‘To me, there’s a lot of these partners that are just now starting to figure out what their AI story is and where they can help their customers, and we’re ready to take that journey with them,’ Lenovo North American Channel Chief Rob Cato tells CRN.

Lenovo’s North American channel chief told CRN the company has its most advanced lineup of products ever armed with market-leading capabilities and it is gearing up to use its network of channel partners to take on all of its infrastructure rivals for shares of server and storage.

“In terms of where we want to go, absolutely we want to take share. We want to continue to grow, but we want to do it in a way that’s responsible and profitable for both us and the partners,” Rob Cato, vice president of Lenovo’s North America channel business, said during an interview at Lenovo Tech World 2024 in Bellevue, Wash. “I think it’s that next wave and the enterprise and hybrid AI space that our partners will really start to see us lean in with them very aggressively.”

Lenovo has number one positions across numerous categories of client devices and within the PC category, but Round Rock, Texas-based Dell Technologies has maintained the edge in massive categories such as x86 servers, as well as mid-market and enterprise storage.

“I think when it comes to storage, specifically, and our partners, we’ve been really good at the entry level,” Cato said. “We’re number one actually in entry storage. And we’ve been very successful with our partners in that space. We definitely want to move up the stack.”

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Cato said the company’s recently announced partnership with NetApp has won positive reviews from partners that are looking for a different kind of offering in the FlexPod plus space.

“So moving up the stack, bringing some different solutions to them in addition to what we’ve been doing around the compute side that you heard about,” Cato said. “It’s not the sexy part of the market, but it’s continuing to deliver our technology into customers, getting the partners comfortable with what we’re doing.”

This is Cato’s 30th year inside the company. He started with IBM and has remained through the 2005 and 2014 acquisitions of parts of that business. Cato has spent the last six years running channel for Lenovo.

He said he’s spent about half his time in end-user sales and half in the channel in various roles throughout North America. For the last three years that has meant responsibility for all products moved through the channel here: PC, server, storage, and services.

“It’s been great. I grew up kind of loving and engaged with the channel partners, and the last few years have been a lot of fun because being able to take it to the next level with them, being able to have the conversation from pocket to Cloud has been a lot of fun,” he said.

Cato believes there is a massive partner opportunity around AI and he said Lenovo is helping them seize it, whether it’s through the work in training within the partner program side or the investments it’s making in partner education.

“To me, there’s a lot of these partners that are just now starting to figure out what their AI story is and where they can help their customers, and we’re ready to take that journey with them,” he said.

Here is the interview between Cato and CRN, edited for length and clarity:

I think somebody said top-line revenue from partners is about 80 percent channel. Is that right?

It’s running between 75 and 80 percent that’s on the commercial statement. So when you add in the consumer, it drops a little bit. But for sure, on the commercial side, we’re running close to 80 percent.

How did you reach that? That doesn’t happen overnight?

It’s in our DNA. It’s our culture. It started with Lenovo. When they acquired us in 2005 on the PC side and in 2014 it just brought a lot of that same mentality.

We’ve been a very lean organization for many years. It’s important to have channel partners to help us deliver the last mile.

And so for us especially in our sales team side, end-user teams, etc., it’s about making sure that when they’re engaging with a customer, that they understand that we just don’t have the capabilities, and our partners do.

We think a lot of times [that] PC and now compute is critical. It is. But there’s so many other things that our channel partners are doing inside of those customers that it’s critical for us to have that relationship with them.

Lenovo introduced hybrid AI solutions with Nvidia and with your network of ISVs you are telling customers you can deliver a proof of concept within six to eight weeks. There are obviously a number of AI products here at the show. How do channel partners fit into that AI discussion and delivering that to customers. Is there a path there for them with Lenovo?

(There) has to be. And it’s interesting, because you were talking about that fast start at 90 days, and in some of the global accounts we can come in and we can bring our people to kind of help with that.

But as you start to get into the enterprise, and especially in this hybrid AI space that we’re talking about, the only way we’re going to be able to do that is with our partners. And so it’s about how do we take our services, either on their paper or ours? Figuring out what that statement of work looks like, and then delivering that ultimately to the customer.

But you have to have a good understanding what the partner’s capabilities are and it’s hard. Maybe we go in and we go into an Insight or CDW or one of the large nationals. You sit down and you do the capabilities matrix, and you kind of understand where everybody has our capabilities, your capabilities, and where does the Venn diagram overlap a little bit?

And that’s where you got to have upfront conversations. They’re not easy. And as a channel guy, a lot of my time is spent advocating inside of Lenovo, just as much as it is bringing Lenovo out to the channel.

Are there any partners that you are going to market with when it comes to delivering these services for customers?

That’s interesting because there are some partners that have built the engineering capacity and capability, the solution architecture and all the things that really come with the early adoption of AI. And then I think there’s going to be the fast followers that are starting to build that capability out now, but we’re already engaged with a number of partners right now.

