HPE Restructuring: 5 Things You Need To Know
A Hewlett Packard Enterprise restructuring, which goes into effect for the start of the company’s new fiscal year November 1, includes a new Hybrid Cloud Business unit, executive reassignments and the departure of two top executives.
Providing A ‘True Cloud Experience’ For Customers And Partners
Hewlett Packard Enterprise CEO Antonio Neri said the company is implementing a restructuring that will go into effect for the start of the company’s new fiscal year on Nov. 1 in order to accelerate the execution of its HPE GreenLake edge-to-cloud strategy.
“Having laid the foundation for success, we are now evolving our operating model to accelerate our execution, deliver a superior customer and partner experience, and drive growth for the company and value for our shareholders,” said Neri in a blog post. “These changes to HPE’s organizational structure and executive leadership, which take effect at the start of our 2024 fiscal year on November 1, 2023, will further unify our portfolio and enhance the delivery of a true cloud experience for our customers and partners. They will enable tighter integrations that benefit our customers and partners and spark innovation. And, they position us to continue to win in the market.”
The restructuring – which aligns business segment financial reporting with the new business structure - moves the HPE Storage business, which accounted for $4.7 billion in sales in the last full fiscal year, into a new Hybrid Cloud Storage business unit.
In the blog post, Neri said the vision he laid out six years ago of a future that would be edge-centric, cloud-enabled and data-driven has turned into “strong momentum” for customers and partners in every industry.
HPE GreenLake now supports 27,000 unique customer logos and 3.4 million connected devices. “HPE GreenLake is at the center of how we implement our edge-to-cloud strategy,” he said.
In the most recent quarter, HPE reported a 48 percent increase in the annualized revenue run rate for HPE GreenLake in the most recent quarter to $1.3 billion. HPE’s GreenLake total contract value is now nearly $12 billion.
HPE’s Intelligent Edge business, meanwhile, was up 50 percent in the most recent quarter to to $1.4 billion. That marks the company’s fifth consecutive record quarter for intelligent edge sales.
The Intelligent Edge business with Aruba networking now accounts for the largest segment of HPE’s operating profit, accounting for 49 percent of total operating profit.
“As I’ve said many times, I’m confident that we can accomplish anything with the right team guided by the right leaders. I believe we have both,” said Neri. “I am proud of the progress we have made in our transformation to be the edge-to-cloud company. These new strategic alignments will enhance the integrated customer and partner experience, strengthen our market position, and accelerate our execution. I look forward to continuing to deliver in ways that only HPE can.”
HPE Has Created A New Hybrid Cloud Business Unit
HPE has created a new Hybrid Cloud business to be headed up by highly regarded HPE CTO Fidelma Russo (pictured), who has made big strides in delivering a more public cloud-like HPE GreenLake experience.
The Hybrid Cloud business will be made up of HPE’s current storage business, HPE GreenLake for Compute provided as a service on a consumption basis, private cloud product and service solutions and HPE software.
Also being transferred to the Hybrid Cloud and Compute business are certain unnamed products and services from the High Performance Computing and Artificial Intelligence segments.
Neri singled out Russo, who will become general manager of Hybrid Cloud effective Nov. 1, for her leadership overseeing the team that created the HPE GreenLake platform. Russo was No. 6 on CRN’s 2023 Top 25 innovator’s list.
“Over the past two years, Fidelma has led the team that created the HPE GreenLake platform, which is now the central offering for all of our Hybrid Cloud solutions, and developed, tested, and integrated new services and launched them on the platform,” said Neri.
Furthermore, Neri said, Russo and her team led the onboarding of OpsRamp onto the platform and “created an innovation pipeline that has delivered high-demand services” like the Sustainability Dashboard.
“Fidelma is a customer-centric leader and will continue to bring revolutionary new offerings to bear for our global customers, helping HPE realize our distinct advantage as we pursue opportunities in the hybrid cloud market,” said Neri.
HPE General Manager of Storage Business Tom Black Is Now Overseeing Private Cloud
HPE Executive Vice President and General Manager of the Storage Business Unit Tom Black, who has transformed the HPE storage business into an as-a-service model, will now oversee the private cloud team in the Hybrid Cloud business unit.
Black, a 10-year HPE and HPE Aruba veteran who also brought HPE Aruba into the switching business, will now report to Hybrid Cloud General Manager Russo.
Neri praised Black for leading the storage business through a transformation to a data services business with the introduction of the HPE Alletra portfolio to a storage as-a-service model.
“I am grateful for his leadership and look forward to the innovation he will drive in this new role to further build out our business in this growing area of the hybrid-cloud market,” said Neri.
