The 10 Biggest HPE Stories Of The Year
HPE CEO Antonio Neri delivered a blinding pace of innovation and a ‘record’ year for channel performance with big gains in partner profitability and Net Promoter Score. Here is our list of the top 10 HPE stories of the year.
HPE’s Competitive Advantage: Partners
Hewlett Packard Enterprise CEO Antonio Neri in 2019 accelerated HPE’s transformation as an edge to cloud Platform-as-a-Service powerhouse with big innovation breakthroughs like HPE GreenLake Central Service and the HPE Kubernetes platform.
“We’ve had a record, record year in terms of selling as-a-service and adding your value-added services on top of it,” Neri told partners in a conference call reviewing fourth fiscal quarter and fiscal year results.
For the full fiscal year, HPE GreenLake channel sales were up 231 percent, he said. What’s more, the HPE GreenLake pay-per-use channel sales pipeline surpassed the $850 million mark.
Besides GreenLake, HPE delivered double-digit growth in strategic areas like Composable Cloud, where sales were up 47 percent; hyperconverged, where sales were up 25 percent; and high-performance compute, where sales were up 15 percent.
Neri pointed out that the focus on higher-value, high-growth segments of the market is paying off in higher profitability for HPE and its partners. He said HPE partners’ gross margin was up a whopping 300 basis points for the fiscal year ended Oct. 31, while HPE itself closed out the year with a 270-basis-point increase in gross margin compared with the prior year.
HPE is also seeing increased channel momentum with channel sales becoming a higher percentage of total sales, said Neri. “We have a big competitive advantage—which is you, our partners,” he said. “We are and will continue to be a partner-led company. That has always been my message to you, and that will not change.”
Here then are the top 10 HPE stories of the year.
Get more of CRN's 2019 tech year in review.
10. HPE Takes Aim At Dell With VMware Cloud Foundation On GreenLake
HPE delivered one of its biggest blows to rival Dell Technologies by unleashing VMware’s Cloud Foundation as a Service on HPE GreenLake.
The new GreenLake as-a-service offering—which runs on HPE’s fast-growing Synergy composable cloud platform—allows partners for the first time to provide VMware virtual machines (VMs) on a pay-per-use basis with the full VMware Cloud Foundation stack on GreenLake.
“We think this is a huge breakthrough over Dell,” said HPE Vice President of Global Marketing Paul Miller (pictured) in an interview with CRN. “We think we have a better VMware solution with Synergy that enables speed, agility, a lower cost point and more flexibility over Dell with metering at the VM level. … Dell meters at the server level. We are the only ones that meter at the VM level and enable customers to bill at that level.”
HPE’s expanded partnership with Dell-owned VMware comes as more customers are eyeing pay-per-use options rather than opting for traditional legacy capital expenditure IT on-premises offerings. GreenLake provides public cloud pay-per-use metered software consumption capabilities and features in an on-premises private cloud model.
Miller said that HPE’s VM pricing “granularity” is a pay-per-use game-changer for customers who have become accustomed to paying for VMs on a core processor server basis under complex licensing agreements. “With GreenLake you only pay for the exact VM,” he said. “The ability to pay based on VM granularity is an economic game-changer for customers.”
Synergy’s composable cloud architecture is also a notable advantage over Dell, said Miller. He said the combination of Synergy and the GreenLake pay-per-use metering model gives customers embracing DevOps the flexibility to dynamically scale up and down with a composable cloud architecture.
“With Synergy you can scale up or down and do DevOps,” he said. “That is a huge advantage. This is delivering the ultimate cloud experience both economically and agility-wise for customers that no one else can touch.”
9. HPE Primera Marks Dawn Of Intelligent Storage Era
HPE made a breakout move to reshape the storage landscape with the introduction of HPE Primera, marking the dawn of what could be regarded as the intelligent storage era.
Primera, which is outfitted with HPE’s artificial intelligence/predictive analytics platform InfoSight, sets HPE apart in the race to provide business insight as companies grapple with a data explosion.
Primera, in fact, is a key part of HPE’s charge to deliver on its autonomous data center vision that puts an intelligent data platform across all of HPE’s infrastructure portfolio including servers.
