The company has put measures in place to drive North American server sales through the channel, and while it is still a distant fourth in server revenues, they are eager to make up ground this year.
Lenovo just reported strong quarterly and annual numbers, with 21 per cent quarterly growth over the year-ago quarter, and 20 per cent growth for the year. They have been leading the PC market for eight straight quarters. In servers they remain a distant fourth, even after absorbing IBM’s x86 business, well behind HP, Dell and IBM. But the company has set its sights on top spot in servers as well.
“We want to continue to be number one in PCs and to be number one in servers,” said Sammy Kinlaw, Lenovo’s newly-appointed North American Channel Chief. “It may take a while, but we want to be there.”
Kinlaw stressed that is the message they are leaving with partners in events like the just-concluded one in Miami.
“We are making sure we are crystal clear that we have an appetite for growth,” he said. “We are very hungry. We have always been a growth company, but we are intensifying that this year.”
Kinlaw said they have put several elements in place to drive server sales going forward.
“We had to make sure our entire distributor network was authorized to sell System x,” he said. “IBM used four distributors for it – Ingram Micro, Tech Data, Avnet and Arrow. We have added SYNNEX, D&H and ASI. All those distributors can now sell both System x and PCs.”
Kinlaw indicated Lenovo has also improved its coverage model on servers.
“The two System x and Lenovo server teams have now been combined, so that all our sellers can sell all our servers and PCs,” he said. “We have combined that coverage model with an additional resource, technical System x channel sellers that help with things like complex design, and pre- and post-sales support. Those technical sellers just rolled out on April 1.”
Kinlaw also indicated that they are making it clear to partners that they are looking to grow in breadth, number of partners, and category.
“There are two million servers still supporting Server 2003, and the SMB and midmarket community is a prime market there,” he said. “To get that business, we have to reach with the right product on the shelf at the right price point through distribution. That’s heavy lifting, and so we are ramping our TopSeller business up in a big way.
“We want to grow our enterprise server business, but the 1u-2u business with TopSeller is really the low hanging fruit,” Kinlaw emphasized.
“Last year, our education segment was up 71 per cent, and we expect similar high double digit growth metrics for this year,” Kinlaw said. “The next 8-10 weeks and those education revenues are critical for our commercial channel. Chrome products are really important to us there.”
One area with no new news to report is Lenovo’s distribution and channel plans for its North American smartphone business, following last year’s Motorola acquisition. Lenovo’s smartphone business is now number three globally, and is growing at a high double digit rate, but the North American distribution strategy is still a work in process.
“We are still considering how best to do that, and are still not ready to announce it,” Kinlaw said.