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‘Doing The Right Thing’: How Lenovo Stepped Up For Partners In 2020

With a new Partner Hub, rich incentives and innovative products, Lenovo’s next chapter is ready to unfold.

As COVID-19 began to spread across North America earlier this year, solution provider powerhouse Microserve suddenly found itself providing an essential service as the end-user computing provider for all of British Columbia’s hospitals.

And as a Lenovo Platinum partner, the Burnaby, B.C.-based solution provider found its close alliance with the PC maker to be pretty essential, too.

One key element to keeping hospitals running was equipping many staff members with laptops to work from home. And that’s where Microserve and Lenovo came in, said Sylvain Jacob, vice president of sales for the solution provider.

“Information is power in these situations. We were able to find out from the Lenovo team what was in-flight coming into the country in order for us to manage the demand,” Jacob said. “So when product landed here in the country, either at Lenovo or at distribution, we already knew what was coming in to support the customer demands.”

Microserve ultimately supplied 3,000 Lenovo laptops for urgent needs at health-care customers during March and April, while also supporting the needs of other customers including municipalities and private sector clients, Jacob said.

“It was really that collaboration between our two teams that made this transition very successful,” he said. “It was a pretty intense moment. But we had a tremendous amount of customer satisfaction throughout all of that period.”

Lenovo has been meeting customer needs during the COVID-19 crisis by keeping the focus on working hand in hand with partners, said Matthew Zielinski, president of Lenovo North America’s Intelligent Devices Group.

“There are so many companies out there that say that they’re channel-centric or committed to the channel. But really, especially [against] a backdrop like this, talk is cheap,” Zielinski said. “We were the first out there to bring a Partner Stimulus Package to all of our partners when COVID hit. … And we have never once incentivized our own sellers to take business direct.”

For Lenovo, engagement with partners has “ramped up in the last six months as we’ve gone into the lockdown and the effects of COVID-19,” said Kevin Hooper, president and general manager for Lenovo’s North America Data Center Group. “As [partners have] experienced challenges in their vendor supply chain, our fully integrated supply chain has actually helped us. We’ve gotten calls from channel partners that had deals on the table that said, ‘Your competition can’t supply this. Could you?’ And we’ve taken those deals.”

Lenovo and its partners, Zielinski said, remain “very hungry” for growth in the business environment shaped by the pandemic.

To that end, the company recently launched its new unified Lenovo Partner Hub along with a bevy of channel incentives across both business groups. On the product front, the new ThinkPad X1 Fold is stirring up excitement.

“Whether you’re a new Authorized partner or you’re a longstanding Platinum partner, we are not going to take that relationship for granted,” he said. “We are with you every step of the way to go after new business and also business that is less about the financial aspects, and more about doing the right thing for those that need technology the most.”

Doing the right thing for customers and partners has been at the heart of Lenovo’s mission from the very start of 2020.

Starting in January, before the coronavirus had fully stretched its deadly grasp across the world, Lenovo created the customer-centric motto, “Act as if life depends on us. Because it does.”

“We had dozens of customer situations, mostly hospitals and health ministries, who contacted us in crisis because they were not set up for remote workers or the volume of patients they were getting through the system,” said Wilfredo Sotolongo, chief customer officer for Lenovo’s Data Center Group. “We started saying inside Lenovo, ‘Act as if life depends on us. Because it does.’ It changes your demeanor.”

When a large regional health-care organization in Canada needed to accommodate an influx of patients and rapidly create a remote workforce, it turned to Quebec-based Lenovo Platinum partner ITI.

“As COVID happened, people started urgently asking, ‘We need services. We need laptops. We need equipment. We need it now,’” said Patrick Richer, vice president of sales, enterprise and education at

ITI, formerly known as ProContact. ITI was able to boost the health-care organization’s capabilities by implementing Lenovo ThinkAgile HX hyperconverged infrastructure while also providing more than 1,500 Lenovo devices, including ThinkPad E590 laptops as well as Lenovo Tiny and Yoga desktops, winning the more than $1.5 million deal.

