Lenovo enters consumption-based IaaS market with partner-friendly TruScale Infrastructure Services

is a relative newcomer to a market that rival OEMs Dell Technologies and HPE have been in for multiple years, but thinks they have something to offer customers – and partners – that their competitors do not.

Lenovo Data Center Group [DCG] has announced the launch of Infrastructure Services,  their Infrastructure-as-a-Service [] offering that will be sold on a consumption-based model. It will include all the DCG portfolio out of the gate except storage, which will take a little longer but and is tentatively scheduled for availability in April. Lenovo is emphasizing the added flexibility and choice for customers, and for partners, they are emphasizing that this model has been purpose-built to be channel friendly.

Both HPE and Dell Technologies have had IaaS for several years, while Lenovo has not, but the company is stressing that coming into the space late allowed them to design a model that learns from the problems encountered by others.

“We think we are coming to market with something that is unique,” said Ben Martin, Executive Director and General Manager of Professional Services and for the Lenovo Data Center Group. “We haven’t had anything like this previously. We did, however, bring in partners and customers early on in the design process to address what others have not. We have designed an offer that gives cloud-like economics on premise. Customers can start with no required minimum capacity commitment at all. It is also channel-friendly. Rather than pay partners a bounty and be done with it, this allows them to have an annuity revenue stream.”

The consumption model allows customers to purchase on an OPEX model without having to take capital ownership of the hardware or other IT assets.

“IDC has found that 63 per cent of IT buyers want more flexible payment options when selecting an IT infrastructure provider, and that the availability of the pay-per-use is important to them,” Martin said. That allows them to avoid investing in a depreciating asset. For some customers, who are very certain of their workloads, and don’t mind the longer lock-in, the lease is still a good fit, but Martin stressed that that 63 per cent number shows consumption-based pricing is more attractive to many.

Lenovo’s TruScale Services offer the entire ThinkSystem and ThinkAgile product portfolios –  except the DE and DM storage arrays, which Martin indicated should be available by April.

“The issue with the storage for selling it on the consumption-based model is that the way we do metering is out of the data plane using power consumption,” he said. “They have a different way of presenting it, so we are making sure we map it correctly. It just requires more time.”

In addition to the core services, TruScale also includes hardware installation, deployment, management, maintenance and removal.

Lenovo is strongly emphasizing that TruScale Services were designed with the channel in mind, something that was not the case with either of their big OEM competitors, especially HPE, where Pointnext services were initially sold direct.

“We started this with the channel in mind as well as the customer,” Martin said. “We have built a financial model they will like. We have lowered the barrier to entry, to make it as  easy as possible for the channel to pick up and run with it. We have invested heavily in a portal with various skins on it to show utilization for their customer base. We have invested in Customer Success managers who provide points of contact with customers. And the partner still maintains ownership of the end customer relationship.”

Martin indicated that the new services option also puts another arrow in the channel partner’s quiver.

“It will allow the channel to provide another purchasing option to the customer, which we think will be especially valuable when the customer isn’t sure of what their utilization will be like,” he pointed out.

Lenovo thinks that the TruScale Services will play broadly to both large customers and small.

“I see them playing up and down the stack because they address requirements which are consistent across the board,” Martin said. “It gives smaller companies access to capital they need to modernize, which at a cost of $300,000 to-400,000, can be significant for an customer. At the same time, we have had early interest in takeup from large corporations, because it provides them with the flexibility to scale up.”

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