“Everything about this transformational pivot we are making is about efficiency, speed and a cloud operational model,” Black told CRN. “This is not about selling bits to customers as a primary focus. This is about a true north obsession with the customer’s operational experience and how they do business with a partner. We flipped this business on its head.”
A New Financial Reporting Structure With The Storage Business Now Under Hybrid Cloud
The restructuring effectively results in a new financial reporting model that puts the $4.7 billion storage business into the new Hybrid Cloud Storage business unit.
HPE’s storage business in the most recent quarter was down five percent to $1.1 billion with a 10.7 percent operating margin compared to 14.83 percent from the year ago period.
HPE GreenLake business, the heart of the hybrid cloud business, accounted for a $1.3 billion in annualized revenue run rate in the most recent quarter, a 48 percent increase from the year ago period. HPE’s GreenLake total contract value is now nearly $12 billion.
The new financial structure will be put in place for the start of HPE’s new fiscal year on Nov. 1.
That move to put storage into hybrid cloud comes with HPE moving to drive more standardized SaaS services like the HPE Alletra storage service.
Besides the storage business financial realignment, HPE is also moving certain products and services in the High Performance Computing & Artificial Intelligent segment to the Compute and Hybrid Cloud segment.
In addition, HPE’s acquisition of the highly touted private 5G provider Athonet along with certain parts of the Communications and Media Solutions Business will be transferred to the Intelligent Edge business.
In the most recent quarter, HPE’s Intelligent Edge sales were up 50 percent to $1.4 billion, the company’s fifth consecutive record quarter for intelligent edge sales.
HPE’s Intelligent Edge business with Aruba networking now accounts for the largest segment of HPE’s operating profit, accounting for 49 percent of total operating profit.
HPE General Manager of GreenLake Cloud Solutions and Software Vishal Lall Is Leaving HPE
With HPE’s Software business being folded into the Hybrid Cloud Business Unit, HPE General Manager of GreenLake Cloud Solutions and Software Vishal Lall is leaving the company.
“Vishal Lall will be leaving HPE at the end of the calendar year,” said Neri. Vishal has held a number of leadership positions at HPE and has made numerous contributions during his decade-long career with the company. His work spanning HPE GreenLake, HPE Aruba, HPE Ezmeral, and Hewlett Packard Pathfinder has had significant impact in driving the momentum and market opportunity HPE is now seeing, which puts us in a very strong position moving forward.”
Lall, a 10-year HPE veteran, drove turnarounds at both HPE Software and HPE Aruba. HPE software sales are up 30 percent year over year on his watch.
Lall was a driving force behind a makeover of the Ezmeral Software data fabric, transforming it into a much more powerful platform for AI and ML-based workloads.
The makeover essentially takes what were four HPE Ezmeral product lines, collapsing them into two products: the HPE Ezmeral Software data fabric and a new Unified Analytics product.
The Unified Analytics product combines the old unified analytics and machine learning operations product into a single product that spans the complete unified analytics/machine learning experience from creating AI models to production AI applications.
Furthermore, as chief operating officer of Aruba from April 2019 to July 2021, Lall over a two-year period took the business from year-over-year declining revenues to 20 percent growth.
HPE Head of Services Pradeep Kumar Is Retiring
HPE Senior Vice President and General Manager of HPE Services Pradeep Kumar, is retiring.
Kumar, a 27-year HPE veteran, has overseen the 23,000 member strong services organization for the last five years.
“Pradeep Kumar, head of HPE Services, has been a remarkable leader at our company for 27 years,” said Neri. “Over the past several months, he has shared with me his wishes to retire from HPE, which he has richly earned.”
Kumar, a passionate advocate for partners, helped usher in the GreenLake as-a-service era as far back as 2019 with his efforts to rally partners to bring the GreenLake Flex Capacity model to customers.
At that time, Kumar told CRN the GreenLake Flex Capacity model allows partners to own the long-standing customer relationship and provide continuous workload optimization in a fast-changing hybrid cloud landscape.
“The partner owns the relationship,” said Kumar, who helped drive strong alignment between HPE’s Pointnext services business and partners. “I want to be very, very clear here: The end-to-end relationship for the whole time is between the partner and the customer.”
With Kumar’s retirement, Neri said HPE is putting all of HPE Services’ product and services under HPE Executive Vice President and General Manager of Global Operations Mark Bakker.
“HPE Services, Supply Chain and Quote-to-Cash will now comprise our Global Operations organization led by Mark Bakker,” said Neri. “By aligning and optimizing our systems and processes and streamlining the end-to-end customer and partner experience, we will accelerate digital transformation for HPE and our customers.”