Search
Homepage Rankings and Research Companies Channelcast Marketing Matters CRNtv Events Acronis #CyberFit Summit 2021 Avaya Newsroom Experiences That Matter Cisco Partner Summit Digital 2020 Intel Partner Connect 2021

CEO Antonio Neri: HPE GreenLake Is A ‘Home Run’

‘We are super proud of the momentum we have in the market with HPE GreenLake,’ said Neri. ‘We believe it is truly differentiated in the market. … What customers like about the model is the ability to procure everything—from from edge to cloud—from one integrated platform.’

Hewlett Packard Enterprise CEO Antonio Neri told analysts Tuesday that the company’s edge-to-cloud platform-as-a-service pivot with HPE Greenlake leading the way is a “home run,” with as-a-service orders up 114 percent in the fourth fiscal quarter.

“Overall I would say this has been a home run,” said Neri discussing HPE’s as-a-service growth over the last fiscal year, with 300 new GreenLake customers added during fiscal year 2021, ended Oct. 31. “We believe we have years of advantage [in lead time over competitors].”

HPE reported a 36 percent fourth quarter year-over-year increase in annualized revenue run rate (ARR), a key measure of GreenLake’s success, to $796 million.

“We are super proud of the momentum we have in the market with HPE GreenLake,” said Neri. “We believe it is truly differentiated in the market. … What customers like about the model is the ability to procure everything—from edge to cloud—from one integrated platform. It is not just infrastructure as a service or hardware as a service on-premises or in a colo or at the edge. It is the fact they can consume anything from network as a service, subscription, to Aruba products, to private cloud to data services.”

[Related: CEO Antonio Neri: 7 Takeaways From HPE’s Securities Analyst Meeting]

Neri told CRN that HPE’s as-a-service pivot is accelerating as a result of the company’s compelling edge-to-cloud platform-as-a-service “value proposition” and customer demand shifting to an as-a-service model. “GreenLake is on fire,” he said.

Among the GreenLake wins, said Neri, is a blockbuster network-as-a-service deal—the largest network-as-a-service deal ever for HPE—with Home Depot. “Our strategy is working; demand is there,” he said.

For fiscal year 2021, HPE delivered a 61 percent increase in as-a-service orders, with ARR up 36 percent.

With the as-a-service pivot, HPE’s forecasted fiscal year 2022 outlook of three to four percent revenue growth in constant currency effectively translates into six percent to seven percent growth, said Neri. HPE is targeting a 35 percent to 45 percent ARR compound annual growth rate for fiscal year 2021 to fiscal year 2024.

More than 900 HPE partners are now selling HPE GreenLake, with the number of active partners growing 47 percent in the fourth quarter, said Neri. “This is one of the largest partner ecosystems selling as-a-service offerings in the industry,” he said. “We added more than $1.5 billion of GreenLake total contract value over the last year, bringing the total to more than $5.7 billion.” HPE now has 1,250 GreenLake customers.

Neri said 25 percent of GreenLake orders in the most recent quarter were new accounts, including a high-profile deal that was closed by HPE partner PKA Technologies with Sutter Home, the second largest family owned winery in the world.

Sutter Home adopted the GreenLake on-premises cloud service to gain additional “flexibility and scale,” with increased automation powering the winemaker’s warehouse where 60 different types of wines are packaged and prepared for shipping, said Neri.

Paul Cohen, vice president of sales for New York-based PKA Technologies, one of HPE’s top GreenLake partners, said the Sutter Home deal is a sign of HPE GreenLake’s growing on-premises cloud services momentum in the channel.

“This is a flagship account win,” he said. “It shows the trust and confidence that customers have in HPE GreenLake.” Key to the Sutter Home win, said Cohen, was the PKA SolveIT managed services offering. “What this shows is the power of Greenlake combined with PKASolveIT,” he said. “It feels great to win this deal, but we are focused on bringing the capabilities of GreenLake to more customers and prospects.”

In fact, PKA’s 2022 sales kick off is focused squarely on driving GreenLake consumption-based sales. “There is an excitement and an enthusiasm around selling consumption[-based services] rather than just another widget,” he said.

“Customers love that they are paying for exactly what they are consuming so they can flex up and down based on seasonal demand or other economic issues,” he said. “There is no over-provisioning or under-provisioning. And by providing PKASolveIT consulting, installation and ongoing support with GreenLake, we are allowing customers to focus on their critical application development rather than worrying about managing infrastructure. It lets them focus on their business.”

Cohen said customers are responding to the security and confidence of having their data on-premises as one of the key differentiators of GreenLake. “Customers like knowing their data remains on-premises and secure,” he said. “Security is one of the top concerns of customers.”

GreenLake on-premises cloud services sales have hit an inflection point, with clearly defined swim lanes as an alternative to public cloud, said Pat O’Dell, general manager and managing partner for Clinton, N.J.-based solution provider CPP Associates, another top HPE GreenLake partner.

“There are a lot of benefits to public cloud. Who can knock what [Amazon Web Services] and [Microsoft] Azure have done? They have their swim lanes, but GreenLake plays really well in production environments where customers are interested in security, scalability, performance, control and price consistency/predictability,” said O’Dell. “If one or more of those things are important, GreenLake plays well, but when all five are important for the customer, it’s a no-brainer.”

CPP is expecting to close out 2021 with double-digit sales growth and is stepping up its focus in the new year on moving customers beyond cloud to focus on business outcomes that drive big competitive advantages around analytics, automation and profitability, said O’Dell. “Our message to our sales and presales team is if customers are not talking about that, we need to educate them to speak that language,” he said. “Customers that don’t focus on business outcomes won’t be around in 10 years.”

Overall, HPE reported fourth quarter non-GAAP diluted net earnings per share of 52 cents on a two percent increase in sales to $7.4 billion. The HPE earnings performance was three cents per share above the Zacks consensus estimate of 49 cents per share, with sales in line with the $7.4 billion consensus.

HPE finished the fourth quarter with orders up 28 percent from the year ago quarter, even as the company grappled with supply constraints that are forecasted to run into the first half of next year. “Obviously the biggest challenge everyone has—not just us—is supply availability,” said Neri.

Those supply constraints held back bigger revenue gains over the last fiscal year, said Neri, with orders accelerating in the second half with total fiscal year 2021 order growth up 16 percent to $28.8 billion compared with $24.9 billion in fiscal year 2020.

“I’m super excited about 2022,” said Neri. “We have a healthy backlog, very large. We have tremendous demand.”

Neri said he sees HPE’s edge-to-cloud platform-as-a-service strategy accelerating in 2022. He said HPE is getting “better and better at closing deals faster” and deploying GreenLake.

“I see 2022 as a year of acceleration of the strategy, which is already resonating in the market,” Neri said. “To me it is all about execution, execution with the partners. What partners need to think about is: are they ready to come along and take advantage of this transformation versus hedging to see what happens. Those that have already taken the challenge are benefitting, like PKA with that unique and every special [Sutter Home] deal. They embraced it and made the investment. Those who make the investments with us are going to get the benefit of growth and more margin-rich offers over time.”

Back to Top

Video

     

    trending stories

    sponsored resources