HPE Chief Richardson On 100 Percent Channel Pledge For Nimble And SimpliVity, Dell EMC And Distie Commitment

HPE's Richardson On The 100 Percent Nimble, SimpliVity Channel Pledge

Hewlett Packard Enterprise Channel Chief Terry Richardson, who recently added U.S. distribution to his duties, spoke with CRN about the company's 100 percent channel pledge for Nimble and SimpliVity, the commitment to distribution and the Cisco partner grab.

Richardson, who was voted as what amounts to the most popular channel chief in the industryas the winner of CRN's 2017 Channel Madness competition, says the 100 percent channel commitment is in sharp contrast to Dell EMC's "customer choice" model.

"There is no customer choice," he said. "It is a 100 percent indirect play which we think is important for our channel partners domestically and around the world to understand. Our plan for SMB is 100 percent channel and we are unwavering in that commitment. It is an important market strategy that goes to the top of HPE."

What's more, Richardson said the Nimble SimpliVity pledge partner offensive takes direct aim at Cisco. "A lot of their success really grew up on what I would describe as the backs of the traditional legacy Cisco partner base," he said. "Those partners were wise in choosing those technologies. Now that both those companies are part of HPE what I have seen is a real shift in interest from those partners not only continuing the relationship with SimpliVity and Nimble but getting more interested in HPE."

How big a deal is the HPE 100 percent channel only pledge forSimpliVity and Nimble?

HPE is not 100 percent indirect. We are probably north of 70 percent around the world. But for those technologies in particular we made the business decision to keep the 100 percent channel model in place that they had when they were private independent companies. It just makes sense for those businesses to have a very predictable engagement model because we think that the hyper-converged and the all flash storage market with InfoSight predictive analytics is exactly what the channel should be focused on right now. We didn't want to have any ambiguity on our go to market direction. It is 100 percent channel.

It is not a coincidence that Nimble and SimpliVity really had market traction starting in the SMB and midmarket. Now we have the ability to help them get into the enterprise in a bigger way which we are starting to see happen in grand fashion as a result of the acquisition. That is going to remain 100 percent channel. Partners that get behind that and differentiate themselves with those skills will be able to sell that to any size customer whether it is enterprise, SMB or public sector.

What is the 100 percent channel model those companies had put in place before being acquired by HPE?

I need to pay a compliment to the sales organizations that came into HPE as a result of the Nimble and SimpliVity acquisitions. They offered compelling technologies to the marketplace at the right time, but because they were going up against such well entrenched competitors they needed to be really sharp on their sales skills and what I have witnessed and we see benefiting our partners now is they are some of the most professionally aggressive and focused sales people with a new account acquisition hunter mentality. That is going to really permeate and benefit HPE across our entire organization. When you talk about technologies like this and moving fast you need that kind of sales approach and I see it in full force in the Nimble and SimpliVity personnel.

How do you compare the HPE 100 percent channel strategy to the Dell SMB strategy?

Compared to Dell EMC we have fewer storage architectures and are a lot more relevant with regard to today's (IT) requirements. We are also very clear as it relates to SimpliVity and Nimble that those are 100 percent channel products. There is no ambiguity about how they will be delivered. There is no customer choice. It is a 100 percent indirect play which we think is important for our channel partners domestically and around the world to understand.

Our plan for SMB is 100 percent channel and we are unwavering in that commitment. It is an important market strategy that goes to the top of HPE. What we do with our M&A analysis is look at how well a company's technology fits with our channel so that we can continue to provide leading offerings and differentiated solutions that we can take to market through the channel. It has really become one of the things that factors into our M&A decisions.

What kind of opportunity do you see for Nimble and SimpliVity in the Cisco partner base?

When I met with my counter-parts from SimpliVity and Nimble after the acquisitions were completed and we started to compare partner lists and do some mapping it became apparent to me that a lot of their success really grew up on what I would describe as the backs of the traditional legacy Cisco partner base. Those partners were wise in choosing those technologies. Now that both those companies are part of HPE what I have seen is a real shift in interest from those partners not only continuing the relationship with SimpliVity and Nimble but getting more interested in HPE.

If you really think about it from the standpoint of having a complete compute portfolio, an end to end complete storage portfolio and ever increasing and improving networking portfolio with services and a commitment to being in the infrastructure business we are a positive alternative for some partners that historically may have been so focused on Cisco they didn't consider anything else. But those times are changing.

How big a game changer is Nimble's InfoSight?

InfoSight is a game changer for HPE. We are excited to bring that technology across our portfolio. It completely changes the game not only for how we perform service delivery and what that engagement experience looks like for our customers. This changes the game for customers so that they no longer have to worry about downtime or planned downtime. They can put all their energy around new application development or other activities that are going to propel their business forward during this time of rapid change and transformation.

It will span across our storage portfolio. It will also be available on 3Par and other platforms. It is very, very strategic. It is to the channel partner's benefit to get started with it now. It is going to open up a lot more doors as they build their expertise with it.

Is there any update on Nimble in terms of channel program integration and engagement?

As far as Nimble goes the HPE full line distributors- Arrow, Tech Data, Ingram and Synnex for the US- now all have access to the full portfolio. Some of them were Nimble distributors before and some weren't. We have announced publicaly that at the start of our fiscal year – Nov. 1- Nimble and SimpliVity both will be part of the HPE Partner Ready program. So it will be one consistent program available to partners. That will be a good change so HPE partners will have access to the full portfolio of storage solutions.

Is there any change in the Nimble terms and conditions and channel engagement model?

