Partners: HPE Service Provider Initiative Is A Game-Changer

Hewlett Packard Enterprise partners say a new service provider pilot program is set to change the rules of the cloud game with improved economics for partners that establish tight ties with HPE.

The new pilot program is the first major move under the leadership of HPE Senior Vice President, Worldwide Indirect Sales Kerry Bailey, who took the top channel chief job at HPE in September.

The pilot program, which includes 100 partners, is aimed at providing a new "disruptive" risk/reward scenario for HPE partners that go all in with HPE on the service provider initiative.

[Related: CRN Exclusive: HPE's Channel Chief On New Service Provider Program, AWS, Microsoft Azure And Cisco Intercloud]

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"We are going to test out some pretty disruptive commercial models with these 100 [partners]," said Bailey, the former CEO of enterprise cloud powerhouse Verizon Terremark. "When our fiscal year 2017 [Nov.1] hits, we can throw the switch with things we have learned."

Iain Mobberley, technology director for OCSL, a $120 million HPE Platinum partner in the United Kingdom that has aggressively embraced the cloud services opportunity, said the pilot program is sure to accelerate OCSL’s cloud services growth. In fact, he expects the HPE initiative to be the spark to help double the company's services mix from about 35 percent of sales to 70 percent over the next several years.

"This working pilot is going to provide the acceleration to double down and to grow those revenues," he said. "This is all about acceleration and capitalizing on the market opportunity in partnership with HPE.’

The pilot is perfectly aligned with OCSL's market direction, said Mobberley.

"The exciting thing for us is this hits kind of split-bang in the middle of where we are trying to go," he said. "It is all about accelerating our managed and cloud services. The idea that HPE is trying to work out how they can support a partner like us in the U.K. and globally is really exciting. There is a lot of work to do, but we can already see what this market trial is going to deliver for us and HPE into the future."

Key to the HPE-OCSL partnership is new "compensation models" that will drive a tight partnership between the two companies, said Mobberley. "We are looking at commercial models and technology decisions now," he said. "Nothing is kind of singularly decided at this point, but we have a golden opportunity to get it right with HPE and define the model for the future."

The HPE initiative comes with customers moving at a breakneck pace to adopt cloud services, said Mobberley.

"The timing is perfect," he said. "We are looking to drive our customers to the new world of IT, which is cloud driven."

OCSL's 25-year channel partnership with HPE was key to teaming with the vendor on the initiative, said Mobberley. "Historically, HPE has had best-in-class partner programs to power the legacy of HPE. This is an opportunity to power the future of HP into 2020. What HPE is bringing to us now are some fresh ideas to look at potentially ripping up everything we have known with regard to how we perceive them so we can sit down together and look at some different risk/reward models where we work in partnership together."

HPE's decision to focus squarely on managed/virtual private cloud and to designate Microsoft Azure as a preferred public cloud provider plays strongly into the tight relationship OCSL has with both vendors, said Mobberley. "We are extremely aligned to HPE and Microsoft," he said.

Henry Fleches, CEO of United Data Technologies (UDT), a Miami-based HPE Platinum partner, No. 119 on the 2015 CRN Solution Provider 500 list, said he sees the HPE pilot program as a landmark offering that sets the stage for UDT to accelerate its cloud services growth.

"HPE is helping us to define the overall model and go-to-market strategy, incorporating new compensation and financial models," said Fleches. "They are investing with us to bring solutions to the market that are customer- and market- driven, instead of just ’let's build it and they will come.’ "

Partners say the HPE pilot comes at an epochal moment given the many half-hearted cloud services partnering initiatives they have seen from vendors with low channel IQ or DNA.

"For a long time we saw this as more of a dust cloud so we sat back and waited for the dust to settle," said Fleches. "It hasn't settled completely, but at least now we can see the horizon. For us this is an opportunity to get close to HPE and identify the right model and strategy,"

UDT is aiming to go after the hybrid cloud market with current midmarket customers, while at the same time establishing cloud services for new emerging customers, said Fleches. "Our goal is to capture them today so we grow up with them in the cloud, participate in the hybrid cloud and, for large enterprise customers, enable them with a private cloud," he said.

Fleches credited Bailey and his team for pulling together a fresh view of the cloud landscape aimed squarely at driving robust profits and margins for partners, while at the same time delivering sales growth for HPE.

"Kerry has approached this from the perspective of what does HPE and its partners need to do to make this a win-win," he said. "It's been a very open and unselfish approach to the market."