Lenovo DCG – Continuing to TRANSFORM via Customer-Centric Solutions

By Charles King, Pund-IT, Inc.  November 15, 2017

Back in June, I attended a media and analyst event in New York City hosted by Lenovo’s Data Center Group (DCG) and entitled, TRANSFORM. The point of the event was to highlight the strategic expansion and repositioning of DCG’s enterprise portfolio to address and support what Lenovo CEO Yuanqing Yang called an “intelligence (industrial) revolution that is already here.”

The primary drivers for this revolution are the massive growth of information, along with advances in big data analytics and artificial intelligence (AI). The value of that information rests in the insights it provides about business processes, customers, suppliers, partners and competitors.

Some might say that Lenovo’s strategy offers little in the way of new or original thinking. After all, most or all other system vendors and server makers support initiatives that are similar to Lenovo’s. But the bigger questions are in how the company’s new DCG portfolio approaches those issues, how it is continuing to evolve and how well its strategy is resonating with customers.

Let’s consider those points further.

Scaling SAP HANA

Long before selling its System x x86 server products and organization to Lenovo (creating the foundation for what became DCG), IBM had a deep strategic partnership with SAP that included optimizing system performance to complement SAP’s core enterprise applications. In fact, from the get-go, SAP leveraged System x hardware as the reference architecture for HANA and S/4HANA applications.

That relationship continues to this day with DCG which recently announced an innovative new solution for deploying and growing HANA environments. Called the Lenovo Scalable Solution for SAP HANA, the new offering approaches S/4HANA from a decidedly different and highly flexible direction. Rather than follow the convention with dedicated, fixed-size appliances tuned for HANA, Lenovo’s offering is a software-defined solution designed to be substantially more agile, scalable and resilient.

The company achieves this with “building block” server components and highly scalable virtualized memory technologies. In essence, customers can begin a S/4HANA deployment with a single 8-socket Lenovo System x3950 X6 compute node wit 6TB of memory, then seamlessly expand it with up to ten 4-socket Lenovo System x3850 X6 “donator” nodes, each supporting up to 3TB of additional memory, supporting up to 36TB of total memory.

That’s significantly larger than competitors’ offerings, such as the 24TB maximum memory of HPE’s purpose-built SAP HANA appliances. But more importantly, Lenovo’s solution also enables customers to more easily afford to explore SAP HANA’s in-memory technologies, and to flexibly grow their investments according to their business needs. In addition, the Lenovo Scalable Solution for SAP HANA supports standard high availability, disaster recovery and back-up practices, including support for SAP HANA system replication.

Add in the fact that Lenovo recently scored three new world’s record SAP SD benchmark results. Bottom line: If businesses considering SAP HANA are looking for a solution that maximizes system performance and flexibility, that search should begin with Lenovo.

Continuing Intel benchmark leadership

Another point in Lenovo’s favor is in the company’s standings in Intel Xeon Scalable platform benchmarks. It should be noted that benchmark performance is nothing like what mainstream customers expect their servers to deliver day-to-day. However, there are many instances where benchmarks are keenly watched, including high performance computing (HPC) applications and supercomputing installations.

In addition, advanced analytics solutions used in sectors, like finance and insurance rely on maximizing robust system performance. Finally, with business customers increasingly purchasing performance-optimized appliances and systems, benchmarks offer a quick snapshot of where vendors stand vis-a-vis system innovation.

So how did Lenovo fare, overall? The company recently achieved 46 new benchmarks in Intel Xeon Scalable systems, more than doubling its previous 42 leading benchmarks for x86-based servers. Moreover, the company’s record benchmark haul simply trounced Intel Xeon Scalable competitors, including HPE (19 record benchmarks), Huawei (12), Cisco (11), Fujitsu (4) and Dell EMC (3).

The journey to AI

Lenovo also announced notable new artificial intelligence (AI)-focused offerings and initiatives at this week’s Supercomputing 2017 (SC17) conference. As Kirk Skaugen, president of DCG, noted, “To truly benefit from the vast amount of data available to organizations today, our customers must embrace AI as the vehicle to help them achieve success.”

Lenovo’s efforts include its continuing efforts in HPC, operating three new AI Innovation Centers (in Morrisville, NC, Stuttgart, Germany and Beijing, China) and AI-focused partnerships with customers. Those include projects with North Carolina State University to improve water usage efficiency in agriculture and with University College London to enhance the analysis of high-energy particle collision events from the ATLAS experiment at CERN’s Large Hadron Collider.

In addition, Lenovo introduced new hardware and software solutions for AI at SC17. The company is adding support for both NVIDIA’s latest Volta-based Tesla V100 GPUs and Intel’s new Scalable Systems Xeon Family processors to its highly adaptable ThinkSystem SD530 solutions. Lenovo also announced the Intelligent Computing Orchestrator (LiCO), a new systems management suite that utilizes an intuitive GUI to help accelerate AI applications.

Lenovo DCG delivers the goods

In other words, following the new strategy and solutions highlighted at the TRANSFORM event, Lenovo DCG is continuing to deliver the goods in terms of new, innovative systems and solutions. But how are the company’s customers reacting to all this? Lenovo’s recent Q2 FY2017/18 earnings announcement, the first full quarter following TRANSFORM, offers some insights on the subject.

Along with the new solutions and strategy introduced in New York, Lenovo DCG also launched new partnerships, a new channel structure and bolstered its global salesforce and leadership. As a result of these changes, the company enjoyed solid revenue growth in North America and Europe/Middle East/Africa (EMEA), including a 10% YOY gain in North America.

In China, where Lenovo and other mainstream vendors have experienced significant challenges, DCG’s revenues improved 7% quarter-to-quarter. More broadly, the company’s global accounts improved by 18% YOY and services bookings grew more than 100% YOY, both of which bode well for the future. On a sector basis, Lenovo enjoyed strong growth in software-defined solution sales, and continued its winning ways with high-profile HPC wins and projects.

Final analysis

What can we take away from all this? Just as it is elsewhere, talk is cheap in technology. Lenovo certainly isn’t the first IT vendor to focus on self-transformation. Plus, given the importance of keeping up with and ahead of developing technologies, it certainly won’t be the last.

But its new Scalable Solution for SAP HANA, the record-breaking successes in Intel Xeon Scalable platform benchmarks, the AI solutions and efforts announced at SC 17 and Lenovo’s recent quarterly earnings results suggest that the company’s Data Center Group is taking its transformation, along with its larger role and responsibilities seriously. What also seems clear from recent events is that Lenovo is not a company that rests on its laurels. Instead, it is always looking to build something bigger and better—and succeeds in a clear majority of cases.

It would be foolish to ignore potential business and technological challenges, especially for a company deeply engaged in major initiatives and sometimes volatile global markets. But if present circumstances offer precursors for the future, Lenovo’s Data Center Group appears extremely well-positioned to address its customers’ needs today and on the road ahead.

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