With its eyes squarely on the IT world’s stampede toward “everything as a service,” Lenovo plans to make purchasing its client hardware at subscription rates easier in the year ahead.
“Device as a service is not a new thing,” says Rob Cato, vice president of North American channel for Lenovo’s Intelligent Devices Group, “but I do think we’ve got to make it more seamless for our partners to be able to transact with us.”
Lenovo competitor Dell introduced a sweeping as-a-service purchasing program late in 2019. HP has had a similar offering since 2016.
Other priorities for the coming months include enhancing partner communications through vehicles like the cross-channel partner hub Lenovo introduced last July, collecting more feedback via partner advisory councils, and introducing more programs for managed service providers with limited hardware expertise.
“I do want to make sure that we have the right offerings and the right solutions for those partners that maybe were born in the cloud that have a more managed services portfolio and are starting to hear from their customers that they need more offerings and solutions that would include things like Lenovo hardware, software, and services,” Cato says.
The Dell Expert Network, which debuted in 2018, is similarly designed to help partners that don’t normally resell hardware meet customer demand for PCs.
Cato spoke with ChannelPro with just under three months to go in a fiscal year that has posed unique challenges due to the coronavirus pandemic but also produced strong financial returns. In the second quarter, for example, the most recent one for which data is available, revenue in the company’s PC and Smart Devices Group, for example, rose 8% year-over-year to $11.5 billion, an all-time record. Lenovo led the industry in shipments and market share during last year’s fourth quarter, according to IDC, which says sales of desktops, notebooks, and workstations across manufacturers grew 13.1% globally in 2020.
“It’s been a strong year for Lenovo in the channel,” says Cato, adding that the company expected hardware sales to climb at least a little in response to the sudden shift to work-from-home computing last spring.
“We went into this without a real clear direction on what the market was going to do, but we felt very strongly that this would create an environment where demand for PCs and many of our products and services would really drive a lot of growth,” he says.
Though demand for client devices did indeed increase, however, the pandemic’s devastating economic effects confronted partners with severe cash flow challenges. Lenovo announced a partner stimulus package last April to help resellers get through that period of reduced sales activity.
Included within it was an extension on credit terms from 60 days to 90 days for all partners who qualify for the financing program Lenovo operates in collaboration with DLL Group. The revised policy is still in effect, and will remain in place until at least the end of March.
“We continue to look at all of our programs every single quarter and evaluate what’s important,” Cato says. “We heard loud and clear from our partners through most of 2020 and into this quarter that they’re still in a position where they needed the extended terms.”
Lenovo expects continued growth in the fiscal year that begins April 1st, citing data from a Forrester Research survey it commissioned last year suggesting that 50% of corporate employees feel their current PC is out of date.
“As we go into 2021, and even over the next couple of years, I think this is creating an environment where it’s not just a PC for the home, it’s a PC for every person, and so what used to be the home PC now is each one of your family members has a PC and everybody at work has a PC,” Cato says.
The federal government’s recent COVID-19 relief law, he continues, will help keep sales strong too. “The $900 billion stimulus package will continue to fuel some of that growth as we go into the first half of, of 2021,” he says, “but even as we get into the second half of the year, we still believe that there is demand that will be needed in the marketplace.”
IDC expects global sales of notebook PCs to climb 3.2% this year. Cato foresees even greater growth for Lenovo specifically.
“Lenovo in this particular market is still number three,” he says. “We have aspirations to continue to grow our business and take market share, and so there’s opportunity for us even if the market is not growing at the levels that we were seeing last year.”
Lenovo introduced new ThinkPad notebooks and new ThinkBook laptops for SMBs this week at CES 2021, which is taking place online through Thursday.
