The IT infrastructure of an organization’s data center has flipped on its head in terms of the new solutions, applications control and workloads flow.
The hybrid cloud world with IoT and mobility is directing technology vendors to enhance, refresh and tweak their data center solutions for the digital world.
IDG had a detailed conversation with Sumir Bhatia, President, Data Center Group, Asia Pacific, Lenovo, on the company’s data center play, competition analysis, and channel strategy for the year ahead. “Lenovo is encompassing the data center of future with a big focus on investing and expanding the channel ecosystem in APAC region, as it leverages new-age technologies for greater customer success,” says Sumir Bhatia at Lenovo.
The modern data center has shrunk in size, but become denser and complex in terms of workloads and applications. What key traits do you see in the data center space?
The data center has to be efficient, agile and secure. Efficiency is all about high availability and reliability is very critical. These are customers’ expectations too for the data center to be energy efficient, both - power wise as well as real estate efficient.
Agility in today's world of disruption makes it difficult for organizations to predict growth. So, it’s important how fast you evolve and support new applications and release, hence you need agile hardware with security underlined as opposed to old hardware.
Right now, we see a lot of hardware getting switched on an average ratio of 1:7 from a server perspective, wherein 7 to 8 servers are getting replaced by 1. The configuration is becoming heavy as customers adapt other technologies, like software-defined in the app economy.
Which technologies will be the perfect catalyst to accelerate Lenovo’s data center business? Are software-defined everything and IoT on the list?
Software defined everything will undoubtedly will be a big catalyst. A couple of years ago, we had to explain the value of hyperconverged infrastructure (HCI) to customers, which isn’t the case now. The customers are also realizing which applications are right - for software and for standalone – in their infrastructure.
Another area that is definitely growing is the HPC/AI space. High Performance Computing (HPC) that comprised of the large deals (US$30 million to US$40 million) have moved into smaller deal sizes as HPC matures into corporates. I believe AI is at its infancy like the cloud conversation few years back but with lot of data there, AI is a key growth area in corporates. I believe it will be ecosystem general edge computing and IoT than a single company. We are positioned well from an AI perspective with the pocket to data center portfolio.
What do CIOs and ITDMs expect from tech vendors like Lenovo in 2019 and do adoption trends across data centers differ across Asia Pacific?
Australia, for example, is a mature market but some of the best adoption of new technologies is happening in emerging markets like India where they leapfrog ahead of other regions’ organizations.
Let me flip the question as the expectation from vendors is not approaching CIOs to talk about hardware. But the value proposition lies in the solution than plain hardware. For example, Lenovo Neptune is a water-cooled solutions server in HPC that provides energy savings. It’s not about telling the features of the solution needing less power but a different discussion with the customer that it will save million(s) of dollars in the power. CIOs and ITDMs look at Lenovo to help them be a disruptor in the market. They are looking for use cases for AI, solutions to make the data center more efficient from vendors like us.
According to research, more than 50% of IT budgets aren’t arising out of IT team budgets but from CXOs, CMOs and LOBs. Is Lenovo exploring that route?
We are definitely headed in that direction - talking more about businesses and business requirement at customer end. These businesses over time had requirements which couldn't be met by the IT department and that's why the easiest form is to go on the cloud. Over time, IT infra had VMs, there was cost involved and it kept on growing. Hence we help companies on both fronts – on prem and cloud – across BUs and LOBs besides IT department.
The pitch to IT teams and LOBs used to be different but it is pretty similar with the change in IT world. A CIO is no longer a personal administrator or the data center manager. Today, he is the person driving the business and the more advanced companies are starting to figure out how to serve their business needs— not only external but internal. For some customers it is a very different conversation but for the agile ones, the conversation inches closer to a better discussion with different stakeholders.
What’s your take on Lenovo’s recent alliance with NetApp? Will it fill narrow the company’s much-desired ‘storage’ gap in the data center story vs competitors like Dell EMC or HPE?
Lenovo had a relatively small portfolio in storage. We were doing well with growth in flash thereby addressing only 15% of TAM. The partnership with storage giant NetApp and its extensive portfolio provides much bigger access to 90% of that market.
The organizations usually look at either compute or storage. For customers who want more storage, it gives us an opportunity with NetApp Storage now. On the reverse side, NetApp customers can leverage Lenovo’s extensive compute portfolio. Lenovo - NetApp partnership imparts us the absolute length and breadth to compete more with other vendors. The customers are resonating extremely well with this alliance till date.
