IDC figures indicated that only 64,000 small and medium enterprise (SME) targeted Thinkservers were sold by Lenovo worldwide from the fourth quarter 2008 launch to the third quarter of last year. This means that it is ranked eighth in terms of market share.

Milko Van Duijl, Lenovo's president for Western Europe, North America, Japan, Australia and New Zealand, told Microscope that Lenovo was in a bit of a hole regarding servers.

Part of the problem is that the outfit has only one and two-way servers aimed at SME customers and that had confined its market penetration to thinking small.

"We are evaluating what we are going to do with it, clearly if we don't sell hundreds of thousands of units it doesn't add much to the business so there is a lot of work ahead," Van Duijl said.

However he continued, "server is an attractive product segment, it's complimentary to PCs."

He indicated that, while it was possible Lenovo would moth ball the operation, that was highly unlikely. "There are plenty of things we can do before we get to that stage," he said.

He suggested that Lenovo might get more aggressively priced in the market, expand its deal with IBM, or acquire another business. µ