The Perfect Partner

Lenovo's Partner-Slip

What a difference a year can make. When the 2005 VARBusiness Annual Report Card (ARC) results were announced last year, Lenovo was at the head of its class, with higher marks in nearly all channel-friendliness criteria than rivals Hewlett-Packard, Gateway and Toshiba. At the time, the PC-maker was riding high on the success of initiatives implemented by IBM, which had won or tied for first place in the Mobile Computers category since 2003.

But as Lenovo has distanced itself from IBM and sought to establish its own channel identity, the company has plummeted from first to last place in the ARC, dragged down by low scores in Partnership and Support. Lenovo scored a 59 in Partnership, compared with Toshiba's 68 and HP's 65. It also earned a 60 in support, compared with the 68 scored by Toshiba and HP.

While Lenovo's total score of 67 was only 1 point below its winning score the year before--a 68--its lackluster performance came at a time when its rivals were picking up the slack. HP improved 7 points to 73, Gateway was up 9 points to 69, and Toshiba soared 11 points to tie with HP's score of 73.

While Lenovo adamantly maintains that it's committed to growing its channel business, Lenovo's partners report a lack of responsiveness and support from the PC-maker, and question whether the vendor is more focused on direct sales or on opportunities outside the U.S. market.

Take, for example, solution provider Future Tech Enterprise, which in 2004 opened the doors to a $2 million IBM ThinkVantage Technology Solutions Center in Holbrook, N.Y. Future Tech's efforts to develop solutions around IBM technologies spurred it to win IBM's Stellar Award in 2005, an honor the vendor reserves for its top U.S. business partners.

But today, Future Tech is disgruntled with Lenovo's channel efforts and technological innovation, and is increasingly looking to HP and Toshiba.

"Lenovo really needs to define to the channel what it wants to be when it grows up, because to a lot of us partners it's unclear. And it's unclear to a lot of customers too," says Bob Venero, CEO of Future Tech. "Verbally, they've made it clear, but their actions haven't. They say, 'yes, we're a channel company,' but yet they're working into other routes, like Best Buy."

Lenovo got its worst ARC score for its ability to manage channel conflict. But Lenovo executives say the vendor is committed to "managing a consistent and predictable hybrid model," and that it has a defined parity process in place to address conflicts when they arise.

"Clearly, what we're trying to do is [make it so that] anything we do direct is not in conflict with our partners. There will be times when there will be some conflict, but we're committed to quickly addressing those," says Steve Mungall, vice president of channel and transaction sales strategy at Lenovo.

The PC-maker expects to sell more units through the channel than through direct sales in the third quarter of 2006, Mungall says.

Partners also cited a lack of responsiveness and support from the vendor.

"It doesn't seem as if they're making an effort," says Jeff Kowalski, vice president of sales at South Seas, a solution provider based in Englewood, Colo. "They tell you they are, but we don't see it."