With enterprises across the country waking up to hyperscale, high performance computing, hyperconvergence and AI, Lenovo revamped its go-to-market strategy to drive emerging technologies. But does that mean the server supremo will shift its focus from traditional business? Not quite. The company witnessed a reassuring 50 percent growth in traditional business as well.
Kirk Skaugen, EVP at Lenovo and President of Lenovo DCG throws light on how the company made this strategic shift and adopted a unified global channel program and a single-tier strategy for its partners.
What has changed with respect to your strategy, especially when it comes to your datacenter operations? Could you give us an overview of your go-to market strategy?
We created a 4x100 day plan. The first 100 days were spent to see what was going well and what needed to be improved. The next 100 days were spent fixing those in the market, following which 100 days were spent in seeing how the new strategy played out in the market. In the last 100 days, we replicated these changes and did the roll out in China.
A year ago, we were declining as a business, so people asked what has changed. First, it is our dedication – all of Lenovo’s sellers are now dedicated to the DCG. We appointed specialists for servers, storage, networking and services.
We trained 11,000 people worldwide, and they are now professionally certified. We brought back our relationship with all our global system integrators and launched the most comprehensive portfolio – the IBM Lenovo history and simplified the branding.
With respect to our go-to market, we reorganized the company to be more customer-centric across different market segments – hyperscale, public cloud, supercomputing, HPC and AI, software defined, IoT, and Telco.
The transformation we witnessed was outstanding – we’re now the largest supercomputing company in the world. We’ve seen a 50 percent growth in traditional business and a 400 percent year-on-year growth in India.
Could you share your observations around hyperconvergence adoption in India? What makes Lenovo uniquely positioned in this space?
We have observed that most CIOs are open to adopting hyper-convergent technology. Our new product, ThinkSystem combines server, storage and networking. Recently, in the US, we announced the new ThinkAgile cloud platform for software-defined workloads, and that’s all set to enter the Indian market in the next few months.
We can integrate and deliver higher performance compared to anyone else because right now our brands stand for the highest performance, highest reliability, highest quality and highest customer satisfaction, as revealed by the ITIC survey. This is true not just in the traditional business but also in the hyperconvergence business.
We grew at 400 percent over the previous year in the hyperconverged space, and that’s only with Nutanix. Most CIOs are coming back for repeat purchases – around 30 percent of our revenue comes from repeat sales in hyperconverged infra.
Hyperconvergence is not restricted to traditional workloads which enterprises use, we have customers who use SAP on it, running their enterprise mission workloads on the same.
How is Lenovo poised in the High Performance Computing (HPC) and Artificial Intelligence space in India? Additionally, what makes Lenovo’s solution a differentiator in the AI space?
We are No. 1 in HPC in 15 countries; 117 of the top 500 supercomputers are made by Lenovo. Today, 17 of the top 25 research institutions in the world run Lenovo’s supercomputers.
In India, we have tied up with Liquid Propulsion Systems Centre under ISRO. Today we’re looking at leveraging HPC for cancer research and reducing city pollution levels. We’re also using HPC to predict weather patterns, hurricanes, tsunami warning, solving global warming, and for HIV research.
To expand our AI prowess in the country, we created a software called Lico, which helps simplify AI for the masses. Sometimes, you have to buy a very large expensive machine and load it up and hope to utilize it. With Lico, you can scale your CPU and your GPU as you go.
The software enables you to grow as you grow. So you don’t need a massive investment upfront. Lico is taking Lenovo’s prowess in supercomputing and AI and it is being brought into the mid-market segment so that everyone can access it.
What is the next wave in datacenter management? Lenovo made a breakthrough in datacenter technology by using warm water cooling. Could you elaborate on that?
We announced this technology called Neptune for HPC and supercomputing – it uses warm water cooling, and it was acknowledged to be the most innovative technology in a showdown between 15 top vendors.
Warm water cooling is a trend that’s quickly catching on in countries where power is expensive – like Japan and Germany. With warm water cooling, we can actually utilize higher voltage Intel CPUs because we have the ability to extract heat more efficiently.
With respect to datacenter technologies, we are excited about Intel’s 3D cross point technology – it will revolutionize the storage hierarchy.
We believe there is a trend for mass customization coming up – for both AI and hyperscale. We are doing deep engineering with each and every hyper-scaler and putting them into our own motherboard factory. We are going from 0 to 33 custom designs this year.
What has changed in Lenovo’s channel partner strategy? How is it going to ensure that it brings about channel loyalty and the ‘stickiness’ factor?
Across Asia Pacific, 85 percent of our business is driven through channels. Now we have one global channel program and a single-tier strategy for our partners. The channel itself is going through a lot of transition and transformation as they move from a commodity to a solution focus. We have also transformed from a server-led company to a solution-led company.
Having these solutions across platforms combined with the added advantage of no legacy, puts our channel partners in a much better position.