BlueShore Financial, the first HPE Primera global customer, sees the intelligent storage platform’s InfoSight software advantage as key to driving cost and efficiency advantages versus public cloud, said Ryan Burgess, manager of technology infrastructure for the boutique financial institution that administers $6 billion in assets.
“We benchmark ourselves against AWS [Amazon Web Services], GCP [Google Cloud Platform] and [Microsoft] Azure from an infrastructure standpoint, and we always come out way ahead of those environments,” said Burgess. “I really strongly believe it is because of the fact that we stick with a single vendor for our solutions. So we stick with HPE for our server, storage and networking because of the autonomous [predictive analytics]. HPE is building that in holistically. They are not building silos. The autonomous [data center] dream becomes more possible because we are using HPE across the board.”
8. HPE’s ‘Revolutionary’ GreenLake Central Service Makes Its Debut
For Neri, GreenLake Central represents the next big “revolutionary” step forward in HPE’s edge to cloud everything-as- a-service sales offensive.
The next-generation GreenLake hybrid cloud platform provides partners and customers with an as-a-service portal/management console that allows them to do cost, performance, governance and security comparisons for all workloads from the edge to the core to multiple clouds including AWS and Microsoft Azure.
“The HPE GreenLake Central portal provides a single-pane-of- glass experience for workloads whether they are managed at the edge, on-premises or off-premises in a true as-a-service model including a catalog of service for developers,” said Neri in a conference call with partners.
GreenLake Central’s open APIs, in fact, allow “partners to add their own services on top of it so we can create a significantly better integrated experience than people just thinking about public cloud,” said Neri, who unveiled GreenLake Central at the HPE Discover More conference in Munich, Germany “This is what customers are looking for.”
GreenLake Central has been released in beta and is being piloted with an initial set of customers. It will be available in the second half of 2020.
GreenLake Central is a “huge” leap forward in the GreenLake hybrid cloud customer experience, said Erik Vogel, global vice president of customer experience for HPE GreenLake. He said it allows partners and customers to do “true apples-to-apples” workload comparisons between GreenLake on-premises workloads and AWS and Microsoft Azure.
“This is really about taking GreenLake to the next level,” Vogel said. “We’re actually providing a hybrid IT experience. Customers and partners can now import their AWS and Azure bills and do comparisons. They now have the ability to look across all of their hybrid environments and do what-if scenarios.”
7. HPE Snags Microsoft Cloud Veteran To Lead HPE GreenLake Unit
In December, HPE upped its cloud consumption software IQ by snatching away one of Microsoft’s top cloud executives, Keith White (pictured), to lead the fast-growing HPE GreenLake business unit as general manager and senior vice president.
White, a 20-year Microsoft veteran, has played a critical role in driving dramatic Microsoft Azure sales growth, most recently as vice president of the intelligent cloud, worldwide commercial business.
“Keith played a key role in driving the significant growth of Azure over seven consecutive years,” said HPE Hybrid IT President Phil Davis in a blog post titled “Technology & Talent: Changing The Game In Hybrid IT. “Keith also brings extensive experience in worldwide field sales and marketing, partner ecosystem development and business strategy leadership—all of which will be key elements of his role here at HPE.
White’s appointment should be a GreenLake “game-changer,” said Bob Panos, vice president of sales and services at American Digital, Elk Grove Village, Ill., which closed one of the first GreenLake 3.0 channel deals.
“It’s a big move,” said Panos. “I see it as a big boost for GreenLake. It’s good to see HPE bringing in an outsider who has played a key role building a big cloud business with Microsoft. This gives HPE a different perspective to grow the business. Having someone like Keith put his fingerprints on the GreenLake business should be good for everybody including partners. Obviously we need to see execution and results in the field.”
6. Supercomputing Game-Changer: HPE Acquires Cray
Hewlett Packard Enterprise stepped up its bid to drive dramatic computing breakthroughs for the most compute-intensive workloads with its $1.3 billion acquisition of supercomputer power Cray.
Neri said the blockbuster deal would help HPE customers get answers to some of “society’s most pressing challenges” that are “buried in massive amounts” of data.
“By combining our world-class teams and technology, we will have the opportunity to drive the next generation of high-performance computing,” said Neri.
