Channelnomics

Lenovo Looks to Channel Growth in 2014 - Channelnomics

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Lenovo has rejigged its One Channel partner program as it looks to reward successful partners and boost SMB business across EMEA.

The Chinese vendor, which has admitted it is in acquisition talks with an unnamed third party, rumored to be over IBM Corp.’s low-end server business, claimed it had listened to partner feedback before making the changes, and will focus further in increasing rewards and cash flows for its channel, particularly around its expanding server and storage portfolios.

In addition, the program — which is formed around a “channel first” strategy — will include two initiatives to simplify the measurement of channel revenues and provide a quotation tool to authorized Lenovo partners’ sales floors.

Gianfranco Lanci, senior vice president of Lenovo Group, and EMEA president, said: “The channel has played a critical role in our remarkable results. Our partners have helped us become the number one PC company in the world and the second largest PC vendor in EMEA, where channel sales represent 95 per cent of our total business.

“We are at an exciting time as a business – we are expanding our portfolio of products in line with our PC+ ambitions and are creating new opportunities for the channel to work with us and grow their business. By continually investing in our relationship and programs with the channel, we believe we will achieve our mid-term objective of also leading the PC+ space.”

Additions in full:

  • The full integration of Lenovo’s storage business will consolidate two programs into one. The former Iomega ioclub portal and programs will be full transitioned into the Lenovo Partner Portal and the One Channel rewards portal, and Lenovo’s tier two Premium partners will earn rewards for storage.
  • All lines of business including servers and storage will have no earning gates or minimum thresholds and pay rewards from the first sales. Targets will be to drive more growth in the SMB sector which will be rewarded with higher incremental rebates.
  • Lenovo’s new partner portal launched in October 2013 will offer dashboard improvements and greater visibility of the earned rewards.
  • Lenovo is also investing further in its Authorized Distributors by increasing the extended credit terms by 50 per cent, to help fuel the continued channel expansion and revenue growth.
  • It is also pledging to simplify program processes such as a new e-invoicing process (where country tax laws allow), resulting in faster processing of the rebate payments, it claims. Partners will have the cash in their banks within four weeks of the close of the quarter.
  • Server focus — Lenovo is further investing into the server and storage categories to drive growth in these markets in EMEA. Rewards are paid from the first sales with no targets or thresholds and are driven by partner business plans. Lenovo is putting those funds entirely behind partner’s own business development ideas, and the partner simply needs to agree that plan with Lenovo to unlock the incremental rebates.
  • It is also providing simple access to Lenovo’s server and storage universe without the need to revalidate technical competences and no stringent technical certification or training requirements.

And there is more to come, with a new price quotation tool, based on Salesforce.com technology due to launch in April. According to Lenovo, the tool will boast a two-hour turnaround on products selected from the TopSeller product set and will give VARs visibility of inventories at their preferred distributor.

Neil Berville, executive director of Lenovo Channels EMEA, said, “We have a ‘channel first’ strategy in EMEA that is paying off. In 2013 we increased our channel revenues by €1.5 billion and, unlike the majority of the market, we expanded our reseller base by 16 percent while the overall channel has reduced by nine percent according to [analyst firm] Context.

“This year we are re-emphasing our focus on the SMB market, by boosting rewards and cashflow for the partners and also adding new incremental rewards for servers & storage to encourage partners to jump in early with a new emerging player,” he added.

For more UK channel coverage from CRN, visit www.channelweb.co.uk.

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