While the PC market has been challenging in the past couple of years, there are now grounds for optimism and Lenovo is well placed to help resellers capitalise on the developing opportunities in the market, according to the company’s vice president channel EMEA.
The past couple of years have not been easy for the PC sector, as Ralf Jordan, Lenovo’s vice president channel EMEA, admits – but this is set to change in 2024.
“Last year, the market in the PC space was very challenging, where we as an industry had high inventory levels but demand softness coming in,” he says.
Ralf adds this was a legacy from the years of COVID followed by the supply chain issues of 2022. “2023 was a year of cleaning up from the problems in the market of the previous years and consolidating our position in the market, and I believe we have done that successfully,” he says. “We kept the number one position in the PC space for the year. And in the infrastructure market, we took market share in what I believe is quite a challenging market environment with high interest rates and inflation becoming a much more important factor than in the past.”
But while 2023 had its challenges, it was nonetheless a good year for Lenovo, and Ralf is optimistic that 2024 can be even better for the company as well as the wider channel. “I go into 2024 very optimistic and seeing a lot of opportunity for the channel,” he says. “I believe that in the PC world, there are drivers that will see the market start to grow again. For example, there is the upcoming Windows 11 refresh, you have AI PCs, all of that is coming and will drive demand in 2024.
“Also with the infrastructure market, one of the main themes I see for 2024 is that the market isn’t about hybrid or multi-cloud – one or the other – anymore, it exists as an integral plan. This is across the board too – large enterprises and SMBs.”
Ralf adds that in most situations now, they are talking about a combination of on-premise, public and private cloud. “The good thing about that for the channel is that it represents a lot of opportunity, because all of that needs to be managed, secured and serviced,” he says. “I think that’s where ultimately it will drive business.”
On the edge
Another driver of business will be edge computing. “Edge will be a key driver this year – this is something that most companies in the sector are predicting, that most of the compute power tomorrow will be installed at the edge,” Ralf says. “That’s different from the past. Compute is coming to storage and to data. And when you think about edge, you talk about different physical places and different contacts in the end users. Internally I’m quite often talking about it’s like a new sandbox, where you can position yourself.
“Lenovo has, I believe, one of the best edge portfolios in the industry and all of them purpose built and secured. Whatever demand is out there in terms of infrastructure, we can help.”
Ralf adds that edge is integrated into vertical solutions, which means it requires specialist skills and a deep understanding of the industry. “All of that represents an opportunity for the channel,” he says.
“We are not talking about one size fits all, we are not in a world anymore where you have one design and setup, now you have to understand much more a business and what are the important drivers, what workloads need to be considered, how secure it needs to be from a security regulations point of view – we are in a world where regulations are playing an important role and I believe customers quite often don’t know all about that. That’s the opportunity that the channel has.
“But it may also require the need to work with more vendors than in the past. There is a trend for implementations to be unique to specific industries and customer requirements. To be a good advisor, you need to know your customer, the industry and ultimately where and how the customer can benefit from the new technological possibilities that are out there.
“When we talk about specialisation requirements, we are already seeing channel partners are working together to bring a solution to the end user. And I believe the specialisation requirement will emerge even more: it’s not that you may be perceived as a one stop shop for everything, but you need to be open to partnering with others to get the required skill sets needed to provide the solution.”
Ralf adds that edge isn’t just going to be for large businesses with multiple sites – he believes it will have applications for smaller single-site businesses too. “It’s really going to go to both extremes, from global accounts to small SMEs,” he says.
Sustainability
But with edge meaning bigger compute, it can also consume more resources, Ralf notes. “Therefore, sustainability, or ESG, becomes even more important because some of the technology can conflict with ESG goals,” he says. “That’s as well an area where Lenovo can differentiate together with its partners.”
Lenovo has long been committed to reducing its carbon impact and has committed to being net zero greenhouse gas emissions by 2050. The company is innovating to this end too, such as with Lenovo’s Neptune liquid cooling technology to stop systems overheating, which uses liquid to remove heat, which is much more efficient than traditional air cooling.
“At the end of the day, as well our corporate responsibility, it is the responsibility of all of us together to ultimately save our planet,” says Ralf.
Home comforts
It is commitments such as this that helped to bring Ralf back to Lenovo in September 2021. But his history with Lenovo goes right back to when he joined the company after it bought IBM’s PC division back in 2005. During the latter period of his original time at Lenovo, he worked as a GM in emerging markets such as Eastern Europe, Russia, the Middle East and Africa, before leaving to pursue opportunities at competitors.
But eventually the pull of Lenovo was too much, and Ralf came back. “The journey that Lenovo is on in terms of expanding and changing the way the company is perceived from a leading PC vendor into something much more than that – addressing infrastructure, services opportunity etc – is a very exciting play,” he says. “It’s is a great opportunity, and my heart is with the channel, my experience is with the channel and that’s why I thought it’s a great reason to join and be part of that journey with Lenovo.”
It is a decision Ralf has not regretted and he is enjoying life back at Lenovo. “When you have a heart for the channel, Lenovo is a very good place to be,” he says. “It’s a channel-centric company and the go to market that we have is very exciting, especially with the transformational journey we are on and that makes the job interesting.”
AI influence
A part of that transformational journey is the growing influence of artificial intelligence (AI). Ralf cites an article by Gartner, which predicts that by 2025, 80% of end users will implement some form of AI and machine learning. “That’s coming from a very low base at the beginning of 2023,” he says. “It shows that AI is everywhere. The important part is that the possibilities around AI are massive potentially for Lenovo as a vendor. On the one hand, we have a portfolio that has more than 70 AI infrastructure platforms. But even more importantly, it’s about helping customers, and that’s the role that I see for the channel to show customers how they can leverage and drive business impact with AI. We need to make it practical and real and to drive benefits.”
Ralf adds that Lenovo has been investing in AI for some years – there are four Lenovo AI centres of excellence situated around the world – and the company has the Lenovo AI Innovator programme. “This has more than 150 solutions that are industry-based; healthcare, manufacturing, retail to name just some of the key industries where already today those solutions are tested and can be implemented, running on Lenovo hardware,” Ralf says.
“It also gives the channel an opportunity to lead the discussion of AI. It is going to be important to do this and help businesses understand how it can be used to drive and optimise website traffic, for example. It’s about ongoing learning and helping to visualise the benefits that the technology can bring to different businesses.”
Positive outlook
The rapidly accelerating potential for AI is helping to fuel Ralf’s positivity for Lenovo and the wider channel in 2024. “We are in an environment where skilled resources are critical; we don’t have enough skills in many technologies to really satisfy everybody. But the good thing if you are a channel partner is you can really play within that environment, create your value proposition, be focused, be adaptable, be flexible, and then make a lot of money,” he says.
“When it comes to Lenovo as a vendor partner, I believe we have a portfolio and there are not so many players left in the industry that is really spending. Lenovo is also a challenger in the infrastructure market too.
“I mentioned about the new sandbox on edge. That enables partners to have fresh discussions and really position themselves differently to many others in the market. I believe Lenovo has a very strong portfolio that enables channel partners to win. I’m very positive about the prospects for 2024.”
