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Lenovo To Make Service Provider Push, Intro Consumption Pricing

Lenovo, fresh off the heels of its acquisition of IBM's x86-based server business, is planning to capitalize on its growing infrastructure presence to change how it deals with managed services and cloud partners, including adding new financing and pay-as-you-grow options.

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Lenovo's Alan Andrade

Lenovo is getting ready to introduce a new service provider program to its channel partners to help them capitalize on Lenovo's recently-concluded acquisition of IBM's x86-based server business.

Alan Andrade, director of North American channel strategy at Lenovo, told solution providers at last week's NexGen Cloud conference that Lenovo is currently the top PC producer worldwide with a market share of 19.7 percent, and that its PC and tablet sales now surpass those of Apple. The company is also the third largest smartphone producer and, thanks to Lenovo's acquisition of IBM's x86 server business in October for $2.1 billion, is also the third largest server vendor worldwide, Andrade said.

With the acquisition of the IBM x86 servers, Lenovo is better able to drive innovation and leverage its scale to grow, he said. "Our focus is to outgrow the market in all areas by a double-digit premium. ... And acquisition of the System x business gives us the opportunity to drive the infrastructure."

[Related: NexGen Cloud: Pressure To Adopt Software-defined Data Center Tech Mounting]

A big opportunity for Lenovo is to provide cloud and managed service providers with new sales and technical support, which Lenovo is doing with its new Lenovo Service Provider Program, Andrade said.

The Lenovo Service Provider Program will bring partners scale, open standards, customization and fulfillment, and access to the best technology, he said.

The program was originally scheduled to be formally rolled out at last week's NexGen Cloud conference, but the company recently decided to wait until January to hear more from its channel partners, Andrade said. "We want to hit a home run," he said. "We want to offer a best-of-breed program for cloud and managed services providers."

One important part of the Lenovo Service Provider Program, and one for which Andrade said Lenovo really needs partner feedback, is a planned "rent to grow" program to provide partners with financial and cash-flow management.

Rent to grow is a consumption-based acquisition model, which would allow partners to purchase Lenovo technology to provide up to a specified threshold of consumption, Andrade said. The cost of using that technology would increase only after that threshold was reached.

For partners who want a more traditional procurement model than "rent to grow," Lenovo will offer what Andrade called the "kick start deferral" program under which the company will work with distributors to provide Lenovo equipment for up to 120 days without the need to pay for it up-front.

NEXT: New Channel Opportunities With The Lenovo Service Provider Program


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"We see this as another key aspect in cash-flow management," Andrade said.

The Lenovo Service Provider Program will also provide partners with access to special pricing and business development funds, leasing help via Lenovo Financial Services, equipment buy-back opportunities, and vouchers to pay for skills testing, Andrade said.

Partners will also have access to discounted services at the customer labs Lenovo acquired with the buyout of IBM's x86 server business, he said.

The new Lenovo Service Provider Program has Derek Keene, president and co-founder of Integration Systems, a Deerfield Beach, Fla.-based solution, wanting to hear more.

"This is the future of consuming commodity technology," Keene told CRN. "It makes a lot of sense. Lenovo has to do it. We'll be all for it if Lenovo does indeed adopt the model."

Integration Systems has a large managed MSP customer who consumes $15 million to $18 million worth of Intel-based technology every year, including servers from HP, Lenovo, IBM, and Cisco, Keene said.

"If that customer could consume all its purchases using the consumption model, it would be happy to do so," he said.

The program sounds somewhat similar to the new Flexible Capacity program introduced by Hewlett-Packard in November, said Keene, whose company partners with both Lenovo and HP.

HP Flexible Capacity opens the door for customers to free up a significant amount of working capital by putting in place minimum three-year, private-cloud, Infrastructure-as-a-Service deals with flex-up bursting or flex-down capabilities. The services agreements, under which HP Financial Services arranges the financing and HP Technology Services holds the sales contract, are based on the same monthly fixed-fee, pay-as-you-go model that has fueled public cloud adoption.

"It's the next logical step in the evolution of the market," Keene said.

Cameron Rowe, CEO of CRC Data Technologies, a Destin, Fla.-based solution provider and HP channel partner, told CRN his company is considering moving back to doing more business with Lenovo given what he called HP's move to focus more on larger partners.

"HP has a better program, but Lenovo's pricing is amazing," Rowe said. "It's interesting that Lenovo is coming out with that services provider program. My services manager will be most interested in it."

Lenovo already has 16 or 17 people helping with cloud and managed services management, Andrade said.

"We're investing heavily in this services organization to be there for you," he said.

Steve Burke contributed to this story.

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