HPE's Next Advantage: CEO Neri Is Taking The Company's Customer- And Partner-First Legacy To New Heights


When Antonio Neri became CEO of Hewlett Packard Enterprise on Feb. 1, he couldn't help but think of the long journey that had brought him to the moment that he now refers to as "living the dream."

It's a journey that in many ways began in earnest when Neri was a wildly curious 15-year-old middle-school student in Argentina with a passion for electronics and technology.

Neri would rise each morning at 4:30 a.m. to make the 30-mile trek to a Navy base, where he would start work at 6:00 a.m. repairing radar and sonar systems from Argentinian ships.

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At 1:00 p.m., Neri would then walk the two miles off the base for a full day of school, a long day that would end with him returning home at 7:30 p.m.

Neri's middle-school years working on that military base coincided with the 74-day Falklands War between Argentina and the United Kingdom. That conflict led to the sinking of the Argentinian ship Belgrano, resulting in the biggest loss of life from the war with the deaths of 323 Argentinians. "There is always risk," said Neri, recounting those days. "You learn a lot. It makes you better. It makes you stronger."

Those formative years in Argentina -- which also included nine years of studying art on his way to becoming a professor of drawing and painting -- were full of what Neri calls "curiosity," "focus" and "sacrifices" that provided him with a rock-solid foundation for life. It's a foundation that Neri built upon when he left Argentina to find economic opportunity, working for a small IT company in Italy. From there, it was off to Amsterdam where he started working as a contractor in the Europe, Middle East and Africa call center for Hewlett-Packard on May 1, 1995.

At the time, the call center was looking for a top-notch technologist who could speak Italian and Spanish. Neri fit the bill, even if he did fail his English test. The British Jamaican call center manager was not put off in the least by the state of Neri's English skills. "We can teach him English," the call center leader told the team at the time. "We need someone who is strong technically."

Twenty-three years later, Neri is set to take the stage at HPE's Discover conference to lay out for the first time his technology vision as the CEO of the 107th largest company in the world. In no small part due to Neri, that Silicon Valley jewel has been reinvented as a fast-moving hybrid IT-intelligent edge market leader with a compelling workload-based pay-per-use services business.

For Neri -- who has the heart and soul of an engineer determined to drive ever-accelerating innovation -- Discover is a chance to show how HPE is redefining the very nature of how business will be done in the years ahead.

"The edge is the future of Hewlett Packard Enterprise," said Neri, speaking about how HPE technology breakthroughs in artificial intelligence and big data analytics will power more intelligent and autonomous infrastructure in the years ahead. "The digital transformation really starts at the edge. Sixty-plus percent of the data is generated at the edge. Two years from now, we are going to have twice the amount of data we generated in human history. That is a massive opportunity, but the connectivity is required at the edge. Analytics and AI are required at the edge. The compute capacity at the edge in the form of cloud architecture is going to be a significant opportunity for us. That is why I am very bullish about the future of HPE."

That sense of optimism is palpable among HPE employees, customers and partners. They say Neri's Next initiative -- an ambitious plan launched last year to simplify HPE and accelerate innovation in a market moving at lightning speed -- has brought a rising tide of passion, energy and excitement.

That exhilaration stems from Neri's vision to define a new era of edge computing in a software-defined, mobile and cloud-first world. That brave new world will be on full display at HPE Discover from June 18-21, where HPE will showcase its ability to "accelerate what's next for partners and customers" with a slew of technology innovation from the edge to the core to the cloud.

HPE is also unveiling GreenLake Flex Capacity, the first-ever pay-per-use consumption offering "purpose-built" for solution providers. The new GreenLake Flex Capacity economics provide robust financial incentives aimed at powering an advisory-led services channel transformation.

The HPE Pointnext offering delivers a partner rebate that is five times greater than what they would get in a traditional Capex deal. The accelerated rebate program is designed to provide a significant margin boost, easing the cash flow squeeze as partners move to a pay-per-use consumption model.

While competitors are offering models "disintermediating partners," HPE is delivering a breakthrough that puts the channel at the center of the pay-per-use consumption model, said HPE Pointnext Chief Ana Pinczuk. "We have the industry's first and most partner-friendly consumption model," said Pinczuk. "There is no one else that is doing this in the industry. Our goal is to make the GreenLake model more attractive to a partner than the traditional model. The rebate portion of this makes it super-attractive for partners."

Pinczuk said Neri's customer- and partner-first focus, combined with his formidable services background, have been critical in HPE's fast-paced pivot to partner-led services. "That has been absolutely huge in terms of our ability to really construct these new business models and to create a new experience for the channel," she said. "We have been going really fast."

The Next Payoff For Partners

The GreenLake Flex Capacity business model innovation is unprecedented, said John Kolimago, executive vice president and general manager of the cloud solutions business unit at Anexinet, No. 208 on the 2018 CRN Solution Provider 500 and one of HPE's top Platinum partners. "This is a game-changer," said Kolimago. "I truly believe HPE is on the cusp of something great with this. Other vendors have always had creative leasing, step leasing and financing offers, but this is different. This is truly selling consumption-as-a-service. No one else is doing what HPE is doing with GreenLake."

