Lenovo Bets Big on SMB business

Globally,
SMBs have been accepted as the economic growth drivers, and in India
too, it would be appropriate to say that micro, small, and medium
enterprises have lot of potential to drive growth as well as volumes.
According to the statistics available from micro, small and medium
enterprises, this sector employs around 59.7 mn people spread over
26.1 mn enterprises, and this dynamic sector has shown enough
worthiness to even survive the recent economic downturn and
recession.

So, given
the
importance of SMB segment in India, major IT vendors have been forced
to target this space for the growth. HP, Dell, Lenovo, amongst
others, have strategized to target this market with their set of
expertise. Lenovo came out to be the recent vendor focusing on the
SMB segment with three-prong strategy.

Lenovo India
works under 3 business units, namely enterprise, consumer and SMB,
where enterprise and consumer units have shown good growth. Lenovo
India managed to segregate SMB as a different unit, seeing the
opportunities present in the market.

SMB unit was
formed last year, and currently contributes 10% of Lenovo India's
overall business. It came out of old vertical, home and small
business, which got split into SMB and consumer units. Initially for
SMB unit, the first half of the year was a consolidation phase
consisting of 30 odd partners. Later it increased the partner
strength to 40, covering major geographies like Kolkata, Bihar, etc.
Seeing the growth, Lenovo plans to expand in geographies like UP,
Odisha, Punjab, and Tamil Nadu in near future.

Lenovo's
SMB unit works in 3 pillars, namely distribution, VARs/SIs and
retail. Speaking to the DQ Channels, Rajiv Rao, director, SMB
business unit, Lenovo India said, “Our organization's key focus
in 2012 is to get all three a balanced growth in their portfolio. In
terms of sheer volume, VAR and RD businesses will lead the space. And
retail will contribute less, but will play a very important role in
the GTM strategy.”

DISTRIBUTION

As of now,
Lenovo has 40 odd redistributors for SMB products, and is adding 7
new redistributors. The company marked its presence across eastern
area in the SMB category with Arihant Mercantile and Netcom Infonet
as its new redistributors. Till now, this geography was left
unattended in this category, though Lenovo's consumer presence was
almost high in these regions. In Bihar too, Lenovo has opened up new
avenues adding Siddhivinayak as its redistributor.

Rao said,
“Currently, we have a partner strength of 40, who are
re-distributors. We increased our presence in the second half of the
year in certain geographies, where we didn't have partners. Six
months back, we almost had no SMB partner in the East, but we have
added few large redistributors in Kolkata and Bihar. We are also
opening up in Odisha and Jharkhand shortly.”

RK
Bacchawat,
CEO, Arihant Mecrantiles, Kolkata said, “For us, it is completely a
new area and the market seems to be very good. The demand is good in
channels for the SMB products.” Some re-distributors also feel that
proper channelization of the SMB products has made things easier for
them. Kolkata based, Shyam Sundar Poddar, CEO, Netcom Infonet said,
“Lenovo has got enough space in the SMB segment, and it seems
there's scope for Lenovo's products. Initially this market was
dominated by HP as Lenovo's Think- Center and ThinkPad products
were not available in the market in a proper manner. Now the uptake
will be really good as there has been proper channelization for SMB
products.”

VARs/SIs

In Lenovo SMB
business unit, VARs never existed, and therefore in the last 3-4
months, it added 100 plus VARs. Lenovo is trying to leverage the
portfolio by adding solutions to its SMB products through this
channel community. It has added partners like New Wave and Vivid in
Bengaluru in this segment, and Sogo computers as both VAR as well as
redistributor.

However in
the last 3.5 months, it has added more than 100 VARs and continues to
do so, depending on the type of city. Rao added, “In VAR or SI
segment, we started with our Think- Pad range, and forayed into it
with the launch of tablets for some commercial activities. We are
also looking to tie-up with ISVs for providing solutions to end
customers.”

However,
Sogo
Computers is unhappy with the association with Lenovo in the SMB
category. Narayan Rao More, GM, finance and administration, Sogo
said, “We are a box pusher in the SMB products segment, and also a
VAR. But due to problems which Lenovo didn't address, we would like
to discontinue selling SMB products this quarter. Lenovo didn't
respond to our back-end claims, and it just wants to do numbers. In
this situation, we are losing money. We will see, if Lenovo allows us
to continue as a VAR, else we will discontinue with Lenovo.”

RETAIL

Retail space
is one of the growth drivers, and currently, Lenovo has leveraged the
existing consumer retail space. Consumer business unit has got 840
stores as of now, and in around 250 stores, it has SMB corners for
commercial products, which target SMB customers.

Amidst all,
Lenovo is also in talks with LFR players to introduce its commercial
products in the display market. The company is also focusing on
enabling the partners with a portal through which it can monitor,
track and incentivize the partners.
Lenovo has launched 'Edge' range of products comprising laptops,
desktops and all-in-ones, focusing specially on the needs of SMBs.