Jay Parker, president of Lenovo North America, said Lenovo solution providers drove $800 million of new business for the company in 2014, helping it become a PC powerhouse and a looming threat on the mobile and data center fronts.
Speaking at Lenovo's annual Accelerate 2014 partner conference in Orlando, Fla., on Tuesday, Parker said that Lenovo's channel was strong, boasting that channel-driven SMB revenue growth is up 28 percent, server profitability is up 67 percent and growth in its education business is up 30 percent.
"So when there is discussion about how the PC market is struggling, shrinking or is becoming a commodity, I respond: $800 million of growth in the commercial channel with Lenovo hardware tells us that the story hasn't ended yet on PCs."
According to Lenovo, over 80 percent of its $6 billion in North American commercial sales was led by partners. Parker said that its North American sales grew $1 billion over the last year, with 80 percent driven by partner-led accounts.
During his keynote to attendees, Parker was light on details about the company’s pending $2.3 billion acquisition of IBM's x86 server business as it awaits regulatory approval. He told partners that its ThinkServer business has been growing and that even after it acquires IBM’s x86 server business, the two product lines would complement one another and not compete. "Keep selling ThinkServe," Parker said repeatedly.
"This year represents a huge inflection point for our business. And soon it gets even more exciting with the acquisition of IBM's x86 business and Motorola," Parker said. "We want to sell servers and we want to be a player. IBM’s x86 business will accelerate our server strategy," Parker said. "We have experience with IBM. We know the cultures, we know the challenges and we know the decisions that have to be made. We are confident that what we had to do with IBM's PC business will happen even faster with its server business."
He said the IBM x86 team, which numbers close to 10,000 employees, will bring a respected product portfolio, technology, expertise and a talent that Lenovo didn't have.
Parker was even more opaque about Lenovo's $2.91 billion purchase of Google's Motorola Mobility smartphone business, hardly mentioning it during his talk. "Lenovo sold 50 million smartphones last year. Those were sold into markets worldwide, but not in North America. Motorola gives us a brand, carrier relationships and intellectual property to succeed here."
"With these two acquisitions, Lenovo will be at least top three from the data center to the pants pocket,” Parker said. "In servers and storage, we'll be number three. In PCs, we are number one. In mobile, we'll be number three,” Parker said. "We have visions of becoming a great technology company, not just a PC company."
Parker outlined Lenovo's priorities for 2014, which include integrating acquisitions -- namely IBM's x86 business and Motorola. Second, Parker said customer acquisitions is a huge priority and something that will help Lenovo grow its footprint in North America, where Parker said it is currently the third-largest PC seller. Parker also said a priority is servers, with ThinkServers a priority today and x86 servers tomorrow.
Finally, Parker called on partners to help grow Lenovo's services business. "Services is a growing business for us. But it’s one that we leverage the partner community to execute. So as hardware sales stay flat, services is a new business opportunity. And as we go create new service opportunities, we are looking at partners to execute," Parker said.
Tyler Bowman, national account executive at SBS Group, a Lenovo partner based in Edison, N.J., said he liked what he heard from Parker, admitting he wanted to hear more about IBM's x86 business. "I give Lenovo a lot of respect for doing what IBM and other companies don't have the guts to do. Lenovo is innovating, it's bringing manufacturing state-side, and it's listening to partners. Instead of saying a market is dead and throwing in the towel, Lenovo is showing you can grow your business, innovate and sell."
Other Lenovo partners attending Accelerate said they appreciated Lenovo's commitment to the PC business.
"Dell seems distracted, and Lenovo is out innovating HP on the hardware front," said Scott Gallacher, technical account manager at Liberty Technology, a Griffin, Ga., Lenovo partner. "We are seeing double-digit revenue with Lenovo. We look forward to seeing that type of growth and product commitment as we move up into the data center with Lenovo," Gallacher said.
PUBLISHED MAY 13, 2014