“Working with Lenovo on the device front, but also the data center [front], we were able to design a solution that was scalable, resilient, better performing, and deploy it rapidly while also continuously engaging with the Lenovo team. In no time, our customer was up and running,” said Richer, adding that ITI’s Lenovo sales are growing at a double-digit clip in 2020. “That was a big success for us. The customer appreciated it. The collaboration with Lenovo was key to all of it.”

Lenovo’s ability to ship products has also helped some of the world’s most vital financial organizations keep the economy moving.

When COVID-19 arrived in full force in the U.S. earlier this year, solution provider Groupware Technology became the lifeline for one of the largest financial institutions in the country. Groupware led the charge in designing, installing and providing ongoing support to revamp the customer’s IT infrastructure on a foundation of thousands of new Lenovo ThinkSystem SR630 and SD530 rack servers.

“With the start of 2020 and COVID-19 hitting, they needed to be open for business to support millions of their customers around the globe to ensure that they could access their money and were able to process any kind of government benefit they were receiving,” said Dawn McCale, vice president of sales at Campbell, Calif.-based Groupware, a Lenovo Platinum partner.

Lenovo was able to allocate the resources and components Groupware needed, even adjusting its supply chain methodologies and routes to make sure the delivery was on time for the customer. Groupware, for its part, expedited the building of the customer’s racks to make sure they were production-ready at the time of delivery, enabling the large financial institution to continue to provide service to millions of people without skipping a beat.

When it came to working with Groupware, Lenovo “pivoted their supply chain and was able to accommodate some of our financial services customers and expedite their shipments to make the production schedule,” said McCale, adding that Groupware’s Lenovo sales are up 84 percent this year compared with 2019.

She’s not alone. Numerous channel partners told CRN that Lenovo, more than any other IT vendor, has been critical to their sales growth during the COVID-19 crisis.

From massive virtual desktop infrastructure (VDI) use cases to arming the new remote workforce with devices across the world, Lenovo has been doing what it takes to meet the needs of its global customers, regardless of their size.

For many, those needs have accelerated as COVID-19 sped up digital transformation efforts or projects, such as VDI.

“Many customers had two-year road maps to get to a full VDI implementation, but they accelerated that,” said Hooper. “Then they found themselves starting to ask the question, ‘OK, who can supply this? Because now we have this opportunity with a little bit of downtime to upgrade all of our internal infrastructure to support people working from home’—but you have to get the equipment to them and you have to be able to support it. That’s where it picked up. So VDI has been a great use case for us.”

Sales Booming During COVID-19 Pandemic

After a rocky fourth fiscal quarter, which was impacted by the closing of Lenovo’s Wuhan, China, manufacturing facility due to the pandemic, Lenovo is now flourishing as it continues to supply businesses with the critical IT infrastructure and work-from-home products they need.

Lenovo reported first fiscal quarter total revenue of $13.3 billion, up nearly 7 percent year over year despite the global economic disruptions caused by COVID-19. Net income jumped 31 percent year over year to $213 million.

While many competing vendors are reporting data center infrastructure sales declines in 2020, Lenovo’s Data Center Group is on the rise. This bodes well for channel partners as indirect sales account for 85 percent of Lenovo’s total Data Center Group revenue, executives said. In its first quarter, revenue from Lenovo’s Data Center Group skyrocketed almost 20 percent year over year to $1.6 billion due to sales spikes in both VDI and high-performance computing.

Hooper said that total revenue for the Data Center Group in North America was up 33 percent year over year during Lenovo’s first fiscal quarter, which ended June 2020, mostly due to VDI infrastructure upgrades.

In Lenovo’s Intelligent Devices Group, meanwhile, PC shipments in the U.S. are up 8.7 percent for the first three quarters of 2020, year over year, research firm Gartner reported in October. That includes a 28.8 percent spike in U.S. shipments for Lenovo during the first quarter, when PC demand surged practically overnight because of the shift to remote work.

Like Lenovo’s Data Center Group, the Intelligent Devices Group has seen no slowdown in its channel charge during the COVID-19 crisis. It has continued to support and invest in partners even amid an unprecedented market situation that has frequently involved unheard-of demand for PCs and monitors, Lenovo executives and partners told CRN.

