Last week I attended the second annual Lenovo Transform event at Pier 36 in New York along with Moor Insights & Strategy server analyst Matt Kimball. The goal of Transform is very similar to any other large-scale enterprise player customer, channel, press, and analyst event- to impress upon everyone that you should buy, assort and support its new product and services. I attend about twenty of these kinds of events per year, making it easy to compare and contrast. So how did Lenovo do?
At Transform, Lenovo announced several new enterprise-class products, solutions, and partnerships to further its cause to go after the server, storage, networking, HCI, composable software, IIoT, PC and conference room devices markets. I’d like to hit the highlights.
Lenovo Chairman and CEO Yuanqing Yang talks about the company’s improved financial performance. PATRICK MOORHEAD
Lenovo Chairman Yuanqing Yang kicked off this year’s Transform talking about the company’s much improved financial performance. It has a lot to be pleased with right now as all three of its business- PCs, datacenter infrastructure and smartphones are all markedly improved from the prior 24 months, driving four straight quarters of year-on-year, quarterly revenue growth.
DCG does a deserved victory lap
Kirk Skaugen, leader of Lenovo’s Data Center Group, kicked off the DCG keynote with a much-deserved victory lap on the past year’s awards and achievements. He touted Lenovo’s continued status as #1 in customer satisfaction and server reliability and went on to showcase impressive growth in the company’s Data Center Group (quarterly revenue improved 67.8% and profit improved 11% YoY). The company is also still riding high off obtaining the #1 share in HPC (see my previous coverage here) and growth was driven HPC, hyperscale and a wide array of software-defined infrastructure offerings. We covered Lenovo’s recent “composable cloud” offering here.
The incredible part about all of this is that many of my contemporaries counted Lenovo DCG out. It was easy to do as both revenue and profits plummeted in many quarters with multiple reorgs, and at the same time, Lenovo was having big issues with its mobile group. To Lenovo DCG’s credit, after literally changing everything, and I mean everything, the division is performing well, and it’s not just because of good market conditions.
DCG lead Kirk Skaugen does a much-deserved victory lap. PATRICK MOORHEAD
As we have come to expect from Skaugen, he’s not afraid to make big promises- last year at Transform 1.0 he said Lenovo would be #1 in HPC (high-performance computing) by 2020, which, by my count, it achieved two years early. Therefore I was paying very close attention to any newgoals Skaugen would communicate, and that’s that it would be #1 in Nutanix revenue in two years. Dell EMC currently holds this spot and Lenovo is the fastest growing Nutanix partner, but I could see as Dell EMC leads with VMware vSAN, HPE leads with Nimble and Lenovo leads with Nutanix in HCI, this could become a reality. Knowing Skaugen, he likely has high confidence in this one, albeit less of a lofty goal, in my opinion, than being #1 in HPC.
Skaugen also talked NFV, an expansion area for the company. Building on Lenovo’s recent forays into 5G with the world’s first 5G upgradable mobile phone from Motorola, Skaugen hinted at Lenovo’s plans to create a new NFV software company in China that will help drive the NVF software stack required for the buildout of 5G networks in China. I believe customers are asking for Lenovo’s help as an alternative to Huawei Technologies where Lenovo has significant advantages when it comes to compute, storage and HCI. I also believe Lenovo is trusted more in Western Europe and North America, which helps. Finally, related to carriers, I hosted a 5G panel with Lenovo executives from the datacenter, edge compute, telco, PC and smartphone, which was enlightening in that Lenovo is actively engaged beyond the smartphone in 5G. Lenovo engagement isn’t slideware, it’s real.
Skaugen also said that Lenovo will be introducing a Hardware-as-a-Service offering that will be more than a “glorified leasing contract”. This new service, which the company says will be available within this fiscal year (Lenovo’s fiscal year ends March 31st), the company says it will be based on Lenovo-developed IP that enables a fully metered solution that allows customers to freely scale their hardware utilization up and down, paying only for what they consume. Lenovo is fast following on this trend, but it’s nice to see them doing this as this is what customers want in cases where they want to shift capex into opex and increase flexibility.
Lenovo is certainly a company to watch right now in the datacenter and Transform 2.0 was a prime opportunity to do just that. So, with that very long intro, let me dive into the major pieces of news that came out of the event and my take on it.
Lenovo + NetApp
The biggest news of the event was undoubtedly the new “multi-billion dollar, multi-year” partnership between Lenovo and Sunnyvale, CA-based, company NetApp. Our storage analyst Steve McDowell and I wrote a deeper dive on this announcement, but I wanted to hit on it briefly.
Lenovo DCG lead Kirk Skaugen outlines the Lenovo NetApp partnership. PATRICK MOORHEAD
Together the two companies pledge to bring their joint technology to enterprise customers, Lenovo primarily in servers and manufacturing and NetApp in storage systems, spanning from the edge to the core to the cloud. To do this, the companies will co-develop a broad line of horizontally-focused entry and mid-range storage solutions that marry NetApp’s all-flash data management solutions with Lenovo ThinkSystem architecture. These solutions will leverage Lenovo’s supply chain (ranked #5 in all of technology by Gartner) and in-house manufacturing (one of the largest) and will be sold under the Lenovo ThinkSystem brand. NetApp will continue to sell its existing storage portfolio under the NetApp brand.
Another important facet to the NetApp partnership announced is a new China joint venture, which the companies say will provide “focused” storage products and data management solutions for China’s distinct, specialized, and rapidly growing cloud ecosystem. An interesting side note: the “futures” section of the announcement PowerPoint made it look like the two companies will target HCI and ES together. Overall this partnership looks strong—I look forward to seeing it in action.
