At Lenovo Accelerate 2016, the hardware giant is doubling down on hyperconverged and data center initiatives with four partners -- Nutanix, Juniper, Red Hat and SAP. Moreover, Lenovo is pushing deeper into the education, healthcare and government verticals with partners.
The latest details surfaced during ChannelE2E meetings with:
- Chris Frey, VP and GM, U.S. Commercial Sales at Lenovo
- Rob Cato, executive director, public sector, healthcare and vertical sales
- Sammy Kinlaw, channel chief, North America
Much like Lenovo itself, each executive has been on a journey of transformation over the past few years. Frey has taken on more and more overall business responsibilities as Lenovo peers retired over the past year or two. Kinlaw expanded from a distribution-centric role to executive director positions before taking on the North America channel chief post. And Cato has expanded from health care to government and K-12 responsibilities. All three executives, like many Lenovo North America employees, are IBM veterans.
When Lenovo officially acquired IBM's server business in September/October 2014, the immediate mantra was to deliver One Lenovo. In other words, the company wanted to offer channel partners a consistent experience via distribution, channel account representatives and overall partner programs. Fast forward to the present day and that work is in place. So what's next?
Lenovo's Channel Partner Priorities
Frey points to four priorities: "Growth, growth, growth and new customers." It sounds like Lenovo on Wednesday is set to announce a range of channel incentives to help partners find, engage and win those new customers. Frey also pointed to talent acquisition -- and then training those talented recruits with a range of data center and vertical market skills.
Building on Frey's growth goals, Kinlaw dove a bit deeper in five areas.
- Market Share: Overall, Lenovo must grow 15 percent faster than the markets in which the company competes. Kinlaw says Lenovo will offer special bids, where needed, to help partners win that growth.
- Premium Brands: Lenovo will put a focus on premium offerings that leverage Windows 10 and Skylake, while also doubling down on Google Chrome OS for K-12 and college offerings.
- Data Center: Lenovo wants to get VARs up to speed on software-defined solutions. The key partner relationships to watch include Nutanix, Juniper Networks, Red Hat and SAP HANA. Distributors will also be to these efforts.
- Vertical Markets: Here, Lenovo will double down on healthcare and government, while expanding more aggressively from K-12 education into colleges and universities.
- Services: Here, Lenovo will promote a range of support and warranty services that partners can resell to end-customers.
Data Center & Hyperconvergence
Lenovo's closest hyperconvergence partner is Nutanix, and the relationship is gaining momenum, Frey said.
"Nutanix is a known entity," he asserted. "Our pipeline has been significant over the past few months," he added while describing potential Lenovo-Nutanix customer wins. "We're having good success in the midmarket. Software-defined conversations are intriguing to midmarket customers" because customers can retain control of more secure solutions that require fewer on-premises managers than traditional data center offerings, he added.
The Juniper relationship, he conceded, is a more recent deal but planning and training between the two companies has been ramping up. On the SAP front, Lenovo claims to be HANA's largest server partner. And with Red Hat, Lenovo is promoting OpenStack for private cloud solutions.
Meanwhile, Lenovo continues to push deeper into the healthcare, state and local government, and education verticals, led by Cato.
On the healthcare front, Lenovo now has 20 dedicated employees focused on the vertical. Over the past year, Lenovo's healthcare-focused revenues have grown about 27 percent year over year. The company has also worked more closely with ISVs, certifying its hardware for specific health care applications and HIPAA-oriented recommendations.
In the education vertical, Lenovo has been pushing beyond K-12 schools into universities and colleges. There, Lenovo's converged data center solutions are catching on for virtual desktop applications, and Chromebook sales are surging. (We heard several data points and we're double-checking the stats there.)
Opportunities and Challenges
Overall, Lenovo's portfolio line -- from mobile to desktop to servers to converged data center -- is likely the strongest it has ever been. However, Lenovo (like many of its rivals) faces headwinds in the PC and hardware markets.
Lenovo's next quarterly results are expected May 19, 2016. In the meantime, Wall Street is hoping that Lenovo and its partners have further diversified the company's revenue streams far beyond the PC market, where Intel recently announced 12,000 layoffs amid a weaker-than-expected sales.
Meanwhile, Dell is seeking to finalize its $67 billion buyout of EMC. Michael Dell and EMC CEO Joe Tucci insist the new company -- dubbed Dell Technologies -- can dominate the converged data center market. And HP Enterprise is expected to announce several major data center and channel partner moves at HP Enterprise Discover 2016 in June.
For Lenovo, the big bet involves finding and training partners who are ready to offer hyperconverged and software defined data centers. The company says sessions on those very topics will be standing-room-only at this week's Accelerate conference in Orlando, Fla. How soon will all that training deliver revenue for Lenovo and partners? That's the magic question.