HPE Pointnext Chief Pinczuk On HPE GreenLake Flex Capacity, Pay-Per-Use Channel Monetization, Customer Choice, And The 'Largest Cloud Professional Services Capability In The World'

Driving A New Channel Pay-Per-Use IT Business Model

Hewlett Packard Enterprise Pointnext Senior Vice President Ana Pinczuk, the driving force behind HPE's everything-as-a-service advisory and operational services offensive, says HPE is in the process of hammering out a channel monetization model for next- generation HPE GreenLake Flex Capacity services.

The seven new HPE GreenLake Flex Capacity services offerings -- HPE Synergy, AzureStack, Gen10 blade servers, 3Par storage, HPE StoreOnce, CS700 (Converged System 700), and SimpliVity -- have been purpose-built for partners and are being piloted by several large U.S. partners, said Pinczuk.

"In terms of the financial model that is part of the trial with these partners -- what does it mean from a consumption model for the partner to make money and us to make money -- I am not quite ready to talk about that model because we are going through these trials as we speak. By the end of January, we'll be able to talk a little bit more about the monetization scheme," she said.

HPE also plans to offer channel partners the opportunity to sell HPE GreenLake on-premises consumption-based IT pay-per-use workload application services including SAP HANA, Hadoop, backup, database and edge compute, said Pinczuk.

"We are working with our partners to move from traditional models to new models of consumption," she said. "I really invite our partners to work with us on all the HPE GreenLake offers."

Get all of CRN's coverage of HPE Discover happening this week in Madrid.

Talk about HPE GreenLake and HPE GreenLake Flex Capacity Services offerings.

We are super excited about HPE GreenLake -- both the Flex Capacity offer, which is the next generation of Flexible Capacity, and the new HPE GreenLake offers we are bringing to market.

This is the first time that any vendor has done this at this level. It is super unique in the industry. There is obviously the ​HPE GreenLake outcome offers. But the conversations I have had with partners is about introducing to the market a set of ​HPE GreenLake Flex Capacity offers.

There are seven that we are introducing to the market over the next three months. They include HPE Synergy, AzureStack, Gen10 blade servers, 3Par storage, StoreOnce and our CS700 [Converged System 700] and SimpliVity.

If you think about these seven offers, we have got both compute and various flavors of storage capabilities as well as AzureStack, which is software-based. These are packaged offers. What is really unique here is the channel has been asking us to really simplify what we have been doing with Flexible Capacity. They have said they really like it but they are not as easy to do as they could be. Flex Capacity is the next generation of Flexible Capacity.

What is the channel compensation model for HPE GreenLake Flex Capacity?

We have been really focused on coming up with these seven initial packages, and we have a trial program with several partners starting in the U.S.

In terms of the financial model that is part of the trial with these partners -- what does it mean from a consumption model for the partner to make money and us to make money -- I am not quite ready to talk about that model because we are going through these trials as we speak. By the end of January, we'll be able to talk a little bit more about the monetization scheme.

Partners are super excited because they will be able to leverage a configurator, which we are testing out now, to put together, say, a storage package with what the customer needs in terms of capacity with pricing and we can spit out a contract right there and then.

This is going to really accelerate the capabilities we have through the channel. It is going to make it much easier for the channel to sell these offers. Today, in order to generate a Flexible Capacity package it takes hours to put it together.

Is HPE GreenLake a direct sales offering only, while the Flex Capacity offers are the channel brand?

The HPE GreenLake brand overall will be both a direct and indirect play for us. What the channel has been asking us for is to take Flexible Capacity to the next level.

The HPE GreenLake Flex Capacity services are almost channel-first. While these are channel-first, they will also go direct as well and likewise with the rest of the HPE GreenLake offers whether it is private backup as a service or big data as a service. We want to enable those through the channel as well, but what we are working through is the enablement process. The sales motion will be direct and indirect.

What is your vision for taking the channel business model to the next level with HPE GreenLake and HPE GreenLake Flex capacity?

There is a vision and then there is a road map of implementation that we are being very careful about. There is an opportunity here to basically deliver an outcome to a client. Let's take big data as a service, as an example. The first component is around professional services. In some cases, customers want us to come in and figure out what does it mean for them to set up a Hadoop cluster with Cloudera or Hortonworks? What is the possibility for them? When we think about big data as a service, it starts with professional services that can be embedded in the offer.

