As AI adoption continues to surge, the tech infrastructure market is undergoing a significant transformation. Traditional IT infrastructure providers are facing increasing pressure to innovate and adapt to the evolving demands of AI-powered applications. This shift is driving the development of new technologies and solutions that can support the intensive computational requirements and data-intensive nature of AI workloads.
At Lenovo’s recently held Asia Pacific summit in Shanghai they detailed their ‘AI for All’ strategy as they prepare for the next computing era. Building on their history as a major force in the hardware market, new AI-ready offerings will be prominent in their enhanced portfolio.
At the same time, Lenovo is adding software and services, both homegrown and with partners, to leverage their already well-established relationships with client IT teams. Sustainability is also a crucial message as it seeks to address the need for power efficiency and zero waste lifecycle management in their products.
Ecosystm Advisor Darian Bird comment on Lenovo’s recent announcements and messaging.
Click here to download Lenovo’s Innovation Roadmap: Takeaways from the APAC Analyst Summit as a PDF
1. Lenovo’s AI Strategy
Lenovo’s AI strategy focuses on launching AI PCs that leverage their computing legacy.
As the adoption of GenAI increases, there’s a growing need for edge processing to enhance privacy and performance. Lenovo, along with Microsoft, is introducing AI PCs with specialised components like CPUs, GPUs, and AI accelerators (NPUs) optimised for AI workloads.
Energy efficiency is vital for AI applications, opening doors for mobile-chip makers like Qualcomm. Lenovo’s latest ThinkPads, featuring Qualcomm’s Snapdragon X Elite processors, support Microsoft’s Copilot+ features while maximising battery life during AI tasks.
Lenovo is also investing in small language models (SLMs) that run directly on laptops, offering GenAI capabilities with lower resource demands. This allows users to interact with PCs using natural language for tasks like file searches, tech support, and personal management.
2. Lenovo’s Computer Vision Solutions
Lenovo stands out as one of the few computing hardware vendors that manufactures its own systems.
Leveraging precision engineering, Lenovo has developed solutions to automate production lines. By embedding computer vision in processes like quality inspection, equipment monitoring, and safety supervision, Lenovo customises ML algorithms using customer-specific data. Clients like McLaren Automotive use this technology to detect flaws beyond human capability, enhancing product quality and speeding up production.
Lenovo extends their computer vision expertise to retail, partnering with Sensormatic and Everseen to digitise branch operations. By analysing camera feeds, Lenovo’s solutions optimise merchandising, staffing, and design, while their checkout monitoring system detects theft and scanning errors in real-time. Australian customers have seen significant reductions in retail shrinkage after implementation.
3. AI in Action: Autonomous Robots
Like other hardware companies, Lenovo is experimenting with new devices to futureproof their portfolio.
Earlier this year, Lenovo unveiled the Daystar Bot GS, a six-legged robotic dog and an upgrade from their previous wheeled model. Resembling Boston Dynamics’ Spot but with added legs inspired by insects for enhanced stability, the bot is designed for challenging environments. Lenovo is positioning it as an automated monitoring assistant for equipment inspection and surveillance, reducing the need for additional staff. Power stations in China are already using the robot to read meters, detect temperature anomalies, and identify defective equipment.
Although it is likely to remain a niche product in the short term, the robot is an avenue for Lenovo to showcase their AI wares on a physical device, incorporating computer vision and self-guided movement.
Considerations for Lenovo’s Future Growth
Lenovo outlined an AI vision leveraging their expertise in end user computing, manufacturing, and retail. While the strategy aligns with Lenovo’s background, they should consider the following:
Hybrid AI. Initially, AI on PCs will address performance and privacy issues, but hybrid AI – integrating data across devices, clouds, and APIs – will eventually dominate.
Data Transparency & Control. The balance between convenience and privacy in AI is still unclear. Evolving transparency and control will be crucial as users adapt to new AI tools.
AI Ecosystem. AI’s value lies in data, applications, and integration, not just hardware. Hardware vendors must form deeper partnerships in these areas, as Lenovo’s focus on industry-specific solutions demonstrates.
