When it comes to positioning Lenovo products against Dell and Hewlett-Packard, Lenovo is taking a calculated approach.
"We have spent a great deal of time over the past year expanding the environments that Lenovo platforms work in," Ward said. "From a systems perspective, we are interested in integrating in existing environments and not trying to get partners to displace the existing system's management paradigms and consoles. We are not trying to displace the incumbents. The position for Lenovo is, you trust Lenovo and the ThinkServer brand. It's just as capable and probably a better value than the competition."
However, toward the second half of the year, Ward said Lenovo will look to cash in on laying the Lenovo groundwork in SMB and large enterprise. "In the second half of the year, as we refresh the products, I think there will be some really big differentiation where you'll have the horsepower, the technology and capabilities to actually start displacing the incumbents," he said.
"We think the competition is taking its eye off the ball when it comes to innovative hardware platforms," Ward said. "We are in the hardware platform business. That's what we want, that's where we focus, and we are in the channel business. Some of our competitors are distracted and some of them are focusing on other parts of their business."
Ward said Intel's Brickland refresh will trigger an enterprise-class server blitz from Lenovo.
"Lenovo has been moving up the data center food chain with some impressive products," said Rick Khan, technology solutions consultant, Microtrends, an SMB Lenovo partner based in Pasadena, Calif. "Its technology is solid and, quite frankly, Lenovo has been earning my business." He said as Lenovo's acquisition of IBM's x86 business nears it has stepped up its partner game, making him question his Dell alliance.
Kahn said with Lenovo he can count on a 16 percent to 18 percent margin. "With Dell, I've got 8 percent margin. With Dell, the customer can configure his own server on Dell.com, buy via DRM or go direct to Dell.com. That forces me to come down on my Dell price. After I shave another point off for shipping, it's not worth my while selling Dell. With Lenovo, customers don't shop prices and, when they do, Lenovo direct is more expensive than my quote."
Lenovo partners say if Lenovo mirrors the success it had five years ago when it bought IBM's PC business with this server business, Dell and HP should have reason to worry.
"I will be bringing my Dell business to Lenovo as soon as Lenovo has apples-to-apples offerings to Dell," Khan said. "Lenovo still doesn't have the types of high-end configurations I need, such as 6-GB Fiberlink Ports. But it will, the only question is when."
One Lenovo PC reseller, which sells primarily HP servers, who asked not to be identified, said Lenovo is now a regular part of server sales calls. "Servers have not been a core competency of Lenovo. But it's an area where Lenovo now has clout thanks to the Think brand. Lenovo's new server racks and software management vision of a data center show that Lenovo sees a lot of life and innovation in a category that other companies have declared is dead. I didn't know who Lenovo was three years ago, but today they are a contender."
Business IT Source's Dadaian said for his company, it's not about displacing his existing HP server business; it's about new opportunities where Lenovo has a chance in giving Dell and HP a run for their money.
"We started selling [Lenovo] to SMB, but we are moving into large enterprise accounts. We aren't flipping them. This is net new data center business. Now we can go in there and talk about more than PCs. We can talk Lenovo projects with storage and a growing product portfolio from ThinkStation, ThinkServer, to EMC storage."
PUBLISHED MAY 14, 2014