Lenovo’s Beijing Headquarters. It was tense in a small meeting room. All the directors were present to discuss an important matter.
“Yuanqing, what do you think?” Liu Chuanzhi asked.
Yang Yuanqing was the head of the PC department. He was also one of Lenovo’s director. Liu Chuanzhi has high hopes for him and even wants to groom him as his successor.
Of course. This was only a thought. Liu Chuanzhi could still work for many years before his retirement.
“I personally support this proposal. Also, Manager Feng had said before. This company will be called Lenovo Software. Lenovo and his shares will be enough to have the controlling stake of the company.”
Yang Yuanqing was from the PC department and definitely support this proposal to give the software department away. This way, Lenovo will focus all its resources on PC manufacturing.
“I object.” Zhu Linan shouted.
Zhu Linan was one of the first few engineers who joined Lenovo. He was in charge of software developments. Lenovo’s Han card was due to his credit. Lenovo had started from software, and he had opposed to Lenovo manufacturing PC from the start. He was glad that the company’s PC sales were doing well, but the company should not kick the software department out for this reason.
Look at Microsoft, and you would know the potential of software. No PC can do without software and operating systems. This includes smart household appliances. The software has a better prospect than hardware.
Also, Lenovo was already the top software company in China. Kingsoft, which Lenovo have a stake in it, had started many projects together. This was the time for Lenovo to take over the Chinese software market and venture overseas. But now, you are telling me that you want to separate the software department from the company to set up another company with others?
“Lenovo started developing software. Our Han card has been generating high profits for our company. Also, we will be launching our supermarket system. This will bring high profits for us. Our Lenovo Server system is also selling well. All these show the potential of our software. Why should we separate them and have to cooperate with others?”
“I also object to setting up a joint venture with others. Lenovo belongs to the Chinese Academy of Sciences. We have advantages in terms of technology. We do not need other people. Also, although the software company is called Lenovo software company, Feng Yu and that Russian owns more than 50% shares. If they join forces, then they will have a bigger say in the company.” Director Zheng said.
Director Zheng was the one who supported Liu Chuanzhi to start this company. He was the one who got the Chinese Academy of Sciences issue funds to Liu Chuanzhi to set up Lenovo. Of course, he was also promoted to the Deputy Director of the Academy because of Lenovo’s success. He was also the head of the Institute of Computing Technology of the Chinese Academy of Sciences.
Director Zheng was the Chinese Academy of Sciences’ representative in Lenovo. His words have a considerable influence on Liu Chuanzhi.
“I agree to separate the software division from the company. We must know where Lenovo’s future profits will come from. Without a doubt, this is the PC era. Our market share in China will be the biggest this year. Next year, we will secure our position as number one in China. We are also going export our PCs to Hong Kong, Taiwan, and other countries in Southeast Asia. Our profits will increase. Our laptops are also very popular. Just the fact that we have the most advanced optical drive, we will not lose to any other company.” Deputy General Manager Sun Hongbin, who oversees the sales of Han Card, servers, PCs, and other products said.
Song Hongbin was one of Lenovo’s longest-serving higher management. He was in charge of their product sales and knew more about the company’s profits than others.
In China, Lenovo’s PC would become the market leader. After their cooperation with Kingsoft, Han Card will also be China’s top Chinese software. The sales of their servers and other products were also increasing. Since the PCs were Lenovo’s most profitable product, they should focus on it.
As for software, Song Hongbin was not very familiar. The profits of the software were also significant. There is only one Microsoft in this world, and it had a monopoly in its industry. But on the other hand, there are countless PC manufacturers and all of them could make profits.
Also, this proposal was not asking Lenovo to give up on their software development. This was a collaboration with the Russians. They might even have the chance to acquire Kingsoft. Why oppose this proposal? The Russians are strong in software developments too. This will be a boost to the company’s developments.
Song Hongbin was also not very happy with Director Zheng and those old directors. He felt their thinking was too conservative and could not catch up with the current market trend. If it were not for him, Lenovo’s sales would not increase so fast.
Liu Chuanzhi had trusted and supported Song Hongbin. If Liu Chuanzhi had not promised to give Song Hongbin shares of the company, he would have left to start his own company. The distribution channels he has was enough for him to set up a trading company dealing in electronics products.
All the directors expressed their views, and all of them have their own reasons.
Liu Chuanzhi also supported to separate the software development from Lenovo. It was only separating from the main company and not giving it up. The new company will also be Lenovo’s subsidiary. This move will also let him have total control over Kingsoft. There were lots of good software engineers in Kingsoft. Russia’s software developers were much better than them. If Lenovo were to reject this proposal, Feng Yu would surely work with that Russian by himself. They will set up their own software company, and Lenovo would have to face a strong competitor.
There were only two options. Cooperate and make money together. The other option was not to cooperate and face a strong competitor. This competitor might even take away the software market from Lenovo. Liu Chuanzhi would choose the first option.
Furthermore, Feng Yu had told him that the new company can still be call Lenovo Software. The Directors of this company will be decided by Liu Chuanzhi and Feng Yu would not interfere.
There was no reason for Liu Chuanzhi to reject this proposal with such good conditions. Although those directors who objected had given good reasons, Liu Chuanzhi had already made up his mind. The meeting today was only for him to see if he got any supporters.
“Ok. I suggest that we should separate the software department to set up Lenovo Software. Also, Feng Yu is a patriotic Chinese businessman. He will not collaborate with that Russian man to con us. All of you can rest assure. Zhu Linan, you go and speak to Kingsoft. We will merge Kingsoft with Lenovo Software Company and you will be the Chairman of this new company.”
Liu Chuanzhi confidently announce his decision and ignored all those who oppose this proposal. He even let Zhu Linan who opposed this plan to be the new company’s Chairman. All the directors kept quiet…….
