IT and Business Insights for SMB Solution Providers

Progress Despite Slowdowns for Lenovo’s SMB Data Center Business

The hardware maker is signing partners and gaining share even as SMB market conditions remain sluggish, according to Steve Biondi, North American channel chief for Lenovo’s Data Center Group. By Rich Freeman

With businesses cautious about the future, conserving cash, and working from home, these are not great times to be selling data center gear. Indeed, Gartner expects global spending on servers, storage, and other data center products to decline 10.3% this year. 

Lenovo, though gaining share on its competitors, is feeling some of those headwinds among SMBs, according to Steve Biondi, Lenovo’s Data Center Group (DCG) channel chief for North America. 

“We probably have a double-digit premium to market in SMB, but they’re not the results that we were hoping for,” he says. Though increased quote and deal registration volumes in recent weeks suggest market conditions are improving, he continues, it’ll be a while before they’re back to pre-COVID levels. 

“Stimulus aside, they’re still struggling,” says Biondi of SMBs.

By extension, hardware resellers who support SMBs are “feeling pressure” too, he notes. As a result, the “partner stimulus” measures Lenovo rolled out in April, which include extended credit terms and accelerated incentive payments, will remain in effect for the foreseeable future.

More targeted assistance is available on a case-by-case basis for resellers as well, as it has been since the spring. “We have very regular conversations with partners big and small and ask them, ‘what can we do to help you?’” Biondi says. “We’re going to continue to maintain that.”

Despite the challenges Lenovo and its channel have contended with this year, Biondi is pleased with the progress his team has made since launching a revamped data center partner program designed to make rising to higher tiers more profitable, and hence attractive. The number of members at the top-of-the-pyramid Platinum level has doubled, in fact, in a little over seven months.

A deeper coverage model, also introduced this year, is getting partners more interaction with Lenovo account reps as well, according to Biondi. “You can change your program, but if you don’t have people to help it, it’s meaningless,” he says.

A new partner portal, which provides sales, marketing, training, and support resources for both DCG and Lenovo’s Client Computing Group in one place, meanwhile, debuted in July, and the supply chain slowdowns that have plagued some hardware makers this year haven’t been a problem for Lenovo, according to Biondi.

“Deals are perishable, customers have immediate needs, and since we can satisfy them very quickly, more and more partners are gravitating to do business with us,” he says. 

Lenovo has introduced new data center products in recent months too. Those include hyperconverged infrastructure solutions developed in partnership with Nutanix, Microsoft, and VMware, among others, and systems for high-performance computing and artificial intelligence workloads unveiled this week

In addition, Lenovo added support for the customer edition of SAP HANA Enterprise Cloud to its TruScale infrastructure-as-a-service platform late last month. Even bigger enhancements are coming to TruScale soon.

“We’ll be announcing some huge improvements to our as-a service-model around January,” says Biondi.

Though he declined to say more for now, Biondi believes those changes plus the others already in place will put Lenovo in a good position to take advantage when steady, reliable growth returns to the data center space.

“If you have a good foundation, everything will be all right,” he says. “I think our play, and our strategy, and our programs are the right foundation.”

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