Lenovo Returns to Product Focus, Specializes with New Hires

Prior to Lenovo’s acquisition of IBM’s x86 server business in 2014, the vendor was more well known in the U.S. as a global PC vendor — a recognition that grew after the company’s acquisition of IBM’s PC business in 2005. Today, Lenovo’s stature is as a contender in the enterprise market, and that’s combined with a channel-led strategy. About 90 percent of company revenue is driven by partners.

In an interview with Sammy Kinlaw, U.S. SMB and North America Commercial Channel vice president – formerly, NA channel chief at Lenovo – he shared his priorities for the next 12 months, the company’s relationship with its partners, and competing against the likes of Dell EMC and HPE.

The vendor just wrapped up its Lenovo Accelerate 2017 partner conference in Orlando — its strongest event ever, with 1280 attendees at the sold-out show. The conference theme “Different is Better” is also Lenovo’s worldwide marketing tag for its new fiscal year, which just began. Lenovo Accelerate 2018 will be held in Las Vegas.

Channel Partners: How about you tell us a bit more about the “Better is Different” theme for the company?

Sammy Kinlaw: For some insight on how we used “different is better,” I asked all of our speakers in the main tent, the breakouts, workshops, even for those hosting a booth, to focus on what that message means to a partner. How our product is different, how our offer is different, how our program is different, how our sales coverage is different — how do we stand out in a field of other manufacturers in the channel world, such as HPE, Dell EMC as well as smaller players?{ad}

Partners got it. The No. 1 theme I asked folks to focus on in the “different” category is a return to focus on product. We have so much third-party validation that we can take advantage of, so a cornerstone of this is to “listen to that” rather than “listen to me.”

CP: What else is new at Lenovo?

SK: As we progressed over the past couple of years, our “One Lenovo” message is still overriding and paramount. So if you’re a VAR focused on DCG (Data Center Group), you have access to sell PC products. If you’re a Lenovo partner that’s been with us before the System x acquisition, you still have access to sell our server product line. Our 30,000 partners have full access to all our product lines.

Beyond that, it’s been 10 quarters since we acquired IBM’s x86 server business — and now that business is up and running and happening. In order to gain more market share and grow faster than the market, we had to come up with some specialization.

We have a new leader, Stefan Bockhop, who’ll focus on DCG specialized partners. He previously ran Lenovo channel for Canada under my umbrella. With this specialization comes tiering – Platinum, Gold and Silver – and the Data Center Program that launched on April 1. Bockhop is responsible for getting partners through the tiers.

In order to move through the tiers, partners have to meet a …

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… revenue clip level and attain certifications. We will be announcing more certifications. For example, a hyperconverged certification will be available this quarter.

CP: Tell us your priorities for the next 12 months.

SK: Aside from DCG, I have three areas of focus. The first is a premium mix of product. Now Chrome is important; it’s a door opener and continues to grow, but our resellers can’t keep their lights on with the profitability that Chrome provides.

So, we’re interested in making sure that our premium products, like X1 Carbon, X1 Yoga, are highlighted and we use third-party validation of why our products are better to succeed in that market.{ad}

The second area of focus is workstations. I have a full line of workstation products that compete in the industry — mobile workstations and desktop workstations. We have double-digit share that fluctuates between 18 and 20 percent. When I look at the competition, I see higher share percentages. When I look at the commercial channel, we’re battling it out with another player, but I’m under-indexed. It’s an area where we compete but haven’t put the proper focus on — well, that changes.

The two ways that will change: I just brought in an industry veteran and leader to run this business — Jimmy Holbert. He knows the workstation business and products inside and out, the market and reseller community, the ISVs. Jimmy is charged with refining our workstation business.

We also have a new incentive stack for VARs.

The third area of focus is services. The fact is Lenovo is very competitive with our service offerings, but I’m under-indexed in terms of the market and the competition for attaching around the box services, such as extended warrantees, accidental damage protection, and keep your drive, for example.

There’s no reason for this; I should be doing better. So I put a leader in place, a channel veteran — Stephanie Fagan. She’s going to run services with an entire sales team and work with VARs and distributors to understand our programs, products, offers and areas where partners can attach our services.

The biggest new change for me personally is SMB – the segment of the market that’s 1-999 seats. Our VARs have done tremendously in SMB. Last year our SMB segment through our VARs grew 47 percent year over year. We well outpaced the market and we took share within the SMB segment.

Our NA president, Emilio Ghilardi, asked me to look at SMB and the area of business that I own, which is channel, and replicate the success we’ve had in channel with the SMB. So now I own not only the route, which is the channel, but I also own …

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… the end-user segment.

It’s a natural fit for me. I can unleash the power of the channel on the SMB segment now that it’s aligned with me.

CP: Since Lenovo purchased IBM’s x86 business and Motorola within the last few years, a lot has changed on the vendor landscape — particularly companies like Dell EMC and HPE. Address these companies as Lenovo’s competitors and attracting partners.

SK:  This is exactly what I thought about for Accelerate and what I was going to put forth as our main message. So, a return to product and focus was the message on main stage and breakouts because at our heart and what began our company was device and PC, which is still our biggest business and what drives the most product.{ad}

We’re a $5 billion business, but what keeps us on our feet is that we act as if we’re a small company that’s paranoid about doing the right things. That’s what sets us apart.

I’d ask partners [to] look at our track record and history, and when they’re thinking about how they’re going to drive their business and who they’re going to align themselves with — to look at our position of trust, of profitability, and products, or are they going to go with the unknown with a track record that’s certainly not as good as ours?