Lenovo Partners Aim For Gains From HP Split
Lenovo partners said Hewlett-Packard's blockbuster split creates unique opportunities to nab share in the SMB and mid-market from HP as it undergoes its transformation into two companies.
Lenovo partners, bolstered by the purchase of IBM's x86 server business last week, said they are set to take advantage of what they see as a period of "instability" that will take place during HP's year-long transition into two businesses -- Hewlett-Packard Enterprise and HP Inc. -- and that the transformation will create uncertainty in the market and raise questions about the company's commitment to partners serving the SMB and mid-markets.
"The challenge, and the opportunity, for Lenovo and its partners, will be to use this period of heightened instability in the tech market," said Douglas Grosfield, president and CEO of Xylotek Solutions, an Ontario-based solution provider who is a Lenovo and IBM premier partner.
[Related: Dell Partners Smell Blood With HP Split]
Grosfield said, SMB and mid-market HP customers are more prone to see the glass as half empty when it comes to HP’s ability to deliver solutions that scale from the bottom to the top of the IT stack.
"The enterprise partner understands HP needs to react to a changing IT landscape and that this is not a move that denotes impending disaster," he said. "Where I see opportunity for Lenovo is to gain market share by speaking directly to the concerns of the SMB and mid-market spaces."
For its part, HP says, it is 100 percent committed to mid-market and SMB. Executives at HP said its future Hewlett-Packard Enterprise business will be committed to all businesses, big, small and mid-tier.
"I suppose we could have called it Hewlett-Packard Business to incorporate government, big business, small business, medium-size business," said Meg Whitman, CEO of HP, in an interview with CRN regarding the split. "To the extent that is the interpretation (that HP is abandoning the SMB and mid-market), we need to make sure that we surround that communication with small, medium-size, and large business."
Ironically, HP now faces the same type of "instability" claims it said Lenovo and IBM partners would experience during Lenovo's $2.1 billion acquisition of IBM's commodity x86 server business. Along with taking out an ad in The New York Times blasting the IBM/Lenovo deal, HP launched a Project Smart Choice website and offered free consulting for IBM partners.
"HP's campaign has come back to bite them," said Sean Hobday, executive vice president of sales at Zones, an Auburn, Wash.-based direct marketing company with a services arm for the products it sells which include both HP and Lenovo. "IBM and Lenovo haven't dropped the ball transitioning the x86 server business. I don't anticipate any disruption with HP and its partners. But that doesn't mean partners won't try to take advantage of the news."
Lenovo partner Debbie Fitzerman, president of DFC International Computing, a Toronto-based IBM and Lenovo partner said uncertainty within HP's business, in light of the split, will help grow her business.
"In mayhem there are margins and money to made," Fitzerman said. "Anytime a customer says let's talk, it's good for channel."
But where HP strategy to win market share from IBM and Lenovo was to leverage FUD, Lenovo is taking a different tack.
NEXT: Lenovo Channel Chief Talks HP Split
"We aren't going to play a PR game against anyone. Our results speak for themselves," said Chris Frey, Lenovo's vice president of North American commercial channels. "The HP news doesn't change our strategy. Our strategy has always been the same. We are going to accelerate growth."
Lenovo is actively pursuing SMB and mid-market partners with data center expertise, according to Frey, who also gave a light jab against HP's PartnerOne channel program.
"Maybe it's ironic, but we talked last week about our strategy that revolves around one Lenovo, one channel," Frey said. "We want our business partners to look at us as one company and to look at our brands as complimenting each other."
Longtime SMB and mid-market partner Joe Lore, sales director at Woburn, Mass.-based Lenovo partner Sunnytech, said he was set to pounce on news of HPs split, but wasn't sure he needed ammo to sway partners to go with Lenovo over HP. "Lenovo offers better prices, more reliable hardware, and better customer service than HP. I don't need to stress anything more than that to my customers," Lore said.
For other firms, such as Xylotek, Grosfield warned the "window of opportunity to gain market share, taking advantage of HP’s woes and struggles, can slam shut in a heartbeat if Lenovo doesn’t make this transition seamless and painless for its partners and customers."
PUBLISHED OCT. 8, 2014