Sammy Kinlaw reviews Lenovo’s recently concluded quarter in North America and indicates their initiatives going forward, including a new distribution agreement for the Motorola products.
Lenovo global first quarter numbers announced last week were decidedly mixed. But in North America, performance was good, particularly in the commercial business where the channel plays, said Sammy Kinlaw, Lenovo’s North American channel chief.
“We saw continued growth, up considerably in some areas, with North American volumes up 13.2 per cent year over year,” Kinlaw said. “That is a premium to the market growth rate, and it gave us a 1.2 per cent gain in share for overall business in North America. That’s our objective, to gain in share in the marketplace, because we know that we are still number three.”
The big problem for Lenovo globally last quarter was the smartphone mobility business, which is still losing money, even though Lenovo had originally projected it should have turned into the black by now. While smartphone sales were especially problematic in China, they were also an issue in North America because of the product transition, with the ending of the old platform and the move to Moto. Lenovo is still confident this turnaround is coming, but for the North American channel, it hasn’t been a critical issue, because it has not been a significant portion of their business.
“For the commercial channel here, the impact has been minimum,” Kinlaw acknowledged. He also stressed that Lenovo has been aggressively taking steps to ramp that up.
“We have enabled Synnex and CDW, so I’ve got increases in our mobile businesses in the commercial channel in these two major entities,” he said. “We are also in negotiations with another distributor to pick up the mobile line from Motorola. Facilitating additional opportunities in the commercial channel for selling Motorola is a strong area of interest for me.”
On the DCG (Data Center Business Group) front, which includes servers, storage, and hyper-converged, a slow overall server market hurt overall numbers, but Kinlaw believes Lenovo’s channel is very well positioned in this space.
“The server market as a whole is still tough, and that has affected us,” he stated. “We are out of the integration phase [with the System x products] and we are into execution. We are making sure we have the right product on the shelf, putting more on the shelf in distribution, and adding two additional weeks of availability. We have also expanded our build-to-order capabilities with distributors who can configure our TopSeller products. So we have increased our emphasis on availability and custom configuration.”
Kinlaw said that the number of partners selling System x has increased by 40 per cent.
While Dell’s acquisition of EMC put the boots to Lenovo’s nascent partnership with EMC, Kinlaw said that had also had minimal impact, and that, ironically, the growth of their hyper-converged presence made its loss moot.
“The EMC loss has been minimal for us, because there were no revenue streams that had begun,” he said. “Sometimes, things have a way of working out. At the time we originally signed with EMC, the whole hyper-converged thing was just in its infancy. Our move into hyper-converged has meant that this has all worked out fine for us. Last year, we announced a very strategic partnership with Nutanix. Those announcements have continued, and we are now shipping our SMB-focused hyper-converged offering the HX2000. We also have hyper-converged partnerships with SimpliVity, where we are very pleased with our pipeline there, and with DataCore.”
In the PC and Smart Device Business Group (PCSD), PC market share in the overall Americas region was up 1.4 points year-over-year to 14.4 per cent, driven primarily by North American sales. Kinlaw highlighted Lenovo’s Chrome business for special notice.
“The Chrome marketplace continues to provide an opportunity to sell volumes exceeding market expectation,” he said. “K-12 volumes are up 60 per cent quarter on order driven by Chrome success, and it also opens the ability to sell them more premium products like tablets. I’m thrilled with that.”
Kinlaw also noted that the SMB business in PCs was also up double digits.
“That’s been consistent for multiple quarters,” he said. “I’m very pleased with what the commercial channel has accomplished here.”