Lenovo introduced an expanded product and solutions portfolio as it celebrated the 30thanniversary of the ThinkSystem (and ThinkPad) products. This introduction was perhaps the most extensive new portfolio reveal I've witnessed in my years as an industry analyst and covers everything from servers to storage to software. Oh, and add a little security, edge, and TruScale to complete the picture. I will try and unpack all the announcement details in the following paragraphs.
Before the details – a little context
Since taking over the helm of Lenovo’s Data Center Group in 2016, Kirk Skaugen has rebuilt his organization to be a competitor in a very competitive server market. And while analysts like me were clamoring for him and his team to be more aggressive in go-to-market strategies, his plan of building a solid foundation of people and products and competing where Lenovo could win has paid off.
A few years later, Lenovo's datacenter group consistently drives profitability through a portfolio of products that dominates the Top500 HPC list and is popular with hyperscalers (more on this shortly). The chart below tells the story of the momentum Lenovo is creating in its datacenter business:
The numbers don't lie – 23% growth in Solutions and Services (SSG) and 14% in Infrastructure Solutions (ISG). This isn't simply about pricing exercises that show top-line growth and negatively impact profitability. SSG's operating margin came in at 23%, and ISG's $2B quarter fueled the continued trend of the group being a profitability engine.
Finally, I believe Skaugen bringing in datacenter marketing leader Susan Blocher indicates that the company has found its footing and is ready to attack the enterprise datacenter market seriously. We know the company dominates in HPC and hyperscalers. Now it feels like the pieces are in place to start gaining more traction in the traditional datacenter space.
Lenovo is all in – everywhere
When Lenovo announced a 10% increase in its R&D budget and a 29% increase in headcount (YoY), it showed a real commitment to increasing its competitiveness across all segments. But numbers without context don't tell a complete picture. For me, Lenovo's announcement helped complete that picture.
I have been in the technology game for a long time. I can safely say I've never seen such an announcement. The company announced 50 hardware platforms spanning servers, storage, edge (including an Arm platform), cloud, and HCI. Of these 50 platforms, 22 are new ThinkSystem V3 server and storage platforms designed from the ground up. Anybody who has worked in the hardware industry can appreciate how considerable this effort is.
Did I also mention the company expanded its Neptune (water-cooled) product line? These high density solutions will play especially well in the HPC and I markets where accelerators (GPUs, etc) consume a lot more power and emit a lot of heat.
Lenovo also introduced 28 HCI platforms as certified nodes (CN) or Integrated Solutions (IS). Delivering this many solutions is a very heavy lift. This is not simply an exercise of installing Nutanix HCI on a Lenovo server and calling it a product. There are so many proverbial nobs to turn, tests to perform, and more nobs to turn before deploying a fully supported platform. Again, it is hard to believe the company was able to roll out so many solutions.
As if this wasn’t enough, Lenovo also introduced enhancements to ThinkShield (security), announced management-as-a-Service (XClarity One), and expanded its overall as-a-Service portfolio (TruScale).
When one thinks about the magnitude of this announcement, it's impossible not to be impressed. Even as the company added substantial budget and resource increases, it is hard to imagine how the ISG team was able to manage the scope (hardware, firmware, software, solutions) and magnitude (22 servers, 28 solutions).
One last thing that Lenovo announced that is worth talking about is the move to bring motherboard design in-house. If you have not worked in the hardware industry, it may sound odd that a company would outsource its motherboard design at all – rest assured, it’s not. It's common practice for server and PC manufacturers to work with original design manufacturers (ODMs) for motherboard design for cost and other purposes. By bringing design in-house, Lenovo can create platforms with optimizations around power, performance, manageability, and security.
So, as you can see – Lenovo has made significant investments across the board – hardware, software, solutions, security, and manageability.
XClarity One – the hidden gem
I want to spend a few sentences on what XClarity One as manageability is an area where I’ve been a little critical of Lenovo. With XClarity One, the company has answered that criticism and then some. It seems a design principle of XClarity One was to provide complete management of Lenovo environments – from provisioning and reprovisioning to sunsetting and from the edge to the cloud. And the ability to consume this either on-premises or as-a-service is smart.
The concept of the single pane of glass to manage IT environments has been around as long as I’ve been in the IT market (that's a long time). And it is hard, if not impossible, to achieve (as any IT professional knows). But, to see the company make this level of investment in manageability is encouraging.
One of the questions I have regarding XClarity One is openness. The modern datacenter is heterogeneous. And what IT craves is the ability to manage its entire environment from a single platform. Regardless of the server vendor. Regardless of the CPU vendor. And irrespective of the software stack. Doing this effectively is more than just providing an open API for other tools to interface. It requires a lot of deeper level integration and enablement.
My hope is that I will be able to answer these open questions and more after doing a deep dive into both XClarity One and Lenovo's strategic vision regarding managing the hybrid IT environment. Look for a follow-up posting on this.
Lenovo has come a long way in the server market. After acquiring IBM’s business, market share numbers dropped significantly. And many predicted the company would exit the server business.
But, the company made some smart moves. It brought in a leadership team that had understood the server business from the ground up. And that team made strategic bets by investing in markets other server vendors chose to exit. And by investing in the HPC space – knowing that these markets were more focused on performance and value than a badge on the front of the server.
And while Lenovo ThinkSystems power some of the most prominent HPC clusters and hyperscalers, the company now seems poised to gain a share in the enterprise and transactional server segments through its V3 launch.
The company has a solid technology portfolio and will no doubt continue to build on its offerings. But good technology alone does not drive market share gains. This is where I believe the addition of Blocher and the energy she brings to telling the Lenovo story and activating go-to-market will pay dividends.
Stay tuned for updates.
Note: Moor Insights & Strategy Chief Analyst, Patrick Moorhead, contributed to this article.