Enhanced Experience. AI enhances operational efficiency and customer experience. Offloading level one support to AI not only cuts costs but also resolves issues faster than live agents.
The increasing alignment between IT and business functions, while crucial for organisational success, complicates the management of enterprise systems. Tech leaders must balance rapidly evolving business needs with maintaining system stability and efficiency. This dynamic adds pressure to deliver agility while ensuring long-term ERP health, making management increasingly complex.
As tech providers such as SAP enhance their capabilities and products, they will impact business processes, technology skills, and the tech landscape.
At SAP NOW Southeast Asia in Singapore, SAP presented their future roadmap, with a focus on empowering their customers to transform with agility. Ecosystm Advisors Sash Mukherjee and Tim Sheedy provide insights on SAP’s recent announcements and messaging.
Click here to download SAP NOW Southeast Asia: Highlights
What was your key takeaway from the event?
TIM SHEEDY. SAP is making a strong comeback in Asia Pacific, ramping up their RISE with SAP program after years of incremental progress. The focus is on transitioning customers from complex, highly customised legacy systems to cloud ERP, aligning with the region’s appetite for simplifying core processes, reducing customisations, and leveraging cloud benefits. Many on-prem SAP users have fallen behind on updates due to over-customisation, turning even minor upgrades into major projects – and SAP’s offerings aim to solve for these challenges.
SASH MUKHERJEE. A standout feature of the session was the compelling customer case studies. Unlike many industry events where customer stories can be generic, the stories shared were examples of SAP’s impact. From Mitr Phol’s use of SAP RISE to enhance farm-to-table transparency to CP Group’s ambitious sustainability goals aligned with the SBTi, and Standard Chartered Bank’s focus on empowering data analytics teams, these testimonials offered concrete illustrations of SAP’s value proposition.
How is SAP integrating AI into their offerings?
TIM SHEEDY. SAP, like other tech platforms, is ramping up their AI capabilities – but with a twist.
They are not only highlighting GenAI but also emphasising their predictive AI features. SAP’s approach focuses on embedded AI, integrating it directly into systems and processes to offer low-risk, user-friendly solutions.
Joule, their AI copilot, is enterprise-ready, providing seamless integration with SAP backend systems and meeting strict compliance standards like GDPR and SOC-II. By also integrating with Microsoft 365, Joule extends its reach to daily tools like Outlook, Teams, Word, and Excel.
While SAP AI may lack the flash of other platforms, it is designed for SAP users – managers and board members – who prioritise consistency, reliability, and auditability alongside business value.
What is the value proposition of SAP’s Clean Core?
SASH MUKHERJEE. SAP’s Clean Core marks a strategic shift in ERP management.
Traditionally, businesses heavily customised SAP to meet specific needs, resulting in complex and costly IT landscapes. Clean Core advocates for a standardised system with minimal customisations, offering benefits like increased agility, lower costs, and reduced risk during upgrades. However, necessary customisations can still be achieved using SAP’s BTP.
The move to the Clean Core is often driven by CEO mandates, as legacy SAP solutions have become too complex to fully leverage data. For example, an Australian mining company reduced customisations from 27,000 to 200, and Standard Chartered Bank used Clean Core data to launch a carbon program within four months.
However, the transition can be challenging and will require enhanced developer productivity, expansion of tooling, and clear migration paths.
How is SAP shifting their partner strategy?
As SAP customers face significant transformations, tech partners – cloud hyperscalers, systems integrators, consulting firms and managed services providers – will play a crucial role in executing these changes before SAP ECC loses support in 2027.
TIM SHEEDY. SAP has always relied on partners for implementations, but with fewer large-scale upgrade projects in recent years, many partner teams have shrunk. Recognising this, SAP is working to upskill partners on RISE with SAP. This effort aims to ensure they can effectively manage and optimise the modern Cloud ERP platform, utilise assets, templates, accelerators, and tools for rapid migration, and foster continuous innovation post-migration. The availability of these skills in the market will be essential for SAP customers to ensure successful transitions to the Cloud ERP platform.
