3 min read

Lenovo goes from pocket to the data centre

Chris Frey
Chris Frey, VP of Lenovo North America

NASHVILLE, TENN. – Lost in all the marketplace action from HP’s split and Dell’s massive acquisition of EMC is main rival Lenovo. Lenovo went through their big push in 2014 with the acquisition of IBM System X and BladeCenter along with Motorola Mobility for smartphones.

Lenovo’s former channel chief Chris Frey told the participants at the One Ingram conference that his company is as different and they have changes; it was just a year earlier than HP and Dell.

Frey, who was promoted earlier this year to vice president and general manager for Lenovo North America, said he wants the channel to look at Lenovo as different

“The channel has to be different too. The way we do business is changing. If you look four to five years from now half the Fortune 500 will change because some of those companies will not want to change,” he said.

Here are some of the more recent changes from Lenovo:

  • Frey acknowledged Lenovo struggled to get products out on time because of the integration. That has been fixed.
  • Lenovo has created a new healthcare business. Frey said it’s a whole new vertical supported by Lenovo MSP and OEM teams.
  • Stoneware webNetwork has been renamed Lenovo Unified Workspace.
  • Announced strategic market alliances with Red Hat and Nutanix.
  • And, Lenovo plans to release American-made tablet devices.

Frey also pointed out that Lenovo is “the only manufacturer in the world” that can bring technology to a person’s pocket all the way to the data centre.

“Some day – sooner than you think – a customer might rely on you for an unlock smartphone and a data centre,” he said.

According to Frey, when an organization has deployed 400 smartphones they will need a server and smart storage device.

The potential margin opportunity for a Lenovo channel partner looks like this:

A 10-unit System X solution has a list price of $2,429,830 or $24,290 per unit.

Lenovo then offers a Bid Index Price that includes a 30 per cent up front discount making the new price $20,889. Then there is an Enterprise Product Rebate of 2.50 per cent; that’s another $522 off. There is a spiff too of $500. If it’s a new customer Lenovo awards a solution provider with a new customer bonus of 15 per cent bringing in an extra $3,133 to a partner’s bottom line. Now that 10-unit System X solution has $4,196 of margin.

On top of that if the channel partner can attach an extended warranty to this sale and they will get 25 per cent extra margin. All these figures were presented by Frey.

The economics are changing and Frey said scaling pricing and programs becomes more important. Another factor is bringing in strategic relationships to augment solutions with Red Hat and Nutanix, as an example.

“Hyper-converged is the wave of the future and software-define is where its going,” he said.

Something not widely known in the marketplace is that Lenovo has software. Lenovo Unified Workspace can provide a secure, browser-based access to files, apps and reports from any device through a single password.

Lenovo Unified Workspace is a Web-based IT service at was acquired in 2012 from Stoneware. The Unified Workspace does not need a VPN and is built on HTML5. It also comes with webStorage, which is a private cloud storage that can access shared and even home directories. WebStorage integrates with Google Drive, One Drive, DropBox and Box for better aggregation of files and data.

Another aspect Frey told the audience at One Ingram in terms of how his company differentiates I that Lenovo owns its own factories and R&D. “We do not buy from OEM. We recently made a bold decision to not resell someone else’s tablets. We are going to bring out our own. They are going to be fabulous. So stay tuned.”