Lenovo Kicks It Up a Notch on Servers

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Lenovo is a very different company in that they uniquely span the tech world from smartphones to servers and are nearly dominant in the supercomputer Space. That is an unmatched breadth of systems and it gives them a unique position in the market with regard to both present, and particularly future, solutions. One of the most interesting areas to watch with them is their servers. This group is lead by Kirk Skaugen one of the most well-regarded executives—with an Intel background.

During their annual Lenovo Accelerate event they highlighted a number of leadership elements, here are some of them.

Server Leadership

The company has an impressive range of products across both their ThinkAgile and ThinkSystem lines which owe their heritage to IBM. They are, according to Skaugen, growing at 1.7 times the market, leading in performance and customer satisfaction, and their products are able to perform 2x over their closest competition in aggregate. They are also the leading provider of supercomputers, with around 28 percent of the market and have an overall reliability that Skaugen reports puts them in the lead here as well. These supercomputers are being used on projects ranging from advanced weather forecasting, to supply chain management, to solving different forms of cancer at scale. One of the more interesting projects is designed to eliminate worldwide food shortages, another (out of Taipei) is focused on a cure for ADHD. It is interesting to note that they also have the top supercomputer in Europe—which is so efficient it saves enough power to supply 4,700 homes with energy in Germany annually.

They plan to launch their most comprehensive line this year spanning from edge to cloud wrapped with their TruScale program. TruScale allows customers to only pay for the performance they use based on the server power they consume. A very cloud-like program for what is an on-premise solution.

Assisting the sales effort is one of the most aggressive partner channel programs I’ve yet seen—Channel First. This program economically places Lenovo’s direct sales channel below the indirect channel. Often there is a lot of under the covers conflict between direct and indirect channels in a firm like Lenovo. Lenovo is going on record with what appears to be a blanket solution to those conflicts.

One interesting area of leadership is in tower servers. This class of server, which other vendors have either discontinued and/or disparage, has proven ideal for small offices, point distributed solutions (which are growing), and for places like retail not set up for a rack-mounted solution.

Telecom

One of the teasers that Lenovo released was they plan to make a massive move on the Telecom industry. With the US going to war with Huawei there is an opportunity for another major player to enter the Telecom segment and Lenovo plans to be that vendor. With the advent of 5G and the need to massively decentralize computing, this move couldn’t be better timed with a major market inflection point. The result should be a powerful new global player which has the support of both the US and China in this now warming segment.

Diversity and Inclusion

One of the areas he spoke to was diversity and inclusion and Skaugen disclosed that Lenovo was now one of the top companies for sustainability, working mothers, fathers, diversity (in all forms), and the firm is ranked as one of the best places to work.

Wrapping Up

With some impressive work by Kirk Skaugen and his team the Lenovo Server Group has gone from largely a market joke to one of the fastest growing, highest-performing, server sellers in the segment. The unit’s focus on things like diversity has only made it stronger and the growth and dominance stats speak for themselves.

We didn’t even mention storage which, with their NetApp partner, they have become a true power here as well with a growth in that segment that is 5x that of market. It was great they highlighted their efforts on diversity and inclusion as one of the big causes for that growth. It appears that Lenovo may be one of the tech firms at the right place and at the right time.

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About Author

As President and Principal Analyst of the Enderle Group, Rob provides regional and global companies with guidance in how to create credible dialogue with the market, target customer needs, create new business opportunities, anticipate technology changes, select vendors and products, and practice zero dollar marketing. For over 20 years Rob has worked for and with companies like Microsoft, HP, IBM, Dell, Toshiba, Gateway, Sony, USAA, Texas Instruments, AMD, Intel, Credit Suisse First Boston, ROLM, and Siemens.

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