Just days ahead of Lenovo Accelerate 2016, the vendor’s channel partner forum, held May 9 to 11 in Orlando, Fla., the Beijing, China-based company announced the launch of the Lenovo Capital and Incubator Group that’s making a $500 million initial investment to foster innovation both inside and outside the company in cloud computing, big data, artificial intelligence, robotics and Internet services.
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Just prior to that, Lenovo’s Enterprise Business Group became the Data Center Group (DCG) with Gerry Smith at the helm. As of April 1, Smith, president of DCG, put together a team of three senior executives and four senior vice presidents. “We’ve built a very dedicated team with a full time focus on this area, spending a lot of time on innovation, and making supply chain a competitive advantage in the marketplace,” said Smith.
Closer to home, at the Accelerate event, company executives sent a clear message that Lenovo has its eyes set on the data center.
“Our vision is to go from devices into the data center, building the future with our infrastructure business,” said Emilio Ghilardi, president of North America at Lenovo, highlighting that the future is software defined.
Clearly, Lenovo is positioning itself to be a market disruptor.
In December, Lenovo announced, at the Gartner Data Center Conference in Lass Vegas, the co-engineered Lenovo Converged HX Series appliances featuring Nutanix Acropolis and Prism software. The hyper-converged appliances will be sold by dedicated Lenovo sales teams and the company’s global network of partners. Products shipped in March. At the Accelerate conference, Lenovo talked about a small and medium-sized business product with a target ship date for later this year, and said that more details will become available in a few weeks.
Back to Nutanix: Lenovo severed its relationship with EMC when Dell announced its acquisition intentions in October 2015; Dell’s relationship with Nutanix would seem to be in question given EMC’s competitive hyper- converged products.
When asked about all of these moving pieces, Smith said the following: “We’re investing heavily in the Nutanix relationship and, unlike competing vendors, Lenovo comes to the data center with a clean slate and no baggage.”
Lenovo also has partnerships with Microsoft, Intel, Red Hat, SAP and, most recently, Juniper, and is open to other partnerships, according to the company.
So what does Lenovo’s data center strategy mean to channel partners who to date sold Lenovo client devices and, maybe, servers? And, what does Lenovo’s infrastructure stance mean to its current partner program?
Smith referred to Lenovo’s data center strategy as a huge opportunity for partners who, if they’re just selling PCs, had better get the capability to sell data center. “And we’ll help you [partners],” he said.
According to Smith, Lenovo and Nutanix are working on a global joint marketing effort using Lenovo’s global partner reach — 3,000 in North America alone.
But what about the question of having a channel capable of selling data center and software defined?
Ghilardi was more forthcoming: Expect to have a channel strategy decision by the end of the summer. What that strategy will be is unclear at the moment.
Today, in Lenovo’s PC business, the vendor has an open distribution model. What that means is in order to sell Lenovo Think or Idea products, partners register themselves with an approved distributor, purchase and sell product — end of story.
“But as we build our data center-centric channel do we use the same model or do we need to do something different including certification, qualification, etc. in return for some sort of benefits from Lenovo?” Ghilardi asked. These are questions that have been under debate at the company as well as with current partners for the last six to nine months, he added.
If the company decides to make changes to its current channel partner program it will take time to implement. “I’d say that this is the year of thinking this issue through, designing and then, if we decide to do something, we may start doing something a quarter before the end of our current fiscal so that we’re in full motion next fiscal…so these are things you want to be very careful about doing,” Ghilardi said.
As an old new startup — having a clean slate in the data center market — Lenovo is in a unique position as it considers what a data center-centric partner program would look like.
Moving into the software-defined space, Lenovo doesn’t expect all current partners to move to the data center. “Today, 85% to 90% of the market is still traditional so you don’t want to stay away from 90% of the market only because you think you can disrupt it,” said Ghilardi. “Then you can appeal to a subset of these traditional data center VARs with the proposition that if you work with me and scale with me, I’ll protect you because I don’t need every reseller out there, I need a subset,” he added.
At the moment, Lenovo is in the process of listening to partners, fine-tuning and designing the next channel program. Today, Lenovo in partnership with Nutanix has three appliances, each of which partners can order with a single part number — hardware, software and services included.
Nutanix built the second and third level of dedicated technical support as their investment in the partnership with Lenovo, while Lenovo invested in global sales team. Together the companies are investing in platform engineering development and go-to-market initiatives.