Lenovo’s Vladimir Rozanovich On Windows 11, Taking Market Share And The ‘One Lenovo’ Rollout
The recently appointed president of Lenovo’s North America business shares how the company is seeking to unify its PC and data center sides to increase growth opportunities for partners.
With the “One Lenovo” initiative to integrate the company’s PC and data center sides, the tech giant is looking to create new growth opportunities for channel partners while capturing share from competitors in the North America market, according to recently appointed Lenovo North America President Vladimir Rozanovich.
Two months into his role, Rozanovich—formerly a 24-year veteran of chipmaker AMD—is driving Lenovo’s efforts to bring together its PC and data center businesses internally. Meanwhile, the work with solution providers around the “One Lenovo” shift is just beginning, and will include appointing a new leader for the North America channel overall, Rozanovich said in an interview with CRN last week. The company plans to debut its new Lenovo 360 channel program, based around the “One Lenovo” approach, in early 2022.
Rozanovich is responsible for all Lenovo product sales and business groups in North America. He also serves as senior vice president for the company’s International Sales Organization, which covers all Lenovo sales outside of China and launched as part of the company’s reorganization on April 1.
In speaking to CRN, Rozanovich said it’s his mission to help Lenovo “transform as a company in the North America space to be even more important to our partners and our customers.”
“I’m hearing so much noise in the market about how our competitors are not treating their channel partners well—reducing incentive rates, pulling customers back in [to direct]. You will always see Lenovo be a channel-first company,” Rozanovich said. “We want our channel partners to be extensions of our sales force. That’s the way we get from No. 3, to No. 2, to No. 1 in the [North America] PC market—and that’s how we grow in the server market.”
Rozanovich also discussed topics including the upcoming launch of Windows 11, Microsoft’s successor operating system to Windows 10, which is expected to debut on new PCs during the 2021 holiday season.
Rozanovich said he was lured to Lenovo in part by the unique opportunity of bringing together the PC and data center businesses—both areas he’s had experience in from his time at AMD. While the two sides at Lenovo have already begun to increase their collaboration in recent years, “there was never that commitment to integrate the teams like we are doing today,” he said. “That’s what interested me to come here.”
Rozanovich was recruited to join Lenovo by Matthew Zielinski, who was both a former colleague of his at AMD and had previously served as president of Lenovo’s Intelligent Devices Group in North America. Zielinski is now president of the International Sales Organization at Lenovo.
What follows is an edited portion of CRN’s interview with Rozanovich.
Since joining the company, how have you been implementing the One Lenovo strategy so far?
The first thing we’ve implemented is our global account team coverage. With large financial services accounts on Wall Street [for instance], when you meet with these IT organizations they’re talking about the entire infrastructure. They’re talking about things like where does monitor technology go, how does thin client technology intermix with VDI technology, how are you going to interface with the cloud providers on an Azure Stack Hub-type solution, what are you doing with Google Anthos? The conversation literally goes from all devices, to collaboration in the office—which then turns into VDI, which then turns into data center. To have those conversations with our global account teams, that’s where we’ve first started. That’s for those largest of the large accounts where people are looking at their IT investments as something that’s critical to their business. That’s where we’re going to make sure our sellers and our partners really understand the whole solution stack—and how we start putting services on top of that.
So you’ve already started working with the channel on shifting to a One Lenovo approach?
That’s where we are now in the strategy. We’ve discussed with all of our channel partners starting with when Pascal [Bourguet] and Rob Cato and Steve Biondi, a few months ago, announced what’s going to happen. For the channel segment, we’re going to put a channel leader in place that’s going to manage that entire umbrella of business. We’re in the process of doing that now. But we’re also making sure that we don’t de-focus on one part of the business or another. We have a lot of IDG channel partners—the Intelligent Devices Group—and then we have a lot of ISG [Infrastructure Solutions Group] channel partners. And the overlap is smaller than anybody thought. And so we have 1,000s of partners selling one device and 1,000s of partners selling the other, and very little overlap. So the question is, how do we work with these channel partners to go bigger and provide more of a solution? So that’s what we’ve now started doing. We’re looking at the channel partner base to say, how do we start leveraging server sales into PC sales?
