Lenovo Demonstrates How Transformation Starts from Within

TREND ANALYSIS: Lenovo has moved from being a small-time PC maker in China to a world IT hardware player. The transformation central to Lenovo is the intelligent, rather than organic, evolution that companies proactively pursue for specific economic, competitive, organizational and business benefits.

Lenovo.2019

Transformation is a commonplace concept in the tech industry, and for good reason. Since the very beginning of computing, servers, personal computers, storage and networking systems and other technology products and services have been employed to fundamentally alter the ways that people live and work. Transformational IT tools and solutions have helped organizations achieve goals and successes that would have been unthinkable a generation or two ago.

But while these business transformations are compelling and even inspiring, how exactly does the process work? That subject was in the spotlight at last week’s Lenovo Accelerate 2019 partner conference in Orlando, Fla., and central to the Transform 3.0 event and industry analyst council hosted by its Data Center Group (DCG). Let’s consider what transformation means to the company and its partners and how it is helping Lenovo DCG shift the competitive balance in numerous markets.

Transformation’s Three ‘I’s’

The transformation central to Lenovo’s events is the intelligent rather than organic evolution that companies proactively pursue for specific economic, competitive, organizational and business benefits. The process typically involves three steps:

  • Intention: Involves a recognition of the need for and decision to pursue specific changes;
  • Implementation: Includes exploring various options, then organizing and executing the strategic plan; and
  • Inspiration: Incorporates after-the-fact efforts to ensure that the transformational shifts continue and stay vital.

It’s hardly a surprise that business transformations often fail. People resist change even when they know it’s necessary. Executives talk a better game than they play. Selfishness and gamesmanship erode the best intentions. Habits are hard to break. Cultural resiliency can quickly morph into pigheaded resistance.

Then again, numerous organizations have succeeded in fundamentally transforming the ways they approach, pursue and compete in commercial markets. That includes Lenovo, which, through both internal development efforts and strategic acquisitions, has grown from being a China-focused PC maker to becoming a truly international vendor of end-to-end solutions and services. Along the way the company has become the No. 1 PC vendor and enjoyed five consecutive quarters of DCG revenue growth.

In Lenovo’s most recent quarter (announced on Feb. 20), the company posted its highest group revenues in four years: $14 billion, up 8.5% year over year. Lenovo DCG saw a 31% YOY increase in revenues to $1.6 billion and recorded YOY revenue growth in all geographies, including triple-digit growth in North America and double-digit growth in Asia-Pacific, EMEA and Latin America. In particular, sales of high-margin hyperscale and software-defined infrastructure (SDI) solutions are far outpacing the market. In addition, Lenovo retained its No. 1 position on the Top500 list of global supercomputers and substantially increased its lead over competing vendors.

Lenovo Accelerate and Transform 3.0

The Accelerate conference for Lenovo’s business partners was held separately from the first two DCG Transform events, so it’s worth asking why the two were integrated this year. The simple answer is that it’s due to the Data Center Group’s increasing importance to value added resellers (VARs), system integrators and other strategic partners.

Kirk.Skaugen

Prior to Lenovo’s 2014 acquisition of IBM’s Intel-based System x products, organization and intellectual property, the company’s modest server offerings mainly focused on small business applications and use cases. The IBM assets immediately supercharged Lenovo’s system portfolio, but the company stumbled a bit out of the gate and failed to capitalize on the global enterprise clients IBM cultivated. That faltering slowed and then reversed course after the 2016 hiring of former Intel executive Kirk Skaugen as president of Lenovo DCG.

It would be difficult or impossible to find a senior executive with a deeper understanding of or experience with Intel-based systems and markets. Prior to joining Lenovo, he spent 24 years with Intel, including a decade managing organizations in the company’s data center group. Skaugen put his deep experience to good use by assembling an exceptional management team and overseeing a build-out of the DCG portfolio, including substantial expansions of both traditional and leading-edge server and storage solutions, and key strategic partnerships.

