Lenovo Channel Chief: The Independent Channel Vision

While Lenovo may have recorded a 30 percent increase in profit for its Q3 December quarter on a 15 percent bump in sales to $10.8 billion, channel partners want more. How will Lenovo’s channel chief lead the channel in 2014? We found out.

“Lenovo was founded on a channel strategy,” Lenovo Channel Chief Chris Frey told The VAR Guy. “From our roots back to China, the business was built on a similar VAR model that we have in North America on store fronts.”

First, the numbers

According to Frey, the total channel in North America grew by 16 percent year-on-year, noting that the “North America business continues to scale through the channel.”

“If I look at what we expect of the channel, outside of the the traditional fulfillment model, we expect the channel to drive SMB for us,” he said.

He said Lenovo’s programs revolve around the acquisition of new customers. It focuses its customer segments on SMB commercial customers, K-12 school districts and state and local governments, which are all bundled under Lenovo’s SMB business.

“We’re not only recruiting partners, but we’ve got partners reselling our product on a quarterly basis at a higher number than ever,” he said.

Frey said Lenovo’s SMB business through the channel last quarter grew at more than 30 percent year over year.

“Very healthy growth in a channel-led model, of which we are rewarding the channel handsomely for doing that business,” he said.

Lenovo’s vision of an independent channel

“We believe in creating an independent channel,” he said. “There’s a very discrete difference between an independent channel and a dependent channel.”

Frey said his team works together with partners to provide them with the tools required to sell Lenovo’s products to customers, without creating a dependency.

“If we train them well enough where they can continuously do it without involvement, they’re independent of us but they’re selling for us,” he said.

To avoid creating a dependent channel, Lenovo consistently focuses its channel programs on simplicity, consistentency, predictabiity and profitability, he said, adding that if a program does not meet all four requirements, it will not be announced for partners. 

Channel struggles, challenges

Frey alluded to an identity crisis among channel partners. Traditional value-added resellers (VARs), managed services providers (MSPs) and cloud services providers (CSPs) are being forced to play in smaller ecosystems because of market dynamics.

Frey suggeted that every partner has its own challenges and needs at the end of the day, depending on its business model.

To cater to all partners on a general level, Lenovo aims to create various strategies to solve different problems, providing partners with choice, he said. Partners may not necessarily stock everything you provide them with, he said, but partners need to be given solutions for common themes.

For example, Lenovo subsidizes a program called Lenovo Financial Services that provides partners with a 60-day credit line that can used through distribution.

“I’ve never met any two customers that are the same, and I’ve never met any two partners that are the same,” he said.

Follow CJ Arlotta on Twitter @cjarlotta for further updates on the story above.