The second piece is the instantiation of the service. It is the hardware capabilities, which can include both compute and storage, the software capabilities with Hortonworks and Cloudera, and the capacity management – the metering and being able to deliver this as an outcome.

When you think about the partner opportunity with the HPE GreenLake offer, what we are doing with partners is figuring out what components of the offer can be partner-delivered. We are not going to scale to do professional services for every customer.

Talk about the channel services opportunity around HPE GreenLake.

The area the channel is super excited about is enabling a certain size of customer with professional services. That is a good piece of revenue and margin for them. Obviously, the other piece is how do we enable the solution – what can we deliver ourselves versus what we enable them to do through a managed service capability.

The managed services capability is something the channel could do as well. That is the vision of the offer – that you can enable HPE GreenLake and it can be channel-sold and channel-delivered eventually. But we are at the beginning of this journey so right now what we are doing is mostly delivered by us and then for the Flex Capacity offers these are the ones we are going to focus on initially as channel-sold and channel-delivered as well.

So the initial HPE GreenLake application outcome services will be done mostly direct with HPE GreenLake Flex Capacity as the channel-first offer?

That is how we are starting. We want to pilot this with our channel. In particular, we are looking at how to deliver an outcome that includes elements like system linkages between us and the channel partners. We just want to make sure all these things are in place.

We have been talking to partners about the HPE GreenLake offers and getting a lot of feedback, making sure we prioritize the offers that they want. The seven [HPE GreenLake Flex Capacity] offers we have talked about are the ones that are the most useful to partners and their customers.

I just did a roundtable session in New York with nine partners a few weeks ago where we talked about the HPE GreenLake offers.

We have been really staffing up in this area. It is new, differentiated in the market and partners love it.

Is there a hard deck or a line in the sand as to where partners play and where HPE Pointnext direct sales will play?

No. Personally, I believe in customer choice. At the top end of the market what I tend to see is some of those customers might engage a partner or SI [systems integrator] with us but they want us to be very involved because the complexity of the solutions they deploy tends to be high. That is where I will put our own professional services people to play. We partner very closely with the Sis -- the Accentures and the Wipros of the world. But we see our [solution provider] partners there as well. I really like to think of it as customer choice there.

Now when it gets to low midmarket and commercial, that is certainly much more partner-centric and partner-led. The reality is that we won't scale. That is certainly a place where we want partners engaged.

We don't have a hard deck, but we do have a set of top accounts. The top account list varies but in reality it tends to be 30 to 40 accounts. Sometimes we take that up to more accounts. But it is really those truly top accounts that tend to be customer-led. Beyond that the market for partners is huge.

What is your call to action for partners who want to align with Pointnext with pay-per-use outcome-based HPE GreenLake offers?

We do a lot of our business with Pointnext through the channel. We have a very good relationship with the channel both on HPE GreenLake and other offers. Over 70 percent of the attach of services is done through the channel. A huge amount of our business goes through the channel. My call to action to our partners is to continue to work with us, look at the ​HPE GreenLake offers and be part of the initial seven ​HPE GreenLake Flex Capacity offers we are bringing to market. It is an amazing opportunity to engage differently with our customers in these pay-per-use offers. That is a new place for the channel. We are working with our partners to move from traditional models to new models of consumption. I really invite our partners to work with us on all the ​HPE GreenLake offers and to help us accelerate the offers to the market.

Talk about the Cloud Technology Partners acquisition and how it changes the cloud consulting game for HPE Pointnext.

Cloud Technology Partners has been an amazing acquisition. We closed the acquisition in September and people came on board on Nov. 1. Just to give you a sense of the momentum, in one week we had over 40 new engagements in the U.S. These are serious funnel engagements.

What Cloud Technology Partners has done for us is to truly enable us to have a right mix [private-public cloud] conversation. Cloud Technology Partners has been around for seven or so years. So they have a long history of having cloud professional services conversations with customers. They are a premier partner for Amazon Web Services and have certifications and partnerships with Microsoft and Google as well. They are a very respected partner for the public cloud providers. That has enabled us to go to our customers and have this right mix conversation that truly looks at their workloads. We are able to say, ’Let's figure out what makes sense for the customer both for their private environment as well as for the public cloud environment.’ That has been super.