Numerous partners pointed to Lenovo’s Partner Stimulus Package—which was unveiled in late March for Intelligent Devices Group partners, just weeks into the crisis in North America—as a pivotal move in helping shore up their businesses and allowing them to stay focused on customers.

A core component of the Partner Stimulus Package was the inclusion of a flat rebate structure, enabling more predictable earnings for partners in recent quarters. To accomplish this, Lenovo eliminated all target-based programs, so that Intelligent Devices Group partners were not required to hit a certain threshold to earn back-end rebates.

In addition, Lenovo provided those payments to partners every 30 days—instead of the usual 90 days—while also offering a 30-day extension on financing for qualified partners through the Lenovo Partner Financing Program.

“Lenovo has stepped up to the plate,” said Susie Smith, general manager of Twotrees Technologies, a subsidiary of Woodard Technology and Investments, a Lenovo Platinum partner based in Wichita, Kan. “They were the first to come out with some type of stimulus package for resellers. They have ensured that we are rewarded for promoting Lenovo and putting Lenovo in the front of our product offerings and they’ve done a great job of being transparent, with weekly calls on the supply issues. They’ve just been a very supportive partner.”

Lenovo’s Partner Stimulus Package was the right move for partners at just the right time, said Shelliy Cymbalski, vice president of marketing and partner programs at iT1 Source, a Lenovo Gold partner based in Tempe, Ariz.

With the flat rebate of the Partner Stimulus Package, “we didn’t have to spend any time trying to adapt or understand whether we were going to hit our goals,” Cymbalski said. “They just took that problem away. It was just a great thing that Lenovo did for their partners.”

Lenovo has also committed to continuing one element of the Partner Stimulus Package, the extended financing, for partners through the end of 2020, executives said.

The COVID-19 crisis has been a tailwind in many ways for Lenovo and its Intelligent Devices Group partners, some of whom have seen booming business in 2020 as the PC has become a critical product in the business world once again. In particular, Lenovo’s portfolio of ThinkPad and ThinkBook business notebooks, small-form-factor desktops and Chromebook education laptops have seen unprecedented demand, according to the company.

Add to this Lenovo’s channel focus and product innovation, and the company has succeeded at capturing a wide array of new customers in the U.S. and Canada this year, executives said. Looking ahead, Lenovo plans to maintain its emphasis on bringing in new customers via partners as the company’s PC business seeks to vault from No. 3 to the No. 2 spot in North America by 2022, Zielinski said. To that end, Lenovo recently launched new partner incentives to help “make sure that we stay on the growth tear that we’ve been fortunate enough to achieve these last couple years,” he said.

Simply put, “we want this generation of Lenovo to be the best Lenovo our partners and customers have ever known,” Zielinski said.

Flexible Supply Chain

Lenovo’s recent growth during the coronavirus pandemic isn’t by sheer luck. In fact, the Data Center Group pivoted in early 2020 to bolster its manufacturing strategy to make it unmatched in the industry, according to Lenovo’s Sotolongo.

As many of its competitors faced IT supply shortages this year because numerous manufacturing facilities were forced to shut down during COVID-19-related lockdowns, Lenovo’s Data Center Group product supply chain has remained mostly uninterrupted.

“You didn’t hear about Lenovo getting hit bad at all because of supply chain restrictions because of the pandemic,” said Sotolongo. “The reason for that is because we own our own supply chain. Most people don’t realize that one of the differentiating factors of Lenovo in this industry is we own our supply chain end to end. We design our own boards, our own products, we make and integrate them, we box them, we test them and we ship them. Most of our competition is not integrated end to end like us. They end up using outsourcing for manufacturing services, outsourcing of support services—we don’t do that.”

Lenovo owns many manufacturing facilities across the globe—from China and India to Mexico and North Carolina. Because of this, Lenovo was one of the first to get a taste of just how impactful the coronavirus would be on the global supply chain when it was forced to temporarily close its Wuhan facility.

