Lenovo's SMB Strategy Targets Dell, HP

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Lenovo is preparing to take the battle for the small and midsize business market to turf that's traditionally been held by companies like Hewlett-Packard and Dell.

The computer manufacturer is banking on its strong Think notebook brand recognition and new line of low-cost mobile computing devices to break into and capture a large part of the SMB market while winning over the hearts and minds of resellers in that space. With new products for consumers and reseller partners, Lenovo is reconsidering its sales philosophy, intent on making a serious run at its competitors.

The Lenovo brand already has a strong channel presence with loyal partners and customers at enterprise businesses that recognize the types of products the computer manufacturer has been bringing to market. The Think line of notebooks has seen a solid following from customers and channels throughout North America, said Stephen DiFranco, vice president of consumer and commercial channels for Lenovo.

"The Think line is healthy and we've seen an incredible dedication from resellers who sell the line for us," DiFranco said. "There is some incredible health in the foundation of our channel business."

As the economy continues to soften, DiFranco realizes it would be a mistake for his company to stand pat and not try to expand into the constantly growing SMB segment. Lenovo's strategy to capture that business is aimed directly at partners who do the majority of their business in the midmarket, noting that those are the resellers who often sell to smaller companies as well.

That push toward what has been for Lenovo a mostly untapped market will start by expanding its product line in the United States, mirroring something that Lenovo does worldwide.

A key ingredient to Lenovo's worldwide sales push is the progress the company has made in the retail space, something that can't be ignored as it goes after the midmarket. Earlier this month, Lenovo rolled out six new computer models aimed directly at the consumer space. Three laptops and three notebooks, branded Idea, were unveiled at the Consumer Electronics Show in Las Vegas. The response to the products at the show expanded DiFranco's and Lenovo's confidence that the time was right to make a move in the SMB segment on domestic ground.

Of course, Lenovo had already been operating in the SMB space in China and other countries abroad.

"Lenovo has an SMB group of products in China sold under that label," DiFranco said. "We manage a multibrand layout there and I think that helps resellers understand which group of products are the right ones for customers."

In addition to China, Lenovo manages brands of products aimed at the SMB market in South Asia and Europe as well. The difference between the U.S., and Asian and European markets, however, is that the SMB segment is more clearly defined and more highly dependent on overseas than it is domestically.

Traditionally, vendors like Lenovo and others have targeted larger corporations with aggressive product rollouts and campaigns designed for both the channel and vendor to realize the best possible revenues. DiFranco admits that this strategy has led to the lack of definition in the SMB market in the United States. Still, DiFranco doesn't believe that just because the SMB space has been largely pushed aside by Lenovo in the U.S., that the company and its partners can't replicate what has been a largely successful business practice beyond these shores.

And DiFranco does believe that the SMB market in the U.S. is ready for a push from vendors like Lenovo, as long as the strategy and products his company employs are the right ones. DiFranco even sees that the SMB market is preparing to rebound out of the darkest corners of the current recession.

"This is a rich marketplace that was impacted early in the recession," DiFranco said. "And because they were hit early, I think these resellers are more fortunate than others -- they've been able to adjust to the economic conditions a little better."

Sensing that the time is right and that resellers are looking for new ways to increase their revenue, DiFranco is preparing an aggressive strategy that will redefine the role of partners vis-a-vis their customers, while simultaneously positioning Lenovo as a leader in the market.

Next: Lenovo Refocuses On The Channel

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