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Lenovo to reorganise company around market demands

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Lenovo

Lenovo Photo: David Paul Morris

Lenovo is embarking on an organisational restructure, adding new business units for enterprise computing and cloud services ahead of the company’s planned $2.6 billion purchase of IBM’s low-end server unit.

The new enterprise unit will absorb the server business acquired from IBM once the purchase clears all regulatory approvals, Lenovo said in a statement. It will be led by Gerry Smith, the senior vice president who already heads Lenovo’s Americas Group.The goal of this group is to aggressively build a new, fast-growing profit engine in enterprise, he company said.

Lenovo Chief Executive Officer Yang Yuanqing is countering the worst slump in the global personal computer industry by adding new products such as smartphones and tablets. A new unit focusing on the popular devices plus smart TV will be led by Liu Jun, who currently leads the Lenovo business group (consumer and mobile products). The company said the unit's aim would be to make "Lenovo a profitable global player in the fast-growing smartphone and tablet" market.

The move follows a wide-scale internal reorganisation at Microsoft.

The No.1 PC manufacturers unveilled a number of new consumer devices at CES earlier this month.

The company said last week the enterprise unit would have wider profit margins than Lenovo’s traditional PCs, while also adding about $US4.6 billion of annual revenue from sales of the IBM servers that run corporate networks.

In addition to the company’s PC business group and its mobile business group for smartphones and tablets, Lenovo is also creating a unit called ecosystem and cloud services to expand sales of products for Google’s Android and Microsoft’s Windows operating systems.

The cloud group will be led by George He, the senior vice president who currently serves as chief technology officer. He will be replaced in that role by Peter Hortensius, Lenovo said.

Lenovo’s PC unit will now be run by Gianfranco Lanci, who currently heads the company’s business in Europe, the Middle East and Africa. Lanci, who left Acer as CEO in 2011 and joined Lenovo in 2012 as a senior vice president, has been promoted to Lenovo’s executive vice president and chief operating officer, the company said.

The changes will be effective from April 1. The company has not yet revealed the impact of the reorganisation on the Australian consumer and enterprise markets

- with Bloomberg

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