And so when we look at some of the bigger [national solution providers], they’re saying, “Hey, you are our No. 1 partner when it comes to client device sales. But we haven’t engaged with you much on server. Can we change that?” I think the time is right, where we’re starting to look at how One Lenovo can cover these channel partners—so that we can scale with their business across how they’re approaching the market. The global accounts are where it makes sense right away. Then for the channel partners, we can show them how to sell solutions more from that “client to cloud” approach.
What changes are you instituting so that the two sides are working together more closely? Are the two sides already communicating and collaborating more?
They are already. That was one of the things I noticed when I first came on board — we already had Rob Cato and Steve Biondi starting to do joint customer meetings. Unfortunately we did have to cancel our business partner executives summit down in Florida, but that was when we were going to start telling more about our [One Lenovo] story to all of our key business partners.
No. 1, there’s a training aspect inside of Lenovo to make sure our IDG sellers understand the ISG portfolio, and vice versa. We implemented some cross-selling engagements across all of our sales teams—not just the channel partnerships, but all of our sales teams. As we go into our next fiscal year, I’m going to start talking about them interchangeably. I’ll be making sure that the teams are up to speed on the technology on both sides and the innovation on both sides. The channel partner alignment is happening as we speak. We’re not going to put a cutoff date. We’re going to be very cautious to see if the partners are responding the right way, and we are getting what we want out of this. So I see this as a rollout.
When would you say that One Lenovo will be pervasive within the company?
I would say it’ll happen as soon as we feel that the company is ready, as soon as we feel our channel partners are ready. There may be overlap or separation on certain partners that lasts a little bit longer than others. But my personal goal is by the time we hit our kickoff for the new fiscal year, in April, we’re there. But by the end of this year, we should be pretty far down the path.
For Lenovo 360, what are the biggest things you want partners to know? And has anything evolved with that plan since it was announced?
I think what I’ve been pushing the team on is to show our partners that they can make more money with us on this strategy. And really it’s those blueprints around the services and software portion of our organization. It’s about, how do we make sure we show these blueprints for smart collaboration offices, how do we show these blueprints for “cloud to client”-type rollouts across something like VDI. Those are the things that I think I’ve seen the biggest impact beginning to start. And even when I look at our SSG [Solutions and Services Group], we drove that portion of the business in North America to over $100 million in revenue. And it’s growing every quarter. We want our channel partners to start taking advantage of that. We will show them the blueprints, how they can make more money, how they can partner with us to be more sticky. Because I think that’s the key thing that you’re going to see out of our 360 strategies—how do we get solutions that are more sticky and bring value. It’s not just about having long-term revenue, it’s about how we bring value to get deeper customer relationships with the channel.
Could you break down what goes into your Solutions and Services Group business?
There are three portions. The first one is premium services and support, such as extended warranties, white-glove service, rapid turnaround on end customer deployments for services and support. You also have things like software add-ons, such as our ThinkShield portfolio, or it could be an Absolute or a SentinelOne type of add-on. Our channel partners and our sellers have been very accustomed to selling that “tower” of services.
The one where we’re seeing the biggest growth right now is what we call our “tower two,” which includes device-as-a-service. Our largest device-as-a-service deployment we have right now covers about 100,000 devices with a very large customer. Half of those devices aren’t even Lenovo devices. We help this customer with everything from asset deployment, management, updates, security patches—and then on the backend we do asset recovery. For customers, instead of a capex cost from buying a device, it’s an opex cost because it’s services. Some channel partners are just now starting to adopt that “everything-as-a-service” mentality. We want to start tapping into potentially some of those reseller partners that are very accustomed to as-a-service.