What does that partner look like?

Everything from a couple of large nationals down to some that are very specialized in the HPC (high-performance computing) space that work very well.

We’re finding a lot of verticalization right now — healthcare, retail, manufacturing partners — that have the capability both in the data center as well as at the edge. And we’re finding some opportunities, for sure, at the edge. You heard a little bit about some of the things that we’re doing to deliver AI at the edge with some of our ISVs, whether it’s retail, or manufacturing. We’re seeing partners that have customers in that space, that have deep relationships and a line of business.

Because right now it’s changing from CIO discussion and sort of centralized to much more line-of-business discussion. How do I help you deliver revenue, or deliver customer experience?

So, again, it’s a lot of partners coming to us saying, “Hey, I’ve got a customer that has 1,000 retail locations and needs help with loss prevention.” Maximizing the data that’s being captured there. Where do I put certain things on the shelf? Where do customers come in and do that? And it’s all capturing that data and then helping them to actually monetize it, or helping them to prevent the loss at the store.

So those are the kinds of opportunities that we’re bringing into our AI Center of Excellence, or into our AI innovators program. And we’ve already got different solutions that have already been vetted. We bring that back to the partner and say, “Hey, have you thought about this?” or “Have you looked at that?”

And in some cases, it’s making sure that ISV is already in the network of that particular partner. So we’re working with TD Synnex on a few of these, and Ingram, and now we’ve added D&H and Arrow to our portfolio and helping them to say, “Go vet these guys and then add them into your portfolio, so that you can easily enable that partner through that network.”

Are you planning on taking a run at becoming number one in infrastructure? Are you satisfied with where you are? Do you want more share?

I think when it comes to storage, specifically, and our partners, we’ve been really good at the entry level. We’re number one, actually in entry storage. And we’ve been very successful with our partners in that space.

We definitely want to move up the stack. We’ve announced a new partnership with NetApp in this AI pod. So it’s NetApp Lenovo compute and Nvidia.

We’re very excited about it. We’ve gotten a lot of good feedback from our partners that have a very strong relationship with NetApp, that are looking for a different kind of offering in the FlexPod plus space.

So moving up the stack, bringing some different solutions to them in addition to what we’ve been doing around the compute side that you heard about. In terms of where we want to go. Absolutely we want to take share. We want to continue to grow, but we want to do it in a way that’s responsible and profitable for both us and the partners.

I think it’s that next wave and the enterprise hybrid AI space that our partners will really start to see us lean in with them, very aggressively.

It’s not the sexy part of the market, but it’s continuing to deliver our technology into customers, getting the partners comfortable with what we’re doing. Our (server management software) Xclarity solution and management profile is a difference-maker for us. Getting the solution architects and our partners comfortable with that, and then bringing that up into the rack and ultimately into the AI space as well.

There have been a lot of announcements here at the show. What are you leaving here and talking to partners about?

It’s back to the sort of where are they focused? Are they in the transactional space? Are they in an enterprise space? What are they looking to do?

I’ve been talking to partners the last couple of days about what we’re doing with HPC and then the warm water-cooled servers and racks. Some of the announcements today with Nvidia, and some of the things we’re getting ready to launch are just groundbreaking.

We’re in our sixth-generation of this. We’re well ahead of our competition, and that’s what they’re saying right now is going to deliver, you know, 30 percent better compute for their customers, and that’s what they want to do.

Then you have the ones that are at the edge that want to be able to talk about transactional products and want to put 1,000 either towers or edge compute devices in their retail or manufacturing or healthcare locations.

So it just depends on what they want to do. But we’re talking about all of it right now, and I think they’re excited about some of the things that we’re doing, in addition to the programmatic side and the investment that we’re making on both programs, as well as training and education to help them move their journey along as well.

To me, there’s a lot of these partners that are just now starting to figure out what their AI story is and where they can help their customers, and we’re ready to take that journey with them.

Talking to folks in the data center space and they say there is one bottleneck to growth and that’s electricity. You guys have a solution that I haven’t heard anybody else talk about, which is ‘we can reclaim 30 percent of the electricity you use for fans, and you can return that to the compute.

Insight, ePlus, WWT, CDW. We’ve got so many that are really starting to learn this. What I would tell you, and what’s interesting to me, is you now can have a differentiated discussion with colocation. And there’s a lot of our partners that have those relationships already, that are established, and they’re like, “Hey, we’re ready to bring your data, repatriate it out of the cloud, bring it down to an on-prem or a hybrid-type solution, and allow you to take advantage of your own data inside your own private AI model.”

And that’s a difference-maker. And again, there’s a number of the ones you just talked about that have the architecture. They have the engineering capability to have those discussions. More will come. But there’s ones that are already on the front foot of being able to do that.