Key Facts You Should Know About Lenovo’s Plans

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Lenovo tablet

Lenovo has much riding on data center products and services sold via the channel. Key to that strategy is training thousands of PC resellers to sell servers.

After posting a loss in the second quarter, mainly due to restructuring costs following the acquisition of the mobile computing business of Motorola, Lenovo reported net income of $300 million in the third quarter. Revenue for the period was $12.9 billion, down 8% year-over-year. Sales in the PC group dropped 18% due to both declining demand and supply chain issues affecting key PC products.

Lenovo claims its restructuring plan delivered savings of $650 million in the second half of the year and $1.35 billion annually in the last fiscal year.

Lenovo said it is on track this fiscal year to reach $5 billion in enterprise revenue, on a constant currency basis. The channel team alone has been tasked with driving $500 million in incremental revenue this year. A larger portion of that increased revenue is expected to be driven by the sale of additional Lenovo services.

Lenovo says it grew its PC market share to a record high 21.6 percent in 2015. The company has also set up a sales team dedicated to drumming up more business for partners in the small-business sector.

The newly formed Lenovo PC & Smart Device Business Group is responsible for PCs, detachables, tablets, phablets, gaming and smart home products across Windows, Chrome and Android products.

Now known as the Lenovo Data Center Group (DCG), this unit focuses on servers, storage and hyperconverged appliances. Lenovo claims to have a 7.2% share of the server market.

Lenovo, hiring 2,000 sales people to drive data center sales through the channel, aims to train thousands of PC resellers to sell servers. The expectation is that many Lenovo partners will be eager to expand their businesses to include more profitable data center products and services.

In addition to teaming up with Nutanix to resell and develop 2u hyperconverged appliances for the SMB market, Lenovo has alliances in place with Red Hat, Juniper Networks and SAP.

Focused on smartphones, Lenovo’s Mobile Business Group is led by Xudong Chen in China and Aymar de Lencquesaing, former head of Lenovo North America, around the rest of the globe. Both executives are co-presidents of MBG.  The Motorola Mobility team will now report to de Lencquesaing, who will become chairman and president of Motorola. The Mobile Group also leads development on a forthcoming Project Tango initiative to create a smartphone in partnership with Google.

A new Lenovo Capital and Incubator Group has been set up to invest $500 million initially in projects through the Lenovo Capital Phase II Investment Fund, which will focus on key technologies, including cloud computing, big data, artificial intelligence, robotic and Internet services.