The new GreenLake channel model allows sales reps to be paid up front for the value of the total deal, said Kolimago. "A lot of companies when they turn to a services-led model, it is to the exclusion of partners," he said. "HPE has worked hard to get the economics right for partners with a hybrid compensation model that compensates the sales reps up front on the total value of the deal on day one, and then the ability to share in the annuity over time as we grow those environments. That is the best of both worlds."

The HPE GreenLake Flex Capacity channel model comes in the midst of a public cloud backlash sparked by soaring monthly bills and increased concerns around data governance. "There is a shift going on," said Kolimago. "With Cloud 1.0, everyone wanted to run to public cloud. They thought it was going to be cheaper. Then they found out all the challenges with ingress and egress of data, variable costs that are spiraling out of control, lack of accountability of mission critical data. Now we are seeing a pivot back where customers are saying maybe the public cloud isn't the best place for their workload."

At the same time, those customers are attracted to the pay-per-use model, which is now available with GreenLake on a wide range of industry-standard offerings, whether it is ERP with SAP HANA, big data with Apache Hadoop, or backup/recovery with Commvault. "HPE is building industry solutions that make it easy for our sales reps and easy for our customers to consume this technology," he said.

The HPE GreenLake channel model builds on what Kolimago calls the industry's most lucrative channel program in the industry bar none, with "unmatched" incentives for partners. Those incentives, combined with a new high-value innovative product portfolio, are driving big sales growth for partners. Anexinet's HPE sales focused on the high-value innovation portfolio of Synergy, SimpliVity, Nimble and 3Par are up 50 percent in the first six months of this year, said Kolimago. "That's what our sellers want to sell because those products are without peer in the industry right now," he said.

Al Chien, president of Dasher Technologies, one of Silicon Valley's top system integrators, No. 161 on the 2018 CRN Solution Provider 500, said the new GreenLake Flex Capacity model thrusts partners into the heart of the pay-per-use market against public cloud competitors.

"This makes us relevant," said Chien. "GreenLake gives us an offering for customers who want an Opex experience. We don't have an offering like this today, so customers default to public cloud. Now we have an alternative that we can offer so we can maintain the relationship with the client. This keeps us attached to the client and promotes our value to the customer. The intent here is to put the channel at the point of the arrow in a cloud consumption model."

Chien, who previously worked at HP for 20 years and has been leading the sales charge at Dasher for the past decade, said Dasher is expecting another year of 25 percent sales growth powered by what he called the best product portfolio he has ever seen at HPE.

Chien credited Neri with driving high-growth acquisitions -- including Aruba, SimpliVity and Nimble -- that are providing world-class solutions that are helping customers manage their infrastructure seamlessly. "Antonio gets it," he said. "HPE has acquired assets and innovated around those core competencies in a way that gives the company a deeper and wider story. It is not piece parts. We are now talking about how customers want to consume IT versus what they want to buy, which is a very different conversation."

Bob Breynaert, global managing director for Equinix, the $4.4 billion data center powerhouse, said HPE's move to GreenLake Flex Capacity is an epochal moment for HPE and its channel partners.

"This is HPE taking what has essentially been a very capital-intensive business, flipping it on its ear and riding the cloud wave," he said. "This is complete, absolute leadership in terms of taking a highly successful business model and moving it into alignment with how companies buy cloud. With GreenLake, HPE has very quickly become a leading cloud company."

Rearchitecting HPE For The Services-Led Era

There's a reason former HPE CEO Meg Whitman chose Neri as the right CEO to lead HPE into the future. Whitman knew that whoever was going to transform HPE to succeed in a rapidly moving technology market would have to know the innards of the company.

Neri's 23 years at the company have given him a unique view into every nook and cranny of the organization -- an insider's knowledge that is absolutely essential to the reinvention of HPE. Neri is, in fact, the principal architect and driving force behind the massive reimagining of HPE called Next that is designed to give the company the ultimate "competitive advantage." It's the equivalent of taking a "clean sheet" approach to the company with massive changes aimed at simplification, innovation and execution.

"What excited me about Next is the ability to transform the company from within and create a competitive advantage for our business," said Neri. "When you grow up in this company for 23 years, unfortunately you know every system, every process, for good or bad. That gives me a sense of where we need to accelerate."

Keerti Melkote, founder of Aruba and now president of HPE's intelligent edge business after HPE's acquisition of Aruba in 2013, said Neri's insider knowledge of HPE is fueling the Next transformation.

"HPE Next is an effort to transform the back end of the company, to modernize the whole thing into a 21st century back end," said Melkote. "That, to me, cannot be done by an outsider. Someone has to know exactly how an order flows through from quote to cash and what are all the various systems and processes that need to come together to make that happen. You can't break that, because if you do, you're going to break the revenue model of the company. Doing it in a manner that works, and works well, is critically important, and Antonio knows it cold."

