85% of our India business has a channel influence: Lenovo

Rahul Agarwal, executive director, Commercial Business at Lenovo India talks to DQ Channels about the company's channel focus

Can you please tell us how the channel structure works for the enterprise campaign?

Lenovo's channel structure for the enterprise business is driven by the need to develop a core channel partner ecosystem in India as observed in Lenovo China.Today, 85% of our India business has a channel influence and we are focused on creating a strong network with nationwide reach, backed by a mutually beneficial professional relationship.
We work with leading national distributors who work with other vendors on behalf of Lenovo India.

Tell us about your ThinkPad range of products.

Until late 2012, we didn't sell our ThinkPad range of products at Lenovo Exclusive stores but our plan is to increase its availability going forward. We have started investing in increasing the accessibility of the Think products and we have already opened five Think Brand stores in the country for SMBs.

Lenovo changed/restructured its commercial business in the last one year, how has it changed the channel strategy for Lenovo?

Earlier this year, we restructured our commercial business into five key verticals, as the requirements for the same were unique in many ways. The five verticals were global (multinationals), very large enterprise (VLE) {for more than 1000 employees}, large enterprise (LE) {for more than 500 employees till 1000}, government and education and we widened our product portfolio to enhance our go to market strategy.

We now have dedicated managers and realigned partners for each vertical and the results have been favorable; we have done exceptionally well and retained our market leadership in the VLE and LE segments. To help our partners to maximize their growth opportunities, we have set up targets for them depending on the vertical and profile.

Now that Lenovo is one of the leading players in the PC market in India, what has been the contribution of the channel fraternity for the enterprise campaign?

Almost 85% of our business in the REL segment is still conducted through the channel partners-up from 75% last year. Needless to say, we will remain committed to their growth and will work in tandem with partners to increase their revenue sources and profitability.

The overall success of our relationship with the channel fraternity is reflected in the market share of our commercial business, which currently stands at 16.4% as per statistics from IDC - Asia Pacific PC shipment tracker for OND, 2012 and without the ELCOT deal, we are no.1 with 24% market share. With help from our partners we won close to 150 new accounts in the last one fiscal alone.

What sort of new offers/incentive programs has Lenovo initiated in the recent past for the Enterprise partners?

Incentive schemes are important to drive business efficiently and to increase productivity in any business. Our incentive schemes are tailored to tie in with the business objectives of the company and it differs from vertical to vertical.

We have revamped our partner program so that partners can earn 50% more on achieving targets. Lenovo provides several incentive schemes on desktops, laptops and software and Peripherals (S&P) in tandem with the business strategies and channel execution. We are also focusing on marketing and execution of high tech premium products like X1 Carbon and Tiny desktops.

What kind of opportunities remains for partners when Lenovo guns for major projects in education and government sectors? Given that Lenovo deals with Large and Very Large enterprises directly how does it ensure that partners also share profits and are able to maximize their opportunities?

There is tremendous scope for growth in both the education and government sectors. Recent tenders by the Tamil Nadu and Uttar Pradesh governments for supplying laptops to students will undoubtedly increase the requirements for PCs in the country.

We expect that over the next five years, over 38,000 schools will adopt high quality computing devices. An IDC forecast predicts that the Indian Education PC market is growing tremendously and will cross 1.8million units in 2013 from approx. 0.6million units in 2012. That said, the education and Govt business comprise only 30% of our commercial PC business, we see a tremendous opportunity to increase our market share in these segments.

When we win major contracts, we ensure that our partners get the opportunity to tap additional revenues by delivering services and solutions. Even in an order such as ELCOT-where we are billing directly because of credit-line issues and margins, our partners are directly involved in installation, delivery, post-sales support and telephonic support.

We increased our retail presence by setting up 1200+ Lenovo Exclusive Stores (LES) and LES Lite stores in close to 500 cities in the country. This allows end customers to view products from the Think brand up close.

Lot of questions are raised at the quality and support provided by Lenovo in B and C class cities especially. What is your say on this?

Lenovo believes that after-sales service is critical in delivering an end-to-end solution to all our customers. With the increase in our market share, we have increased the number of service centres in the country for delivering effective service and after sales solutions.

For instance: as a part of the Tamil Nadu (ELCOT) deal, we set up 72 dedicated After-Sales support centres to provide efficient field support to the students. Various third party sources indicate that we offer the most reliable machines in the industry.

What kind of set up do you have in place of service and support and secondly, do you have reverse logistics mechanism in place. If yes, please elaborate. If otherwise, state the reasons.

We are in the process of transitioning our service and support centres so that customers will witness a start-of-the-art transformation in our after sales services. This transition will be marked by three key changes.

# We will be moving from IBM managed warehouses to Lenovo managed ones and gradually increase the nos. of warehouses from 19 to 22 for the REL business.

# From IBM managed contact centres, we will be making a move to Lenovo managed direct contact centres for customers 

# Finally, we will be increasing our field services from 230

Are there any new trends in 2013 that partners should look forward to from Lenovo?

Gartner study for 2013 indicates that social networking, mobile communications and the shift to a cloud computing model will pressurize enterprises to make fundamental changes in the business by adopting cutting edge information technology solutions. Trends indicate that the PC market will veer towards slimmer and yet more efficient computing devices in 2013.

With people moving towards a wireless network, we will see an increase in the demand for ultraportable devices, which offer a range of connectivity options and better battery life. The growth of the enterprise PC market will be led by demand from the education and government sector, as they look to adopt mobile computing devices for e-literacy and e-governance.

Ultimately 2013 will be the year when the market will witness a clear shift to smarter notebooks, tablets, smartphones and even smarter televisions powered by apps hosted in the cloud.

Prasanth Menon

(prasanthm@cybermedia.co.in)