The two previous Transform events highlighted substantial expansions of Lenovo’s server (2017) and storage (2018) portfolios, and the latter also included the announcement of a high-profile strategic partnership with NetApp. By growing DCG’s solution portfolios and effectively pursuing new and emerging markets, Skaugen and his team have enabled Lenovo to engage with businesses of every kind and size, in virtually any global market. In turn, those same efforts have considerably expanded commercial opportunities for Lenovo’s strategic partners to pursue.

So, what was new and different at this year’s conferences? Central to both events was a notable broadening of Lenovo’s vision across all workspaces, data centers and clouds, to the edge of enterprise IT infrastructures. In fact, Skaugen’s keynote highlighted expanded edge-to-cloud portfolio and service offerings, led by a new wireless-enabled edge solution, the ThinkSystem SE350 Edge Server.

Designed for easy installation and management, the ThinkSystem SE350 can streamline the collection and analysis of data collected from remote sensors, cameras and solutions, including Lenovo’s customer validated ThinkIoT offerings. The new system will also complement solutions for specific vertical markets and use cases the company is developing with partners, such as Pivot3 (video surveillance) and Scale Computing (future ready retail).

Skaugen also discussed plans to expand commercial engagements with telco customers to take advantage of emerging 5G business opportunities. Given Lenovo’s success in hyperscale markets (the company already counts six of the top 10 global hyperscale companies as customers), developing solutions for the extreme conditions of telco data centers is a logical step.

Finally, Skaugen welcomed Franz Faerber, Executive Vice President and Global Head of SAP Technology and Innovation for Big Data, who announced that SAP had named Lenovo as the Pinnacle Partner award winner in the infrastructure category for 2019. The companies have long worked closely together ; SAP utilizes Lenovo’s ThinkSystem platforms as the reference architecture for its HANA in-memory database solutions. The Pinnacle Partner award underscores the continuing value and vitality of their relationship. In addition, Skaugen announced the Lenovo Intelligent Insights with SAP Data Hub, which addresses corporate challenges with managing, orchestrating and governing data.

Lenovo runs Lenovo

The Accelerate audience was both appreciative and enthusiastic. This isn’t surprising, since Lenovo’s new products and services, along with its longer-term strategies, are effectively putting more arrows into partners’ quivers and preparing future targets to hunt. But there was also a deeper subtext in the Lenovo keynotes that rounded out the new products/new opportunities messaging.

Art Hu, Lenovo’s SVP and CIO touched on those points during his keynote by focusing on the profound, constant, never-ending change that is a central element of 21st century business. The central question, Hu noted, is: “How to capture value and opportunity during times of extraordinary change?” For Lenovo, an obvious focal point is to continue exploring, expanding and exploiting new technologies and opportunities associated with broader market evolution.

But Hu also noted that the company recognizes and respects “the value of trusted partners to drive the next stages of smart business transformation.” In other words, transformation isn’t merely a cliché—it is elemental to effective competition and success, and strategic partners have critical roles to play in the process. At the same time, business evolution is seldom, if ever, happenstance. Instead, it requires everyone—vendors, partners and customers—to step up, excel and lead or enable of intelligent transformation.

Final analysis

Why should Lenovo be regarded a leader in business transformation? Why should business partners trust the company to deliver on its promises?

Because Lenovo has been there and done that itself, time and again. From the company’s founding 35 years ago to its emergence as a maker and then a leading vendor of PCs for China, to its acquisitions of IBM’s PC and Intel-based server organizations, to becoming the global leader in PC sales to nearing annual revenues of $60 billion, and to focusing on IT solutions that extend across workspaces to data centers to clouds to the edge and beyond.

As Hu noted in his closing remarks: “Lenovo runs Lenovo.” That is, the company clearly understands that transformation comes from within. Plus, it has the history to show what intelligent transformation, successfully intended, fully implemented and continually inspired can accomplish for a company, its business partners and customers.

Is it any wonder that the attendees at Accelerate 2019 and Transform 3.0 are ready, willing and able to trust and follow Lenovo’s lead?

Charles King is a principal analyst at PUND-IT and a regular contributor to eWEEK.  © 2019 Pund-IT, Inc. All rights reserved.

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