Three Year R & D Doubling And Service Upgrading Strategy: Lenovo'S New IT Market In The Future

On September 8, 2021 Lenovo innovation and technology conference with the theme of "new it and new engine" arrived as scheduled.

This is Lenovo's seventh tech world, and this year is quite different from usual, "service" is the core keyword of this year. At the conference, Lenovo launched a new service brand, Lenovo truscale, with its subscription and one-stop all inclusive service mode, aiming to reshape the trillion new IT service market.

Xaas "everything is service" is the core of Lenovo's truscale strategy. Yang Yuanqing, chairman and CEO of Lenovo Group, said that Lenovo will create complete new IT solutions and services. Customers' demands at all levels of ICT architecture can be responded to and met anytime and anywhere, making everything simple.

The output of service capability comes from the precipitation and practice of Lenovo's new it all factor field. Among them, technological precipitation is hard core capability. Yang Yuanqing stressed at the conference that Lenovo will continue to increase R & D investment and plans to double its R & D investment in the next three years. After the performance statement in August, Yang Yuanqing proposed to double the R & D investment.

"Looking back on the past few years, we think that digital transformation has become a major trend of the times, and every enterprise is thinking about the significance behind it." in an interview with 21st century economic news reporter, Tong Fuyao, senior vice president of Lenovo Group and President of ISG in China, said that the digital transformation of enterprises is not limited to a certain point, It covers the whole process of the enterprise's product business cycle and is more complex. For Lenovo, this is also a new opportunity.

Upgrade service strategy

If Lenovo's business model in the past relied more on "selling hardware", today Lenovo is transforming into a full-scale service, which is also the reason for the birth of Lenovo truscale.

According to reports, Lenovo truscale integrates the traditional mode of decentralized procurement of hardware, software and services, and the mode of segmented implementation of design, construction and operation and maintenance into a subscription based, one-stop, all inclusive service mode. Lenovo's truscale service has corresponding solutions for all levels of ICT architecture, from DAAS, IAAs, PAAS and SaaS, which can be responded to and met.

What needs to be noted is that behind Lenovo's strategy of upgrading services, the wave of digitalization has already gained consensus in the industry.

Li Daokui, President of the Institute of Chinese economic thought and practice at Tsinghua University, believes that a new industry is emerging in the world, namely the fourth industry information service industry. In the future, China's economic upgrading must be closely integrated with the world economy and make efforts in the fourth industry.

Li Daokui predicted that the information service industry of the fourth industry will account for about 10% of the major economies, and upgrade the primary, secondary and tertiary industries. At the same time, he pointed out that in the whole information industry and in the whole operation process of multinational companies, new it will attract extensive attention in the future, and will also have good guiding opinions on the development of related industries.

Satya NADELLA, Microsoft's global chief executive, believes that digital transformation is accelerating and affecting all walks of life.

"We're going through the so-called 'how to get the best of both worlds' in mixed office," says Satya NADELLA, "Employees of enterprises want both flexible office methods and more cooperation among people. There is no single standard that we can follow. Therefore, enterprises are rethinking their whole business process and structure, how to make new investment in human resources, how to create a more modern workplace for flexible office, and how to combine office Business process digitization. "

Intel Global CEO pat Kissinger pointed out that ubiquitous computing, ubiquitous connectivity, cloud to edge infrastructure and artificial intelligence are the core superpowers of industrial digital transformation. "I appreciate Lenovo's use of as-a-service products such as Lenovo truescale to support traditional business models and promote the innovation customers need through collaboration. This partnership between Intel and Lenovo will enable more people to acquire key technologies and enable enterprises to dynamically expand their key business services and stay ahead of changing business needs."

Huang Jianheng, senior vice president of Lenovo Group and President of solution services group, said, "The essence of Lenovo truscale is to deliver the integrated services to customers in a subscription mode. Customers can either purchase the solution one-time like the traditional way, or pay quarterly, monthly, or even according to the actual use of it. The core elements of this model are Lenovo's professional and strong service delivery ability."

Profit and R & D doubled in three years

Lenovo's sprint to the service market will undoubtedly boost the company's overall performance. Yang Yuanqing also said bluntly in the previous financial report explanation meeting that Lenovo's net interest rate target is to double within three years - compared with hardware, the profit margin of service income is obviously more significant.

From Lenovo's performance in the latest quarter, the service business is also booming. SSG's support service revenue increased by 24% year-on-year. Operation and maintenance services fully reflected the market demand for xaas solutions, with revenue growth of 64% and profit margin increased by 1.8%. The growth rate of solution business revenue was 56%.

Lenovo said that in the field of smart city and intelligent retail, Lenovo is still winning more customers, and the customer list of hybrid cloud solutions based on self-developed IP is gradually expanding. Smart city solutions, "lighthouse factory" solutions, Internet data centers, and retail solutions have a total contract value of more than US $100 million and form replicable solutions.

Therefore, the launch of Lenovo's truscale service strategy at this conference can be understood as Lenovo's overall sprint towards the service market.

It should be noted that Lenovo's ability to export service to customers is inseparable from the precipitation and practice of its new it all factor field. At this innovation and technology conference, Lenovo demonstrated the self-developed enterprise level artificial intelligence platform Lenovo brain, and the panoramic deployment of "end edge cloud network intelligence".

And all these benefits from Lenovo's long-term investment in R & D. Yang Yuanqing previously said that Lenovo's profit margin and R & D investment are complementary. In the past few years, Lenovo's investment in digital and intelligent construction, as well as investment in high-end hardware, is or will bring about the prospect of profit growth.

Facing the future, Lenovo's R & D investment will still be locked in various fields of new it. For example, the smart devices business group will continue to invest in high-end computer fields such as ultra-thin computers and folding computers. In addition to computers, Lenovo will even invest in components including display, batteries, chips and software. At the same time, it will also invest in non PC business areas such as intelligent conference solutions and embedded computing.

In addition, Yang Yuanqing also revealed that Lenovo will make larger investments in such fields as artificial intelligence enabled edge computing, hybrid cloud solutions, cloud network convergence network solutions, Lenovo brain, and AR computing platform.

Tong Fu Yao told 21st century economic reporter that Lenovo's R & D will be divided into three levels, including long-term investment within two years, three to five years and more than five years. The R & D investment within two years will have expected short-term benefits, such as servers, artificial intelligence all-in-one machines, customized products, etc., while the R & D investment in three to five years will focus on the development of software and hardware, the operating system and algorithm of edge server, etc. As for the long-term investment of more than five years, it will focus on emerging technologies and products with high added value, such as algorithms and chips.