On January 16, 2025, Lenovo and Infinidat jointly announced the acquisition of Infinidat by Lenovo.
Neuralytix believes this acquisition favors Infinidat, its investors, and its employees. The acquisition also reflects the success of Phil Bullinger, who joined Infinidat as its CEO in January 2021. However, given Lenovo’s lack of history in the high-end enterprise storage system market, we predict that this acquisition will not be as advantageous as Lenovo hopes.
Although Lenovo holds a leading position in the low-end storage systems market (storage systems less than US$100,000), it is our opinion that its portfolio of storage systems – ThinkSystem DE, DG, and DM storage systems – while price competitive, is not particularly distinctive in terms of technology or innovation. In fact, Lenovo’s leadership in the low-end storage systems market reflects a focus on volume over value.
To be successful in the high-end storage systems market, the focus must be on value. Value can be measured in many different qualitative and quantitative measures. But a key measure is whether a vendor has a successful track record in terms of product innovation and development, maintenance and support, and the ability and viability to sustain these capabilities in the long term.
The storage and protection of data has never been so important in the history of enterprise computing. Today’s enterprises are all “data-driven”. With AI taking such a high degree of attention, expectation, and criticality, the amount and availability of data is top priority for all IT organizations. Lenovo lacks any history in the high-end enterprise storage systems market, and this will be a concern for both existing and prospective customers.
The acquisition is not likely to impact existing customers. Infinidat customers generally make substantial investments, not only in financial terms, but in the amount of storage capacity they purchase from Infinidat, many in the petabyte range. These customers will not (in reality, cannot) make any short or medium decisions to move away from their Infinidat investment, even if they lack, or are at least concerned about, the confidence or trust in Lenovo over the long-term (5+ years).
However, the absence of a long history (or even a short history) in high-end enterprise storage systems among prospective customers is likely to have a negative impact on Lenovo’s ability to realize the success they expect from this acquisition. Prospective customers will also have a heightened concern over Lenovo’s commitment to enterprise storage in general.
While the product placement on a website is hardly a barometer of a vendor’s commitment to a particular market, it is interesting to note that “Servers & Storage” is positioned eighth, while “Accessories” is positioned fourth on the list of product portfolio on Lenovo’s US home page. For a list of items listed horizontally, humans generally perceive and rank the importance of the list of items from left to right. Note: Depending on the country, Lenovo presents its list of product portfolios differently.
Source: Lenovo Homepage, January 2025
Our initial analysis of Lenovo’s acquisition suggests that Lenovo’s acquisition will prolong the sales cycle for existing opportunities under negotiation. Many prospective customers will take the time to reconsider whether an investment in one of Lenovo’s competitors is a safer long-term investment.
In the short term, Neuralytix does not expect a change in market share from the change in ownership. As we noted above, existing customers will continue to invest in Infinidat. Unfortunately, Neuralytix predicts that Lenovo is likely give up some market share to established high-end enterprise storage system vendors.