Lenovo Launches A New Server Lineup…And A New Lenovo

By Matt Kimball - July 28, 2017
On the heels of Intel ’s Purley launch, the OEM community quickly announced the availability of their respective product portfolios. For the most part, these announcements were about what one would expect with Hewlett Packard Enterprise (HPE) focusing on its engineering prowess, Dell  EMC  promoting the strength of the merged company and products, and Cisco Systems continuing to drive UCS. And every OEM made a compelling case of driving messaging that resonated with the market, from security to performance to TCO. One of the more interesting product launches came from Lenovo . Launching its revamped product portfolio with a renewed focus, Lenovo’s message was tailored for the datacenter audience: Simplify the portfolio and deliver world class products supported by an organization loaded with server experience. Before delving into Lenovo’s renewed focus, let’s set some context. When Lenovo purchased IBM’s  Intel -based x86 server lineup in 2014, it was expected that Lenovo’s market share would quickly grow to 10%. But given market dynamics, regulatory and other challenges, Lenovo has not seen this success. In fact, per IDC’s quarterly tracker, Lenovo exited 2016 with 6.5% market share, down about a percentage point from 2015 (7.4%). Given these dynamics, Lenovo appears to have to gone back to the basics. The result was what felt like a new Lenovo launching a new product portfolio a few weeks back. My takeaway from the launch event is that Lenovo wants to do three things:
    1. Build great products
    2. Simplify the buyer’s journey
    3. Stay maniacally focused
1. Engineered Products for the Datacenter Lenovo built on the heritage of the old SystemX product line by launching servers that resonate across the spectrum of use cases, from everyday workhorses to higher-end, purpose built servers. It seems Lenovo’s strategy for gaining credibility in the datacenter is to focus on performance. Lenovo seems determined to let the industry know it’s serious about performance by touting 42 world records. And Lenovo’s focus has been broad, mapping benchmarks to target workloads such as virtualization, database, and analytics.  Now, benchmarks should always be taken with a grain of salt.  Every OEM seems to tout a new world record for industry benchmarks. With that said, Lenovo is on the right track. 2. If You Build It, They Will Come…Maybe Unfortunately, we don’t live in a movie, and this is not binary. However, to try and simplify the buying process for the average IT Administrator, Lenovo has simplified its product line up by reducing SKUs and creating two portfolios, ThinkSystem and ThinkAgile. Consider ThinkSystem the traditional server play. Towers, racks, and blades designed for all market segments and supporting a range of workloads, from File & Print to Artificial Intelligence. While Lenovo established performance credibility via benchmarking, the key to success will be in positioning. This starts with using this performance data to drive relevance across all market segments. The ThinkAgile portfolio was designed with Software Defined Everything (SDx) and hyper-converged in mind. Lenovo claims the portfolio allows for customers to purchase systems or appliances, focusing on simplicity and agility. During Lenovo’s launch, it touted design wins with the likes of Nutanix, Microsoft , and VMware . Early indicators of go-to-market success will be evident in Lenovo’s ability to drive effective “go-to-market” strategies with each of these partners.
Lenovo’s focus on reducing the product mix and positioning by market segments, use cases, and workloads should make it easier for that IT Manager of a 20-server shop to find, learn about and purchase her new database server. Conversely, an enterprise IT Director looking to deploy SAPHANA can quickly and easily find the resources and content that leads them to the appropriate Lenovo server platform. Whether Lenovo can drive that simplicity through their established channels is the real question.
3. Stay Maniacally Focused
Interestingly enough, one of the more interesting elements of the Lenovo launch had nothing to do with the product. The time spent demonstrating a renewed commitment to the server market was perhaps what the market most wanted to hear. Those who have been in the server business know the hit that Lenovo has taken around the marketing, selling and support of their server products. The message from Lenovo’s Kirk Skaugen was simple: This is a new Lenovo, not just in product, not just in marketing, but organizationally.
We will better know how successful Lenovo’s strategy has been as we watch its revenue and market share over the next few quarters.  And how much penetration of North America it can achieve. Some of the early beacons of success will be key wins and additional ThinkAgile reference architectures as this signal confidence from the ecosystem.
But for now? It looks like a new Lenovo has entered the server market.  
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Matt Kimball is a Moor Insights & Strategy senior datacenter analyst covering servers and storage. Matt’s 25 plus years of real-world experience in high tech spans from hardware to software as a product manager, product marketer, engineer and enterprise IT practitioner.  This experience has led to a firm conviction that the success of an offering lies, of course, in a profitable, unique and targeted offering, but most importantly in the ability to position and communicate it effectively to the target audience.