Hewlett Packard Enterprise is unleashing its game-changing Next initiative into the SMB market with a new streamlined operating model aimed at driving big price-performance advantages for partners selling the ProLiant Gen10 server line.
The new HPE SMB operating model mirrors the dramatic changes that HPE CEO Antonio Neri has already pushed forward in the enterprise market under the HPE Next initiative.
The HPE Next initiative, which was unveiled last year, is aimed at re-architecting and simplifying the structure of the company with a goal of saving the company $1.5 billion over a three year period.
Now that global initiative is firmly focused on the SMB market with a bid to drive price-performance leadership on the Gen10 platform.
The first order of business is taking the HPE ProLiant Tower systems from 160 builds to order model SKUs to just 15. That transition to the new ProLiant Tower model begins this week.
Once the ProLiant Tower overhaul is completed, HPE will move forward in the second of the year with an overhaul of its Gen10 ProLiant Rack build to order servers from nearly 500 SKUs to 40.
"This HPE Next change makes us faster, more agile and nimble and better able to respond to the needs of the SMB customer," said Tim Peters, the vice president and general manager of HPE's SMB business. "HPE is operationalizing HPE Next with a new operating model specifically for SMB customers. This gives us for the first time a global SMB product organization with the ability to manage end to end delivery of products and capabilities for small business customers."
The massive next SMB overhaul will provide a marked "competitive advantage" for HPE in the SMB market, said Peters. The dramatic reductions in SKUs will create a "very low everyday price" for customers, he said.
"When we look at our product portfolio we see areas where we can be more aggressive than our competition, and we want to optimize those," he said. "This creates very strong value, especially around our Gen10 platforms. That is where you are going to see our greatest advantage in the market."
HPE is doing "net price" comparisons with competitors with an aim to drive advantages for partners selling the new preconfigured server SKUs "When a partner selects one of these new offers, they will have an advantaged cost position, hence a price position they can provide to their customer relative to competitors," said Peters.
HPE is planning to work with is parts suppliers and global supply chain to gain significant pricing advantages for specific components, said Peters. "This allows HPE to drive an optimized cost and supply chain on those SKUs," he said.
HPE also intends to help partners drive online digital demand with merchandising options for partners looking to capture share in the intensely competitive SMB market, particularly around the Gen10 servers.
Raymond Tuchman, CEO of Experis Technology Group, a Potomac, Md., HPE partner, said the HPE Next SMB restructuring is going to make it easier to capture SMB sales.
The dramatic reduction in SKUs will significantly reduce the cost of sales for partners and HPE itself, said Tuchman. "This is going to save HPE hundreds of millions of dollars and could very well make them the price leader with Gen10," he said.
The changes will also significantly reduce delivery times for Gen10 servers from four to six weeks to what amounts to same or next day delivery for customers, said Tuchman.
Tuchman applauded HPE for the dramatic improvements to the SMB operating model. "The SMB market is our bread and butter," he said.