Beyond PCs: Lenovo Makes Big Data Center Strides with Partners

Market figures show that 2018 was a good year for Lenovo’s Data Center Group (DCG), and with new alliances – such as that with NetApp – and new products, the vendor has its sights set on a successful 2019.

Lenovo’s DCG posted its second-quarter fiscal results in November, reporting its fifth consecutive quarter of profit growth, and a 58 percent increase in revenue, compared to the year prior, to the tune of $1.5 billion. There was strong triple-digit growth in hyperscale, and software defined infrastructure (SDI) revenue was up 150 percent. In North America, there was triple-digit revenue growth, the company reported.

Channel Futures caught up with Stefan Bockhop, executive director, Data Center Group channel, North America, at Lenovo, to find out what partner opportunities lie ahead the rest of the year.

Channel Futures: It wasn’t too long ago that Lenovo was primarily a device, or PC, company. For the past couple of years, however, Lenovo has shifted its focus to the data center and its Data Center Group, with you overseeing DCG partners. What can you tell us about that transformation?

Stefan Bockhop: Our transformation, which started about 18 months ago, is going well. Prior to that there was really no differentiation for Lenovo partners who endeavored to put a data center in for one of our mutual customers. All partners were under a single umbrella. From that beginning point until now, we have thousands of partners who’ve taken certifications. We have a full certification strategy and we continue to bring that forward.

Lenovo’s Stefan Bockhop

We’ll have some new certifications – that I can’t tell you the names of now – but they’ll align with some of the new offers we’ve launched, and we’ll have the highlights of that at our Accelerate event in [May].

We continue to see demand from our partners wanting to become certified to be able to deliver a solution-based outcome to customers.

CF: Let’s focus on Lenovo’s products.

SB: The product portfolio continues to grow. We have a full storage portfolio now, which has come about with our partnership with NetApp. That’s starting to get a lot of traction — if you think about how people consume technology. About half of the market, when you’re buying storage, it’s being dragged by a compute sale; and for the other half, the servers get dragged by the storage sale. That’s giving our partners the ability to go after a wider aperture of customers and bring new solutions to bear.

As we launch that storage opportunity, we’ve already seen some of our alliance partners say, now that you’ve got that combined with compute and our software or our solution, we have a great outcome for “this” business problem, such as cold data backup with Veeam or activities around data analytics — all of these activities spawn from that expanded platform.

Our partners are excited to see that just because they signed up with Lenovo and are a Lenovo partner, we bring a whole new set of solutions and conversations they can have with customers. We’re going to continue to find ways to make it more worth their while, to double down on these more disruptive solutions because we see ourselves as that disruptor, that shifting, more modern platform — that’s how we see ourselves going after the data center. It’s legacy-free thinking that’s about outcomes and how the customer needs to transform their business.

CF: What’s the profile of a Lenovo DCG partner?

SB: We have a few groups of partners, [generally speaking]. We have large national partners who have robust call-center businesses, and we offer …

… technical support and the certified solution-based outcomes. There’s a large emerging set of partners who are going down the MSP route, whether they’re doing it managing owned data-center infrastructure for customers or are taking it on themselves and are delivering some of that as a service …

We have some – I’ll hint to – important announcements about that consumption model and how that will look in the coming year.

The other group [of partners] where we’re seeing great success [from are] folks who traditionally did their work in the data center, and who we knew from our legacy device-company business and are now specializing in SAP or cold-data backup — now we’re a viable vendor for them bringing some of that disruptive or different way of thinking.

CF: Tell me more about the opportunity for MSPs.

SB: There are still customers who want to buy the components and put together the solution with the partner or by themselves within their own four walls, for whatever reason — could be regulatory, data protection, IP and so on. That infrastructure may be cloud or traditional.

Then there’s a contingency of customers who are willing to move to a more consumption-based model. They want to pay “this” much, pay monthly or lease, but they don’t want to have the expertise, the support or the infrastructure, or not as much of it on premises, on the books — and would rather pay a partner.

There’s a continuum that every customer is on — that buy or build model. As a vendor, you have to think multitenant, multivendor, multicloud.

Given our relative share position and our desire to increase our relevancy in all markets, we’re looking to grow in all of these routes to market, all these consumption models.

CF: What are your top three objectives for 2019?

SB: Our aspirational goal for 2019 is to add another 100 partners in North America. That will represent growth and a broadening of the ecosystem. That could be new partners coming into the ecosystem or existing partners moving to another tier level, such as silver to gold or gold to platinum

Another goal is to double our hyperconverged infrastructure (HCI) business; that takes the form of Nutanix today. It’s an area where there’s a lot of headroom to grow in the market. We have the most diverse portfolio of ways to deliver that technology to our mutual customers. We can do it as an appliance, as a certified node/software platform, or as a fully managed environment through our ThinkAgile stack.

The last objective is to diversify the portfolio and go after the storage space. With our agreement with NetApp and our new storage line, we can penetrate the broad storage market, over 80 percent. That combined with a strong partner like NetApp who is willing to go to market together with us, that’s a whole adjacent space where we see a tremendous amount of headroom, and we see it as the next area of growth for us and our partners.