Lenovo North America President Says Lenovo 360 Program Is Paying Off
Vlad Rozanovich says partners that once only offered Lenovo PCs now offer its infrastructure.
November 28, 2022
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The macroeconomic conditions around the world and the political uncertainty have proven that some parts of the market are contracting a little bit. And when you look at the PC segments, we see a little contraction. That said, Lenovo had a good quarter.
When we think about what we could accomplish, our PC business remained No. 1 worldwide, and profitability improved year on year for the 10th consecutive quarter. It’s proof point that our manufacturing environment, our supply chain relationship with partners, and most importantly, our relationship with the channel and customers still show that they trust Lenovo,” said Vlad Rozanovich, president of Lenovo’s North America international sales organization.
With the public sector, if you look at state economies and state spending, anytime you have an election year, like the midterm elections — we had 37 of the 50 governors around the country up for re-election,” noted Rozanovich. “Usually, what we see as part of that is that there’s always a good amount of state funding, especially for infrastructure projects. And part of those infrastructure projects — if you look at those, IT is usually involved in some of those.”
“In our server business alone, we doubled our server revenue from two quarters ago through the channel,” said Rozanovich. “That includes our range of offerings from high, medium and low end, including data analytics servers, core infrastructure servers, rackmount servers and tower servers, where revenue from the channel doubled over the last six months.”
As part of the Lenovo 360 Better Together program that we ran for the channel, we saw that one plus one plus one doesn’t necessarily equal three,” said Rozanovich. “It could actually equal 3.3. And so what that means is when we give our channel partners targets of ISG, product, IDG product and SSG products, if they hit all of their metrics, they get accelerators on the overall total amount. We saw a push where, No. 1, we landed more channel partners supporting the entire Lenovo portfolio, expanding either just outside of PC or just outside of data center products. We saw that we’re starting to add more partners selling a broader portfolio of Lenovo products.”
The ‘Better Together’ program through the Lenovo 360 incentive program, where we offered a one plus one equaling two plus two type incentive, we definitely saw that they got the mindshare of the channel,” said Rozanovich. “Because … I want the channel to make more money with us, I want us to be one of the highest profitability guys out there, I want them to want to partner with us because they know that by keeping it within the Lenovo portfolio, when we offer every device from pocket to the cloud, from our mobile, Motorola devices all the way up to our data center products, the more they sell the entire Lenovo portfolio, the more I want our channel partners to be profitable with us.”
“There are two areas that we tracked,” said Rozanovich. “Number one, how many partners are selling more than just one line of our business? We saw that go up. It was about 7% or 8%, quarter on quarter. Not drastic, but enough where there are people who are looking at it saying, I can see why ‘Better Together’ works. Suppose you can roll out a data analytics Edge Server, along with laptops, monitors and docking stations, and put premier services and support on top of that, all coming from one vendor. In that case, it gives the channel partner some consistency to say, ‘Hey, everything I’m going to provide you with is from one vendor.’ And it ensures that things are consistent and will be interoperable. It’s actually one of the benefits that I think Lenovo has in the market.”
“Our infrastructure business remains very strong, storage remains very strong, and cloud costs continue to increase,” said Rozanovich. “Every CIO I talk to says their Amazon Cloud or Google Cloud costs have gone up 25% yearly. We think about some of the things like the egress costs of the cloud, what we’re seeing is more people are now starting to say, ‘Hey, I’d rather put the storage on-prem.’ So our storage business went through the roof last quarter, which I think is a huge opportunity for us here in North America. That’s one area where I think you’re going to see continued strength.”
“Our infrastructure business remains very strong, storage remains very strong, and cloud costs continue to increase,” said Rozanovich. “Every CIO I talk to says their Amazon Cloud or Google Cloud costs have gone up 25% yearly. We think about some of the things like the egress costs of the cloud, what we’re seeing is more people are now starting to say, ‘Hey, I’d rather put the storage on-prem.’ So our storage business went through the roof last quarter, which I think is a huge opportunity for us here in North America. That’s one area where I think you’re going to see continued strength.”
The Lenovo 360 unified partner program has already resulted in higher attach rates, according to a top company official. Lenovo partners who have traditionally focused on selling PCs and devices increasingly are also offering the company’s servers and services.
Lenovo 360, launched earlier this year, builds on the company’s new organizational structure, which it created in April 2021. The reorganization created Lenovo’s Intelligent Devices Group (IDG), Infrastructure Solutions Group (ISG) and Solutions and Services Group (SSG).
One of the critical goals of the new organization was to enable the groups to work more effectively together. And that culminated in the launch of Lenovo 360, which aimed to make it more appealing for PC partners to provide offerings from the other groups.
Lenovo’s Vlad Rozanovich
In the quarters since launching the program, Lenovo officials believe that it has achieved its intended results. Vlad Rozanovich, president of Lenovo’s North America international sales organization, explained how Lenovo 360 has accelerated cross-organizational sales.
Lenovo Channel Sales Growth
During its fiscal quarter ending Sept. 30, non-PC products accounted for 37% of revenues. Data center product revenues in North America grew 67% year-on-year, Rozanovich said. He emphasized that customers made the bulk of those transactions through the channel.
“We’ve seen really good results through the channel around our server compute and server storage offerings,” he said.
The Lenovo 360 program played a significant role in that growth, Rozanovich added.
“As part of the Lenovo 360 ‘Better Together’ program that we ran for the channel, one of the things we saw is that one plus one plus one doesn’t necessarily equal three. It could equal 3.3,” he said. “What that means is when we give our channel partners targets of ISG, product, IDG product and SSG products; if they hit all of their metrics, they get accelerators on the overall total amount.”
Other observations from Rozanovich are in the slideshow above.
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