The alliance will lead to a common pool of channel partners (indirect route) of NetApp and Lenovo. Is there an aggressive strategy to acquire partners of competition like Dell EMC or HPE?
We have completed a comprehensive mapping in Asia Pacific of our (Lenovo and NetApp) channel partners. That overlap is very little, which is fantastic. We have identified partners that overlapped; relationship strengthening and also cross pollination is happening now. Our focused channels are moving with NetApp, and NetApp channels are moving towards compute portfolio too.
About 33% of Lenovo channels partners give around 85% of our business in APAC. However, our rebate system was rewarding across, and it was a ‘peanut butter’ spreading. Going forward, we are launching a new rebate system in early 2019 due to the change in the broad-based ecosystem with emergence of CSPs, besides VARs and Systems Integrators. Managed services providers is a key channel community which is growing fast.
Will new age channel partner like MSPs, or the traditional SIs be more successful with verticalised solutions with Lenovo’s single partner program?
The single partner program for Data Center Group will focus on extremely strategic and long term alliances with channels as the days of moving from one transaction to the other are over. There are partners that focus on mid-market and SMBs both, which is fine. We want to be very selective on partners’ specialisation and their focus areas – say SDI or AI, or we would partner with a NetApp partner that’s proficient in storage.
The verticalization of solutions will be an evolution; though our focus right now is more of a horizontal approach like SDI, AI.
What have been your channel mantras over the years and do you see them change with the market dynamics?
We want to be the easiest vendor for the channels to do business with. For many channels across Asia Pacific, we work with the partners’ specialized competencies and co-sell in front of the customers. Another opportunity is hyper scale, as we sell to about 6 out of 10 large cloud service providers. The futuristic developments in APAC makes a business case for partners to co-work with us, and AI is another domain for co-selling.
Enabling channels with the latest tools, besides just trainings is a focus area for us - For instance, channels can now get a quote within 24 hours on Lenovo portal. The Maestro program profiles the various job profiles or focus areas sales, technical, CXO, marketing of partner companies. A CXO would need quarterly financials while a technical person would need info on typical reference architecture. In April 2019, an online app will provide curated material and relevant information.
Another marketing activity delighting our channel partners is digital campaigns. Many partners can get the campaign ready in under two minutes, including tracking of that campaign. It’s called Power of Zero because they don't pay anything for it and they have the power.
If given a crystal ball to predict 5 big trends from 2019, what they would be and why?
The repatriation of the cloud with hybrid cloud is a big trend with the customers consolidating their cloud strategy. Software defined in the data center is a big area. I will bucket HPC and AI as an important trend. We see AI moving into businesses and smaller deals as we help the customers look at use cases for small trials, across small divisions that will grow over time.
There will be an overall transition with huge amount of investment into replenishing the hardware. Which solution application goes as software or into the data center will come to play.
IoT will move quicker from the usual use cases of building and transport, into agriculture, windmills, and storefronts through retail – for example. There will be heavy computing at the edge and hence that edge compute has to be very powerful. Hence a part will be in the edge, cloud, data center and there will be an evolution of ecosystem around it. And of course, security will underline all the trends.
What about the emergence of HCI and Lenovo’s tryst with it?
We have alliances with key HCI vendors - Nutanix, Microsoft and VMware – but worldwide we have partnered with Cloudistics and many other software vendors. For specific requirements in surveillance, we have a relationship with Pivot3, who offers great video surveillance products.
I believe the organizations will prefer Lenovo Data Center versus competition as we are open and very futuristic. We have the data center of the future already with no legacy, and we provide end-to-end solutions stack - from the pocket to the data center.
Four Priorities of Lenovo DCG for APAC
- Big growth in channel ecosystem and continue investing in APAC.
- Lenovo 3.0 to help leverage all new technologies for great customer success.
- Consolidate Lenovo’s dominance in Hyper converged with HPC / AI as big focus.
- Continue to build the right and talented team of people within the company.
My Top Channel Mantras at Lenovo : Sumir Bhatia
- To be the easiest tech vendor for the channels to do business with.
- Co-Sell with partners’ specialized competencies in front of customers.
- Equipping channels with innovative enablement tools besides T&C.
- Co-marketing initiatives with curated content, digital campaigns etcetera.
Sumir’s 5 Big Trends for 2019
Repatriation of cloud
Software defined Infrastructure
HPC and AI
Internet of Things