Lenovo thought PC salesfolk could sell servers and was wrong by about $500m

In Q3 2014m, the last period before offloading its x86 server business to #Lenovo, #IBM had server revenue of US$2.33bn, across x86 and its more exotic architectures. And in Q1 2017 IBM still had server revenue of $831.5m. Lenovo hauled in $731.5 which, once we do the math of IBM's old revenue minus Lenovo's current cash count, is a difference of about 750m. So where did that money go? Some went into the ether as the server market shrank. Some went to new hyperscale wholesalers. If we round things to the nearest half-billion we end up with around $500m per quarter no longer landing in Lenovo's pockets. Today the company told El Reg the sales dip can be attributed to “over-integration” with its existing sales teams. That term was given to us today by Rod Lappin, Lenovo's senior veep for global sales and marketing, who explained it describes the company's early efforts to have its existing PC-centric sales teams sell servers. The company did so because its PC sales team was extensive in terms of numbers and global presence, and had a fine track record. Integrating server and PC sales was thought to be the way to win. But it turns out he PC sales people didn't have the right skills or contacts: the company couldn't have the right conversations with the right people. Which partly explains the sales dip, subsequent restructuring and opinion from CEO and chair Yang Yuanqing that the Lenovo's data centre business is now described “showing some signs of stabilization”. The company's recently-launched ThinkSystem servers and storage, plus the new ThinkAgile hyperconverged kit are hoped to accelerate the turnaround, as are dedicated data centre sales and support teams. Lappin also said the company will soon reveal news of new ThinkAgile appliances. But the company hasn't given up on the PC connection entirely: execs The Register met today were fond of quoting market share statistics for enterprise IT spend spanning client devices and data centre kit, with their hope being that overall market share makes it easier to start conversations about servers.

https://www.theregister.co.uk/2017/08/16/lenovo_server_sales_slowdown_back_story/