The perfect 10?
A decade on from Lenovo's acquisition of IBM's PC business, Sara Yirrell catches up with UK and Ireland channel director Darren Phelps to see what a difference 10 years has made
It hardly seems like five minutes since Chinese vendor Lenovo acquired IBM’s PC business for $1.75bn (£1.13bn), but in fact it has been 10 years.
The road has certainly not been smooth and without challenges for Lenovo, but the firm is in a bullish mood, and added to its might last year with the acquisition of IBM’s x86 server business.
Starting off at ninth position within the global PC industry back in 2005, Lenovo has risen to the top spot, and is number three in smartphones, number three in tablets and more recently, number three in x86 servers.
In our chat with UK and Ireland channel director Darren Phelps, we see what impact the acquisition has made on the vendor, what the future holds for this ambitious firm and the role the channel will play in that future.
What difference did the IBM acquisition make to Lenovo’s business?
The acquisition of IBM’s PC business played a critical role in making Lenovo the company it is today. Prior to this, Lenovo ranked number nine in the worldwide PC industry with 2.3 per cent market share and annual revenue of just $3bn. Overnight we scaled to become a major global player with the R&D, talent and supply chain which allowed us to become number one.
Was the intention always to become a global PC player? Could it have been achieved without the IBM acquisition?
Our CEO, Yang Yuanqing, had a strong vision for the company and very early on he put a stake in the ground stating that Lenovo would become the number one global PC brand. In doing so, he inspired and led a global team, ensuring we all worked hard to meet this goal. The IBM PC acquisition and its growth over the past 10 years gave Lenovo the fuel to accelerate its expansion across our three growth engines: PC, mobile and enterprise.
What has been the highlight of the last 10 years?
Last year was certainly one of the most exciting for Lenovo. Closing the acquisitions of Motorola Mobility and IBM’s x86 business has transformed the company, giving Lenovo the most complete hardware portfolio on the market. And what has been the biggest challenge? Post-acquisition of IBM’s PC business, our leaders worked hard to create the Lenovo culture.
As we strived to become a truly global company, we adopted English as Lenovo’s main language and set out to build a diverse leadership team. Today our global team is balanced and diverse: the top 12 leaders represent seven nationalities, while the top 100 executives hail from 20 different countries. This level of diversity allows us to better respond to the needs of customers at both a global and local level, which has consequently been one of our biggest successes.
How has the PC market landscape changed in the past 10 years and how is Lenovo adapting to that?
It has certainly been a decade of change. Consolidation has affected all the key players and innovation has transformed the technology we use on a daily basis. This change has created a number of new and interesting form factors such as tablets and wearables, which would have been unthinkable 10 years ago.
We’ve continued to grow market share through heavily investing in R&D, continuing to bring new and exciting products to market. Having a strong M&A strategy has also helped build our business.
How important has Lenovo’s channel been in helping it achieve global success?
Our channel has been vital to our success; in the UK we are proud that 95 per cent of our business is conducted via our channel partners. They give us scale and reach and as they have grown we’ve been able to grow our business to the size that we are.
How do you think the market will change in the next 10 years?
The Internet of Things, wearable technology, and other emerging technology such as driverless cars will stimulate innovation and the creation of start-ups across the UK and beyond. It will be our role to nurture and support these fledgling companies as they will no doubt shape the technology we use over the next decade.
How will Lenovo change in the next 10 years?
We aim to remain nimble and respond to new opportunities and new trends. We’ve solidified our position as a global hardware player and go into the next decade with the most robust product portfolio on the market, so you can guarantee that we will continue to innovate in the PC, server and smartphone markets.