Lenovo to resellers: check us out again 8 June, 2009 By Liam Lahey

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The stateside promotion was partially done to "take the good work we've done in Canada and spread it to the U.S. and Latin America" and also to coordinate strategies north and south of the border as opposed to creating a different go-to-market strategy in each region, he explained.

Given its' IBM legacy and a traditional focus on large enterprise and the public sector, Lenovo has been ramping up its efforts to sell into the SMB arena and as part of a larger strategy, it now is focusing attention on the Canadian SMB channel community.

"We found a lot of the high market share we have is with a select, very thin channel in Canada; ones that do very well at large organizations," he explained. "When we looked closely we saw about 1,000 or 2,000 resellers that sell to SMB and probably for good reason, have not looked closely at Lenovo."

Lenovo has been "extremely strong on notebooks and desktops in Canada specifically in the large enterprise space", he said.

"IDC reports (Lenovo's) share as being north of 41 or 42 per cent of all large enterprises in Canada carrying ThinkPads and using ThinkCenter desktops in the office," he continued. "That's the highest share that Lenovo has in any country in the large enterprise space in the world."

Michelle Warren, principal analyst, MW Research & Consulting, said Lenovo is gaining presence in SMB circles in Canada. The vendor faced a really big hurdle in the market initially, she said. The bulk of Lenovo Canada's executives came from IBM where "small business" is considered a firm of less than 1,000 employees.

"They have been very active in trying to understand the SMB marketplace . . . Lenovo corporate has a strong understanding of the product demands of the SMB space, so the Canadian execs are able to work with a broad selection once they understand what Canadians need and want," she said. "The challenge lies in setting up an executive channel program and in keeping inventory."

Another big challenge for Lenovo will be competition, namely vendors such as HP and Dell that have built up strong partner relationships within Canada.

"Their partner and retail (and direct) sales strategies have helped them build strong names for themselves in Canada," Warren remarked. "So, HP and Dell benefit from 'top of mind' status when purchasers are considering PCs."

To match its' enterprise market performance in the SMB space, McBain made clear Lenovo wouldn't chance taking short cuts with its technologies or products offered to that demographic.

"When you look at small and medium businesses, specifically in Canada, we have six per cent share. Years ago, SMB wasn't our key focus . . . there's a bit of a nuance and I think a lot of big companies do this, thinking SMB: take your products today and make lightened versions of them and it doesn't work," he said. "SMBs require full technologies. It's just sometimes . . . they're looking at a more aggressive price point or how they acquire technology is a little different."

The netbook market is also proving to be a boost for Lenovo's business, McBain said.

"Netbooks have become a very fast growing part of our business. It's one of the sub-segments during this economic downturn that has grown exponentially for us. Most of the (netbook) volume was consumer group . . . now we're starting to see SMBs figuring out ways to use them," he said. "For the first time we're seeing this concept of pervasive computing. We're not scared about not selling a $1,000 ThinkPad because we're selling a $300 netbook. We've found our netbook sales so far have all been incremental. We haven't heard of customers that decided to not do a roll out of $800 ThinkPads and instead do a roll out of $300 netbooks; we haven't had that yet."

Lenovo recently introduced a new IdeaPad U350 and the Lenovo G550 laptops for SMB users. To meet what he called a growing category for 'thinbooks', these machines, along with the the IdeaPad S12 netbook and the IdeaPad Y650 laptop, currently round out the vendor's latest light, mobile offerings.

"On the thinbook side . . . it's a new category. Netbooks broke the code in notebooks that's been around for 20 years which is 'thinner and lighter is more expensive'," he said. "Thinbooks will be in between netbooks of 10- and 12-inches and notebooks of 14- and 15-inches. Screen size almost dictates the price as opposed to thin and light."

Meanwhile, Lenovo has done its 'capacity planning' -- taking a close look at Canadian metropolitan areas to find out where the leading SMB resellers are.

"However, we didn't look at the broader channel. But the capacity planning piece gave us the outline of who the partners are, where the opportunity exists geographically, and allowed us to hire a third party company to do a recruitment piece for us," he said. "We've opened call centres that are out actively recruiting SMB-focused channel players that may not have worked with Lenovo in the past."

And the vendor is taking "a lot of our investment" and putting it back into distribution. In the past, Lenovo tried to do a lot of things on its own, he said, "in Canada we've taken more of our marketing dollars and processes and pushed them to distribution that are best fit to deliver them."

Lastly, Lenovo has approached or will approach its' traditional, existing resellers that represent it in the large enterprise space and that have SMB divisions, and encourage them to 'think Lenovo' as it pertains to their small business clients.

"In Canada . . . we want to have 1,000 more resellers working with us . . . taking another look at Lenovo in terms of delivering durable, high quality products at new price points they probably didn't expect," he said. "The one thing we do right is build very good products. We've been hesitant to go and hire the cheapest build like other firms have . . . of the feedback (partners have) given us, that's translated into some changes we've made in the last 60 days around how complex we are to do business with. We've simplified our web portal, our communications; our programs; about three months ago we had 30 different programs, now we have six."

On the product side, McBain said there are some really interesting categories and form factors that are going to be introduced in the summer by Lenovo as it now considers itself a full solution PC company with notebooks, desktops, and servers.

And to address one universal channel gripe, McBain added Lenovo's channel won't have to worry about competing with retailers on price points.

"We've really been channel focused. One of the biggest complaints you hear from channel partners about different competitors is a retail store's ad is blowing up their sales," he said. "We're not focused on direct; we're not focused on retail. We don't want distractions (for channel partners) from BestBuy or Future Shop . . . we're focused on (the channel) as a community rather than trying to hit every market out there."

And simplifying channel communications and business processes was high on McBain's list. For instance, it used to be quite a process for a partner to sign up with Lenovo, he admitted. Now it's a quick and easy reference check.

"We're trying to change the game in terms of working with the channel," he said.