Why Lenovo’s XaaS play is gaining strength: Keys for digital transformation success


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Lenovo is betting on ‘everything-as-a-service’ (XaaS) to help organisations navigate their digital transformation journeys – and the stars now appear to be aligning to an end-to-end landscape. 

The value proposition is straightforward: one provider to plan, procure and manage a customer’s IT environment from a single source, offering full maintenance, support and management, real-time insights, and constant ROI through a cloud-like consumption model. Under the TruScale umbrella brand, better known as Lenovo’s infrastructure as a service (IaaS) offering, myriad capabilities are covered, from infrastructure, to device, to platform, as well as vertical solutions.

At a Budapest analyst summit in June, where Craig Routledge, Lenovo’s executive director for hybrid cloud, outlined the TruScale strategy, progress was noted. Matt Kimball, of Moor Insights and Strategy, wrote: “The company is making suitable investments and focusing on the right solutions to stand up TruScale as an effective service.”

The hard work with the analysts and consultants has therefore paid dividends, as Routledge explains. “It’s interesting – a year ago, awareness [of TruScale] was pretty low,” he says. “We are interested in [industry] recognition and what I would call competitor recognition. They know we’re here now.”

What’s more, Routledge feels Lenovo has also benefited from what he calls competitors’ ‘missteps’. “Some companies have grown some of their services capability very quickly and tried to diversify from OEM-type products into services, then into solutions, then into software, and tried to do that over a very short period of time,” he explains. “Certainly, becoming a software company at scale is a massive, hugely different challenge.”

This is where a longer haul strategy comes into play. In Lenovo’s solutions and services group (SSG), Routledge notes that his customer base is growing consistently with each quarter, a mix of long-term customers who have bought PCs and have agreed to let Lenovo handle their infrastructure and applications, to customers used to buying infrastructure, to those simply looking past their current OEM. He describes it as a ‘continual evolution’ of sales, pre-sales, and design and delivery capability to take account of these varied conversations. “That’s ongoing,” he adds. “We haven’t got to the end of that journey by any means.”

One example of a customer XaaS story is US retailer Kroger. Kroger uses Lenovo’s edge AI servers, wrapped up with warranty services, to help fortify its self-service checkouts, handling hundreds of hours of video each day from tens of thousands of transactions. There are various benefits, from stock placement based on store traffic, to reducing shrinkage; making sure customers can scan items correctly and creating more efficient processes not just for the customers but for the wider store.

“[These customers] view the ‘everything as a service’ concept, where we wrap around a software layer, a service layer, a support layer, and bundle that together as a complete solution for the customer, as very exciting,” Routledge adds.

This wide-ranging process gets to the heart of how Routledge defines digital transformation as a term. “I would say digital transformation is taking existing business requirements and digitising them end-to-end – and that to me is the difference,” he says. “For a long time, organisations have digitised pieces of processes, [such as] putting up ways to fill in smart PDFs and [digitally] sign them, which is all well and good [until] you’ve then got to transcribe that document into something else.

“Unless it flows all the way through, enabling that flow all the way through in a complete environment, it doesn’t really add enough value. It doesn’t help the customer leave the old ways of working behind.”  

Often, companies are aware of the capability of digital transformation. They just want the consistency to go with it. Kroger, for example, was also using a visual AI application from Everseen, running on Lenovo servers. “Quite often, customers already have the software that they want, and they know what they want,” explains Routledge. “What they need is a super-high performing, consistently priced infrastructure.

“That’s at the other end of the ‘everything as a service’ infrastructure; consistent price per terabyte, per gigabyte of virtual memory; the consistent price per hour of running it, combined with the managed services and professional services to operate it,” he adds.

This consistency is especially important when you’re operating at speed. When Lenovo launched its global XaaS strategy in 2021, a stat attributed to Ken Wong, SSG president, stood out: CIOs were saying that their organisation’s technology needs were evolving every 12 to 18 months. Routledge says this is still the case, but emphasises the need for security – in a financial sense – when undergoing such churn.

“Their needs are probably revolving even quicker, though the ability to implement is still at the 12 to 18 month window,” notes Routledge. “But the other issue is: how do you finance that? If you suddenly have to abandon your old IT architecture after 12 to 18 months, many IT organisations take a massive write off and the corporations just can’t afford that.

“That’s part of the reason why, both for our device as a service and our infrastructure as a service, we try and embed financing and asset control into that model,” Routledge adds. “If the customer needs to make a change, we can migrate some of the assets that are maybe a year, or two years old, use them for less strenuous applications that are not as demanding in terms of processing and memory, and put new systems in. That helps mitigate the financial pain for the customer.”   

Another aspect which is very important to Lenovo across this digital transformation process is sustainability. Kimball described the company as ‘manically focused’ in this regard, and Lenovo is cited as the best rated IT company in the Hang Seng Corporate Sustainability Index.

The company has a liquid data centre cooling technology called Neptune which aims to ‘go beyond simply cooling the CPUs’ and not sacrifice energy efficiency for higher performance. “Part of this digital transformation is making sure that we have a minimal impact on the environment, because data centres are pretty hot places to be,” notes Routledge.

Routledge is speaking at the Digital Transformation Week Europe event in Amsterdam on 26-27 September on key considerations for technology investment in this landscape – and expect many of these themes to feature. “Don’t think ‘I need to transform this little piece of my data centre’,” he explains. “Look at ‘can I get the power from this somewhere differently?’, or ‘can I design the platform differently, so it gives the business outcome quicker?’

“The key theme is – don’t think in narrow silos.”

Picture credit: Lenovo

Want to learn more about how to power your digital transformation journeys from industry leaders? The Digital Transformation Week event series takes place in Amsterdam, California, and London. Explore other upcoming enterprise technology events and webinars powered by TechForge here.

  • James Bourne

    James has a passion for how technologies influence business and has several Mobile World Congress events under his belt. James has interviewed a variety of leading figures in his career, from former Mafia boss Michael Franzese, to Steve Wozniak, and Jean Michel Jarre. James can be found tweeting at @James_T_Bourne.

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