July 10, 2005 9:00 PM PDT

Lenovo links with blade desktop maker

Lenovo will resell blade desktop systems from ClearCube Technologies as the Chinese giant kicks off its effort to woo the international set.

Under the deal, the two companies will cooperate to sell ClearCube's blade systems, initially to the customers Lenovo acquired when it bought IBM's PC unit. The units sold by Lenovo will bear ClearCube's brand. IBM Global Services already resells ClearCube desktop systems.

Similar to blade servers, blade desktops are complete desktop PCs, but instead of coming in a plastic chassis, the computers are circuit boards stuffed into a rack in a computer room. At their desk, users have only a keyboard, mouse, monitor and a networking unit that connects them to their computer.

Putting the PCs in a rack cuts support and real estate costs, according to Raj Shah, chief marketing officer of ClearCube. Several financial firms and branches of the military have installed the company's computers. (The North American Aerospace Defense Command uses them to scan the sky for incoming missiles.)

The company is also in the midst of a trial with health care specialist McKesson. At select hospitals, a swivel screen is placed in patient rooms. Patients can order movies or get information on their problems; doctors can also log in to the system with a magnetic card to retrieve patient records.

Though the market is small, it's growing rapidly, according to ClearCube. Revenue for the small company tripled last year, albeit from a small base, said Shah, and is growing in triple figures this year. Hitachi's services organization and SAIC also resell the company's computers.

So far, Hewlett-Packard is the only major computer maker with its own blade PC system, but its take on the concept has not sold particularly well, according to analysts. One reason is that the first versions relied on chips from Transmeta, the struggling processor designer.

If blades are so promising, why don't other manufacturers jump in? The management and security software layers required in blade deployments take time, energy and money, which few want to risk.

"The PC companies have been asleep at the wheel for the past few years. No one is innovating," Shah said. "How much has the corporate desktop PC changed in the last 20 years?"

Shah also pointed out that ClearCube has about 80 patents; competitors therefore would have to figure out how to get around the company's intellectual property.

The IBM purchase marks the point of no return for Lenovo's long ambitions to become an international tech powerhouse. Except for some token sales in Italy and Southeast Asia, the company has sold PCs only in China. Even there, it has lost market share to Dell and HP in recent quarters.

The company unfurled a tablet PC back in June and said it planned to open a center to design different types of PCs for different markets such as potentially cheap PCs for places such as India.

 

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