Photo: VCG

Tech giant Lenovo Group has seen steady growth in revenue from its non-PC business over the past three years thanks to its international business strategy, and it is betting on increased innovation to drive future growth amid industry challenges, a company executive told the Global Times.

In an interview on the sidelines of the company's 2023 North America kickoff on Tuesday in the US state of North Carolina, Matthew Zielinski, president of International Markets of Lenovo, discussed the company's plans for the future and how it plans to stay ahead of its competitors.

Matthew Zielinski, president of International Markets of Lenovo Photo: Lenovo Group

While PC products remain Lenovo's core business, the company has expanded into other areas including servers, storage and data center equipment as part of its 3S strategy (smart internet of things, smart infrastructure, and smart verticals), said Zielinski.

To support this multi-business-unit growth, Lenovo reorganized the company into three distinct business groups: a devices group, infrastructure solutions group, and services and solutions group. The company plans to leverage its massive PC footprint to sell more server storage and data center equipment to existing customers and expand its services and solutions offerings, according to Zielinski.

Over the last two years, Lenovo has gone from a $50 billion organization to one worth about $70 billion, with non-PC businesses accounting for over 40 percent of its total revenue in Q3. Zielinski told the Global Times that the company's growth businesses will become much more solutions and services oriented, but it will maintain a successful PC business.

The shift toward remote work and online learning, which has been accelerated by the COVID-19 pandemic, has further driven Lenovo's development in recent years. As more people work and study from home, there has been an increased demand for laptops, tablets, and other digital devices. Lenovo is well-positioned to take advantage of this trend, with a strong presence in the PC market and a range of products designed for remote work and learning.

Gartner, a technology consulting firm, said in its latest forecast that worldwide IT spending is projected to total $4.6 trillion this year, an increase of 5.5 percent from 2022, despite continued global economic turbulence.

"If you add this potential of our growth businesses with the fact that IT spending is still increasing significantly, I wouldn't say that we face many challenges," said Zielinski.

"Evolution from computing devices to computing power" is an important transformational achievement of Lenovo's research and development (R&D) in recent years. It has grown from a computing device company to a computing company that also provides computing infrastructure, data collection, and data processing algorithms. It is extending its innovation to a broader range of computing fields and scenarios, including edge computing, cloud computing, and the new IT architecture of end-edge-cloud-network intelligence.

Forbes has listed accelerated technological innovation as one of the top five technology challenges in 2023, as technologies including cloud, edge computing, machine learning, metaverse, web3, non-fungible tokens, robotics, 5G and others are all advancing at an incredible speed.

When it comes to future product development and innovation for the company, Zielinski said it all starts with products. Over the past three years, Lenovo has increased its R&D personnel by 8,800, nearly double compared to the beginning of 2020. One out of every five of Lenovo's employees is actually in R&D, and 20 percent of the company's workforce is creating new products and offerings.

"Innovation is essential as a growth driver for Lenovo and to solve humanity's greatest challenges," he said.

In 2004, Lenovo made a historic move for Chinese technology companies by acquiring IBM PC, marking its bold entry into overseas markets. In 2014, Lenovo completed the acquisition of IBM's System x business and Motorola Mobility, developing two new business pillars in mobile and data centers and further expanding into global markets.

Since then, the company has become recognized as the top PC maker in the world, with over 75 percent of its revenue coming from outside China.