At the beginning of 2018, Gartner released its global and China IT spending forecast: global IT spending is expected to reach US$3.7 trillion in 2018, an increase of 4.5% over 2017; China's total spending on technology products and services in 2018 will increase by 6.7% , more than 2.6 trillion yuan. From a global perspective, from 2017 to 2019, the growth of data center systems and equipment showed a downward trend year by year, while the growth of software and IT services was quite rapid. Gartner highlights that digital business, blockchain and IoT projects, and innovative technologies such as big data, algorithms, machine learning, artificial intelligence, and others will continue to drive growth in IT spending.
On April 19, 2018, during the Lenovo Data Center Business Group 2018 Partner Conference, Tong Fuyao, Senior Vice President of Lenovo Group and President of Data Center Business Group (DCG) China, said that the exciting new growth point of the Chinese market is the ToB business. Enterprise-level business, the growth point comes from a series of opportunities. On the other hand, he believes that the current Chinese IT market is unhealthy. As Internet companies enter the market and seize the market by burning money, the current growth of businesses such as X86 servers is mostly due to unhealthy orders. The phenomenon of the Western Wall is very obvious.
The so-called scenery should look at the amount. In 2017, Lenovo's data center business group has undergone a series of adjustments such as business spin-off, team expansion, and product line optimization, and has stood in the Chinese enterprise IT market in 2018 with a new attitude. "Last year, it was summed up in one sentence as 'changing engines in the air'. We did not lose the chain in the business, and at the same time transformed the business itself and achieved profitable growth." Tong Fuyao said that if we want to jump out of the data center market, we will see a few Years later, the entire IT market has become a big plate, and I will come back and think about what to do today. "This year, DCG China will adhere to a customer-centric business model to accelerate business growth in China."
The vast world of ToB business
As far as the global market is concerned, according to Gartner's forecast: in addition to communication services, the bulk of IT spending in the future is IT services, which will account for 27% of the entire global IT spending in 2019, while equipment will account for 18.8%, and enterprise software will account for 18.8%. 11.1%, and data center systems will account for 4.7%. The trend of the global IT market is the wind vane of the Chinese IT market: data released by ××× shows that in the first quarter of 2018, the tax contribution of the software and information technology service industry increased by 31.1%, and the cumulative growth rate has exceeded 20% for 17 consecutive quarters since 2014. %, and the cumulative growth rate has exceeded 30% for 9 consecutive quarters.
No matter for Lenovo or China's IT market, the current equipment market accounts for the majority, but the enterprise IT services combined with data center systems, enterprise software and IT services will be the growth pole of the future market, and the scale of this market has not little. According to Gartner's forecast, in 2019, the combined market size of China's data center systems, enterprise software and IT services accounted for 17% of the total IT spending, reaching about 478 billion. More importantly, the global data center system market will enter negative growth in 2019, and the equipment market will also enter almost zero growth. For IT companies, if they do not invest in software and IT services, they will fall behind in the IT industry in the future.
Lenovo split its global business into four segments in March 2016: Personal Computer and Smart Devices Group (PCSD), Mobile Business Group (MBG), Data Center Business Group (DCG) and Lenovo Ventures Group (LCIG). According to the financial report of Lenovo Group, in the third quarter ended December 31, 2017, DCG not only achieved the expected performance for three consecutive quarters, but also recorded the highest turnover in two years: the quarterly turnover reached 1.2 billion US dollars, a new high in two years. It increased by 16.7% year-on-year and 25.5% quarter-on-quarter.
In May 2017, Lenovo reorganized China into two separate organizations, the Personal Computer and Smart Device Group (PCSD) and the Data Center Business Group (DCG), in order to focus on serving customers and responding to the market more quickly. The space for independent development and growth of DCG business is given. Tong Fuyao is the President of DCG Business China, responsible for the end-to-end business of DCG China and the global hyperscale data center business. Under the leadership of Tong Fuyao, Lenovo's DCG China business has undergone continuous transformation.
During the 2018 Lenovo Data Center Business Group Partner Conference, Tong Fuyao talked about the four growth opportunities in China's ToB market: First, the country is independent and controllable, which has shifted from PC to storage, server, network equipment and other fields. "As a national strategy , this is only a matter of time, and I believe this time will come soon. If we do not seize the opportunity of self-control, domestic manufacturers will not have any right to speak in the ToB business in the future.” The second is software-defined infrastructure, not only Software-defined storage, network or data center, but a software-defined high-efficiency business model will bring new revolutionary changes to the future development of data centers; the third is other Internet companies other than BAT, although BAT and other Internet companies The market is still growing rapidly and drives the growth of the entire X86 server, but the procurement of any company outside BAT, such as JD.com, Didi, Kuaishou, and Meituan, may be several times that of traditional central enterprises, and it is still growing; The fourth is that artificial intelligence will bring revolutionary changes, such as new opportunities brought by smart manufacturing.
