HPE CEO Antonio Neri: Lenovo’s TruScale Comparison To GreenLake Is Misleading To Customers


Hewlett Packard Enterprise CEO Antonio Neri said that rival Lenovo is misleading customers when it compares its new TruScale electrical consumption pay-per-use model to HPE's fast-growing software-based GreenLake Flex Capacity model.

"From my perspective there is no other offer like ours," said Neri in an interview with CRN in response to a question on Lenovo's claims that its TruScale consumption model is superior to HPE GreenLake. "Sometimes our competitors – in the spirit of trying to deliver news – mislead customers. When you put [the HPE consumption model and the Lenovo consumption model] next to each other, it is clear there is no comparison."

[RELATED: HPE CEO Antonio Neri Sees Accelerated Revenue Growth Ahead]

Lenovo fired the first round in the TruScale vs. GreenLake battle two weeks ago when it called out its new TruScale electrical consumption based offering with no minimum capacity as a breakthrough compared to HPE GreenLake.

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“The minimum requirement that HPE and other competitors have is that there’s a utilization model that says, ‘You have to be using at least this much for it to potentially work.’ We’re saying, ‘No, we don’t need to do that’," Laura Laltrello, vice president and general manager of services at Lenovo Data Center Group, told CRN. "Outside of services fees, which is going to be scoping up front, basically the utilization model is based on electricity. You turn the thing off, we don’t charge you.”

HPE's GreenLake Flex Capacity model – which includes HPE's own software-based metering platform Cloud Cruiser – is "a true services-led offering on-prem – a full solution which means it is enabled by software and backed by HPE Financial Services. It is the most flexible on-prem consumption model on the market," said Neri.

The HPE GreenLake metering model is based on Cloud Cruiser which includes a portal that is aimed at allowing customers to "optimize their usage and costs" both on-premises and in public cloud.

HPE GreenLake – which has been on the market for four years with a breakthrough update last June – is also one HPE's fastest-growing offerings in the channel. In the most recent quarter, HPE GreenLake Flex Capacity channel sales were up 300 percent.

One reason for the big HPE sales traction is its big investments in the channel pay-per-use model that has drawn rave reviews from partners looking to provide customers with an on-premises alternative to public cloud. GreenLake Flex Capacity includes a whopping five times the rebate incentive partners would get in a traditional CapEx on-premises deal.

"GreenLake already has more than 450 customers and $2 billion in TCV (total contract value)," Neri told CRN. "That business continues to accelerate. We are growing it double digits. I believe we have a three-year advantage compared to any competitor in that market."

Lenovo counters that even though TruScale has only been on the market for two weeks it has already closed two deals.

In a written response via email to CRN to Neri's comments, Lenovo Data Center Group TruScale Services Director & General Manager Matt Horne characterized TruScale as an "innovative approach to an old problem.”

“Lenovo intentionally designed Lenovo TruScale to solve the challenges that customers face and their need for operational agility in today’s fast-paced, ever-changing dynamic world," he said. "Lenovo TruScale provides full flexibility to meet customers’ needs in a simple model – with the ability to scale up and down real-time, without a minimum capacity commitment required."

Key to the Lenvo TruScale model, Horne said, is that "no minimum capacity" commitment; a metering solution that is "out of band" and does not enter the "data plane" of customers; and the fact that it is not limited to a "subset of solutions," but rather spans the entire ThinkSystem and ThinkAgile portfolio.

As to Lenovo’s view on the cost of the per use model for a comparable enterprise workload –such as SAP HANA-based on electrical consumption rather than software usage, Horne replied: "Cost of any ‘per use’ model is going to be primarily dependent upon the specific solution and the structure of the individual customer agreement, not the metering method deployed. We always focus on delivering efficient solutions based on customer requirements."

Joe Hemani, the founder of chairman of Westcoast, the $3.3 billion U.K. distributor which recently closed a multimillion-dollar GreenLake deal --the largest channel GreenLake 3.0 channel deal yet, said Westcoast has several other multimillion-dollar GreenLake deals in the pipeline.

"When you close the first deal you then have a reference point, and as soon as you have a reference point life becomes slightly easier for the second and third customer," he said. "That is why we have a great pipeline.We have two or three other big multimillion-dollar [HPE GreenLake] deals on the go. I hope that in the next six weeks or so they will come to fruition. "

While HPE definitely has an eight- or nine-month lead on Lenovo in the pay per use market, Hemani said it would be a mistake to under estimate the Hong Kong-based computing behemoth. "I am quite impressed with what they are doing," he said. "I am impressed with their technology. I am impressed with their hunger."

Hemani said he expects the difference between Lenovo TruScale's electrical consumption utility model and GreenLake's software based consumption model to be marginal. "We have done all kinds of studies on this working with Microsoft on pay per use," he said. " I would say it is a marginal difference."

As to HPE's claims that it has a three-year lead on Lenovo in pay-per-use, Hemani said: "Lenovo has some unbelievable offers. Their determination should not be taken lightly. If HPE says it is ahead, they are right. If HPE says they have a lead they are right. If they think they are three years ahead, I would say no."

