Lenovo’s infrastructure group posts a yr of income • The Register | Area Tech

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In February 2022, Lenovo shared a barely particular determine: $17 million. That is the primary revenue made by its Infrastructure Options Group (ISG) since its predecessor was fashioned by the 2014 acquisition of IBM’s x86 server enterprise.

Yesterday Lenovo revealed one other essential quantity: 4. That is the variety of quarters ISG has made a revenue.

A complete yr of black ink is an effective change, apart from one small downside: the ISG solely makes a tiny revenue.

Register has executed the sums, and in these 4 worthwhile quarters, ISG made $8 billion in income and made $71 million in revenue.

Listed here are the numbers for the yr of earnings, with quantities in thousands and thousands of {dollars}:

Q3 22 $1,928 $16.9 0.9%
This fall 22 $1,408 $6.8 0.5%
Q1 23 $2,086 $11.3 0.5%
2T 23 $2,614 $36.0 1.4%

common revenue
$8,036 $70.9 0.8%

Lenovo’s ISG earnings aren’t a lot worse than these of the 2 corporations it is chasing within the enterprise {hardware} market: HPE and Dell. Every firm teams totally different merchandise below their firm numbers, so direct comparisons are troublesome.

However the place Lenovo stands out is in its small measurement. Dell’s enterprise {hardware} enterprise is a $9.5 billion per quarter laptop, whereas HPE makes round $6 billion per quarter.

Lenovo factors to its just lately enormously expanded vary of enterprise {hardware} as one motive it could flip final yr’s black ink right into a long-term success.

Yesterday’s third quarter earnings announcement noticed ISG President Kirk Skaugen clarify Lenovo’s plan.

“We had cloud data, all-time data, in addition to a second-quarter file in enterprise and SMB,” he advised traders, including that the group additionally posted “data in conventional NAS markets and SAN and hyperconvergence and cloud-based storage.”

“It was broad-based from a geographic perspective with all-time highs in Europe, Asia, the Pacific and the Americas.”

However whereas executives from Lenovo’s PC-focused Good Units Group and consulting-led Options and Providers Group (SSG) talked about working to defend and enhance margins, Skaugen didn’t.

So ISG seems to be a great distance from its worst days, when Lenovo burned itself out through the use of its PC gross sales pressure to change servers. Nevertheless it stays to be seen the way it handles a low-profit enterprise whereas taking over greater, richer rivals, even because the cloud continues to supply consumers all kinds of alternate options to native {hardware}. ®

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Lenovo’s infrastructure group posts a year of profits • The Register