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Lenovo’s Everything-As-A-Service Strategy: From The Data Center To The Edge To IoT

The company lays the groundwork for a new consumption-led sales motion with TruScale Infrastructure Services, which allows customers to use and pay for on-premises data center hardware and services without having to purchase the equipment.

The days of Lenovo Data Center Group partners having to sell solutions in the traditional Capex sales motion will soon be over.

In a bullish move to arm solution providers with a differentiated solution set, the company is planning to make every single asset in Lenovo’s portfolio—from data center to the edge to the Internet of Things—available to sell as a service, which is music to the channel’s ears.

Lenovo is poised and ready for this massive market transition and laid the groundwork in February with arguably its biggest data center initiative in years: TruScale Infrastructure Services.

TruScale is a consumption-based, Infrastructure-as-a-Service offering based on electrical consumption that allows customers to use and pay for on-premises data center hardware and services without having to purchase the equipment. Customers never take capital ownership of the hardware or IT assets, and there is no minimum capacity or utilization requirement.

[RELATED: Lenovo Partners Reaping Benefits Of New Channel Charge]

“Some customers are demanding as a service,” said JeanPhillipe Couture, director of managed and cloud services for ProContact, a Quebec-based Lenovo partner. “This is what will help ProContact and partners just like us to differentiate ourselves in the market. We need to stay ahead and innovate, and innovation is not only about technology. It’s also about the way we consume IT and the way we can provide ease of business for customers. The more Lenovo implements their as-a-service portfolio, the bigger it will be for us and for our customers. It’s really great news for the channel.”

Lenovo’s surge toward Opex offerings comes as more and more businesses are ready to consume IT through monthly subscriptions or consumption-based pay-per-use models.

“If we are going to survive and our partners are going to survive, we have to move to a more consumption-led model,” said Wilfredo Sotolongo, vice president and chief customer officer for Lenovo’s Data Center Group.

“We had an estimated pipeline for TruScale by the end of last quarter [and] we are more than 5X the pipeline that we had expected—we’re getting swamped with interest,” said Laura Laltrello, vice president and general manager of services for Lenovo’s Data Center Group. “We’re driving this as an annuity stream with the channel and enabling them to put their own service offerings on top of it so that they give a full solution to the customer and get a sticky relationship. We’re not going to take that relationship away from them.”

TruScale has already seen several customer wins, although the installation can take longer than a traditional data center install due to the customer having to change its infrastructure and its financial model, according to Laltrello. Partners can currently sell all of Lenovo’s data center offerings, including its ThinkAgile software-defined infrastructure and ThinkSystem server portfolios, on the pay-for-what-youuse subscription model, which includes hardware installation, deployment, management, maintenance and removal.

“We do have a lot of traction with TruScale as we speak,” said ProContact’s Couture. “It really fills a gap in the market right now. Some customers are looking at cloud and they’re worried about data resiliency, cost, etc. So they want to keep things onpremises and are looking at the flexibility and agility of doing consumption-based IT services.”

But Lenovo isn’t stopping with TruScale—the company is now gearing up to take its as-a-service capabilities to the next level.

“We’re going to be working vigorously to be able to enable TruScale with more and more capability because we recognize that there’s a huge demand for those capabilities in the marketplace. We hope that we’ll be able to do as-a-service for anything in our portfolio, including edge and IoT,” said Sotolongo. “Every product that you can buy today as an asset, we’re going to turn into an as-a-service capability—every product.”

Sotolongo admits that creating as-a-service offerings at the edge will be more difficult compared with the data center, but said Lenovo has the capabilities and drive to make it happen sooner rather than later.

“TruScale is good for the data center side of things. We might add some edge as-a-service solutions. We’ll have a PC as a service or intelligent devices as a service. Customers are asking for this right now,” said ProContact’s Couture. “The more programs and solutions they build around that, the easier it will be to do business with our customers.”

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