HPE partners, for their part, said the Cray deal opens the door for new high-performance HPE GreenLake pay-per-use opportunities in hot markets like machine learning and artificial intelligence.
“For a customer, the ability to put a couple of thousand nodes of a Cray on site through a GreenLake consumption will be pretty cool,” said Worth Davis, executive vice president and chief technology officer at Computex Technology Solutions, a Houston-based HPE partner. “You’ll be able to handle some [high- performance machine learning/artificial intelligence] burstable workloads without having to invest in the largest environment possible.”
5. HPE’s New Partner Ready Program Doubles Down On GreenLake, SMB Sales Growth
HPE doubled down on both its GreenLake pay-per-use offering and capturing a bigger slice of the SMB pie with its fiscal year 2020 Partner Ready program.
On the GreenLake front HPE is keeping GreenLake sales compensation at the top of the pyramid with its 17 percent up-front rebate. GreenLake has the highest 5X multiplier in the HPE partner compensation incentive program.
HPE also added a GreenLake competency certification—along with Partner Ready accelerators aimed at getting more Silver and Gold partners to sell GreenLake,
HPE is also doubling the number of sales specialists focused on helping partners close GreenLake pay-per-use deals; rolling out its GreenLake Quick Quote tool, which dramatically reduces the time it takes to do sales quotes from days to minutes; and introducing a new GreenLake competency.
On the SMB front, HPE is also adding new sales resources including an expanded inside sales team and has instituted a new instant pricing model for SMB partners for deals priced under $100,000.
HPE has also made sure the new Partner Ready program is designed to incent smaller Silver and Gold partners to aggressively sell the HPE portfolio.
“We continue to have the most attractive program in the marketplace,” said HPE Vice President of Worldwide Partner Programs and Operations Jesse Chavez (pictured) in an interview with CRN. “GreenLake and SMB are the biggest opportunities in fiscal year 2020. I think that is where we will see the growth. The overall margin profile is going to be higher in those particular areas.”
4. HPE’s GreenLake Sales Explosion
HPE’s soaring GreenLake pay-per-use channel sales pipeline surpassed the $850 million mark in 2019.
The sharp rise in the GreenLake sales pipeline comes with HPE GreenLake channel sales up 326 percent in the fourth fiscal quarter ended Oct. 31, said HPE Worldwide Global Channel Chief Paul Hunter (pictured). For the full fiscal year, HPE GreenLake channel sales were up 231 percent.
The robust sales growth comes with the number of active partners selling GreenLake hitting a “record” high in the fourth fiscal quarter, said Hunter in a conference call with partners alongside Neri.
The GreenLake channel business now makes up 27 percent of total GreenLake revenue, up from just 5 percent a year ago.
“We’ve made really great progress in terms of evolving the partner-led GreenLake business,” said Hunter in a conference call with partners after HPE posted robust GreenLake fourth fiscal quarter sales. “We delivered an outstanding quarter for GreenLake in total and the partner segment of that delivered even faster growth.”
Hunter singled out SHI International Corp., the $10 billion Somerset, N.J., solution provider behemoth, for closing in the fourth quarter the “largest-ever” partner-led GreenLake deal. “Congratulations to the SHI team,” he said.
3. New HPE North America Sales Structure Brings More ‘Channel Champions’ To Leadership Roles
HPE restructured its North America sales organization effective Nov. 1 as part of a plan to accelerate its channel go-to-market with more “channel champions” across the business, said HPE Managing Director North America Dan Belanger (pictured).
“What partners will see is that there are now more channel champions in leadership roles up and down the organization,” said Belanger. “We have more leaders on their front foot, leaning into the channel, developing and executing plans hand in hand with partners.”
The restructuring puts world-class channel leaders into a streamlined go-to-market model that will benefit customers and partners, said Belanger.
The new structure puts what was a three-tier enterprise account model (global enterprise, large enterprise and mid-enterprise) under a single North America enterprise business with East and Central/West businesses leaders.
At the same time, it puts what was a five-tier commercial account structure (SMB, midmarket, inside sales, cloud service provider, SLED), under a single commercial business leader.
