Lenovo Looking To Double X86 Business, Partner With Synnex Around Mobility

Lenovo is hoping to sign a distribution agreement with Synnex for mobile devices and wants to double the size of its x86 server business in the next year.

The Beijing-based technology giant has more than tripled its North American market share over the past half-decade, to 13.2 percent, and hopes to double its market share to more than 26 percent within the next five years, Aymar de Lencquesaing, Lenovo's North America president, told nearly 2,000 people at Synnex's Inspire North American Conference.

"We're ready to compete with anyone," de Lencquesaing said Thursday in Greenville, S.C. "We're determined, we're patient, we're relentless, and we will compete and be aggressive."

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Lenovo acquired IBM's x86 server business for $2.1 billion in October 2014, and needed to transform the business unit to effectively integrate it into the vendor's fast-paced, cost-conscious environment, he said.

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"We're not at all where we'd like to be in terms of [x86] market share," said de Lencquesaing, noting that it's still in the single digits.

The integration work is now done, de Lencquesaing said, and there's now a larger team of people selling x86 devices than there was when IBM owned the business, which leaves him optimistic that the business can be doubled by 2017.

De Lencquesaing said he hopes to soon get Lenovo's mobile devices in the hands of Synnex's channel partners, noting that Lenovo and Synnex are working right now to get a distribution deal done.

Lenovo's mobility business operates under the Motorola brand -- which the vendor acquired from Google for $2.91 billion in October 2014 -- in North America and other mature markets, and uses Lenovo branding in emerging markets, de Lencquesaing said.

Lenovo wants to become one of the top three mobility companies in the world -- which de Lencquesaing said the vendor has nearly achieved -- and is not too far off from manufacturing 100 million smartphones a year.

Lenovo has led the market in PC sales for the past eight quarters and is looking to widen its gap over the competition, de Lencquesaing said. The company's PC market share today is in excess of 20 percent, and de Lencquesaing said Lenovo plans to be extremely competitive and aggressive in growing its market share to 30 percent as quickly as possible.

The PC push is motivated in large part by fast consolidation in the market, and de Lencquesaing said Lenovo wants to make sure it remains on top.

"There's not room for an infinity of players," he said.

The company's market share gains are thanks in large part to Synnex, which is Lenovo's fastest-growing enterprise distributor after delivering year-over-year gains of more than 200 percent in that space. Partners of Synnex -- which does not do any business with IBM -- gained access to x86 servers for the first time in October 2014 after Lenovo closed on the purchase from IBM.

Synnex's SMB business with Lenovo also grew by more than 20 percent in the past year, making the Fremont, Calif.-based distributor the leader in market share for Lenovo VARs.

Even through Lenovo has grown into a $50 billion business just a decade after entering North America, de Lencquesaing said the vendor must continue to be responsive, agile and willing to accept feedback and make changes.

"We don't ever think we've got it figured out," de Lencquesaing said.

Metro Datacom sees Lenovo gaining ground, and was impressed with de Lencquesaing's offer to give Synnex North American Conference attendees 50 percent off on all devices.

"From my perspective, they're coming on really strong," said Ace Ten Eyck, president of the McLean, Va.-based Synnex partner.

Metro Datacom is partners with Dell, HP and Lenovo, and is most tightly aligned with HP. But based on de Lencquesaing's presentation, Ten Eyck said he might push his customers a little harder to purchase PCs from Lenovo.

Spinitar is impressed by the direction Lenovo has taken within the industry and where they seem to be heading, said Jay Rogina, CEO of the La Mirada, Calif.-based Synnex partner, who recently switched to Lenovo PCs for his own staff.

Spinitar is almost entirely in the audio-visual business, but Rogina said he's considering adding technology offerings to his line card to help grow his business and take advantage of the increased convergence between audio-visual and IT. If Rogina decided to embrace reselling IT, he said Lenovo would be at the top of his list for vendors to work with.

"The road map [de Lencquesaing] laid out there made a lot of sense to me," Rogina said.