Lenovo Sets Big PC Sales Goals for the Channel

LENOVO ACCELERATE — Lenovo demonstrated unity as it paraded top executives across the stage at this year’s Accelerate event, held this week in Orlando. For partners, that coming together highlighted an increasingly fluid alliance between Lenovo’s Intelligent Device Group (IDG) and Data Center Group (DCG) as the company advances from selling products to offering solutions.

Senior channel and sales leadership across both organizations agreed that their failings with partners over the past couple of years would soon be seen as a blip on the radar as Lenovo lives up to its promise of being a channel-first company.

“I believe that Lenovo is in a very unique position with all the right building blocks – whether that’s 5G, big data, data center IP and client IP – to put all of these things together,” said Matt Zielinski, president, Lenovo NA IDG. “What does that mean to us as a community and as partners? We’ve done a very good job of selling hardware and devices, but we’re going to have to pivot to sell nothing but solutions going forward.”

Zielinski was nothing short of apologetic to partners admitting that Lenovo, “lost its rutter” with the channel. Presenting at his second Accelerate event, Zielinski he said it was great to be back at Accelerate, since joining the company a little more than a year ago. Then he got a few laughs: “Last year, I was the sixth person to present to you as the person sitting in my chair in six years. So, we’re setting records already.”

Taking it to the judgment zone, as promises are cheap and results are powerful, fiscal year 2019 was a good one for Lenovo, realizing growth of more than 20% with the channel. The vendor also attacked new markets, with the launch of a storage portfolio in September — and grew that business by 46% in North America, delivered new AR/VR solutions for education, and exceeded in the high-performance compute market, the cornerstone of artificial intelligence (AI). Partners also won with Lenovo’s enhanced workstation portfolio, with market share up 28% year over year.

Lenovo’s Matt Zielinski

He pointed to other areas where the company has made progress, but also where there’s still work to do. For example, the company diversified in retail, where it was 77% beholden to one major partner; today the company is 50-50. Lenovo promised to attain double-digit market share in Canada, from 4.5% market share, and reports that it achieved that growth. In the PC market, Lenovo is No. 1 in Canada for the first time. New customer acquisitions with Think are off the charts; the company’s K-12 business is up 27% year over year, but Lenovo is “nowhere” in higher education with Zielinski giving Lenovo a D+ grade at best.

He also noted the company’s SMB business is up 40% year over year, thanks to it being a partner-led sales engine.

“Our SMB business is back — and it’s back with a vengeance. And we’re about to throw some gasoline on that fire,” said Zielinski.

Lenovo acquired 247 new logos representing almost $1 billion in revenue in corporate accounts — thanks to partners. The company’s premium business did well in FY19 but services not so well – maybe a B grade – even though service revenue grew.

“We realized about a third of the way through the year, ‘Holy smokes, we’ve got a lot of work to do here,’” he said. “Honestly speaking, we realized that we had …

… fundamental issues at the core of how we were coming to market with our services offering.”

The company is currently tearing down the problem to fix it — a work in progress.

What’s ahead for FY20?

Lenovo’s goal is grab 20% of the PC market within 3 years – largely channel driven – and be No. 2 in the PC market within 5 years.

The vendor is out to reinvigorate its brand, and is backing that up with big investments. The company is focusing on the corporate, public sector and SMB markets. Zielinski reports that Lenovo has doubled the size of its hybrid team and doubled the size of size of resources to help partners go after more logos.

The company’s commitments for the new fiscal year are to invest in the future, tools and enablement. It’s working on an automated best-in-class portal for partners, and to keep winning with them.

Kevin Hooper, president and general manager, North America, Data Center Group, is a newcomer to Lenovo, hired in February, about the same time as Nicole Roskill, executive director, global channels, DCG.

Lenovo’s Kevin Hooper

“I can tell you that from the very early stages of my career in the data center world, all the way through a two-and-a-half- year stint as a reseller, partners have been key to everything that I’ve ever done,” Hooper told partners.

Hooper worked at IBM for seven years, and for the latter part of that time, held executive channel positions. He also worked at HPE for five years and NEC for three. He shared with partner’s his three-point strategy for sales, a strategy he’ll use with his team: Be curious, have an opinion, and work with someone different.

“What they all have in common is each one of these is a mechanism to provide competitive advantage to your customers that requires fundamental change to the way they’re managing their data center infrastructure,” said Hooper.

Lenovo will help partners with this type of engagement in the field.

“The notion of working with someone different is challenging. It requires …

… working outside of your comfort zone. It requires you to meet new people and start to ask the question, “How are you going to make your goals and align together to be successful?” he said.

Hooper told partners that his team will so three specific things for partners; joint account planning; provide a license to hunt in a set of identified and mutually agreed upon accounts; and pre-protect that license for partners for 90 days, with no requirement for partners other than working with DCG to develop a lead within that account.

Joint account planning will consist of approximately 2,400 accounts that Lenovo has identified and created as focused accounts in North America — this is where you’ll find the competition.

Finally, Hooper talked about local engagement. The doubling of territories in North America and the 2,400 focused accounts are focused around 13 cities.

“This notion of local engagement, this notion of getting to know my team around a joint set of business, is to sell a portfolio that solves real problems.”