HPE is automating deal registration, special pricing and even providing an AI-based 3Par to Primera storage opportunity sales proposal engine to drive SMB and midmarket sales growth, said HPE Worldwide Channel Chief George Hope.
“We think there is a big opportunity for transformation in the midmarket and SMB,” said Hope. “With the volume of opportunities we are going to be dealing with we need automation and tools to be able to handle that type of volume without slowing it down. We are trying to speed it up.”
Hope said he expects the new tools to result in quicker turnaround on deal registrations for partners, faster special pricing decisions and an increased pace of 3Par to Primera sales proposals. “We have invested heavily in tools that help our partners reduce friction and accelerate sales,” he said.
The new tools are a key part of Hope’s pledge to focus heavily on improving the partner experience in HPE’s new fiscal year, which began Nov. 1.
“If there is one thing that we are focused on significantly this year it is the partner experience,” he said. “One of my three pillars for priorities is partner experience. I think the enhancements on that side are going result in a quick turnaround in [deal] registrations, a quicker turnaround on [special] pricing, leveraging virtualized demos and POCs [proofs of concept], and leveraging AI through some offerings we have around doing tech refreshes on storage [3Par to Primera] and proposal-based selling.”
Hope discussed the AI and automation Partner Ready program enhancements and the big opportunity to increase profitability and sales growth with GreenLake and Primera in an interview with CRN.
HPE is automating deal registration in the new Partner Ready program. What specifically are you doing there?
We have been ranked very highly from a program perspective for a while. Stability and continuity are critical to the program this year. We are making operational enhancements to focus on ease [of use] out [to help partners].
If there is one thing that we are focused on significantly this year, it is the partner experience. One of my three pillars for priorities is partner experience.
I think the enhancements on that side are going result in a quick turnaround in [deal] registrations, a quicker turnaround on [special] pricing, leveraging virtualized demos and POCs [proofs of concept], leverage AI through some offerings we have around doing tech refreshes on storage and proposal-based selling.
We have invested heavily in tools that help our partners reduce friction and accelerate sales.
What is going to be the net impact on partner economics like reduced cost of sales with automated deal registration?
The midmarket is ripe for transformation. I think what happens in that space is that it is a lot of customers versus in enterprise where there are fewer, larger customers. We think there is a big opportunity for transformation in the midmarket and SMB.
With the volume of opportunities we are going to be dealing with we need automation and tools to be able to handle that type of volume without slowing it down. We are trying to speed it up.
How are you using the AI Primera Storage Opportunity Engine to provide recommendations on migrating workloads from 3Par to Primera?
We have AI and Infosight so we are enhancing the support experience through predictive analytics, and we are using AI for tech refresh. It can understand the workloads that the customers are running and make recommendations for the next offering and put a proposal together for them.
We are looking at automation to see how we can price quickly and more effectively.
We are trying to turn the partners loose in that space and give them tools to succeed and not slow them down.
It seems like special pricing is still 80 percent of the deals and 20 percent are not. Are you trying to flip that?
We are absolutely trying to flip it. We are trying to turn the percentage of escalated deals into the percentage of non-escalated deals. We are trying to flip the 80-20 to a 20-80 so our partners can get on with selling.
How is the new integrated inside sales organization going to work with partners on lead generation?
It is a combination. We are combining the inside sales muscle with digital marketing. What we are finding is that in these times we have to have a more effective use of marketing dollars. Digital is the way to go. You can’t have events anymore. Everybody is virtualizing events.
We are doing a data-driven, digital-first approach to marketing—omni-channel marketing—which is supposed to give you a 3X return over traditional marketing. What we are trying to do is create opportunity and feed some of our partners, working collaboratively with inside sales, qualify those opportunities and then get our partners engaged in more opportunities.
How big a differentiator do you think digital marketing will be to drive SMB and midmarket growth?
I think it’s creating demand in the new normal. It is looking at customers’ propensity to buy and aligning them with sellers in real time.
What are the three pillars you are looking at in terms of your priorities?
Helping our partners embrace our as-a-service vision is No. 1. Capturing opportunities in the SMB and midmarket space is No. 2 and maximizing the partner experience is No. 3.
How big an opportunity is the 3Par to Primera upgrade opportunity?
That’s an enormous opportunity. Storage crosses all three segments: as a service, midmarket/SMB and the customer experience. That is why we created the AI tool to help with the storage refresh. It is understanding what workloads the customers are running today, what would be the best solution in our portfolio for them to move those workloads to, that could be Primera, Nimble, dHCI, SimpliVity.
Storage is an enormous opportunity for us and it is high margin. Storage is higher margin for us than server and it is higher margin for our partners. We should all be selling the things that maximize our comp plans, whether you are internal [HPE] or external.
HPE rearranged the account structure to focus on a growth account segment. What is the new account logo opportunity with the additional 6 percent to 12 percent margin?
It is still TAM [total addressable market]-focused. We look at where the spend is coming from and we want to align the resources to where the spending is coming from.
In those areas of high spend, some of those companies are big customers of ours, and some of them aren’t. We want to accelerate the journey for the ones that are, and we want to recruit the ones that aren’t. That is why we are putting an extra emphasis from a return perspective on helping us break into new accounts. We want to make it lucrative for our partner community to crack open new accounts with a new account bonus incentive.
Where do partners need to move more quickly in terms of alignment with HPE to maximize sales and profits for fiscal year 2021?
They need to embrace the as-a-service vision. It may not be for every customer today, but for some customers it is going to be a game-changer.
Partners need to get used to positioning it because that is where the business is going. It may not be tomorrow or this year, but everybody is going to have to get there. We are a couple of years ahead of everybody else because of our approach to it.
Partners can sit on the sideline and watch and potentially lose business to their competitors or they can get in the game.