Tower three is customized, complex solutions. This is the one where it really gets some stickiness. This is where we’re looking at things like Lenovo workstations integrated with our AR/VR glasses. We just launched the new ThinkReality A3 smart glasses this past week, and then you have the software on top of it.
What would be an example of a complex solution that Lenovo can now provide to customers?
I was talking to a large automotive company just a week ago, and they were buying mobile workstations, VR glasses and software. So for this automotive customer we had our workstation team on the line, we had our AR/VR team on the line, and we had our SSG team on the line. And one of the things we talked about was that we could do this as a package. We could actually sell it as a complete package with those software components involved—so this automotive customer doesn’t have to go to one provider for workstation, one provider for VR glasses, one provider for software. That’s a complex solution.
For those three pillars of the SSG, we think there’s opportunity for channel partners to make money in every one of them. They’re used to it on the premium services today. We think device-as-a-service could really pick up for some of these channel partners. And then the complex solutions, that’s where we’ll have to start working with some more unique partners that might be specialized in high-performance computing or workstation.
With Lenovo 360, is the goal for partners to essentially be dealing with one organization across PC, data center and services/solutions?
Yes. Eventually we want to get to the point where [it’s one system] for things like reporting and incentives and rebates and all of that. That’s some of the complexity we want to remove. Right now, a lot of our partners who are dealing with both sides of our business may have contracts both legally and rebate-wise and incentive-wise on one side of the house, and they have very similar contracts and rebates and programs and incentives on the other side of the house. We’re saying, wouldn’t it be a lot easier if we looked at consolidated spends, consolidated rebate programs. One of the things I like about it is, as you start showing a bigger revenue profile, it means that we can say, maybe we’ll give you a kicker once you hit an overall revenue profile [across both PC and data center]. Now you’re starting to be really strategic in the fact that we’re growing business together. And the benefit to us is, maybe we just got the device side of the revenue before but now we’re actually getting some services business. It’s incremental.
Lenovo currently has different tiers—Platinum, Gold etc.—for both the IDG and ISG sides of the business. Will you eventually just offer partner tiers that cover the entire Lenovo business?
I think that would be an ideal end state goal. We know it’s not going to happen overnight. But that if we say, here’s how a partner gets to Platinum [across all solutions] that could be really good for the partner. Because they know that they can hit that revenue by looking at other solutions [besides the ones they’ve been focusing on]. Sometimes that data center revenue adds up quick. When you’re looking at servers that go $10,000 each, versus client devices that might be $1,000, when you start looking at these bigger rollouts, you could hit higher thresholds of revenue quicker with some of these customers. And it could benefit us both.
Could that be something that happens in 2022, or would it be further out than that?
I don’t have a timeline for it. But the concept is one plus one should be more than two. And that “more than two” really is that profitability for a channel partner. If their overall revenue with us goes up, I want to make sure they’re incentivized.
We’re going to make sure that there are [targets] in place for both those businesses. So if there’s a particular channel partner that says, “I’m not going to worry about the server side, I can sell some more devices and hit my targets”—we want to make sure that my team has goals on both sides.
You mentioned that you’re looking for an overall “One Lenovo” channel leader?
The goal is that we will have a channel leader for One Lenovo for North America. I want somebody on my staff that’s going to handle everything channel across our business. Over the next year we will have both ISG and IDG coverage of accounts. But I want one channel leader. Because with Lenovo 360, if we say, “Here’s incentives around services, here’s incentives around PC, here’s incentives around ISG”—I want there to be one person that’s going to be responsible for all of that and have ownership of all of it.
Could this leader end up being Rob Cato or Steve Biondi, or would the two of them be reporting to this leader?
My view is both of those candidates are great candidates. We have two absolutely amazing leaders who are leading that business. The way I look at it right now is they are acting as leaders of this combined One Lenovo today. I feel that this is one where we’re going to look to keep it within the family.
With Windows 11 on the way, how big of an opportunity is this for Lenovo and partners?
