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Lenovo claims data centre wins

Lenovo says it is winning in the data centre. After a strong Q4, Lenovo’s Data Center Group (DCG) reported a record revenue quarter of $1.6bn, the third consecutive quarter of double-digit revenue growth, and up 67.8% compared to the same quarter a year earlier.

The record high revenue was driven by growth in Software Defined Infrastructure, High Performance Computing & AI businesses and Hyperscale. Lenovo’s software-defined products, led by the new ThinkAgile brand, reported more than triple-digit growth year-on-year. The Hyperscale business also grew by triple-digits year-on-year while improving gross profit and diversifying the customer base. Traditional infrastructure continued on a positive trend and flash-based storage solutions showed strong momentum at 42% YOY growth, it reports.

Across the whole product range, Q1 revenue was up 19% YOY to US$11.91bn and it reported second consecutive, double-digit quarterly growth and profitability improvement across all business units.

“As we persistently execute our 3-wave strategy, all our businesses made solid improvements in both revenue and profitability. Lenovo has passed the turning point and entered a phase of ‘acceleration’ - accelerating the execution of our transformation strategy and accelerating the rising momentum in business performance,” said Yang Yuanqing, Lenovo Chairman and CEO. “In the future, we will maintain industry leading profitability and premium to market growth in PCs; return the smartphone business to health; build the data center business into a sustainable growth and profit engine, and continue to invest in ‘Smart IoT + Cloud’ and ‘Infrastructure + Cloud’ to drive long term sustainable return.”

He says Lenovo has turned a corner in its transformation and enters a new phase of growth, thanks to meaningful progress on its strategy and focus on “Intelligent Transformation” during the quarter.

Last quarter, Lenovo announced the creation of its new Intelligent Devices Group (IDG), combining its Personal Computer and Smart Devices Group with its Mobile Business Group. Rethinking the ways these units and their devices interact and impact customers led to IDG’s double-digit, quarterly revenue growth year-over-year, and PC unit market share gains in every geography, it says.

During the quarter, the PC and Smart Devices (PCSD) business under IDG delivered strong double digit revenue growth for the 2nd consecutive quarter, growing 19% year to year while maintaining industry leading profitability of 5%. Lenovo is the fastest growing player (by units) among the Top five global PC makers and returned to the global PC number one leading position according to Gartner. Outside of the core PC business Lenovo continues to invest in growing its portfolio of smart devices including smart home; smart office and AR/VR.