Lenovo's Matthew Zielinski: Intelligent Devices Group Is ‘Absolutely On Fire’

Matthew Zielinski, president of Lenovo’s North America Intelligent Devices Group, spoke with CRN about the ‘beast mode’ share gains the group has made and how there is no end in sight to continued growth.

One year into his tenure as president of Lenovo’s North America Intelligent Devices Group, Matthew Zielinski has plenty of wins to point to thanks to a yearlong effort to put a greater emphasis on working with partners. Lenovo added PC market share at a faster-than-expected pace in North America last year, driven by surging sales in areas such as SMB, where solution providers are critical. Zielinski tells CRN about the ‘beast mode’ share gains the group has made and how there is no end in sight to continued growth.

CRN: How has Lenovo performed since you laid out growth goals at Accelerate last May?

Matthew Zielinski: We took back the lead as the No. 1 PC company in the world. We hit a global market share of 24.6 percent [for the fourth quarter of 2018, according to IDC], which is 16 percent growth. ... On the North America side of it, we were significant contributors to some really strong results. I refer to ‘beast mode’ every time we speak, which is adding [one-quarter of a percent] of market share a quarter sequentially. That would yield a total of about [0.75 percent to 1 percent] of share gain for the year. And I think we’re going to smash through that. Through calendar Q4 of last year, we were the fastest-growing PC manufacturer in the largest five. Our shipments jumped 29 percent year to year, and in calendar Q4 we outgrew the market by 26 points—just some astounding growth numbers there. That is North America alone. Not only was it 26 percent year-on-year growth, but we were just way faster by a country mile relative to the competition. ... We’re absolutely on fire, and I’m extraordinarily bullish on our plans for next year.

What sort of growth have your corporate and SMB businesses been seeing in North America?

As part of this ‘beast mode’ that we set out at the beginning of [last] year, we said that acquiring new customers was really important to us. And we set out an objective to say we want to acquire 50 new logos on a quarterly basis. And I think we’re going to smash well beyond 200 new logos for the year, with over $1 billion of new revenue from obtaining accounts that we didn’t have previously. That’s in corporate. ... I think our greatest accomplishment has been the turnaround in SMB, which is obviously huge in terms of how the channel drives that. Our business was up over 50 percent year to year. That just speaks volumes to the complete rebirth that we’ve had with our channel partners.

What were the key channel changes you made that have enabled this to happen?

We had an outstanding team in place, but it had a rough few years. I think they needed some real crisp direction. They needed some confidence and swagger back. If I had one job, it was really to reinstill swagger in the organization. Part of that also carries over into the channel. We had a huge rebuilding exercise that we had to undertake. If you recall, the October before I started, we did some things in the channel that were not favorable at all—that can leave scars and black-and-blue marks on business and trust for a long time. We had to get back to basics, retool our programs. All of us had to hit the road and re-engage, and really get back a lot of the trust that was challenged and lost during those times. ... I would argue that our [channel] relationships are stronger than ever, and I’ve got to really give all that credit to Rob [Cato, vice president and North America channel chief in Lenovo’s Intelligent Devices Group] and his entire team. We’ve seen incredible growth as a result. Our channel business is up 18 [percent] to 20 percent year on year. Those results don’t happen unless you’ve got some mojo back and some chemistry back with all of your partners.

What’s the outlook on supply shortages for partners?

There’s no doubt we left demand on the table in the first calendar quarter [because of the Intel processor shortage]. I am becoming increasingly optimistic as the year goes on. I don’t think we are in business as usual until maybe late calendar Q3, early calendar Q4, to be totally honest. But what I can also say is we’re seeing some glimmers of hope. And, to be honest, I wouldn’t have said that to you [in early March]. ... For the first time, I can say we see improvements. It’s nowhere near as fast as we would like it to be. But I also feel that we’re in a good position to plan through these sorts of things, and make alternative plans where we have to. It’s getting better. We do have a really good strategy around AMD and also MediaTek to service demand as well. To qualify it and quantify it, I think we have it managed for the year. … But regardless of what happens, I think we’ve got a really good plan in place to hit the share objectives that we do.

What other investments are ahead for the channel?

We’re investing really heavily in what we call our big bets for the year—which is public sector, state and local government, and higher education—where we’re frankly south of 10 percent market share with a ton of headroom. And [we’re also investing in] our corporate acquisition business, which is that engine for everything from larger SMBs to small corporate. If you look at state and local government, higher education and our acquisition teams, we’re tripling, quadrupling and even [multiplying by five] from a headcount standpoint to really put resources in place to grow that demand. That’s a really good thing for our channel partners. The other thing we’re doing with the partners is this partner transformation effort, which is a multiyear journey around the full-on partner experience—think portal, think enhancing the touchpoints with digital capabilities, intelligent automation, things that we can do around pricing. That’s another area of improvement that we’re just getting started on—that overall interaction and experience with the infrastructure for the channel.

What is the power of your Intelligent Devices Group combined with your Data Center Group for partners?

As much as we really have a future vision of being one Lenovo, we still have a lot of work to do there. So if you think about the potential there, we’re doing extraordinarily well without being able to play that full-portfolio strategy like some of our competitors. But that’s still a place where there’s room for improvement for the year to come. … We all acknowledge there’s opportunity to be had with a much more combined approach on both sides of the business. … There is no doubt that versus one of our competitors specifically, it would be advantageous for us to be able to potentially compete with them at their style of game. Right now we’re playing a different style of game, which frankly is working very well [in the PC business]. We all acknowledge there’s opportunity to be had with a much more combined approach on both sides of the business.

Do you still feel like the underdog, the up-and-comer in North America?

We’re having a fantastic year, there’s no doubt about it. We started the journey at 13.4 percent share. And to end the year [having hit] a high point of 15.6 percent—all that has done has made us even hungrier. And so from an investment standpoint, year to year, the company has never invested in the region like it is [investing] in the upcoming year. We know what we’re capable of, and now it’s time to stay hungry, stay humble, stay on our toes, and just keep going. We’re really not satisfied yet. ... We’re coming off the best year that Lenovo North America has ever had in our history. We won’t for a second undercall the gravity of the role that our channel partners have played in what I would just call a ‘comeback.’ Our partners are really at the epicenter of what we’re doing here. … And I know it took a leap of faith ... to really re-engage with us. I would just say we’re extraordinarily grateful to our partners. We’re going to win together, make history together, make money together, and define the future of the IT landscape together.