I think through history we’ve always seen any transition on Windows has led to opportunity. It usually ends up an opportunity for PC refresh cycles. Because so many times we’ve seen that if [an organization] rolls out a new OS, they’re most likely going to roll out a new device as part of that. They don’t want to do a retrofit back to an old device, because you never know if you have the right configuration, the right memory size, the CPU type that can handle the additional performance requirements. So we love the fact that there’s this transition coming up. We think it’s going to add more feature sets to end users.
You also have the Intel Evo product that’s also new in the market to compete against Apple M1. They’re going to put a good investment behind that as well. So you’re going to see this Windows 11 plus Intel Evo combination, together with our latest and greatest devices. We view that as an opportunity for us as a refresh cycle.
Do you have any sense on whether this refresh cycle is bigger because of the hardware requirements that haven’t been there before?
I think it’s a little too early to tell yet. We are looking very favorably at this refresh cycle. The big question is, how quickly is the transition going to happen? How long are people going to keep asking for Windows 10 devices, after Windows 11 rolls out? Because the other thing I’ve seen in the industry is, usually once you have a rollout, people still want the older [operating system] for a long period of time — just because of the fact that they’ve been certified on it. Maybe it’s a large global organization that’s certified on it, and they don’t want to change anything. So you are going to see some of those types of positions in the market as well.
In terms of security, is it beneficial in your view that Windows 11 has these higher security requirements?
I think we have to [increase security requirements]. What we have seen with work from home and education from home — people have become more mobile, which opens up the door to security risks and vulnerabilities. People’s home networks are not as secure as having a VPN in an office building. I think the entire industry is looking at that. The CPU providers are saying, how do we make sure we design in solid hardware requirements? The OS guys like Microsoft are saying, how do we build our OS to be more secure? We’re looking at it to say, how do we make sure that our application set at the device level offers protection and capabilities? Based on the fact that so many people are working remotely, probably in insecure environments, now it’s up to the device manufacturers, the OS guys and the CPU guys to say, how do we make sure our devices are more secure?
In addition to the TPM 2.0 chip requirement with Windows 11, which is obviously about security, do you have a sense that the requirement for newer processors from Intel or AMD is also a security measure?
Yes. If you saw some of the vulnerabilities over the last couple years on the security side — Spectre and Meltdown — those are sideband intrusion attacks that people can come in via the memory. Those are things that the CPU guys have gotten their arms around. With every generation of the CPU, they’re going to be looking at these vulnerabilities. I think with Spectre, Meltdown and others, the CPU guys really clamped down on that. These malicious individuals, they’re going to find other ways to try to get in. And so it’s going to be a continuous update of OS, BIOS, application, silicon.
Overall, what is your message to partners?
I’m hearing so much noise in the market about how our competitors are not treating their channel partners well—reducing incentive rates, pulling customers back in [to direct]. You will always see Lenovo be a channel-first company. Channel partners drive so much of our business in North America. We want our channel partners to be extensions of our sales force. That’s the way we get from No. 3, to No. 2, to No. 1 in the [North America] PC market—and that’s how we grow in the server market. I want my teams to have trusted relationships with our partners. We will work with them to make sure they’re successful — that’s our goal. So first and foremost, we’re continuing to be a channel-first company.
The second thing is, there are going to be new revenue streams of opportunities for those channel partners between SSG and ISG coming into that IDG space—and vice versa. With some of the channel partners where we’ve been super strong on the server side, I want some of those channel partners to start offering solutions around smart collaboration, maybe commercial tablets, maybe looking at new sectors like government. That’s one of the areas that I think is a prime opportunity.
In the first nine weeks I’ve been on board at Lenovo, I feel like I’ve come up to speed quickly. And I’m even more excited than before about the opportunity we have. My sights are set on, how do I grow from No. 3 in the PC space to No. 2? And then my sights are also set on growing our services, and server and storage revenue—to the point where we are going to be a force in the industry.