Lenovo recently announced it plans to forge a strategic alliance with VMware, the supplier of cloud infrastructure solutions. Through the tie-up, Lenovo's ThinkServer enterprise-grade servers will combine with VMwares' software solution targeted mainly small- and medium-sized businesses. It is recently seen that cloud computing has driven the development of hardware involved, including a wide range of mobile devices and server systems, which all have seen profound growth. With rather mature server markets in North America and Europe, signs of faster server growth in key emerging markets like China have made them the next battlefield. This report examines the reasons behind Lenovo's decision to deepen its partnership with VMware, strategic implications of Lenovo- VMware collaboration for the server industry and market, and its consequences thereafter.