Under the restructuring, HPE North America Channel Chief Terry Richardson, a 35-year enterprise sales veteran who has been singled out by partners for his ability to help them close deals, will run the multibillion-dollar East Enterprise sales business.
HPE North America Hybrid IT Compute Vice President Leslie Maher, a 30-year enterprise sales veteran who has helped design key sales programs that have led to HPE share gains, is taking over as North America Channel Chief.
HPE Vice President of SMB Sales Jas Sood, a 21-year HPE veteran who was leading the SMB sales charge, will lead the new commercial sales organization.
Peter Brennan, who was heading up worldwide sales of VMware’s fast-growing Cloud Foundation private cloud business, was hired as vice president and general manager of the West/Central Enterprise accounts business for HPE.
2. Channel Gains: ‘Best Year Yet Between HPE And Channel’
With big gains in partner profitability and a record channel Net Promoter Score (NPS), HPE delivered what Neri called the “best year yet” for channel performance.
“This was the best year yet between HPE and the channel,” said Neri in an interview with CRN after HPE closed its fiscal year 2019 ended Oct. 31 with gross margin up a whopping 270 basis points from the prior year. “We made remarkable progress. We solidified our relationship [with partners]. The channel understands that we are and will continue to be a channel-led company.”
HPE’s shift to the GreenLake pay-per-use model continued to pick up steam in the fourth fiscal quarter with HPE GreenLake orders through the channel up a whopping 326 percent, said Neri.
With the shift to GreenLake and higher-value software-defined offerings, HPE partners have made a 3-point improvement in gross margins year over year, said Neri.
That increase in partner profitability helped drive a 5-point year- over-year increase in HPE’s Channel NPS, said Neri. “I’m really, really proud of that,” he said of the NPS score—a closely watched indicator of partner profitability and channel loyalty. “It was a record year. Obviously, we have been very predictable, …Our Net Promoter score is twice as big as the next competitor.”
Partners are flat out “making more money” by teaming with HPE, said Neri. “Ultimately, partners understand they can make more money with us,” he said. “In the end, they need to make money and they see Hewlett Packard Enterprise not only as a trusted partner that can grow with them but also as someone who provides them the ability to make more money. Ultimately, we are better together in front of our customers. I feel pretty good about it. It’s the best year we ever had [with the channel] and there are still way more opportunities out there.”
Paul Cohen, vice president of sales for New York-based PKA Technologies Inc, one of HPE’s original Platinum partners, said PKA is seeing the benefits from HPE’s channel-led charge. PKA is coming off double-digit growth in fiscal year 2019 and is forecasting double-digit growth once again in fiscal year 2020, said Cohen.
Cohen, in fact, said he is already seeing the benefits of the HPE North America restructuring with Richardson (pictured) moving into a new role as North America East enterprise sales chief and Maher as the new channel chief.
“Terry Richardson moving into the East sales role is a huge benefit to the channel,” said Cohen. “His influence on the district managers and the sales force is already being felt. Terry knows what it takes to expand and grow the business by leveraging the channel.”
1. Neri Pledges Everything-As-A-Service By 2022
Neri raised the bar in the intensely competitive as-a-service market by promising that HPE would transform its entire portfolio to as-a-service by 2022.
The GreenLake as-a-service sales offensive is aimed at making the GreenLake model the predominant way to buy HPE products and services.
“Our vision for our company is to deliver everything we do as a service,” said Neri in addressing partners at the Global Partner Summit. “Three years from now, this company will become consumption-driven and everything we do whether it is at the edge, the core, the cloud business, software or infrastructure and services will be available to you and to our customers as a service.”
Neri said now is the time for partners to pivot to GreenLake. “This is the time to transition and be bold and take the opportunity we have in front of us,” he said.
For partners, all of the GreenLake advancements mark a huge leap forward in the race to drive bigger sales and profits with a pay-per-use model that delivers business-outcome-based services in a long-term contract for customers with robust partner recurring revenue opportunities.
American Digital’s Panos said he expects “exponential” GreenLake sales growth with an increasing number of customers anxious to get out of the data center business and move to a pay-per-use model. “More and more customers want to buy as a service,” he said. “HPE has the right strategy.”