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CEO Antonio Neri On Why HPE ‘Outperformed’ Dell, Cisco

'We outperformed every single competitor,' says HPE CEO Antonio Neri. 'Everyone that was put in front of us we beat them this quarter. Cisco was down. Arista was down. Juniper was down. Ruckus was down. Ubiquiti was down. We were the only one that had a plus in front of it.'

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Can you talk about the quarterly results and how the channel performed for HPE?

Let me give you a summary of the quarter, and then I’ll put that in perspective for the channel. Obviously, I was disappointed by the revenue but that was driven mainly by the compute business, which was impacted by three things: One, macro uncertainty; two, the supply constraints that we have had—we had good demand but we couldn’t fulfill it; three, we did a [manufacturing] consolidation [in North America] that took a few weeks longer than we wanted.

To put it in perspective relative to our competitors, even with that we did better than Dell. So Dell [servers and networking] declined 19 percent. Our compute business, which is a combination of compute and HPC [high-performance compute], was probably down 10 percent. You can see we did better than them.

What I am very pleased with is the momentum we continue to gain in key strategic areas. One of those areas is our pivot to as a service. That business continues to do extremely well. GreenLake is up 48 percent year over year, and the channel is a big force in that growth. GreenLake services orders were up 48 percent as a function of the future, but what is hitting the P&L this quarter was up 19 percent. Obviously, that order booked takes time to mature. What we see in our P&L is growth year over year of 19 percent.

The intelligent edge—the next big frontier and opportunity—returned to growth. We outperformed every single competitor. Everyone that was put in front of us we beat them this quarter. Cisco was down. Arista was down. Juniper was down. Ruckus was down. Ubiquiti was down. We were the only one that had a plus in front of it.

All geographies and all Aruba products were up year over year. Aruba products were up double digits. North America was up double digits. That is pretty remarkable considering the macro uncertainty and the fact that we had to deal with last year’s challenges. I am super proud of the team and what we have done there.

All of the high-value categories did very well, whether it was high-performance compute, hyperconverged, composable cloud. To give you some perspective, composable cloud in the channel was up 25 percent year over year. HPE FS [Financial Services] with as-a-consumption-model-driven business—a component of GreenLake—was up 20 percent from the channel. We increased the attach rate by 30 percent on that. GreenLake sales pipeline was up 40 percent quarter over quarter.

If you look at specific products, Nimble was up 16 percent, and GreenLake was up quite significantly—the number of partners activating GreenLake is up almost 100 percent.

We see very strong momentum with the channel as usual. The fact that we have a simple program and enable them to pivot with us and make the right balance of margin while we pivot is the name of the game here.

The negative story was compute and compute for us was the same story as our peers, but we had the demand and we could not ship everything we wanted.

 
 
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