Hardware vendor consolidates resources, offers new partner incentives across endpoint and data center business units
Channel first is how Lenovo is pushing forward with its plans to erase mistakes and overcome challenges in taking its portfolio of endpoint, data center, and smart devices to market. The hardware vendor is taking the wraps off plans to consolidate channel resources, provide partners with incentives across its business units, and provide the support that leads to partner-led sales and growth.
The Lowdown: At its annual Accelerate event this week, Lenovo is revealing plans to create new pathways for partners to unlock benefits and rewards for selling endpoints (PCs and notebooks) and data center products (servers, storage). The vendor hired new channel leadership in its respective business units, including Nicole Roskill as the first global channel chief for the Data Center Group (DCG), and is making new investments in partner resources to break down the barriers that have inhibited sales across the portfolio.
The Details: The changes and investments made by Lenovo in its Intelligent Devices Group (IDG), led by channel chief Rob Cato, include a simplified deal registration program, increased rebates on select products, and improved price quoting tools. The IDG and DCG consolidated their channel resources, training, and operational support under one portal to simplify partner experiences and operations. And Lenovo is creating end-to-end Internet of Things bundles to make it easier for partners to sell and deliver smart devices and systems to customers.
The Impact: According to published reports by CRN and Channel Futures, partners are enthusiastic about the changes. Partners concur that the improved resources and clearer paths to success, including simplified terms for advancement in the program tiers, will lead to more and faster growth across the respective product groups.
Background: Traditionally, Lenovo has had tremendous success in leveraging incentives and pricing concessions to drive PC sales through partners. Lenovo hasn’t had similar success, though, with its server lines, which are less exposed to pricing sensitivities and more aligned with buyers’ platform standards.
The channel program changes and “channel first” strategy is the latest attempt by Lenovo to capitalize on its 2014 acquisition of IBM’s x86 server unit. Over the past five years, Lenovo struggled to find the formula that made it a success in PC sales against incumbents HP and Dell. The latest approach does seemingly break down external barriers that inhibited partners from selling across the portfolio. What’s unclear, though, is whether masses of partners will sell PCs and servers; many Lenovo partners are more focused on one hardware line.
Lenovo does has momentum in its DCG. According to IDC, Lenovo saw server revenue surge 34% and unit shipments climb 5% in the last three months of 2018. While Lenovo is outpacing most of its rivals in terms of revenue and shipment growth, it still lags far behind HPE and Dell by sitting in fourth place for both revenue and market share (6.4%).
In PCs, Lenovo is in a far stronger position. It’s virtually tied for the highest market share with HP. And Lenovo and Dell are the only vendors to see revenue and share growth in the first quarter of 2019 as PC manufacturers continue to grapple with the Intel processor inventory shortage.