Editor’s note: Challenges continue form Lenovo’s data center group, which is based in the Triangle. But the DCG is showing signs of progress, says Technology Business Research Analyst Stephanie Long. Lenovo reported its latest earnings on Thursday.
HAMPTON, N.H. – Lenovo’s Data Center Group (DCG) has been in a state of transformation since early 2017, as the vendor works to correct some initial missteps with its acquisition of IBM’s x86 business back in October 2014.
3Q17 was the third consecutive quarter in which DCG reduced revenue declines sequentially.
The unit achieved $976 million in revenue, and declined 9.8% year-to-year in 3Q17. Although DCG continues to operate at a loss, reported pre-tax income improved from -$140 million in 3Q16 to -$100 million in 3Q17.
This demonstrates that although performance has not yet reached the black, the significant investments Lenovo has undertaken to transform its data center business are proving successful.
TBR estimates that DCG’s revenue performance will continue on its upward trajectory in 4Q17, as the total rebranding of its infrastructure line into ThinkSystems and ThinkAgile generates upward momentum and slowly reduces revenue declines.
(C) TBR