“We realized, ‘Wow, this is going to be a big mess. We better start planning for the worst.’ So we began to really architect our supply chain so we can build anywhere and ship anywhere,” said Sotolongo. “That gave us an incredible competitive advantage because it’s no secret that my two top competitors had very serious supply chain constraints through the pandemic. That opened doors for us, not only with customers, but also with partners. Partners that had difficult situations with customers that needed something— like a hospital or laboratories or a doctor’s office—we were able to serve them quickly. So we reconfigured our supply chain to do this, and it worked beautifully.”

Lenovo’s Data Center Group supply chain stronghold throughout 2020 has been a major benefit for channel partners. Solution providers said when other vendors couldn’t provide the needed IT products their customers were quickly clamoring for, Lenovo stepped up to the plate and delivered.

“When the urgent requests started flowing in, ‘I need something for next week. We need desktops tomorrow. We need 200 devices for the medical units that we’re putting together for testing. How fast can you have it?’—Lenovo was always in stock depending on the model,” said ITI’s Richer. “With other vendors, sometimes you would receive ETAs for two weeks or three weeks, which is way too long. So with Lenovo, what we did was we started identifying the types of equipment on the data center side and device side that would be required so that we could plan ahead with their executive team in trying to forecast what would be required. In doing so, we were able to shorten the delivery time quite significantly.”

Due to its flexible strategy, Lenovo’s Data Center Group was able to shift its supply chain through different shipping ports and mechanisms to be able to get products into the hands of customers in order to meet tight production schedules.

“They used air. They used ships. They went through different countries to route around the areas that were closed off to COVID,” said Groupware’s McCale. “It’s been a great success for Lenovo and Groupware.”

That said, manufacturing and supply for the Intelligent Devices Group has not gone as smoothly in all cases due in part to component shortages.

Availability of student-friendly Chromebooks has been especially low across all manufacturers, as demand has soared as a result of widespread remote learning. Multiple solution providers told CRN that they’ve seen shortages and order delays in recent months for Chromebooks from all vendors, including Lenovo.

When asked about Chromebook supply, Rob Cato, vice president of North America channels in Lenovo’s Intelligent Devices Group, acknowledged that “the headwinds that we’re facing right now are certainly challenging.”

“It’s really important for us to try and do everything we can to get products to the schools and the students that need them the most,” Cato said. “We’re continuing to work through the best way to do that—through a combination of working closely with our suppliers all the way through our global supply chain, and then ultimately with our sales and logistics team, and making sure that we get product to the customers as fast as we can.”

Lenovo, Cato said, is “not satisfied until every student and teacher that needs a device has one. We’ve got to be able to solve that quickly and effectively for those school districts out there. That’s our No. 1 priority. We’re not going to be satisfied until we get that done.”

Eye On The Mission

Countless customers are still contacting Lenovo and its channel community, urgently looking for infrastructure and devices to keep business afloat and employees safe.

“They call you up on Thursday, order on a Friday, and they expect the delivery on a Sunday—that kind of stuff. And we pulled off quite a few of those because they were not set up for remote workers or the volumes of patients they were getting through the system,” said Sotolongo.

The new mission—“Act As If Life Depends On Us. Because It Does”—has enabled Lenovo and its channel partners to make inroads with net-new customers at a rapid pace. For example, during the height of the COVID-19 pandemic in New York in early April, a New York-based hospital, for the first time ever, reached out to Lenovo in dire need.

“They said, ‘I don’t have enough tablets for my caregivers to handle the incoming load of patients. And by the way, I don’t have the infrastructure to support the VDI solution needed for those tablets.’ This was yet another company that had not done business with us before,” said Sotolongo.

The New York hospital’s cry for IT help came on a Saturday morning. At that point, Lenovo had shut down a factory in North Carolina because of the nationwide quarantine lockdown. However, Lenovo made the decision to reopen the factory with a limited set of employees and went back in that Saturday. The employees were able to build the tablets, package them up with Lenovo servers that had been shipped from another North America Lenovo manufacturing facility, and send the products on Sunday to the hospital in New York.

“We didn’t even talk about pricing. It was like, ‘If you’re going to accommodate more patients by doing this, let’s go.’ In the end, we ended up donating part of that equipment. But from Saturday morning to Sunday—from a closed plant, to an open plant, to shipment and support and eventually implementation—that’s a Lenovo story. We acted as if life depends on us.”

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