HPE CEO Antonio Neri 'Bullish' On 2019 Outlook With Intelligent Edge, Hybrid IT Momentum


Hewlett Packard Enterprise CEO Antonio Neri Tuesday said he is bullish on the 2019 outlook with explosive growth in data continuing to drive strong sales of HPE intelligent edge, storage and compute products and HPE's hot selling Greenlake consumption-based platform.

"Why I am confident about 2019 is data continues to explode around us," said Neri in an interview with CRN after the Dow Jones Industrial average plummeted nearly 800 points on Tuesday on fears of an economic slowdown. "That data has to be stored and managed. It is just physics. That is a big opportunity for both us and our partners: how we really accelerate outcomes from that data with the best edge to cloud architectures with connectivity, security, AI and the right cloud computing associated with those workloads."

[Related: HPE Adds New AI, Machine Learning InfoSight Capabilities To Boost Nimble, 3Par Performance]

The only possible wild card that could put a damper on 2019 would be a recession which could cause customers to hold back on IT purchases, said Neri. "I am actually bullish about it unless something really bad happens from a recession perspective where people stop buying things completely," he said. "I don't think this is going to slow down in the near term."

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Neri's comments came after the intelligent edge-hybrid IT powerhouse delivered better than expected results for its fourth fiscal quarter ended Oct. 31 with Aruba intelligent edge sales up 17 percent; compute sales up nine percent; storage sales up six percent and HPE Greenlake pay per use consumption orders up 30 percent.

HPE also delivered strong performance for the full 2018 fiscal year – Neri's first fiscal year since he took the helm last Feb. 1- with higher than expected sales growth of seven percent to $30.9 billion. That full year sales growth was led by 13 percent growth in the intelligent edge business; 13 percent growth in the storage business; nine percent growth in value compute offerings including 25 percent growth in high performance compute and 280 percent growth for Synergy composable systems with a more than $1 billion annual run rate; and 54 percent growth for HPE Greenlake.

"We have strong momentum across our differentiated portfolio as we head into an expected healthy IT spending environment in 2019," said Neri.

Neri said HPE's InfoSight artificial intelligence (AI) predictive analytics platform is giving the company a marked competitive advantage in the software defined, autonomous data center battle with an intelligent and autonomous data fabric.

Just last week, HPE announced that InfoSight is being extended across HPE's innovative composable hybrid cloud platform. "Customers see the value of predictive analytics, fix the problems before they happen," said Neri.

That InfoSight innovation is leading to storage share gains, said Neri. "HPE InfoSight has been a phenomenal success," he said. "We couldn't do any of this without our channel partners. Our channel partners see the value of our architectures and the software defined intelligence that we are bringing to it. Customers are seeing that they can deploy this on premises cheaper and they can run it more autonomously. That is the opportunity for us and the partners."

HPE’s software-defined solutions are 20-30 percent less expensive than public cloud offerings particularly in large scale virtual machine environments, said Neri. "If you are talking about thousands of VMs at scale you really get into 20-30 percent (savings) quickly," he said. "That is the reality of it."

For the quarter ended Oct. 31, HPE reported non-GAAP diluted net earnings per share of 45 cents on a four percent increase in sales to $7.9 billion. That was above the Wall Street consensus of 43 cents per share on sales of $7.85 billion.

For the full fiscal 2018 fiscal year, HPE reported non-GAAP diluted net earnings of $1.56 per share– above the previously provided outlook of $1.50 to $1.55 per share.

Even with the strong results, HPE shares were down 25 cents in after hours trading to $14.80. That came after HPE shares closed down 45 cents for Tuesday to $15.05.

Michael Goldstein, CEO of LAN Infotech, a Fort Lauderdale, Fla., solution provider, said HPE is firing on all cylinders with a big innovation and execution advantage with InfoSight and the HPE next generation software-defined infrastructure.

"Our customers are excited about HPE," said Goldstein. "It's about innovation. They are leading the way with innovative, products, services and acquisitions. Customers see that the HPE innovation is reducing overall IT spend, labor and overhead."

A great example, said Goldstein, is HPE's acquisition of BlueData – a software platform that leverages Docker containers to drive down the cost of big data, AI and machine learning applications.

Goldstein said Neri's intelligent edge vision has generated a rising tide of energy and excitement in the company and the partner community. "You can feel it," he said.

Neri, for his part, said the big opportunity for partners is to drive sales of intelligent storage with InfoSight on Nimble and 3Par; take the lead in edge computing with Aruba; continue to drive composable hybrid cloud with Synergy and provide customers with pay per use consumption solutions with Greenlake.

Noting the positive feedback from partners at last week's HPE Discover in Madrid, Neri said: "I am very bullish about what we are going to do in 2019 and beyond. Our partners last week at Discover were ecstatic about the strategy and how we are working with them. I have never seen such positive feedback and momentum from customers and partners."