The essence of Neri's Next transformation is a return to an "innovators at heart culture," said Melkote. "This all comes down to innovating for our customers and keeping our partners in mind at all times." That innovation acceleration is aimed at powering the digital transformation of all customers so they are not disrupted in the same manner that Uber ripped apart the taxi industry, said Melkote. "That was a 100-year-old industry completely transformed," he said. "That's happening across the board. There's no technology company today that has had a lot of roots in the past that is leading the transformation. For HPE, the opportunity is to become that company."

Neri -- who is used to the long hours required of hands-on leadership -- is working at a feverish pace to make HPE that company. That includes moving fast on market-rattling acquisitions aimed at driving an ever-faster pace of HPE innovation.

In the past three months, HPE has moved to acquire three companies: Plexxi, a software-defined networking fabric provider; Red Pixie, a cloud consulting company that specializes in Microsoft Azure; and Cape Networks, an artificial intelligence network analytics provider.

Neri is driving the Next initiative -- which reduced the num ber of management layers from seven to four -- with his own brand of hands-on sales leadership. He is the first to step in to solve a customer or partner issue with an email or a phone call.

When Mark Melillo, founder and CEO of Melillo Consulting, one of HPE's top enterprise partners, had a delivery issue crop up that was impacting customer satisfaction, he reached out to Neri, who in no short order fixed the problem. "It ended up with a customer that was extremely happy," said Melillo. "The bottom line is that Antonio is unafraid to shake things up internally to make sure customers are happy."

Melillo said he is heartened by Neri's Next initiative and the significant supply chain changes at the company. "Antonio is taking on the supply chain issue head on," he said. "He is changing the entire process. We are already seeing some of the benefits of that, and with supply chain management in the future I think it is going to be better. It's a significant change and one that will bear a lot of fruit. HPE is becoming -- no pun intended -- a ’nimble' company that can do what they do very well, be very innovative and out-execute the competition."

Steinar Sønsteby, CEO of Atea, the $4.5 billion European infrastructure giant that has been partnering with HP for more than 20 years, said Neri has partners, customers and employees believing in HPE's technology vision and story.

"I am blown away by the energy and motivation inside HPE today," said Sønsteby. "He has people believing in HPE. It started internally and now it has very quickly spread to partners and customers. Five years from now, Antonio is going to be remembered as the person that put the fire back into HPE. We are seeing an engineering spirit that people want to be a part of. Being a great leader is more of an art than a science. Antonio has a passion for people, engineering and how the technology is going to be developed, deployed and used by customers."

Sønsteby said he has personally witnessed Neri's customer and partner first-commitment. When Atea was bidding on a $100 million four-year deal, Sønsteby was not satisfied with the proposal put together by his and the HPE teams. He reached out to Neri and in a conference call on a Saturday evening, he and Neri hammered out a new proposal with stronger technology offerings that surprised the HPE-Atea team. The result: Atea and HPE won the deal. "Partner and customer commitment is his life," said Sønsteby of Neri. "That is who he is and what he does. He does not let himself or the organization back down."

The Journey To Become HPE CEO

Neri's journey to the corner office is the quintessential American success story that began in that HP call center in Amsterdam 23 years ago. That first job with HP had a profound effect on Neri's view of the world.

"You have to understand what customers are experiencing when you talk to them," he said. "My job at the time was to make sure that I not only represented our brand by providing a great customer experience, but helped them achieve the business outcomes they were looking for with our technology."

Neri's rise up the ranks began six months into his tenure when he became a support engineer. Within a year, he was an education manager. Two years later, he was the manager of the EMEA call center, and in three years he was the services manager for all of Europe.

Neri met his "dream girl" and future wife, Caroline, at the call center, where he learned firsthand the power of a customer and partner-first mentality. In fact, it was Neri's keen technology mind, combined with his passion for helping customers succeed, that led to his move to Boise, Idaho, in 1997 to take a job as the worldwide director of HP's imaging and printing services business. The offer came just weeks before Neri was to be married.

Neri, whose two children were born during his stretch in Boise, moved to Houston with his family in 2004 to take a job focused on fixing what was a struggling PC business with services issues. After success in the PC services business, Neri was asked in 2011 to run the technology services business.

From there it was onto Silicon Valley after he was handpicked by HPE CEO Meg Whitman to become executive vice president in 2015, president in 2017 and then CEO.

On his first day on the job as CEO, in a LinkedIn post titled "Living the Dream," Neri recounted his HPE journey from his days as a customer service engineer to "countless adventures all over the country."

Neri, who along with his wife became a U.S. citizen in 2012, said he does not take for granted the responsibility he has to HPE employees, customers and partners.

"I have a big responsibility to take it very seriously every day," he said, as he gears up to deliver his first keynote address as CEO at HPE Discover. Neri knows that moving fast is critical to winning today and that his legacy at HPE will largely be determined by how successful he is in driving the Next competitive advantage.

"I am focused on making sure that this company is relevant to our customers and partners," Neri said. "Obviously, we built this company with our partners. We are going to continue to enable them with innovation and the best experience we can provide to deliver business outcomes for customers and to grow our business with our partners."