"If you look at China's future growth, if you look at the entire enterprise-level business or ToB business without the data center, I think this is a very broad world." Tong Fuyao emphasized.
a blueprint to draw
From 2016 to 2017, Lenovo experienced a series of business adjustments. "Lenovo was No. 1 in China (server market) in 2015 and 2016. I thought later, is this really important? In the enterprise market, customers are more concerned about what kind of experience Lenovo can bring and help What problems do CIOs and CTOs solve, not the No. 1 market share." When Lenovo gave the data center business more space, Tong Fuyao and his team began to see how the future blueprint should be depicted with an internal entrepreneurial mentality.
"On the basis of the global data center business strategy, I put forward a concept with Chinese characteristics: to help customers achieve digital transformation. If you help customers achieve digital transformation, Lenovo will definitely not be able to only play the role of hardware supplier. Before you rarely You will hear that we have signed consulting agreements with customers. We now have not only consulting business but also software business, and we are actively expanding in this area. Once we get involved in customers' software, consulting, and even end-to-end solutions, we will soon face the challenges of our own capabilities. Challenge, whether it has the ability to deliver? I think the positioning of Lenovo's data center business group is to focus on services, not just hardware suppliers."
In May 2017, when Lenovo China spun off two independent organizations, PCSD and DCG, DCG was still a business with a quarterly revenue of about US$1 billion and a volume of about 15% of PCSD. Although the volume is small, it also gives DCG the advantage of "small ship and easy to turn around", especially the organization of the PC business is independent, giving DCG the opportunity to reshape new organization, culture and genes. "Because of the small scale of DCG, the system and business model allow us to make new changes, and we start a business internally. What kind of mentality should be when starting a business in a stable large enterprise organization? Should we still advocate a KPI culture? In the traditional IT architecture in the past, it was necessary and necessary to emphasize KPIs, but when iterating on business models and technologies, in addition to emphasizing KPIs, it should also emphasize the flattening and rapid iteration of the organizational structure. The organizational structure of Lenovo DCG will follow suit. change as the business changes.”
In terms of cultural remodeling, Tong Fuyao shared his thoughts and practices: "First of all, I think that employees should be allowed to fail, try, and make trial and error. Last year, we considered divesting some business sectors, from the traditional organizational structure. Spin it out and give employees equity incentives when Lenovo holds a large stake, so that they have a mentality of innovation and entrepreneurship. Secondly, we also emphasize the end-to-end ownership of the business, and hope that business leaders are not only sales managers and directors Instead, we should look at our own revenue like the general manager of the company. Third, traditional recruitment used to hope that there are more talents with a background in the traditional IT industry. Now we hope to have more young talents, especially from the Internet field. In the team, bring us new ideas.”
As an internal entrepreneurial partner with Tong Fuyao, Bi Wei, chief architect of Lenovo's data center business group, echoed Tong Fuyao's point of view: "I have a small dream, when we do this (DCG transformation), can it enter the textbook , it has become a case of the transformation of a large enterprise, and it has not been left in vain, which is an exciting place." In order to understand the needs of customers, Bi Wei has traveled to many fourth- and sixth-tier cities in the past year, just to understand the needs of customers. Go to the customer's site to really understand the customer, "After the plane and train are finished, you must take a local car to get to the county-level city, which is really hard."
Air change engine
Lenovo Data Center Business Group completed the transformation and improvement of various processes and the continuous optimization of the organizational structure in fiscal year 2017, and various businesses have flourished and achieved fruitful results. ) China's No. 1, the world's No. 2, the single-socket tower server and entry-level fiber storage maintains the first market share and many other achievements, and has also created a number of industry benchmarking projects in the industry, and these achievements are all in the "air-changing engine". " under the premise of obtaining.
"In the past year, Lenovo's data center business group has re-established an end-to-end team. A large number of new employees have come from competitors and from all over the world. They have joined Lenovo's camp, re-planned the channel system, and strengthened refined management." Tong Fuyao reviewed the past one Years of experience, I am more emotional: Lenovo's front-end and back-end pulling to do enterprise-level business began in 2011, when Lenovo was the first in the second echelon of China's server market; in 2014, Lenovo acquired IBM X86 server business; 2015 In 2015, China underwent rapid integration, and ThinkSever and ThinkSystem achieved the No. 1 market share in China in every quarter of 2015 and 2016. In 2017, after Lenovo spun off its three main businesses, the data center business group began to emphasize that "healthy growth is the first priority" and that "from a long-term development perspective, the business should be made healthier."
Tong Fuyao summed up the "air-to-air engine replacement" in the past year. Lenovo's data center business group has mainly done three things: first, it has established an end-to-end sales organization, including sales, regional sales, industry sales, pre-sales, after-sales, solution teams, Call center, marketing, channels, promotion, etc., form a complete and independent end-to-end team, which has the advantage of being more focused; secondly, it is customer-centric, sorting out the database of Lenovo's ToB business in the past ten years, and at the same time. Organized the database of Lenovo enterprise-level products purchased in the past few years, and re-classified them according to industry, customer purchasing behavior, customer health, etc., so that front-end sales can be more focused on valuable customer groups with room for growth; the third is to recruit troops, More than 100 new employees have joined the team of Lenovo Data Center, and the channel business has also been adjusted. Become a very important source of turnover and profit for Lenovo DCG business.
