HPE SVP Hang Tan On HPE, VMware ‘Co-Innovation,’ And The $32.3B Private Cloud Opportunity

HPE Senior Vice President and Chief Strategy Officer Hang Tan sounds off on the benefits of HPE GreenLake for VMware and the massive private cloud opportunity.

A ‘Massive, Massive’ Opportunity For Partners

The new HPE GreenLake for VMware deal puts HPE’s GreenLake for Private Cloud Enterprise in a “pole position” to capture the massive hybrid cloud opportunity, said Hewlett Packard Enterprise Senior Vice President and Chief Strategy Officer Hang Tan.

“This is about helping customers deliver an optimal hybrid cloud mix,” said Tan. “We want to help them deliver the private cloud aspect of that (hybrid cloud mix). On top of that we are providing managed services to help customer manage their hybrid multicloud environment. That is a massive, massive opportunity.”

The new HPE GreenLake for VMware—which will be available sometime in the first half of 2023—was unveiled this week at VMware’s Explore 2022 conference in Barcelona.

As a result of the agreement, VMware Cloud can now be fully integrated with a single consumption and licensing model with HPE GreenLake. That includes VMware Cloud for HPE GreenLake for Private Cloud Enterprise.

“This agreement basically allows us to integrate their entire VMware Cloud Foundation portfolio as part of GreenLake,” said Tan.”This is really about delivering the best of VMware Cloud capabilities with the best private cloud offering from GreenLake, the market leader in private cloud infrastructure.”

The deal comes with a major version of HPE GreenLake for Private Cloud Enterprise being made available on October 31. That new version of HPE GreenLake for Private Cloud Enterprise establishes a new bar for provisioning and deploying an on premise private cloud for enterprise customers. It includes increased automation and scalability backed up with an enterprise-grade service level agreement.

What does this VMware Cloud on GreenLake include?

The idea is to bring to bear the full VMware Cloud stack. Obviously depending on the solution and the workload and the customer scenario we may bring a different mix of VMware capabilities with HPE GreenLake. As part of this agreement, we want to bring as much of the VMware portfolio to the market as possible.

What are the benefits that VMware and HPE are bringing to the table with HPE GreenLake for VMware?

It is a big deal. I think it is a game changer. You have two market leaders in their respective domains coming together. I think one big benefit is the fact that we are now in a true consumption model. VMware used to do perpetual licensing. Now they are going to subscription licensing on a per core basis. So that is 100 percent compatible with our GreenLake consumption model.

That makes the customer economics even more flexible because now both the software and the infrastructure side are fully integrated into a cloud offering. So the entire stack is now on a consumption basis. We never had that before in the past.

Secondly this is a fully integrated experience. So when we are managing the environment in GreenLake they are not stitching together a solution themselves. They are not stitching together VMware with GreenLake infrastructure. They are essentially subscribing or consuming GreenLake private cloud. That is a much more seamless experience and it lowers the customers’ TCO (Total Cost of Ownership). So we think that is a huge differentiator.

Thirdly, we are both co-innovating very aggressively on a road map. So this partnership allows us to really drive a significant amount of innovation in a very inter-locked way going forward. I think that will bring a lot of benefits to end customers. Expect to hear a lot from us in the coming year on new features and capabilities.

Lastly this is good for the channel and our partners. It removes a lot of complexity from our partners. They don’t have to stitch together the solution. We are delivering essentially out of the box hybrid cloud offering. That is obviously good for our customers. And then our partners can focus on value added services, catering to the specific needs of their customers.

Those are the game changers from this partnership.

How big a leap is this from perpetual VMware licensing to pay per use on GreenLake?

That is how we built the GreenLake business model. It is a pay for only what you use model. VMware’s move (to subscription licensing) also aligns to that model.

In the past you had to forecast how much capacity you needed for your workloads and that forecasting translated into a set of software licenses and obviously infrastructure that you would have to purchase.

With the new model and with this integrated offer we are basically tying those two together in purely consumption based approach.

What does this mean for HPE GreenLake Private Cloud?

This allows you to basically do pay per use for the full private cloud – not just the infrastructure and the managed services part of it. This is inclusive now of the entire private cloud stack. That is really the big game changer.

I think most IT departments are pretty experienced with VMware licensing. We help (now) manage that capacity on the customer’s behalf. The simplicity of that experience will be appreciated.

What does this VMware Cloud on GreenLake include?

The idea is to bring to bear the full VMware Cloud stack. Obviously depending on the solution and the workload and the customer scenario we may bring a different mix of VMware capabilities with HPE GreenLake. As part of this agreement, we want to bring as much of the VMware portfolio to the market as possible.

How important is the ability to go to a pay-per-use model in the wake of Broadcom’s acquisition of VMware?

The benefit here is really about pay for what you use. I can’t speak for future pricing of our partners. That is not something I can comment on.VMware has always been a great partner of ours and so has Broadcom. I don’t think that really plays into it. It is more that now the entire (VMware) solution is delivered in a fully integrated seamless way for the customer and the entire stack is now consumption based.

That is how the customer can really optimize their TCO (Total Cost of Ownership) because they are not over provisioning and they can now spend more time delivering value added services to their internal customers versus stitching together and managing those environments themselves. That is really the value proposition that really resonates with our customers. Obviously we have spoken to a lot of customers about this. That is what we are really excited about.

How important is the choice that partners can now use the full VMware multicloud stack with GreenLake?

Customer choice is super important to us. This speaks to the fact that customers are going through a digital transformation and they have different needs for different workloads. They are delivering new digital experiences and services either to their internal stakeholders or their external customers.

The enterprise IT customers have a broad set of needs. Giving them choice around different run time environments is an integral part of our GreenLake value proposition.

What is the message to partners on the economic opportunity in private and hybrid cloud?

From a macro standpoint we are seeing a ton of growth in private cloud or hybrid cloud deployments. Obviously public cloud continues to grow, but I think especially in the current (economic) environment customers are much more prudent about their expenditures and private cloud is increasingly being viewed as more attractive. Hybrid cloud deployment with a more balanced mix is becoming a lot more attractive.
This is a $32.3 billion market (market researcher IDC estimates for total addressable market for Hardware and Enterprise Private Cloud by 2025) growing double-digits. This is definitely an area partners should really focus on. This is about helping customers deliver an optimal hybrid cloud mix. We want to help them deliver the private cloud aspect of that (hybrid cloud mix). On top of that we are providing managed services to help customer manage their hybrid multicloud environment. That is a massive, massive opportunity. I think if you look at the GreenLake offerings we have today with the added partnership with VMware we think we are in a pole position to capture that opportunity. This is a great opportunity for us and our partners.

Going into 2023, how much more attractive is pay per use because of the economic situation and the high cost of public cloud?

I think it is huge. I think hybrid has a lot of benefits besides economics obviously: control of your data, regulations and also just the benefits of data locality. That is huge.

Obviously public cloud also has a great capability that I think our customers should take advantage of. But I think given the current environment we are just hearing a lot of our customers really making sure that they are spending prudently. I think having a more balanced mix between public cloud and private cloud in a hybrid deployment is definitely top of mind. We are leading with that narrative with our partners. I think it is going to be huge.

How far reaching is this agreement between VMware and HPE?

This agreement basically allows us to integrate their entire VMware Cloud Foundation portfolio as part of GreenLake.

This is really about delivering the best of VMware Cloud capabilities with the best private cloud offering from GreenLake, the market leader in private cloud infrastructure.