Senior Leadership Change at Lenovo

By Patrick Moorhead - June 12, 2024

The Six Five team discusses Senior Leadership Change at Lenovo

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Transcript:

Daniel Newman: I was on my way the next day to record with our friend Kirk Skaugen, longtime president of Lenovo’s infrastructure business, ISG. And we found out that there’s a transition there. Not a lot of details at this point, but what we do know for sure is that Kirk is no longer leading that role. Pat, what’s your take there?

Patrick Moorhead: Yeah. First off, just like I did for Jim Anderson, I pulled some numbers up about Kirk Skaugen. Basically-

Daniel Newman: Thanks for doing that, by the way.

Patrick Moorhead: You got it, man. It’s what you can do when you’re home and not on an airplane. Rough numbers, Kirk took the business from 4 billion in revenue to around 10. That’s 140% improvement, which by the way, that’s a 50 point premium to the market. While growing operating profit over $500 million. Some people might say, “Oh, it’s because you reduced the reliability and the quality.” Well, they were still at least based on their third party research, not ours or yours.

Number one in x86 reliability. High performance computing, which Lenovo is number one. They went from 80 positions on the top 500, to 165. They are now, according to that other company, IDC, rank number three in AI servers up from six. Storage, people didn’t even know that Lenovo sold storage. They went from 4% to 37% since the first quarter of 2018. That brings them going from… Sorry, that was low end storage to level four storage. ODM Plus didn’t even exist. And ODM Plus is where you are operating as an ODM plus an OEM too, where they’re doing their own PCA, they’re doing PCB, doing their own chip shooting. And by the way, Lenovo, they don’t talk about it a lot, but they have supplied eight of the top 10 hyperscaler cloud with millions of units.

Well, it was great getting to know Kirk at Lenovo. I got to know him very well at Intel. And wherever he is off to, it’s going to be great to reconnect. I can see a lot of companies, Kirk could totally go in and do the CEO role if he wanted to. He could do the number two role. Really, whatever is out there. But the show must go on. Lenovo data center keeps moving, they’re on a roll. And I look forward to tracking that. But I got to tell you, it was tough to lose Kirk from The Six Five Summit just like it was Jim Anderson.

Daniel Newman: Yeah. Look, that was probably one of the more disappointing moments in the whole run-up to the summit. But Pat, look, Kirk’s got a bright future anywhere he goes. I’m absolutely sure. We’ve had the chance to spend time, break bread. He’s one of those people that can be very explicit in how he thinks about things and how he’s thought about the business. He’s been very strategic. He’s really helped Lenovo’s reputation in data center. Think about the complexity of a company of Chinese origin that has managed to win hearts and minds of enterprises around the world in the West, and has been competitive.

And it’s created a really strong diversification that, frankly, had a lot of important value to Lenovo over the last few years when cycles have cycled in and out of devices. So wherever he lands, I think he’ll do well. I expect that we’ll be back in touch. And meanwhile, I hope he’s off in the mountains somewhere catching some wind or some air, whatever it is. Sailing, skiing, whatever it is that you do, Kirk. Wishing you all the best.

Patrick Moorhead

Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.