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COLUMN: HPE Is A Cloud Service Provider, Not A Hardware Company

Steven Burke

CRN’s Steve Burke says partners that look at HPE as a hardware manufacturer with a broad and deep compute, storage and networking portfolio are missing the boat.

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HPE CEO Antonio Neri

Those partners continuing to look at Hewlett Packard Enterprise as a hardware manufacturer with a broad and deep compute, storage and networking portfolio are missing the boat.

HPE President and CEO Antonio Neri made that crystal clear when he ended HPE’s fiscal year by fully integrating the GreenLake on-premises cloud service into the core operations of the company.

The move from what Neri calls the “incubation” of GreenLake as a separate commercial business unit into the heart of everything HPE does is a culmination of its remarkable cloud services transformation. Under Neri’s leadership, HPE has made the quantum leap from hardware provider to a full-fledged cloud services company with its own powerful cloud-native software services platform.

[RELATED: HPE CEO Antonio Neri On Dell’s ‘Little Bit Strange’ Decision Not To Provide Apex Quarterly Updates]

Neri and HPE do not get enough credit for bringing partners into the heart of the cloud services game. The HPE GreenLake edge-to-cloud service, in fact, has forever changed the public cloud versus private cloud equation. Partners and customers are increasingly waking up to what Neri calls GreenLake’s “lowest-cost- per-workload,” security and data sovereignty advantages.

GreenLake’s lowest-cost-per-workload advantage, Neri said, is “especially true when an application requires significant data egress and ingress, which is the majority of the cost—not the cost of compute—or in cases where workloads are largely predictable, which means you don’t have to scale up or down all the time or if data protection services are needed.” As for the security and data sovereignty advantages, more and more customers want to control their own data destiny and are simply not willing to throw caution to the wind and put all their data assets into the public cloud.

HPE’s on-premises cloud services revolution has been made possible by a robust cloud-native software stack, which includes HPE Aruba, HPE Private Cloud for Enterprise and HPE GreenLake for Data Fabric, a single data store for hybrid cloud.

All that said, even with 70-plus cloud services and more than 80 ISVs—including VMware, SAP, Nutanix and Veeam Software—HPE is still being viewed by too many partners as a hardware provider. “In the end, make no mistake, it’s going to be the entire company inside GreenLake,” Neri told solution providers at CRN parent The Channel Company’s XChange Best of Breed conference in October.

“For us, it’s not about just being able to consume as a service, it’s being able to run your entire business through HPE GreenLake,” he said.

While HPE has made solid inroads in bringing its partners into the on-premises pay-per-use cloud services game, it still represents a small fraction of the partner base. That’s because of the cultural shift partners have to make to go from selling hardware to selling cloud services.

That transformation is as big a shift as HPE itself made from hardware provider to cloud service provider. It means—just like HPE itself did—changing the go-to-market model, sales compensation and culture of the company. That edge-to- cloud services shift, given the customer demand for pay-per-use IT services, is not optional. Partners that make the move to an on-premises cloud services model will prosper. Those that don’t will find themselves fighting for a smaller and smaller piece of the IT pie.

Steven Burke

Steve Burke has been reporting on the technology industry and sales channel for over 30 years. He is passionate about the role of partners using technology to solve business problems and has spoken at conferences on channel sales issues. He can be reached at sburke@thechannelcompany.com.

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