The biggest difference between the enterprise market and the PC and other equipment markets is that "customer-centric" requires customized solutions and services. Taking sales as an example, consumer products are mainly sold to channels and sold to end users. Manufacturers do not know who the products are ultimately sold to or where the end users are. The data center business group also used the PC channel sales model from the beginning, with some adjustments: 80% of the goods were delivered to the channel, and the remaining 20% was let DCG sales run by themselves. This is a "big stocking and small business opportunity"; After the sales of the central business group have traveled to almost all relevant end users in the fourth- and sixth-tier cities, such as the government procurement centers in more than 2,800 counties, a large number of business opportunities have been accumulated, and there is no need to press goods from channels, and it has become a "small stocking big." business opportunities" model. "Lenovo's employees go to the front line to run customers. This is a very hard ToB model, but it works. In one year, we have been invincible in the entire fourth- and sixth-tier markets, and have achieved very good turnover and financial returns."
Regarding the "change engine in the air" in the past year, Tong Fuyao said: "Sometimes, no matter how tall and high you describe things, it is better to run customers. Run customers, and business will come." In fact, "with the "Customer-centric" and insisting on "running customers" are the keys to the success of all ToB businesses. Tong Fuyao introduced Lenovo’s experience in selling directly to the fourth and sixth levels: There are two main channels for small and medium-sized enterprises to purchase enterprise-level products. They can find the official website or find local partners. The blood vessels are spread to the fourth or sixth level, and various exhibitions are made in the fourth and sixth level market every month and every quarter, which can attract many customers. "The method is very crude, but it is effective."
At the same time, Lenovo's large enterprise customers are actively engaged in digital transformation, and they expect Lenovo to provide a series of expert advice. Therefore, Lenovo's data center business group will also actively participate in the design of customers' top-level architecture, including business process reengineering, when promoting the digital transformation of the industry. Bi Wei said that through the practice of the past year, the thinking at the solution level has become clearer and clearer. Basically, in 2018, it will be adjusted into three major parts: solutions around the data center, solutions around the industry, and solutions around the industry. Solutions for Smart Cities. Taking data center solutions as an example, DCG will focus on understanding the demands of Party A's team in the data center, and provide targeted overall solutions for the data center, including consulting, planning, design, disaster recovery and disaster recovery for the entire data center. Active-active, security, etc. Bi Wei emphasized that the data center solution focuses on the in-depth operation of 200 selected customers with operating value. The overall IT budget of each customer is between 100 million and 600 million yuan, providing end-to-end turnkey projects. And this basically reflects the concept of "healthy growth comes first".
Li Guoqing, Vice President of Lenovo Data Center Business Group China, is also in charge of the three functions of sales, service and cloud business. Li Guoqing introduced the main tasks of the data center business in the new year: First, change from a product-oriented organization to a solution-oriented organization The organization is divided into five platforms: data center infrastructure, software-defined infrastructure, high-performance computing & artificial intelligence, software & solutions and the Internet of Things, to promote the solutions required by the market and customers; the second is to provide life cycle technical services, solutions Solution services and support services are divided into three categories, and together with partners to create a solution ecosystem; the third is to set up cloud services, including ThinkCloud private cloud, the just-released AzureStack hybrid cloud, and SAP cooperation with Lenovo Enterprise Cloud (LEC) Enterprise cloud; Fourth, expand industries, especially focus on seven major industries such as government, public security, higher education, electric power, military, professional services, and radio and television; Fifth, focus on expanding more than 420 medium-sized Internet companies in addition to the top ten Internet company customers And 6259 small and medium Internet customers.
In terms of product and technological innovation, in 2018, Lenovo Data Center Business Group will also launch 14 customized products for the Chinese market to meet the individual needs of domestic customers. At this partner conference, Lenovo also released the ThinkAgile SX for Microsoft Azure Stack hybrid cloud solution, which is the first integrated system to support Azure Stack in the domestic market. As early as at the 2016 Microsoft Ignite Conference, Lenovo was the first An international vendor demonstrating Azure Stack all-in-one integrated hybrid cloud.
The current data center business group is a small but beautiful organization. "Lenovo Lenovo Data Center Business Group has its own unique advantages. In addition to a stable product platform, there are also a series of resources such as nine vertical industries, ten regional sales, and very professional marketing, channels, pre-sales, after-sales, and promotion. , management system, organizational system. At the same time, Lenovo Ventures has invested in nearly 100 companies, including artificial intelligence, big data, cloud computing, etc., which are also an important part of our ecology.” Tong Fuyao emphasized.
It is precisely because of a small and beautiful organization that Lenovo's data center business group was able to complete the "in-the-air engine replacement" in the past year. Under the vision of "helping customers achieve digital transformation", the future blueprint of Lenovo's data center business group has just begun to be drawn. (Text / Ningchuan)