Channel Focus: Lenovo Accelerate 2016

Staying ahead of the technological game is important, as all major industries know — Lenovo is in that mode.  During the recent Lenovo Accelerate 2016 conference held in Orlando, Florida, the company’s North American Channel announced major goals for the coming year; data center growth, premium PC opportunities, PC growth, and movement in markets and services.  Lenovo’s new force, the Lenovo Capital and Incubator Group, has so far invested $500 million toward creating Internet services, robotics, cloud computing data and artificial intelligence centers.

Recent Background

Lenovo’s former Enterprise Business Group is now the Data Center Group (DCG) with president Gerry Smith in the leading role.  Smith has developed a team of executives to focus on creating strategies to bring new and competitive products to the marketplace. The main idea, says Emilio Ghilardi, president of North America at Lenovo, is to “bring devices into the data center, building the future with our infrastructure business.”

In 2015, the company introduced its Lenovo Converged HX Series appliances – sold exclusively to conglomerate partners.  At the Lenovo Accelerate 2016 conference, company officials gave details on small and medium-sized business products and their availability. Lenovo is partnered with Intel, Microsoft, Red Hat, SAP and now, Juniper. The company is actively working to expand this list and engage with other businesses for lucrative partnership potential.

PC Marketing Growth

The market for personal computers (PCs) is on a downswing; Lenovo’s North American channel head Sammy Kinlaw acknowledges that statement. However, according to the company’s fiscal and TopSeller business software (keeping track of in-stock systems ready for shipment), sales of commercial computers were up 8% year to year and total revenue through the channel rose 15% in a declining market. Kinlaw notes that unit sales are on the rise but he thinks increasing competition in the marketplace (from Chromebook) has caused the average price per Lenovo system to drop.  The plan now is to push for (Lenovo) personal computer growth by collaborating with Microsoft on its Windows 10 and Intel’s new Skylake processor. Windows 10 and Skylake are more expensive software products but more effective, too, says Kinlaw.

Services

At Lenovo’s Accelerate 2016, the company’s North American channel brought the concept of service to light.  The growth of maintenance services, extended warrantee sales and accidental damage protection are a part of Lenovo’s hope for the future; so called “back-end” revenue is important for financial success.

Products

New products such as the ThinkPad X1 Carbon and ThinkPadX1 Yoga will soon be joining the Lenovo line. The company is tripling the number of ultra-portable devices available in 2016 than in previous years, thanks to Microsoft and Intel innovations, says North America channel boss Sammy Kinlaw. The K-12 vertical (informational technology computers for schools and educators) grew considerably over the past year; about 99% in the channel.  To further this growth direction, Lenovo is releasing two laptop computers meant for schools K-12; the Windows 10-based N23 and the N4 Chromebook.  Also, notes Kinlaw, System x partners can now sell Think and Think vendors can sell System x.  Channel products are now interchangeable and can be accessed from one combined distribution site.

Data Center

The new data center strategy is, according to Data Center Group president Gerry Smith, an opportunity for channel partners to increase their own businesses, especially if they are only selling personal computers. Lenovo and its Nutanix Acropolis and Prism software partner are working on a joint marketing project that utilizes Lenovo’s brand strategies. Smith and Ghilardi have not released the exact nature of those strategies or when the process will take place.  The company is looking at options for its data-centric channels and whether it must use the same business model or expand on that.

But when it comes to the idea of “data center,” Lenovo executives do not think that all current partners or customers want to move their operations in that direction. According to Ghilardi, nearly 90% of the market is made up of traditional computer-thinkers and thus, they cannot be ignored just because they don’t follow the trends.

Bottom Line

 Lenovo is not looking to make rash decisions but instead, listening to and soliciting its partners for input on the best ways to move forward. With help from partner Nutanix, Lenovo has created three appliances for vendors to use in ordering services, hardware and software. In bringing the product to the market, Lenovo focuses on sales while Nutanix develops the levels of technical support.  The ultimate goal, say company leaders, is to bring cloud-based computing and cloud economics — principles, benefits and costs — to all kinds of businesses.   Increasing demands on business, industry owners and CEOs are on the rise and because of that, information technology (IT) services are always in need of an upgrade. Lenovo wants to be on every step of that ladder, from determining costs, research and development, management and staffing requirements.