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Lenovo ANZ MD explains Kiwi channel plans

27 Feb 14

Matt Codrington, Lenovo ANZ managing director, would clearly like to be discussing the vendor's recent acquisitions and their potential impact on the New Zealand channel.

The problem is, under regulatory restrictions, he's more than a little restricted in what he can say.

Within a space of a month, Lenovo has announced plans to acquire both IBM's x86 server business, in a US$2.3 billion deal, and Google's Motorola Mobility smartphone business, in a US$2.91 billion deal.

Codrington notes that the IBM deal will see Lenovo move from number six in servers globally, to number three.

On the smartphone front, Lenovo already has 23 handsets – including its first Windows phone, launched at Mobile World Congress earlier this week – and is currently number four globally, having dropped from third position. Lenovo's head has stated his intentions for the company to return to third quick smart.

“And that's with no [smartphone] presence in the New Zealand and Australia, the United States, Western Europe and Japan,” says Codrington. “With the intended acquistion, we gain a valuable brand and also an established route to market. Motorola will give us good traction, quickly.”

Channel benefits

For the New Zealand channel, Codrington says the planned acquisitions enable an end-to-end solution via Lenovo. “The Thinkpad brand is quite strong in New Zealand. In the commercial and All-of-Government spaces we're one of the top vendors. But what we don't have is an end-to-end solution.

“With any acquisition there is always some risk, obviously, but considering our track record [with previous acquisitions] we would hope to push the server business into an even stronger position.”

Codrington says with BYOD and CYOD becoming increasingly relevant, there is increasing need for selling of hardware independent of network contracts.

“And that means the traditional reseller can leverage the end-to-end offerings more.”

Codrington says there's also plenty of scope for Kiwi resellers to make money with services around Lenovo's end-to-end offering. “With the right services portfolio, that's a very compelling offering to partners. Some of our competitors focus services around the box. Lenovo isn't doing that.”

He says with the ever increasing squeeze on margins, Lenovo believes enabling partners to bring services to market, without competition from Lenovo on the services front, is the best option and a way of driving profitability for both partners and the vendor itself.

“There are base services we have to offer, but are we going to be consulting and investing in services? No, probably not,” he says, adding that's an area for partners to make their mark in by providing extended services or warranties.

He says he's started to make in-roads with a consumer strategy for New Zealand, and is currently in discussions with retailers here. Strategies for the enterprise and phone businesses are also being worked on and Codrington says by the end of the year, he'd hope to see a wide portfolio of products including servers, PCs, tablets and smartphones, available here.

The Dicker front

Like many in the industry, Codrington wasn't surprised when Australian distributor Dicker Data acquired Express Data. “They are very ambitious,” he notes.

Dicker Data has been 'a very strong partner' in Australia for Lenovo, since 2012. In 2013 the distributor, with its SMB focus, was Lenovo's biggest distributor for a couple of months. “It ramped up very quickly and was very quick to pick up sales and do very well,” Codrington says.

He says its not clear how distribution will play out in New Zealand.

“We have some loyal partners in New Zealand and building a level of trust and sustainable partnership is key to me, so we need to be careful how we service the market.

Codrington says with two 'great' partners in New Zealand – with Ingram Micro and Synnex – any new distributor would need to have 'a different route or play worth discussing'.

“We have to have discussions [with Dicker Data] as they go through the stages of the acquisition and decide on their structure and strategy for New Zealand. At the moment I would say I'm very non-committal.”

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