A top sales executive for a Solution Provider 100 company, who did not want to be identified, said HPE GreenLake is rapidly gaining momentum in the channel as a true hybrid platform with the ability to optimize workloads in public and private cloud settings.

"We use HPE GreenLake as an optimized private cloud with our own service offering," said the solution provider sales executive. "We have customers using it for SAP and Oracle workloads. HPE has cracked the code on bringing a true cloud operating model to the data center. HPE is doing this at scale. Our HPE offering is one-third the cost of public cloud."

Lenovo has ground to make up because it does not have the enterprise applications expertise and DevOps stake in the ground that HPE has with its breakthrough Synergy composable infrastructure platform, said the sales executive. "Lenovo doesn't have all the components that HPE has to run a data center application," said the executive. "They don't have the experience in the data center, the experience with mission-critical enterprise workloads, and they don't have an application practice like HPE does. Lenovo has traditionally been a server and desktop play."

HPE's 2017 acquisition of hybrid cloud consulting provider Cloud Technology Partners (CTP) has been key in the hybrid cloud HPE GreenLake buildout, said the sales executive.

"HPE GreenLake is already doing what AWS Outposts wants to do," said the sales executive, speaking of AWS-VMware on-premises offering that is not due to be delivered until the second half of this year. "HPE has a cloud operating model on premises – a virtual private pay-as-you-go cloud."

The CTO for an SP500 national solution provider, who did not want to be identified, said HPE has proved its channel mettle with GreenLake working closely with partners through HPE Financial Services.

"HPE has come a long way with GreenLake," said the CTO. "HPE has made it a partner-friendly, services-friendly MSP offering. GreenLake is very viable. If someone needs 1,000 blades, I can make more money bundling that as a GreenLake deal than selling 1,000 blades. HPE can provide a full and complete solution for any enterprise with 3Par, all-flash Nimble, SimpliVity, Synergy, and all of its products, and HPE Financing is more than happy to finance any other products, like Cisco switches."

As for Lenovo TruScale, the CTO said he would have to see just how channel-friendly the new offering is for a full enterprise solution. The key to Lenovo's success may well rest on how well it can work in a no minimum capacity setting, said the CTO. "If I could get 1,000 servers from Lenovo for a great price and then turn them off or hand them back to them, letting power consumption drop to zero, then it could win some deals," he said. "I'd really have to see how the Lenovo proposal works in a real-life enterprise customer scenario and see just how channel friendly it is."

With the Lenovo pay per use model, capacity can be scaled up or down to ensure infrastructure is correctly sized all the time, said Jean-Philippe Couture, director of business development, cloud and managed services for Quebec-based solution provider ProContact. "No matter what kind of infrastructure or architecture you put behind it, it can be fully consumed through TruScale. It is very simple. I’ve had meetings with competitive vendors, and their offerings are so complicated that I still don’t get,” said Couture, who has been piloting TruScale to customers. “The other vendors offer hardware-as-a-service, but it’s not as-a-service if you cannot scale down. It’s easy to scale down with TruScale.”

Raymond Tuchman, CEO of Experis Technology Group, one of HPE's top enterprise partners, said it is ridiculous to compare an electricity consumption model to GreenLake.

"There is a big difference between charging for electrical consumption and actual usage of applications," said Tuchman. "I assume Lenovo just doesn't have the software to actually monitor the systems except for knowing if the system is on or off. So that's what they are basing their consumption model on."

One problem with the Lenovo electrical consumption model is if the system is having compute or storage issues, customers could still be getting charged based on electrical consumption, said Tuchman. "With that model, it's not about whether the processor or storage is working, it's about whether you are using electricity," Tuchman said. "HPE is monitoring actual software usage and the operation of the system. It's all about making sure the system is actually operating and doing work. With GreenLake, the customer, HPE and the partner's interests are all aligned. Customers like the GreenLake model. It gives them comfort. They know HPE's interests are aligned with their interests. It's not a transaction to HPE. It's a commitment."

The GreenLake portfolio includes enterprise solution offerings including an SAP HANA offering; a Hadoop data lake offering; a backup solution based on Commvault software; a database with EDB Postgres and an edge compute solution.

Tuchman expects GreenLake Flex Capacity to be a several million-dollar business for Experis this year. "GreenLake is a great deal for the customer and for partners," he said. "When we sell a GreenLake deal we get recurring revenue for the full length of the deal. We participate in any uplifts, upgrades or new opportunities. It's a wonderful thing for partners."

Paul Cohen, vice president of sales for New York-based PKA Technologies Inc., one of HPE's top Platinum partners, said the Lenovo electrical consumption model is a lot different than the proven HPE software-based usage model. "It's not an apple-to-apple comparison," he said. "HPE is a value offering. From a technology perspective, HPE's portfolio of product is far superior than the Lenovo portfolio when it comes to data center and enterprise compute, storage and networking."

Additional Reporting By Mark Haranas