SASH MUKHERJEE. SAP’s partner strategy emphasises business transformation over technology migration. This shift requires partners to focus on delivering measurable business outcomes rather than solely selling technology. Given the prevalence of partner-led sales in Southeast Asia, there is a need to empower partners with tools and resources to effectively communicate the value proposition to business decision-makers. While RISE certifications will be beneficial for larger partners, a significant portion of the market comprises SMEs that rely on smaller, local partners – and they will need support mechanisms too.
What strategies should SAP prioritise to maintain market leadership?
TIM SHEEDY. Any major platform change gives customers an opportunity to explore alternatives.
Established players like Oracle, Microsoft, and Salesforce are aggressively pursuing the ERP market. Meanwhile, industry-specific solutions, third-party support providers, and even emerging technologies like those offered by ServiceNow are challenging the traditional ERP landscape.
However, SAP has made significant strides in easing the transition from legacy platforms and is expected to continue innovating around RISE with SAP. By offering incentives and simplifying migration, SAP aims to retain their customer base. While SAP’s focus on renewal and migration could pose challenges for growth, the company’s commitment to execution suggests they will retain most of their customers. GROW with SAP is likely to be a key driver of new business, particularly in mid-sized organisations, especially if SAP can tailor offerings for the cost-sensitive markets in the region.
As AI evolves, the supporting infrastructure has become a crucial consideration for organisations and technology companies alike. AI demands massive processing power and efficient data handling, making high-performance computing clusters and advanced data management systems essential. Scalability, efficiency, security, and reliability are key to ensuring AI systems handle increasing demands and sensitive data responsibly.
Data centres must evolve to meet the increasing demands of AI and growing data requirements.
Equinix recently hosted technology analysts at their offices and data centre facilities in Singapore and Sydney to showcase how they are evolving to maintain their leadership in the colocation and interconnection space.
Equinix is expanding in Latin America, Africa, the Middle East, and Asia Pacific. In Asia Pacific, they recently opened data centres in Kuala Lumpur and Johor Bahru, with capacity additions in Mumbai, Sydney, Melbourne, Tokyo, and Seoul. Plans for the next 12 months include expanding in existing cities and entering new ones, such as Chennai and Jakarta.
Ecosystm analysts comment on Equinix’s growth potential and opportunities in Asia Pacific.
Small Details, Big Impact
TIM SHEEDY. The tour of the new Equinix data centre in Sydney revealed the complexity of modern facilities. For instance, the liquid cooling system, essential for new Nvidia chipsets, includes backup cold water tanks for redundancy. Every system and process is designed with built-in redundancy.
As power needs grow, so do operational and capital costs. The diesel generators at the data centre, comparable to a small power plant, are supported by multiple fuel suppliers from several regions in Sydney to ensure reliability during disasters.
Security is critical, with some areas surrounded by concrete walls extending from the ceiling to the floor, even restricting access to Equinix staff.
By focusing on these details, Equinix enables customers to quickly set up and manage their environments through a self-service portal, delivering a cloud-like experience for on-premises solutions.
Equinix’s Commitment to the Environment
ACHIM GRANZEN. Compute-intensive AI applications challenge data centres’ “100% green energy” pledges, prompting providers to seek additional green measures. Equinix addresses this through sustainable design and green energy investments, including liquid cooling and improved traditional cooling. In Singapore, one of Equinix’s top 3 hubs, the company partnered with the government and Sembcorp to procure solar power from panels on public buildings. This improves Equinix’s power mix and supports Singapore’s renewable energy sector.
TIM SHEEDY Building and operating data centres sustainably is challenging. While the basics – real estate, cooling, and communications – remain, adding proximity to clients, affordability, and 100% renewable energy complicates matters. In Australia, reliant on a mixed-energy grid, Equinix has secured 151 MW of renewable energy from Victoria’s Golden Plains Wind Farm, aiming for 100% renewable by 2029.
Equinix leads with AIA-rated data centres that operate in warmer conditions, reducing cooling needs and boosting energy efficiency. Focusing on efficient buildings, sustainable water management, and a circular economy, Equinix aims for climate neutrality by 2030, demonstrating strong environmental responsibility.