Again, check out or deeper dive on this we published yesterday as this is just a crop dusting.
ThinkShield client device security
As we have written many times in our research and blogs, many enterprises’ chief concern in their digital transformation efforts is security. The more connected devices and people and the more of them used outside the firewall, the more opportunities for exploitation.
Lenovo is no slouch when it comes to security—it touted at the event a statistic from CVEDetails.com that found that Lenovo had as much as 99% less common vulnerabilities and exposures than the company’s major competitors in the first half of 2018. This was a real eye opener, and you will be sure I will follow up with HP Inc., Dell, and Microsoft on this claim. I admit I do appreciate claims this big as it places a big target on the back, but also exudes confidence in its security stance. Doubling down on its security efforts, Lenovo announced at Transform 2.0 its new ThinkShield security brand—designed to secure devices end-to-end, through their entire lifecycle.
End to end is the only way to go with security as it’s only as good as its weakest link and quite frankly, is hard to market. Lenovo says it sets stringent security standards and policies for its manufacturing facilities and global supply chain, touting its transparency. Lenovo’s Quality Engineers retain the right to audit the company’s Trusted Suppliers at any time, giving the company even further control and insight into the security of its devices’ components. I wrote on DCG’s server security stance here.
ThinkShield also secures at the design level, building in secure BIOS and firmware, as well as privacy screens and laptop camera shutters into its devices. ThinkShield is designed to protect users’ identities and credentials, offering FIDO-certified authenticators and integration with Intel Authenticate (offering up to 7 authentication factors). ThinkShield also features BIOS-based Smart USB protection, which functions by configuring USB ports to only respond to keyboards and pointing devices.
Enterprise lead Christian Teismann introduces ThinkShield. PATRICK MOORHEAD
ThinkShield’s protections extend to users’ online activity, notifying users when they attempt to connect to unsafe wireless networks and utilizing BUFFERZONE technology to “sandbox” online threats. Meanwhile, Lenovo’s Endpoint Management seeks to unify cloud and endpoint security across multiple devices, in a manner that is simple and secure.
The final component of ThinkShield is data protection throughout devices’ lifecycles. Lenovo leverages Absolute Persistence technology, which the company says provides “enriched asset intelligence,” automates endpoint hygiene, and maintains continuous compliance ahead of any possible audits. Lenovo pledges to keep customers’ data secure at the end of their devices’ lifespans by wiping the drives and securely recycling the components. It also offers a paid service called Keep Your Drive, which purportedly makes sure sensitive data never leaves the hands of its customers.
One of the big things I think Lenovo could add is a service to restore systems to a known good state if they are compromised or in the case of ransomware, hijacked.
My take on all of this is that every PC OEM is vying for the “most secure” position in the market right now, and it is tough for anyone to break through. That being said, Lenovo clearly brings a lot to the table when it comes to security, and I think the new ThinkShield brand should help unify and strengthen its portfolio. It will take some time for me to perform the side-by-side comparison with competitive offerings, but this is a positive sign if for nothing else, to elevate the security discussion bar. A rising tide raises all boats and the more PC OEMs we have saying they’re the most secure the better.
IoT and home health edge compute demonstration
Lenovo also used the Transform 2.0 event to give some more insights on its previously announced plans to build an IoT infrastructure business to complement the investments it has made in consumer IoT and smart office devices. Skaugen announced plans for a comprehensive set of edge gateways and ruggedized industrial edge servers to support Industrial IoT implementations. Lenovo is a fast follower here, but I certainly don’t think it has missed the opportunity as the market is in its infancy. I expect Lenovo to partner with the channel, but in certain geos and verticals, create its own SI capabilities.
Another thing that caught my eye was a demo booth on how CSPs or carriers could potentially utilize Lenovo’s AI Edge computing platform for home health applications. Picture a patient home or clinic, with various sensors and cameras deployed for health monitoring. Lenovo’s ThinkSystem and Tiny systems feature powerful GPUs capable of locally processing video and other sensor info and are capable of initiating responses even when the cloud server is down.
These systems are integrated with WiZR analytics, which can perform complex AI healthcare functions (i.e. facial recognition, heat mapping, body positioning, etc.). Lenovo claims that by doing so much processing on the edge, versus the cloud, it can significantly improve incident detection and reduce response time. This makes a lot of sense and the value will be directly related to the degrees of latency improvement versus the cloud.
This was a good example of Lenovo moving well up the food chain and talking a lot more about total solutions versus feeds and speeds. Lenovo had 62 demos, many being comprehensive solution demos including vertical elements around food supply, healthcare, retail, public safety, and modern classroom. This is the first time I remember Lenovo doing this and is a good sign of the health and direction of the company.
All in all, it was an informative event, a step up in many ways to any Lenovo event I had attended previously related to the enterprise. You just “felt” there was more going on with a lot more leadership. The NetApp partnership and joint initiative in China was the big news of the day, and I’m interested to see how it plays out over time. The two companies both bring a lot of strengths to the table, and it seems like a smart match, and I believe marketing and sales will be the ultimate determinant of early success. Lenovo needs to communicate harder than most in the west on security and is right to play up its security credentials, as that is perhaps the number one concern amongst businesses undergoing transformation. ThinkShield brings all of Lenovo’s security features under one, end-to-end umbrella, and I think it is smart branding. Finally, I appreciated the chance to see solution use cases for Lenovo’s IoT edge technology, and I look forward to seeing more and more of how the company plays the integrator role. Good work, Lenovo.
Note: Moor Insights & Strategy writers and editors may have contributed to this article.