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Lenovo 'Keeps Stepping It Up': Plans Device-As-A-Service Offering For SMBs

Device-as-a-Service 'for the longest time has really been designed for very large customers,' but Lenovo is now looking to change that, channel chief Rob Cato tells CRN.

Lenovo's Intelligent Devices Group in North America is developing a new Device-as-a-Service offering tailored to meeting the needs of small and medium-sized businesses, top executives in the business told CRN.

The offering is timely because a growing number of customers are interested in the types of monthly lease options for PCs that Device-as-a-Service provides, particularly amid economic uncertainties affecting countless solution providers, executives said.

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"Device-as-a-Service has been talked about in the industry for quite some time. But without a doubt, we've seen a significant desire from SMBs and from a lot of customers that weren't really kicking the tires on Device-as-a-Service until now," said Matthew Zielinski, president of Lenovo's North America Intelligent Devices Group. "And I think that's purely a result of them managing cash, given that [Device-as-a-Service leases are] less of a capital outlay. If you're going to amortize it on a monthly basis, then it's a bit more palatable financially for a lot of our customers right now. So we're trying to create as many offerings as we can in that space that are appealing throughout the channel."

Overall, "we have seen a rapid desire for DaaS" as a result of the economic environment created by the COVID-19 pandemic, Zielinski said.

Lenovo is also consistently hearing from our partners that they're trying to increase their monthly recurring revenue, said Rob Cato, vice president of North America channels in Lenovo's Intelligent Devices Group.

"This has been going on in the channel for the last several years. They're shifting their business from more of a transactional type business to more of an MRR kind of business," Cato said. "And as they do that, DaaS is a perfect opportunity for them to get into more of that monthly billing cycle and that recurring revenue."

While Device-as-a-Service is becoming more commonplace in large enterprises, fewer SMBs have adopted the model as a result of their smaller-scale workforces and differing needs--but Lenovo is aiming to change that, executives said.

"I think the big thing that we've got to figure out there [is that] DaaS for the longest time has really been designed for very large customers--very solutions-oriented, [created to be] very unique for them," Cato said. "We've got to figure out how we create--with our partners and with the distributors--a DaaS model that's more transactional in nature. I want to go in, I want to be able to select my system, I want to be able to add these services. I want to be able to add my financing, and then just easily convert that to a quote to a customer. That's what we're working on now."

Michael Goldstein, president and CEO of LAN Infotech, a Lenovo partner in Fort Lauderdale, Fla., said what Lenovo is describing sounds like a "great offering."

"SMB customers will love this – especially in today's environment," Goldstein said. "Lenovo just keeps stepping it up."

Larry Fulop, vice president of technology solutions at Tempe, Ariz.-based MicroAge, also said it sounds like Lenovo is working on an "interesting offering" for partners and customers.

"There are quite a few options out there. But this might be the future of client products," Fulop said. "So it has an opportunity to be attractive [as a way for] Lenovo products to be sold, leveraging Lenovo finance a little differently than historically."

Mark Sanchez, CEO of Loganville, Ga.-based CommQuest, a Lenovo Gold partner, said the current economic environment "very well could be the trigger" for more SMBs to adopt Device-as-a-Service.

Additionally, "it's an education thing," Sanchez said. "All of the partners will need to educate and lead with that information [on DaaS]."

In terms of when the new Device-as-a-Service offering could launch, Cato said that "Lenovo is working very fast on it."

"And again, one of the things we want to make sure is that we've got a model and an ability for them to transact online. But they need an easy solution. You want to be able to go online, configure, do what you need to. So we're working on that," he said. "But in the meantime, I think there are opportunities to work with our distributors who do have the financing and the capital to be able to support many of these partners that want to have that. And so whether it's Ingram or Tech Data or Synnex or D&H, we want to be able to work with them to provide that solution in the near term as well. So we're doing a little bit of both right now."

Ultimately, "those SMB customers who are able to come out of this [crisis] on the other side will probably put in different business continuity and business contingency plans. And they're going to want to have those services that provide support, whether it's in the office or whether it's a work-from-home," Cato said. "And I think MSPs who have those kinds of services and capabilities will be really, really attractive in this new world going forward. So with DaaS, we're seeing a lot more interest."

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