Lenovo calls on channel to increase market share in Asia
- 09 January, 2019 14:00
Ken Wong (Lenovo)
Lenovo CEO Yang Yuanqing and his team are focusing on the vendor's vision of intelligent transformation across geographies.
To achieve such a vision, the tech giant is fast expanding its portfolio beyond PCs to emerge as a strong "end to end data centre" player.
According to IDC, Lenovo dominated the global PC market as a leader in Q3 of 2018.
“We have embarked on a very different strategy of intelligent transformation, which is about smart IoT, data and computing power across PCs, smart devices and data centre of a modern organisation,” said Ken Wong, president of PCSD across Asia Pacific at Lenovo, when speaking with IDG India in Hong Kong.
Wong leads Lenovo’s fast-growing Asia Pacific business across PCSD (PCs and Smart Devices) in diverse markets of Australia and New Zealand, Central Asia Pacific (ASEAN, Hong Kong, Taiwan and Korea), India and Japan.
First up, how diverse are the trends in the adoption of PCs and smart devices by Asia Pacific companies? Does the maturity curve differ across regions?
A couple of trends that we are obviously seeing, especially in the past 12 to 18 months is a very strong commercial demand mainly driven by the Windows upgrade. And for obvious reason, because Windows is going end-of-life by the end of 2019.
With the recent news of the biggest airlines in HK, and the other from the biggest hotel chain group; companies are becoming more aware of the importance of security. When more devices are connected it's not an IT question, even lines of business, CEOs, CFOs, the CIO have the same concern.
We see strong demand coming out of the security issue for PCs and we introduced a new product suite few weeks ago - ThinkShield. ‘As-a-service’ model is another rising trend.
Asia Pacific is the most dynamic geography, for example areas like Japan and A/NZ, and then come the more emerging but also extremely dynamic regions such as India and Southeast Asia.
The modern CIO has to prioritise work and be answerable to the LOBs on their IT demands, and that is a big driver of as-a-service model.
So, will we live in a world of ‘everything as-a-service’ like PC as-a-service, laptop as-a-service?
Yes, and it depends on the customer type. With PC as-a-service we had a couple of successful cases, as organisations want more time and capacity for IT leaders to focus on say AI to help their business, or develop deep learning teams or monetise their data.
Microsoft is also driving a lot of software-as-a-service or application-as-a-service demand. At the end of the day, it will be technology-as-a-service as everything can be on that platform. This is not only confined to enterprises as we have seen SMB version of ‘technology-as-a-service’ emerge in the last six months for the smaller companies in APAC.
Cloud-as-a-service is already quite mature. But companies are trying to figure out SaaS, device-as-a-service - PC, tablet, smartphone - and we have introduced such offerings in the market, not only for enterprises but also for SMBs.
Lenovo was the leader in global PC market in Q3 2018 with 24 per cent market share followed by HP and then Dell, according to IDC. Was the growth driven by Lenovo’s joint venture with Fujitsu or you see overall momentum continuing in the PC market?
I think it's both. We obviously got some growth from our inorganic model, but if you look at our organic growth it's also very promising. In Asia Pacific, we reclaimed number one in the last quarter too.
Lenovo was globally number one, and the highlight was that in the past 22 years it was a record high for any vendor in the market, as per IDC.
More than 95 per cent of our business in APAC is driven through channel, and the IDC report tags us as the fastest growing vendor in this space. We are substantially investing in channels to maintain our market leadership by enabling our business partners to do more business and help them lead the intelligent transformation vision of Lenovo.
What are the key tenets evaluated by CIOs when they engage with a PC vendor? Does the conversation start with pricing?
They don't look at hardware as such, though it’s important. They look at how much productivity or capacity they need. As more CIOs manage their complicated infrastructure setup, they look at how the tech provider can help them simplify the same.
And lastly, security has come a lot higher in the stack than maybe three years ago when I talk to CIOs in the regions.
Channel partners have been big proponents of PCs to organisations. What's the report card on Lenovo’s channel strategy and the road ahead?
The biggest initiative around channel, not only for Asia Pacific, but also for the world is Project Velocity. It's basically coming up from our business partners’ feedback in the past two years that ease of doing business with Lenovo from a channel perspective has not been our strength.
Project Velocity - the worldwide program launched six months ago with a total duration of 24 months, has three core pillars.
The first being reengineering our processing around channel operation, making good use of technology to drive that experience and third one revolves around AI, deep learning and data analytics.
The next focus in GTN (Gross-to-net) programs which can be a combination of quarterly target incentive programs or monthly tactical promotions that Lenovo announces to channel partners to support their sell through or sellout sales.
"GTN tools" refers to an automated system that Asia Pacific has launched to calculate the rebate payment amount for these programs and also, to speed up payouts to partners.
In the past, there were some disputes with our partners. I'm happy to share the early successes - this quarter, in some part of Asia Pacific, we have already piloted the digitisation of our GTN program, including record and tracking on the portal, and now you don't need paper.
After completion of a quarter, it was a lengthy process for channels to submit claims and get back the rebate. With digitisation, the claim to pay lead time for our business partners has reduced by 30 per cent.
Do you really feel Project Velocity will sway channel partners from competition or it would mean selling more with existing partners in an extremely diverse PC market?
It's definitely a plus for Lenovo. The four objectives of Velocity are speed, consistency, simplicity and profitability.
And our ultimate vision is that partners should be able to get all their needs fulfilled through the portal real time, not just from the web portal, but also from a mobile app for a specific industry or vertical.
Project Velocity is about intelligent transformation. If you look at the solutions we provide to our business partners’ customers, we are by far the most differentiated and competitive in the market.
It’s not only about GTN or putting a little bit of sales materials digitally, but it’s about revamp of the channel process and delivering an ‘end to end’ channel experience to partners.
As APJ chief for Lenovo’s PCSD division, what would be your three priorities for 2019?
My top priority is growth. I don't think any company can survive without growth. We talked a lot about customer centricity as the core of how we make a decision.
Secondly, lot of companies might have missed the big element in CX which is about employee satisfaction using PCs in your company. How can an unhappy employee deliver happiness to the customer?
The third one is intelligent transformation which is one of the most important transformations in the past two to three decades of Lenovo.
This article originally appeared on IDG India