Lenovo Brings Underdog Mentality to Server Market

Lenovo ServersOne would be forgiven for thinking of as a PC company – the vendor stands alone in still unapologetically labeling itself an endpoint-focused company. But Tuesday morning at the spring meeting of ’s reseller community, the company put the spotlight on its small but growing server business.

Granted, it’s starting from a small base a year ago, but the company reported 76 percent growth in the channel for its server products in 2012. And there are signs that while the company is building awareness, it still needs to activate its partner base – an informal poll of resellers in the Varnex crowd showed that while a majority of partners were aware of Lenovo’s server push, only a few partners indicated they were actively selling those products.

But , executive director of the enterprise systems group at Lenovo, said that’s changing, in part because of the company’s underdog mentality in the market – he called the server business “a startup” within one of the world’s largest PC makers.

“We have a lot of resources, but lesser volume expectations than the big guys, so there are more dollars available to help you,” Nelson told partners. “We need to have the trust and partnership of our VAR community. We’re measured, and my bonus is measured, on what you guys think.”

The company has made it clear that it’s focused on the volume server space. Nelson said he’d gladly hand over the high-density datacenter and blade server market to the incumbents, in favor of getting a bigger piece of the bigger pie that is the overall SMB server market. And with its push on the market not yet at the one-year mark, there are some signs it is succeeding. From Q1 2012 to Q1 2013, the company grew its share of the tower server market from 12 percent to 20 percent, and from “rounding up to get to one percent” in the rackmount market, to five percent of the market, narrowly passing in terms of overall server share.

“We grew faster than Cisco, but they get all the love, they get all the press,” Nelson lamented.

That may be set to change – Nelson detailed how Lenovo is getting louder about its server business with industry analyst and IT trade media, part of an overall campaign to increase awareness around the company’s server lineup.

The company has offered in the past – including a history of more than 20 years in the server market in its native China. At the beginning of 2012, Lenovo largely rebooted that business, with new products, new programs, and increased focus on rackmount . That approach has paid off, as Lenovo has built impressive growth numbers, albeit starting from a small base compared to its entrenched rivals.

It seemed odd to see Lenovo highlighting its performance against its former parent, but the numbers Nelson shared suggested the company was gaining ground in both the tower and rack server markets, at the expense of , and to a lesser degree, . But it was that drew most of Nelson’s wrath, as the company seeks to paint the former direct-dealer as a mutual foe of Lenovo and the channel community.

Nelson provided an update on the company’s partnership with , announced last year. That deal sees move to integrating Lenovo servers in many of its solutions, displacing the Dell servers it had used before Dell’s storage-related acquisitions turned it into more competitor than partner to the storage giant. It also means that Lenovo will start reselling parts of ’s storage lineup, particularly in the SMB-focused Iomega family. While Lenovo has started including storage in other markets, Nelson said that the company would wait until the beginning of next year to bring those combined offerings to North America, as it seeks to finish ramping up the server business here first.

To get more partners testing the water with the company’s server business, Nelson offered a Varnex special to conference attendees here in Orlando this week – the opportunity to purchase one of the company’s rackmount server SKUs for $299, up to 90 percent off list price through distribution.

He said partners were free to do with it as they wish, whether it’s seeing an account, keeping it for their own infrastructure, or his clear preference, “using it in a bid you’re doing against Dell and really kicking their butts.”

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