Lenovo Deal Holds Promise for ChannelBy Pedro Pereira | Posted 2005-04-30 Email Print
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As Lenovo closes its purchase of IBM's PC business, IBM's acclaimed channel programs are being transferred. Coupled with the potential for carrying a low-priced product line, the deal could bode well for the channel.Now that IBM's sale of its Personal Computing Division is final, part of the legacy new owner Lenovo Group Ltd. has to live up to is the unwavering commitment IBM has made to the channel in recent years.
Little has been heard from Lenovo as of yet, but channel partners like what they have heard from IBM executives about what will happen now that Lenovo is taking over. Partners are pleased that most of the channel team from IBM's PC division will stay involved, and they are especially pleased with that team's promise that its channel focus will not waver.
Years ago if you asked some resellers about their relationship with IBM, you'd hear heated condemnations of the computing behemoth's inability to control channel conflict.
The Big Blue Monster so many used to love to hate has effectively replaced once-favorite HP as the channel's preferred vendor.
IBM earned that by working hard to meet partner needs and eliminating conflict with its direct sales force. Partners say what once occurred far too often for their tasterunning into IBM sales reps when trying to win a dealrarely, if ever, happens anymore.
Pete Peterson, vice president of systems and software product marketing at distributor Tech Data, says channel conflict involving IBM has been virtually non-existent in the last two or three years.
But avoidance of channel conflict carries no lifetime guarantee. Channel brand loyalty is commensurate with a vendor's own loyalty to its partners. Just as some resellers opted to switch from HP following its acquisition of Compaq and its direct-selling efforts, channel partners are just as likely to abandon IBM if the company loses its channel focus.
An important factor in ensuring the channel strategy remains untouched is the position that Stephen Mungall will have at Lenovo. Mungall is vice president of partner sales and distribution at IBM and will oversee direct and partner sales at Lenovo. By managing both direct and channel sales, he will be able to prevent channel conflict whenever there is any indication that it might happen.
Mungall also promises that Lenovo will respect the relationship between reseller and end user as much as IBM has. In practice, and in theory, that means Lenovo direct-sales reps won't be contacting a channel partner's customer.
What remains to be seen is whether Lenovo can keep that promise.
At this point there is no reason to believe otherwise. Lenovo has signaled it is truly committed to the IBM PC business by moving its headquarters from Shanghai to Purchase, N.Y.
The move bodes well for partners' expectations that Lenovo, which markets its products only in Asia now, will bring some of its own models to the markets where the Personal Computing Division does business.
By bringing its reputedly low-cost, well-engineered products to North America, Lenovo would actually be doing something atypical when it comes to mergers and acquisitions. Rather than narrowing choices, which is usually what happens when two companies merge, Lenovo presumably would create more options for partners.
So in addition to selling the popular IBM Think line, partners would get a chance to expand their offerings with what they hope will be affordable machines they can market against low-priced models from Dell Inc. and Gateway Inc.
Too good to be true? Yes. And we'll have to wait and see what actually transpires.
But if past behavior is the best indicator of what one may do in the future, IBM's channel approach of recent years holds promise for partners. And considering the background of the folks who will be in charge of channel strategy at Lenovo, partners have good reason to feel positive about the imminent change.
Pedro Pereira is a contributing editor for The Channel Insider. He covered the channel from 1996 to 2001, took a break, and now he's back.