‘Bold Commitment:’ Lenovo’s Channel-First Initiative Puts Partners Front And Center

“That Channel-First strategy not only has delivered, but it has also protected us through this last six months of lockdown and the effect of COVID-19,” said Kevin Hooper, president and general manager for Lenovo’s North America Data Center Group

When Kevin Hooper took the reins of Lenovo’s Data Center Group last year, he brought with him a vision and go-to-market strategy to bring Lenovo into “its rightful position” in the IT market.

“It was to be channel-first,” said Hooper, president and general manager for Lenovo’s North America Data Center Group, who joined Lenovo in February 2019. “The goal was to create a material change in the go-to-market strategy for Lenovo, which was to make a bold commitment supported by legal and human resources that we would pass all net-new business to the channel, and that we would be channel-first all the time. So a year later, we’re not changing. That Channel-First strategy not only has delivered, but it has also protected us through this last six months of lockdown and the effect of COVID-19 for a couple of interesting reasons.”

Prior to Hooper’s Channel-First initiative, 57 percent of the revenue from Lenovo’s North America Data Center Group came from indirect sales and 43 percent from direct sales. By the end of Lenovo’s fiscal year 2020, which ended in March, 66 percent of the company’s North America Data Center Group revenue came from indirect versus 34 percent direct, representing a 9-point increase in the channel’s favor. “That wasn’t a share shift, that was incremental growth. Our direct business stayed roughly the same. So all of our sales growth came from the Channel-First initiative,” said Hooper. “Channel-First was about anything that was net-new incremental, anything that Lenovo found, we would not take it direct. We would always engage channel partners. It gave us an opportunity to recruit partners—not just by having the material changes that we’ve made in our programs, but I can provide them with a hot lead, and we are going to help go and work and close the deal with them. Our growth in the overall market has all come from the channel.”

[RELATED: ‘Doing The Right Thing’: How Lenovo Stepped Up For Partners In 2020]

Hooper’s Channel-First initiative has been a massive success for Campbell, Calif.-based Groupware Technology, whose Lenovo sales are up 84 percent in 2020 year over year.

“Lenovo is one of those companies that we just trust to do the right thing,” said Dawn McCale, vice president of sales at Groupware, a Lenovo Platinum partner. “One of the cool things Lenovo does is they have executives who are happy to meet with CEOs and CTOs to brainstorm ideas to solve the customers’ top corporate objectives like increasing profitability, finding a competitive edge, taking out a competitor—big things like that. They’re really good thought leaders in that way.”

Lenovo partner PCPC Direct, meanwhile, has been doubling down on its partnership with Lenovo with great success, both prior and during COVID-19.

Recently, Houston-based PCPC Direct teamed with Lenovo to build a “VDI use case on steroids” for a large oil and gas customer that needed to move to a remote workforce, said Michael Walsh, sales executive at PCPC Direct.

The offering—dubbed PCPC’s RemoteViz Solution—included Lenovo ThinkSystem SR650 rack servers and switches, software from Nvidia and Red Hat, virtual GPUs and Lenovo ThinkPad P1 laptops—with all of the underlying technology being a Lenovo SKU. For the first time ever, the customer’s employees, which include geophysicists and scientists, were able to efficiently and effectively work from home.

“We did it end to end: the host end, the data center end and the client end, which is all Lenovo [ThinkPad] P1 laptops and brand-new 4K touch screens. It’s really a slick solution,” said Walsh. “The customer glows when he talks about it and how wonderful and beautiful it is.”

PCPC owner Joe Vaught said his company’s relationship with Lenovo is invaluable. “I get more calls and more help and more offerings to partner with Lenovo than I do with anybody else. They’ve become more quick, agile and friendly. I’ve got great upper-level support,” said Vaught. “My value and my customers’ value with Lenovo has probably more than doubled [in 2020]. My business is swinging up with Lenovo. I never, ever had to call for help—I had it coming my way first.”

Before Lenovo’s Channel-First strategy was implemented, in Lenovo’s fiscal year 2019 the company had about 2,950 net-new customers purchasing through channel partners. In fiscal year 2020, Lenovo had around 3,950 net-new customers buying through channel partners.

“So not only were they new customers, but there were 1,000 more of them,” said Hooper. “We are on an acquisition, growth and market-share push, and we’re delivering on it.”

As part of this Channel-First initiative, Lenovo launched a revamped partner program in April and has also brought on 54 new channel partners, including many global systems integrators, to its Data Center Partner Program.

Since January, Lenovo has also doubled the total number of Lenovo Platinum partners, which is the highest status in Lenovo’s partner program.

In a move to win even more partner mindshare, Lenovo this year hired Steve Biondi, a longtime industry veteran who was Avaya’s former global channel chief.

Biondi, Lenovo’s new North America Data Center Group channel chief, quickly hit the ground running, launching a revamped partner program in April that included new additional rebates for exceeding growth targets and acquiring new accounts. In terms of boosting profits, Platinum partners can now earn nearly 40 percent more for similar year-over-year performance.

Biondi also ramped up presales and technical support to enable faster and more personalized responses for channel partners by increasing the Data Center Group’s back-office resources by 30 percent. In addition, he focused heavily on pushing a competitive bid program that included new incentives aimed at displacing the competition.

Biondi said COVID-19 hindered many vendors’ supply chains, rendering partners unable in some cases to fulfill customer orders. However, with Lenovo’s unique manufacturing and diverse supply chain capabilities, the company began to court solution providers during the coronavirus pandemic, leveraging its nearly always-in-stock product supply.

“Around June, we started approaching some of our competitors’ partners to say, ‘Look, deals are perishable. Customers need to have stuff now. If we can help you, let us know.’ So we put a program together to say, ‘Let us help you. We’ll take care of you the way we take care of the rest of our partner base.’ That’s been working,” said Biondi. “We’ve got almost three dozen partners from our competition that have never done business with us before that are now doing business with us. … We are winning, and it feels pretty good right now.”

Lenovo also has relentlessly been doubling down on new tools and resources to boost channel sales and simplify the deal process.

In a blockbuster move for the channel this summer, the company launched its new partner portal, the Lenovo Partner Hub, to give partners more tools and foster greater collaboration between channel partners and Lenovo’s sales teams across all its business groups.

Designed for Lenovo’s Data Center Group and Lenovo’s Intelligent Devices Group partners, the Lenovo Partner Hub provides a single access point for tools, resources and personalized information that is most relevant to solution providers’ needs, geographic markets and past history. It includes a streamlined and integrated pricing engine with deal registration and a new customer bonus; digital marketing assets and partner-ready services; faster turnaround on rebate payments; and a dashboard that provides snapshots of sales performance, KPI tracking and personalized sales summaries that allow deals to close faster.

“Our new partner portal is really important,” said Biondi. “If you’re an [Intelligent Devices Group] partner or a data center partner, it’s still one interface. We’re going to start now to leverage that global platform that works in both sides on the Lenovo camps for our partners.”

Hooper said the next step in his successful and ongoing Channel-First initiative is inviting more partners into the fold by bringing along net-new customers to match with the channel around emerging opportunities such as high-performance computing.

“The next turn of the crank is to take areas where we’ve been particularly successful, like high-performance compute where we’ve seen substantial growth, and to build channel relationships where they can leverage our capability and expertise,” said Hooper. “That’s not something that is particularly natural when you get into something that’s as technically intensive as high-performance compute, but we’re doing it. We’re doing it right now. We’re deliberately building a channel, and we’re deliberately inviting channel partners into those opportunities because we think that’s where the future lies.”