Equinix’s Private AI Value Proposition
ACHIM GRANZEN. Most AI efforts, especially GenAI, have occurred in the public cloud, but there’s rising demand for Private AI due to concerns about data availability, privacy, governance, cost, and location. Technology providers in a position to offer alternative AI stacks (usually built on top of a GPU-as-a-service model) to the hyperscalers find themselves in high interest. Equinix, in partnership with providers such as Nvidia, offers Private AI solutions on a global turnkey AI infrastructure. These solutions are ideal for industries with large-scale operations and connectivity challenges, such as Manufacturing, or those slow to adopt public cloud.
SASH MUKHERJEE. Equinix’s Private AI value proposition will appeal to many organisations, especially as discussions on AI cost efficiency and ROI evolve. AI unites IT and business teams, and Equinix understands the need for conversations at multiple levels. Infrastructure leaders focus on data strategy capacity planning; CISOs on networking and security; business lines on application performance, and the C-suite on revenue, risk, and cost considerations. Each has a stake in the AI strategy. For success, Equinix must reshape its go-to-market message to be industry-specific (that’s how AI conversations are shaping) and reskill its salesforce for broader conversations beyond infrastructure.
Equinix’s Growth Potential
ACHIM GRANZEN. In Southeast Asia, Malaysia and Indonesia provide growth opportunities for Equinix. Indonesia holds massive potential as a digital-savvy G20 country. In Malaysia, the company’s data centres can play a vital part in the ongoing Mydigital initiative, having a presence in the country before the hyperscalers. Also, the proximity of the Johor Bahru data centre to Singapore opens additional business opportunities.
TIM SHEEDY. Equinix is evolving beyond being just a data centre real estate provider. By developing their own platforms and services, along with partner-provided solutions, they enable customers to optimise application placement, manage smaller points of presence, enhance cloud interconnectivity, move data closer to hyperscalers for backup and performance, and provide multi-cloud networking. Composable services – such as cloud routers, load balancers, internet access, bare metal, virtual machines, and virtual routing and forwarding – allow seamless integration with partner solutions.
Equinix’s focus over the last 12 months on automating and simplifying the data centre management and interconnection services is certainly paying dividends, and revenue is expected to grow above tech market growth rates.
As tech providers such as Microsoft enhance their capabilities and products, they will impact business processes and technology skills, and influence other tech providers to reshape their product and service offerings. Microsoft recently organised briefing sessions in Sydney and Singapore, to present their future roadmap, with a focus on their AI capabilities.
Ecosystm Advisors Achim Granzen, Peter Carr, and Tim Sheedy provide insights on Microsoft’s recent announcements and messaging.
Click here to download Ecosystm VendorSphere: Microsoft’s AI Vision – Initiatives & Impact
Ecosystm Question: What are your thoughts on Microsoft Copilot?
Tim Sheedy. The future of GenAI will not be about single LLMs getting bigger and better – it will be about the use of multiple large and small language models working together to solve specific challenges. It is wasteful to use a large and complex LLM to solve a problem that is simpler. Getting these models to work together will be key to solving industry and use case specific business and customer challenges in the future. Microsoft is already doing this with Microsoft 365 Copilot.
Achim Granzen. Microsoft’s Copilot – a shrink-wrapped GenAI tool based on OpenAI – has become a mainstream product. Microsoft has made it available to their enterprise clients in multiple ways: for personal productivity in Microsoft 365, for enterprise applications in Dynamics 365, for developers in Github and Copilot Studio, and to partners to integrate Copilot into their applications suites (E.g. Amdocs’ Customer Engagement Platform).
Ecosystm Question: How, in your opinion, is the Microsoft Copilot a game changer?
Microsoft’s Customer Copyright Commitment, initially launched as Copilot Copyright Commitment, is the true game changer.
Achim Granzen. It safeguards Copilot users from potential copyright infringement lawsuits related to data used for algorithm training or output results. In November 2023, Microsoft expanded its scope to cover commercial usage of their OpenAI interface as well.
This move not only protects commercial clients using Microsoft’s GenAI products but also extends to any GenAI solutions built by their clients. This initiative significantly reduces a key risk associated with GenAI adoption, outlined in the product terms and conditions.
