Lenovo extends enterprise play in China

Chinese PC maker aims to simplify IT management for enterprise customers in its domestic market by focusing on infrastructure, software and terminals. But, it faces challenges in expanding its enterprise footprint, analysts say.
Written by Liau Yun Qing, Contributor

Chinese PC maker Lenovo has unveiled a new strategy specifically targeting enterprises in its domestic market with promises to help ease the management of IT environments.

Chen Xudong, group vice president and general manager of Lenovo China, said the company wants to simplify IT management for its enterprise customer by focusing on three areas of IT: infrastructure, software and terminals

Speaking at the Lenovo Enterprise Technology Forum in Shanghai Friday, Chen said the company will conduct independent research and development to identify hardware and software products that meet the needs of enterprise customers.

Elaborating on the terminals component, which include desktop computers, portable computers and mobile devices, Chen said the company's smartphone, LePhone--which was launched only in China--already supports push-mail functions as well as major enterprise mail and Web mail services.

On the infrastructure front, Koh Kong Meng, Lenovo Asean's executive director of key account business, told ZDNet Asia in an e-mail interview that Lenovo will be offering offer cloud computing products that include desktop, enterprise-class data centers and large-scale public computing facilities for the Chinese market.

This is not the company's first foray into cloud computing, according to Koh. The PC maker had expressed interest in cloud computing since September 2009 when it inked a partnership with thin-client computing software company, Wyse technology, he said. The agreement saw Wyse introducing its thin-client operating system optimization, management and virtualization software in selected models of Lenovo's ThinkPad laptops, according to a media release on Lenovo's Web site.

Koh noted: "In cloud computing, our strategy is to host and deliver the connection between the middleware and content providers while providing secure access to private and public clouds and helping to monitor cloud performance."

He added that Lenovo believes that with the rapid development of mobile Internet technology, access to business cloud computing will move from fixed Internet to mobile Internet.

The Lenovo Enterprise Technology Forum also marks the release of the company's first mobile-based business offering which includes a "mobile information push cloud computing platform", which will integrate mobile Internet services with an open architecture application development platform, he said.

Asked if the new enterprise strategy will be extended beyond the Chinese market, Koh said this will depend on "who our customers are and what they need, not where they are located".

Analysts divided on enterprise direction
More widely recognized as the world's fourth-biggest PC maker than a real enterprise player, Lenovo will face some challenges in its bid to gain a bigger footprint in the business space.

In an e-mail interview with ZDNet Asia, Carter Lusher, research fellow and chief analyst for enterprise applications ecosystem at Ovum, believes it is not too late for a major IT vendor to enter the enterprise game.

"Lenovo does have key assets it can bring to the game including existing customer relationships with enterprises around the world, access to world-class manufacturing, a burgeoning pool of China-based computer scientists, designers and technicians, and hard-won experience integrating the IBM PC division acquisition," Lusher explained.

However, the analyst pointed out that Lenovo is at a disadvantage because its core competency is in the personal and mobile computing and not in broad enterprise IT. "Merely adding a cloud-based data-center replacement is not sufficient to become a strategic enterprise player," he said.

In the global enterprise market, the Chinese vendor is also hindered in terms of scale, said Lusher, noting that Lenovo only generated US$16.6 billion in revenue and US$1.94 billion net cash reserves in its 2009/2010 fiscal year, ended Mar. 31.

"Filling in the gaps of its enterprise IT capabilities will require many billions in investment and significant new expertise," he noted.

However, Liu Jingwei, associate research manager for China at Springboard Research, believes Lenovo has a chance of making a mark in the Chinese enterprise market.

As China's leading PC provider in, Liu said Lenovo is well positioned to ride the wave as cloud computing drives PC innovation and new demand such as thin clients.

The company's LePhone also supports the company's vision that the cloud computing platform will move from PCs to mobile devices. According to Liu, the LePhone is one of the top selling local models, and foreign players such as Research In Motion's BlackBerry and Apple's iPhone are currently not dominant in China's enterprise mobile market.

"The success of mobile will be important for Lenovo's overall cloud strategy," she said. "Lenovo needs to improve device quality, enhance data security for enterprise usage and work with partners to create killer applications."

A good relationship with Chinese telcos is also important to push the adoption of LePhone, Liu added.

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