No change yet, but what we do need to work on is the plan to integrate the Nimble channel personnel with the HPE channel personnel. Those discussions are happening, the planning is happening now and we'll have announcements as we get ready to begin our new fiscal year.

Do you have any goals on how many new partners you are aiming for with regard to adding Nimble and SimpliVity to their line card?

The products are under-represented in the market. I don't have any goals on how many partners we want to add. What we have done aggressively is to make sure that any of our partners that weren't previously selling Nimble or SimpliVity are adding those offerings to their portfolios. We have already increased the number of partners that are actively selling and representing Nimble and SimpliVity. That was a specific decision we made. Both technologies are compelling and disruptive and we want to get them into the hands of as many partners as possible. Now we have end to end the most complete storage portfolio of anyone in the market.

What is the message to partners now that you are overseeing U.S. distribution?

We value distribution at HPE. We are committed to the two tier model. Of course we bridge the gap from the kind of volume transactional all the way through complex value added solution and we have distributors that play in one or both camps and my job is to make sure both are executing well and firing on all cylinders. We have really strong distributors in the US. I think we have an appropriate level.

One of the opportunities that I see as this industry moves more toward solutions and business outcomes is to do a better job aligning with complimentary ISVs - software providers that the distributors also go to market with. So I will try to influence more work between the distributor, HPE and software partners for the benefit of Value Added Resellers.

How does distribution help with next generation technologies?

We have an opportunity with our distributor relationships to help us be disruptive with hyperconverged and SimpliVity. We are driving the all flash storage technologies with Nimble to market and continue to gain share in wireless and security with Aruba.

When you look at some of the areas where we have innovated - Synergy is a great example - our value distributors are really getting behind Synergy to make sure partners are prepared and ready to go with the product having conversations around composable infrastructure to drive that into the marketplace.

What are the new HPE incentives to drive SMB sales?

As a company we have made a decision to get more focused with HPE badged personnel assisting partners. If you remember we have a traditional structure – Platinum, Gold, Silver and business partners. We are hiring 15 or so people to help cover some of the Silver and below partners as part of an explicit strategy. We are also leaning on our commercial distributors to provide a better partner experience with coverage.So we are ramping up incentives for both the distributors and the partners for the Silver and below partner community.

How much white space is out there in terms of potential growth in that Silver and below partner space?

We are definitely under represented in that portfolio when you look at the relative HPE market share versus the market opportunity. We are still sitting at single digits (SMB market share). It tends to be a much higher growth and frankly a much higher margin category so we can afford to offer greater channel and reseller and distributor incentives so people spend their time helping us drive solutions like SimpliVity, Nimble, Gen10, Aruba and the rest of the portfolio.

Distributors are really playing a very active and important role in helping us cover the market and doing a better job effecting coverage.

How important will the additional HPE badged employees be to partners?

Those are HPE badged employees in our call center. They are really trying to effect resources to support Silver and below channel partners to make sure their experience with HPE is optimal.

This will be a combination of strengthening relationships, making sure that through the distributor efforts and our own efforts the partners are fully enabled. They will really help to profile the partners to understand where they are in their transformation journey: how many are staying as classic resellers, how many are interested in becoming MSPs or hybrid of the two. We want to make sure we can provide the best possible coverage and serve their needs better going forward. So they will be doing enablement, relationship building, profiling and doing everything necessary to ensure they are growing their business with HPE.

How will those newHPE badged employees touch people?

They will directly touch partners from a communications standpoint. All the revenue will go back through distribution. It's oriented around our strategy to make it personal. At the end of the day this is a relationship business. As this industry transforms so rapidly having a personal relationship with a vendor like HPE we think is going to be a competitive differentiator as they formulate their business plans on how they are going to grow and change to meet the market requirements that we see today and going forward. So it is an investment in additional partner touch resources.

This is the biggest investment I have seen for the HPE channel in recent years. It is part of our overall commitment to be a partner first company. We are leaning into the channel. We are unwavering in our commitment to grow with and through partners.

How big an opportunity is there for SMB partners to grow by teaming with HPE and focusing on SimpliVity and Nimble?

It is a huge revenue and more importantly margin opportunity that focus on SMB. Don't forget our definition of SMB is pretty expansive. It is everything but our named accounts. It is a very, very large TAM (total addressable market). It is the largest TAM we have and it is 100 percent channel.

With our decision to say Nimble and SimpliVity are 100 percent channel, all of our SMB business is 100 percent channel. It is really the area we are looking for additional partnerships to really help us gain profitable growth.

What is HPE's next-generation software-defined infrastructure strategy?

A core element of our strategy is we will focus on next generation secure software defined infrastructures. If you look at the acquisitions we have made they all largely are related to software defined. Nimble fits that bill. SimpliVity fits that bill and others too. When you look at our acquisitions and strategic partnership with Arista for software defined data center networking and our own internal R & D efforts driving innovation with technology like Synergy, the portfolio is in the best it has ever been to reshape what partners are talking to customers about. HPE is best positioned to lead the transformation in this industry.

What is the partner opportunity with these digital transformation offerings?

Anytime you are getting involved in those type of technologies you are talking about rapidly growing - triple digit growth in many cases in the market – that are commanding very healthy margin dollars not only on the platform and solution sale, but especially on services delivery around that platform. It is very high growth revenue and a very lucrative margin opportunity. It is really the opposite end of the spectrum from the large corporate account with sophisticated procurement that wants to put everything out to bid and have partners fight over who wants to take it for the lowest margin this quarter. It is the other end of the spectrum and it is really where we are seeing disruptive change.