Lenovo to invest big in enterprise, mobility, PC

Lenovo Australia managing director Matt Codrington said the company will be making large investments in its enterprise, mobility, and PC business.
Written by Aimee Chanthadavong, Contributor

With a research and development budget north of $1.2 billion this year, Lenovo is determined to deliver results across its broad portfolio from mobility to enterprise, and even PC.

Lenovo Australia managing director Matt Codrington told ZDNet that despite increasing competition, Lenovo is focused on making continued investments to grow its market share and position in the Australian market.

In the mobility space for example, Codrington reassured the company's presence in the smartphone market under Motorola's Moto brand is still "very active".

He said Motorola in fact grew in Australia last year, and the company plans to make investments there to ensure that growth continues. He attributed part of the growth to the partnership the company forged with Vodafone and the release of its Moto X Force handset.

The company purchased Motorola Mobility from Google back in 2014 for $2.91 billion, and announced in January that it had plans to slowly combine the Motorola and Lenovo brand names under "Moto by Lenovo".

Last August, the company's ANZ product manager Danny Adamopoulos revealed the company was looking to launch its Moto Maker service in Australia, with Codrington at the time saying it was only a matter of time before Australia would see the arrival of it.

Moto Maker was initially launched in the US in November 2013 through established partnerships with all the major wireless carriers. The service is also available in France, Germany, the UK, and China.

Codrington said the company's global approach to the smartphone market will be very similar to how the company has grown its PC business -- one sector he reassured is still "very relevant".

"Our focus for the coming year primarily is to continue to drive speed and efficiency. The investment in innovation is absolutely key and scaling the enterprise business because we've got a really solid business. Much like the PC side, we'll grow that business a little," he said.

According to Codrington, while commercial devices are evolving to cater for the mobile workforce, the PC is still a "foundational" tool for the office and business, noting that the PC market is still a $230 billion market.

He said Lenovo's success in the PC market has been due to its ability to scale the business' "breadth and depth of products".

Codrington's remarks echoed what Lenovo CEO Yang Yuanqing said earlier this year during the Consumer Electronics Show -- noting that the company will focus on making PCs more productive, and that means using cloud to support them.

"For different groups of customers, we have a different product, and also we have a different cloud to meet their requirements," Yang said at the time.

"We need to work with Microsoft on Office 365, we can work with Salesforce.com on customer CRM, we can work with Workday on human resources. These kinds of cloud must be connected to devices, so this will be Lenovo's strategy: Every device will be connected to a certain cloud, no matter if it is PC, tablet, or smartphone."

Meanwhile, Lenovo's enterprise business remains on track to achieve $5 billion in enterprise revenue. Codrington said the company will continue to build out its enterprise partnerships in order to deliver suitable capabilities to customers, who at the moment are looking for out of the box solutions cloud solutions.

Lenovo has so far signed partnerships with Nutanix, Datacore, Simplivity, and more recently Juniper.

"We have customers who have traditional infrastructures and are looking to understand how they can engage with a cloud model. We're lucky to give them a solution that works out of the box and is extremely scalable," he said.

"I think it's at the forefront of our customers' thinking right now and how they can become more agile in this space because it's changing and evolving so quickly. They can invest in it without risk to the business."

With the education and healthcare sector still being key priorities, the company recently installed Phoenix, a high performance supercomputer system, as part of a contract with the University of Adelaide, and another supercomputer for Melbourne Health to be used by Victorian Life Sciences for cancer research. Codrington added that the company is also in talks with a number of government customers.

On the question of whether the company has its sights set for any more acquisitions, Codrington said: "Lenovo has shown that we have an interest in organic growth and making sure we are procuring the right partnership, joint venture, or acquisitions. Based on that, I think we are open to making sure we can build out the right portfolio".

In January 2014, the company announced the acquisition of IBM's x86 server business for $2.3 billion.

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