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Lenovo Wants More Partners Selling Data Center Services

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Lynn Haber

**Editor’s Note: Click here for a list of recent important channel-program changes you should know.**

With Lenovo Group’s second-quarter revenue down (U.S. $11.2 billion, down 8 percent year-over-year – and profit up (U.S. $157 million compared to a $714 million loss same time last year) as reported on Oct. 3, Sammy Kinlaw, Lenovo’s North American channel chief, attributes the profit uptick to company restructuring and PC growth.

Lenovo's Sammy KinlawLenovo’s solid performance comes at a challenging time in the industry, with both the PC and tablet markets down, and smartphones and servers showing only modest growth, the company stated.

“Market conditions remained challenging but we delivered solid results. Our PCSD business maintained leadership and strong profitability, our mobile business had good quarter-to-quarter volume growth and margin improvement, and our data-center business is actively addressing its challenges,” said Yang Yuanqing, chairman and CEO, Lenovo. “We have also added several of the industry’s top minds into Lenovo, and are continuing to strengthen our leadership team. We remain confident in our vision, our strategy and our team’s ability to achieve new heights.”

The three new executives that joined Lenovo included Kirk Skaugen, executive vice president and president of the data center group; Laura Quatela, chief legal officer and senior vice president; and Dr. Yong Rui, chief technology officer and senior vice president.{ad}

IDC’s Worldwide Quarterly PC Tracker reported in October that worldwide PC shipments in third quarter totaled nearly 68 million units, a year-on-year decline of 3.9 percent, which still beat projections by 3.2 percent

The better-than-expected results reflect competition among the market leaders and an effort to capitalize on market consolidation and future stabilization. After struggling to reduce inventory over the past year or more, PC vendors are now rebuilding inventory for the second half of the year. Combine this with an improving outlook, a race for market leadership between Lenovo and HP, and efforts to guarantee component supplies, and market drivers are taking shape. The seasonal increase in volume during the second half of the year and projected stronger demand going forward provide some justification for more aggressive positioning.

Lenovo, a channel-led company in North America, however, isn’t just a manufacturer of PCs. The company has increasingly intensified its focus in the data center. In June, for example, the company rolled out new solutions including StorSelect next-gen software-defined storage, enterprise network offerings via a partnership with Juniper Networks, high-performance servers and …

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… an enhanced suite of its HX Series of hyperconverged appliances.

The first StorSelect software-defined storage appliance program offerings are Lenovo Storage DX8200N and DX8200C — that integrate SDS software from Nexenta Systems and Cloudian Inc., respectively. At the same time, the Lenovo-branded midrange storage systems, the V-Series family (V3700 and V5030) hybrid and all-flash SAN, began shipping in June.

Lenovo’s expanded HX Series of hyperconverged appliances are based on Nutanix software and its own server technology.{ad}

On Oct. 1, Lenovo opened up a SPIFF program incentive – previously reserved for its SMB partners – to all network partners. Under the Lenovo SPIFF program, authorized Lenovo Partner Sales Reps can earn up to $10,000 per quarter selling select PC or data-center products, Kinlaw told us.

“This is a major investment and a major incentive and it’s a way we’re striving for line of business conversion from our PC resellers to look at servers,” he said.

The line-of-business opportunity for conversion is big for Lenovo given that about 30 percent of current PC and network partners sell servers today.

Expect to hear Lenovo further push into the data center with the introduction of specializations – software-defined, high performance computing and SAP Hana – sometime next year or around the time of its Accelerate Partner Conference in April 2017.

“In the coming months we’ll more formerly announce an accreditation program and we’ll also announce a new tiered model based on how partners are specialized,” Kinlaw noted.


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