Lenovo has moved aggressively in the workstation market of late, which is interesting considering that workstations, while powerful, tend to be static in terms of competitive moves. This is because those who use workstations, mostly engineers and computer scientists, specify the hardware they use and tend to be wedded to the vendors that they have been using.
But when Lenovo took AMD’s initially consumer-focused Threadripper platform to market in a workstation, suddenly, users became surprisingly mobile, and Lenovo picked up enough share to take over segment leadership. Dell, which has been very risk-averse of late, was caught napping and has not recovered.
This week, Lenovo made a similar announcement with Anaconda, a leading provider of the world’s most popular source code for AI, machine learning, and data science. This time, Lenovo is working with Intel. This should shake up the market again, and again, Dell is the most exposed.
Let me explain.
Taking Risks
When Apple produced the iPad and the iPhone, both were massive risks. Had those risks not been taken, it would have resulted in Apple’s market collapse in the early 2000s because it just wasn’t competitive enough in a market defined by Microsoft and X86 (mostly Intel) to survive. But Apple took those massive risks, and the result is that Apple is now defined as an extremely successful consumer electronics company that does PCs on the side rather than as a computing company.
Successful companies are defined by those who take reasonable risks and execute well around them. Mainframes for IBM (they built tabulating machines and even built kitchen utensils prior to the mainframe), operating systems for Microsoft (prior to that, it built productivity software mostly for Apple), Google’s monetization of search, NVIDIA, and AI (it was a gaming company prior), and Dell’s acquisition of EMC were all massive risks that paid off equally massively.
Lately, Lenovo has stood out as being willing to take big risks and then execute well. It took IBM’s failing PC division and turned it into a market leader. Then it took IBM’s failed X86 server unit and made it successful. After Dell’s catastrophic failure in smartphones, Lenovo bought crippled Motorola and turned it around. It’s a shame the BlackBerry acquisition attempt failed, as that would have been far more powerful.
This willingness to take reasonable risks has defined the modern Lenovo and allowed it to challenge vendors like Dell that were thought to be unchallengeable. Lenovo’s latest partnership with Anaconda showcases that willingness and the power of a critical partnership to take advantage of the ramp to AI.
Lenovo and Anaconda
AI development has gone vertical this year. Every company that plans to be around by the end of the decade has pushed massive resources into AI development and especially into training. Having workstations specifically tuned for this kind of activity would seem like an easy decision, except that this is a brand-new technology, which makes these focused moves far riskier.
However, Anaconda is already a platform leader, so by partnering with it, Lenovo reduces the related risk significantly while creating a solution that should appeal to the growing horde of AI developers. This will allow Lenovo to gain more share as it addresses the needs of this ever-larger, well-funded customer base.
This partnership will benefit both Lenovo and Intel as Intel continues its path to recovery, placing it at a critical juncture that is focused on the folks who will be building the AI world of tomorrow and who need ever-better tools with which to build it.
Wrapping Up: Reasonable Risks = Leadership
It is always easier to kick back and be risk-averse. If you don’t take big risks, you can’t be accused of making big mistakes. At least, that’s what executives in companies that are struggling with change would seem to believe. But reasonable risks are what define future markets like music players, smartphones and advanced computing.
Lenovo has proven itself to be a master of reasonable risks, while Dell has become increasingly risk-averse and tied up with its own internal politics. The result is the very real potential for Lenovo to displace Dell across the board, much as it has and continues to do with PCs and workstations.
We are watching the rise of Lenovo and the decline of other firms like Cisco, for instance, who have become risk averse, and it is due to the differences in companies’ willingness to take reasonable risks.
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