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Lenovo Partners Seeing Huge Momentum In Device-As-A-Service Deals

Lenovo partners are seeing huge momentum with DaaS, which offers the ability to scale down the number of devices on demand -- not just scale up.

Rick White is one of the many Lenovo partners now gearing up for a big shift in the way that PCs are sold as the current economic environment accelerates consumption-based Device-as-a-Service offerings.

“I think that’s just the way of the future,” said White, cofounder and president of vision21 Solutions, a Lenovo Gold partner based in Wake Forest, N.C.

White is far from alone in thinking so, particularly as demand for Device as a Service (DaaS) begins to pick up steam.

[RELATED: ‘Doing The Right Thing’: How Lenovo Stepped Up For Partners In 2020]

Lenovo first launched a DaaS offering in the North American market four years ago before relaunching the offering in its current form two years ago.

But it wasn’t until the upheavals of 2020—which have prompted customers to increasingly demand consumption-based offerings for all of their IT needs—that Lenovo’s DaaS has begun to see major traction, executives said.

“The Device-as-a-Service pipeline that we’re starting to see at Lenovo is growing pretty exponentially,” said Rob Cato, vice president of North America channels in Lenovo’s Intelligent Devices Group.

In response, Lenovo’s Intelligent Devices Group is doubling down on its efforts to expand DaaS and other recurring revenue opportunities with partners.

Along with packaging together PC leases, support and software into a monthly subscription, Lenovo’s DaaS offers a key differentiator, said John Stamer, vice president of Americas services in Lenovo’s Intelligent Devices Group. That differentiator is the ability to scale down the number of devices on demand—not just scale up, Stamer said.

This ability is crucial for customers in the current environment, where workforce size will be a major uncertainty for the foreseeable future at many businesses, he said.

The “flex up, flex down” capability—combined with the growing popularity of as-a-service IT models—has led Lenovo’s DaaS offering to gain momentum in 2020, Stamer said.

“Our pipeline is the highest we’ve ever seen,” he said, noting that a “significant portion” of Lenovo’s DaaS deals have been delivered by partners.

“There’s an extreme pressure to minimize spend. Financial flexibility and agility are key. All those things fit this as-a-service consumption model,” Stamer said.

Without a doubt, there is a major shift in thinking among customers from buying PCs outright to paying for the use of them over time, said Susie Smith, general manager of Wichita, Kan.-based Twotrees Technologies, a subsidiary of Lenovo Platinum partner Woodard Technology and Investments. Among the K-12 education customers that Twotrees focuses on serving, DaaS eliminates the need for bidding out contracts and adds predictability to costs, Smith said.

“I see that Device as a Service—and not just Device as a Service but Everything as a Service—is a direction that the whole industry is going to go,” Smith said. “I think you have to start planning it out—it’s a requirement.”

Meanwhile, Lenovo is also focused on determining how its solutions can fit into—and enable—other recurring revenue opportunities for partners, executives told CRN.

This includes ensuring that Lenovo’s go-to-market, channel programs and enablement models are prepared to support traditional resellers that are expanding into managed services, said Wendy Welch, senior director of U.S. distribution and VAR sales in Lenovo’s Intelligent Devices Group.

For example, because sales cycles are different for MSPs, Lenovo is evaluating how to build a program stack to enable predictable, consistent earnings for them, Welch said.

“The seasonality of an MSP can look very different than for a traditional VAR,” she noted.

Lenovo’s efforts are about ensuring that the company understands the capabilities and the key infrastructure requirements for MSPs, Welch said.

“Then, we’re analyzing what that does to buying trends— for hardware, software and services—to adapt and create relevant channel program models and earning potential that resonate with their business,” she said. “As we look to grow and increase our partner base, we need to ensure that we’re relevant for the various types of partners that exist in the marketplace.”

Stamer said the focus on services is critical for Lenovo and its partners, as the PC market remains highly competitive.

“To get new customers and keep existing customers, the competition is fierce. But it’s proven that if you put the customer in the right solution and you attach services, the customer experience increases—and that overall relationship with that customer is improved,” Stamer said. “So the key message that we’ve been talking with partners about is we have to get these customers in the right solutions and add in the right services and software that will help keep them happy.”

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