What kind of services does Cloud Technology Partners have that can potentially be offered through partners?

Cloud Technology Partners has launched some new software-based services including managed compliance services. Those are some of the services we have been looking at also taking through the channel. It is pretty early. They have only been part of our organization for only a few weeks.

We are looking at how to take their professional services available through the channel – how to make them into packaged services that we can enable the channel on. The second piece is how do we take this managed compliance service through the channel as well. Those are the two elements that we are looking at in terms of channel-enabling CTP.

Will there be more acquisitions as you staff up to scale up your digital transformation practice?

With Cloud Technology Partners, we got close to 240 people as part of that acquisition. We already had a cloud practice. Matching both the Cloud Technology Partners with the practice that we had, we believe that we have got the largest cloud professional services capability in the world. In fact, that is what our cloud partners are telling us. So from a competitive perspective around cloud professional services, we think there is no match.

The second thing I would tell you is Cloud Technology Partners has most of its capabilities in the U.S. and some in Europe and the U.K. In terms of M&A, we will continue to look at organic and inorganic activity relative to these professional services.

How big is the consulting and services opportunity for partners?

From a hardware perspective, over 70 percent of our business goes through the channel. It is the same thing when we attach services. So we have a huge opportunity through the channel.

In terms of the market opportunity, when you look at Gartner -- depending on what aspect you look at it is somewhere between $20 [billion and] $60 billion depending. The good news is we are not opportunity-constrained. For us it is all about execution and having the trusted adviser relationship with our customers and being able to execute. These professional services have been growing. We believe we have got a great position with our customers and partners to continue to deliver.

Talk about your channel commitment and expertise and how that is shaping your channel views.

We did an analysis recently that said we have about a half-a-billion-dollar opportunity with the channel. Anything that starts with a ’B’ gets your attention. To me the channel is a huge opportunity. We are putting a lot of investment to deliver solutions that are channel-first with both our advisory and our operational services. We are investing in VARs, disties, OEMs and SIs. Most recently, you saw us announce an agreement with Rackspace. So we are looking at doing both channel and technology partnerships. That opens up a whole new opportunity for managed services as well through the channel.

I see a lot of opportunity to serve our customers better by providing a full portfolio of HPE Pointnext solutions all the way from advisory and professional services to operational services through the channel. I see that as fuel to really get the power of the HPE Pointnext offers into the market.

Talk about the Pointnext mission and what you are seeing in the market from customers.

HPE Pointnext as launched in February with a vision and focus on customers that wanted to be advisory-led and consumption-enabled. That is a huge portion of our customer base. The reason that is so important is because of the digital journeys that our customers are going through.

Customers are struggling with how to make the move to digital and do that fast, whether that is through an agile transformation, building up a DevOps model, figuring out how to link the edge to the core to the data center. There are a lot of shifts that are happening.

HPE Pointnext was launched with a view that we would help our customers with that digital journey both from an advisory, professional and operational services perspective, and the big change you are seeing is this concept of consumption and advisory-led. Customers are really looking for HPE and its partners and Sis to help them with that journey.

What has been the customer reaction you have seen with Flexible Capacity?

Of all the Flexible Capacity customers, we have not had one customer leave. We have had 100 percent customer retention and customer satisfaction. As we go through this with as-a-service models we will manage the outcome for them. It really simplifies the world for our customers so they don't have to get all the skills and capabilities on their own in order to go digital. On top of that, we do it fast. It is a new world with HPE Pointnext. It is a journey of digital transformation – advisory-led and consumption-enabled. We are really shifting the organization to enable that for our customers together with our partners.

Talk about the power of the HPE holding the paper on the Flex Capacity offers with HPE Financial Services.

That is key. The nice thing about our offer is that we have the hardware, software and HPE FS [Financial Services] that provides the financial element of the solution. It is an all-in-one solution that we can enable and enable for our partners as well.

We have got over 400 customers. These are repeat customers. With Flex Capacity, this is a land-and-expand capability. The nice thing is our customers see what we can do and then we end up expanding to other areas.