Earlier this month, the Chinese PC maker reported very strong sales of its laptop and tablet PCs, earning it the No. 2 spot in terms of PC shipments worldwide, and narrowing the gap between No. 1 and No. 2 by seven-tenths of a point. Even more impressive, this is the 11th quarter in a row that Lenovo outgrew Hewlett-Packard, Dell and Acer.
HP, meanwhile, just posted the worst loss in its 73-year history with a 10 percent drop in its PC business revenue compared to last year’s quarter. Dell’s PC sales have dropped as well vs. last year’s quarter.
Yet while Lenovo is going strong in PCs, it isn’t stopping there. Last month, the company unveiled a partnership with EMC in which it will gain access to EMC’s enterprise technology and EMC will gain access to a massive Chinese market where Lenovo is king -- and other emerging markets where EMC wants a foothold. Clearly, Lenovo also has its sights set on the enterprise server market, hoping to continue to build on its success and take away more share from Dell, HP, IBM and Cisco on the server front.
The secret to Lenovo’s success will be communicating the channel message and executing consistently with VARs. In fact, the battle for market share will be fought in small and midsize businesses, where VARs are pitching upgrades.
The vendor that has the strongest incentive program and channel message around new hardware and Windows 8 will have an opportunity to make the greatest gains. If Lenovo can execute on its program and message, it will take the top spot away from HP within two quarters. Furthermore, if Lenovo can leverage its relationships with partners, it can successfully chip away at the data center market.
Meanwhile, HP needs to make up for some significant lost ground during the past 12 to 18 months. Its missteps in the PC business have left VARs ripe for the picking.
Let’s be honest, HP is still very internally focused right now and, really, who can blame it? Positions are being shuffled, jobs are being eliminated and employees, tired of the uncertainty, are packing their bags and going elsewhere. In many cases, VARs are forced to forge new relationships with HP field reps, and the chaos has left HP VARs looking for options. Even HP executives have admitted they are still fielding questions about whether HP is truly committed to the PC business and the channel, much to their chagrin.
HP has to get externally focused and be aggressive if it is going to keep the top spot. It needs to get back to a place where it is consistent, trusted and easy to do business with. The company also needs a solid, differentiated and innovative product lineup, and it needs to get the message out around those products. Lenovo is already creating buzz around its products by preannouncing them and showcasing them at VAR events. In fact, Lenovo was the first vendor to announce a Windows 8 tablet.
Surely, Lenovo is in an enviable position as the leader in China, one of the fastest-growing economies. But, truly, this is HP’s game to lose. The biggest technology vendor in the world has got to put the past behind it, admit the mistakes it’s made in the past, and convince VARs it is once again committed to PCs and to the channel.
BACKTALK: Kelley Damore is VP, Editorial Director for UBM Channel. You can reach her via e-mail at email@example.com.
- The New Channel Normal: Why You Can't Talk About Products Anymore
- Your Customers Have A Secret: Why Now Is The Time To Transition To Cloud
- Microsoft, HP: Time To Make It Right For Channel Partners
- Giving Back: Business4Better
- 30 Days That Humbled IT
- Proving The Industry Wrong
- Fast Growth: Top-Flight Tips
- The One To Watch
- Can We Have It All?
- Scratching The Surface
- EMC: Extra Mighty Channel?
- Compliance Is A Gold Mine
- Happy Anniversary, CRN
- Whitman Must Bury 8/18/11
- The Apple Of My 'i'
- Channel Business Index Offers Insight
- What I Learned At BOB
- It's All About Software
- What HP Needs To Do
- Tablet Gold Rush