However, compliance with a set of Required Mitigations and Codes of Conduct is necessary for clients to benefit from this commitment, aligning with responsible AI guidelines and best practices.
Ecosystm Question: Where will organisations need most help on their AI journeys?
Peter Carr. Unfortunately, there is no playbook for AI.
- The path to integrating AI into business strategies and operations lacks a one-size-fits-all guide. Organisations will have to navigate uncharted territories for the time being. This means experimenting with AI applications and learning from successes and failures. This exploratory approach is crucial for leveraging AI’s potential while adapting to unique organisational challenges and opportunities. So, companies that are better at agile innovation will do better in the short term.
- The effectiveness of AI is deeply tied to the availability and quality of connected data. AI systems require extensive datasets to learn and make informed decisions. Ensuring data is accessible, clean, and integrated is fundamental for AI to accurately analyse trends, predict outcomes, and drive intelligent automation across various applications.
Ecosystm Question: What advice would you give organisations adopting AI?
Tim Sheedy. It is all about opportunities and responsibility.
- There is a strong need for responsible AI – at a global level, at a country level, at an industry level and at an organisational level. Microsoft (and other AI leaders) are helping to create responsible AI systems that are fair, reliable, safe, private, secure, and inclusive. There is still a long way to go, but these capabilities do not completely indemnify users of AI. They still have a responsibility to set guardrails in their own businesses about the use and opportunities for AI.
- AI and hybrid work are often discussed as different trends in the market, with different solution sets. But in reality, they are deeply linked. AI can help enhance and improve hybrid work in businesses – and is a great opportunity to demonstrate the value of AI and tools such as Copilot.
Ecosystm Question: What should Microsoft focus on?
Tim Sheedy. Microsoft faces a challenge in educating the market about adopting AI, especially Copilot. They need to educate business, IT, and AI users on embracing AI effectively. Additionally, they must educate existing partners and find new AI partners to drive change in their client base. Success in the race for knowledge workers requires not only being first but also helping users maximise solutions. Customers have limited visibility of Copilot’s capabilities, today. Improving customer upskilling and enhancing tools to prompt users to leverage capabilities will contribute to Microsoft’s (or their competitors’) success in dominating the AI tool market.
Peter Carr. Grassroots businesses form the economic foundation of the Asia Pacific economies. Typically, these businesses do not engage with global SIs (GSIs), which drive Microsoft’s new service offerings. This leads to an adoption gap in the sector that could benefit most from operational efficiencies. To bridge this gap, Microsoft must empower non-GSI partners and managed service providers (MSPs) at the local and regional levels. They won’t achieve their goal of democratising AI, unless they do. Microsoft has the potential to advance AI technology while ensuring fair and widespread adoption.
IBM has made several significant announcements in the last year and are clearly pivoting fast for continued success.
In October, IBM held a series of analyst briefings to highlight their future strategies. This included a view into the “New IBM”, the re-branding of IBM Global Business Services as IBM Consulting, and the future roadmap for Kyndryl.
Going forward IBM is betting big on the dual capabilities of the Hybrid Cloud and Data & AI. Their strategy keeps a firm eye on the evolving needs of the enterprise with offerings such as the IBM Cloud Satellite, IBM Garage, and industry clouds.
Ecosystm Analysts, Tim Sheedy, Ullrich Loeffler, Matt Walker, Venu Reddy and Sash Mukherjee comment on IBM’s strategy going forward and the associated opportunities.
Two years ago at Discover, HP Enterprise’s President and CEO, Antonio Neri promised that all of HPE’s portfolio would be available ‘as a service’ within three years.
At the current Discover virtual events, HPE made a series of announcements to showcase that GreenLake is on its way to meet that ambitious goal in 2022. HPE continues to evolve their enterprise capabilities, as is demonstrated by their acquisitions of Determined AI and Zerto.
Ecosystm Advisors, Alan Hesketh, Darian Bird, and Niloy Mukherjee comment on how HPE is preparing for the Hybrid world and the key announcements at HPE Discover, 2021 including GreenLake, Lighthouse, and Aurora.