What is the potential for Everything as a Service to change the financial character and health of partners and even HPE itself?
Be a first-mover. You can’t get a first-mover advantage without moving.
What is at stake in terms of net financial impact as you look at the Everything-as-a-Service transformation for both customers and the channel?
I think the customers need it to be competitive. The business climate has changed. The customers need to transform. For the customers to transform, they need to rely on the expertise of their trusted advisers, which are the partners. If the partners don’t have the capability to take them on that journey, there is risk that those customers will find other trusted advisers. That is just the reality of it as the market transforms.
What is your mood going into the new fiscal year?
We are coming out of COVID-19. I don’t think it can get worse. I think we all have nowhere to go but up.
We need to accelerate the rate at which we go up. The 2020 compares are going to be horrendous. It is just a matter of getting in front of this thing and taking somebody else’s share. Don’t grow at the rate the market grows, grow faster than the market.
What is the biggest challenge to the Everything-as-a-Service vision?
It’s easier said than done. People need to roll their sleeves up and figure out how they are going to take advantage of it.
One of the challenges that the partner community has to get their head around is ARR [annualized recurring revenue], when you are talking about booking recurring revenue versus just Capex deals. It is a different mindset.
The market is rewarding ARR, but you have to pay your reps different. You have to drive them and measure them differently. It is a mental transition for some of the partners. The question is how quickly you want to do that. It changes your cash flow and all the other metrics they are driving the business on like return on working capital.
Has HPE changed its own internal comp to drive GreenLake and Everything as a Service?
You have to. Otherwise you can’t get your reps to sell it. You have to be focused on it. It can’t be too opportunistic. If it is opportunistic somebody else is going to outrun you.
How big a step was it to change the compensation internally at HPE around ARR and GreenLake?
It is an evolution. Look at others that have done it. Unfortunately, it is not a switch.
Where can partners make the most money for fiscal year 2021?
I do think GreenLake is the biggest opportunity for the partners. It‘s margin-rich, and it’s sticky. If you get GreenLake into an account and then you start showing the value to the customer in that account, you are immovable. From that point forward, you are their strategic vendor. It’s just a matter of time before they move more workloads onto GreenLake.
We are 10 years into the public cloud and 70 percent of the workloads are still in the data center. That’s because it‘s hard [to move all corporate applications to the public cloud]. You can’t move them all for various reasons, like app entanglement and latency and [data] sovereignty. You can’t move everything to the public cloud. But if we bring the cloud to you, you can just continue to move workloads on to the cloud and start consuming them [as a pay-per-use service]. You change your experience to consumption and you just pay for what you use.
It’s an enormous opportunity. … It is super profitable for them and creates customers for life.
What are the fiscal 2021 investments and sales alignment on Everything as a Service and GreenLake?
First of all, we are training our primary sellers on how to have that conversation because it‘s a critical conversation. It’s a game-changing conversation, whether it leads into our SMB and midmarket strategy or into our storage strategy.
Being able to make it easier for customers to transform digitally is what we do. [HPE President and CEO] Antonio [Neri] talks about it a lot. The pandemic has brought the future to us.
We have been talking about this moment for the last couple of years. Being edge-centric, cloud- enabled and data-driven has been Antonio’s mantra for two years. The vision has become a reality overnight with COVID-19. People are having to respond quickly to this new normal. The ones that respond will have a better chance of surviving than the ones that don’t. It isn’t optional anymore. It’s an imperative.
We are ramping up to take [partners] on this digital journey. Now we are taking them on this digital journey at their pace. We are not expecting everybody to convert every workload to as a service. But we want them to know what is available. We want to bring this cloud to them, have them see the value in it and then realize they can continue to move workloads to it.
To ramp up for it we are enabling our [partner] sales organizations to have those conversations. We created a specialty organization that they can rely on to bring into accounts to have further conversations.
I am doing the exact same thing with the partner business managers and the distribution business managers. They have to own this message and they have to be able to manage customers through partners.
So as we look out at the space, we need to leverage the partners as enablers to take this message to market and collectively help these customers.
What is the point of the arrow in the new Partner Ready program?
GreenLake itself is the point of the arrow. Ezmeral is another enabler to make the GreenLake message stickier. I think the world is evolving from Infrastructure as a Service to Workload as a Service. So I think with GreenLake we get close to Platform as a Service.
But then Ezmeral says, let’s offer Container as a Service, let’s offer ML Ops as a Service. Through Ezmeral we offer specific Workloads as a Service and take that to the next level.
I think GreenLake creates the opportunity for customers to start consuming as a service. Then we get more specific with what we can allow them to offer as a service whether it is VMs as a Service, whether it is Containers as a Service. It opens the door in a huge way for that.
How does the edge tie into the Everything-as-a-Service vision?
The cloud experience isn’t just private cloud versus public cloud. We are the edge as well. Antonio went out and bought Silver Peak and that gives us SD-WAN. Now we have the opportunity to extend that experience to the edge. The edge is the new frontier. Seventy percent of the data is now being created out at the edge. Data is heavy. We need to bring compute out to the edge and be able to give that same experience out there. The whole thing dovetails together and creates an incredible opportunity for our partners to add value.
Is there anything you are doing to incent partners to sell both GreenLake and Aruba?
It is all there. GreenLake is a motion in which partners will be rewarded significantly regardless of whether it is storage GreenLake, compute GreenLake, Aruba GreenLake. Anything that goes out as a service is all bundled into the benefits that the partner gets for selling as a service. It is not distinguished. If you embrace the motion and the [pay-per-use on-premises cloud] experience and create that with the customer, the entire portfolio can get rolled into that and you get paid on the whole thing.
So do partners get paid the 17 percent on the Networking as a Service with Aruba when you do a GreenLake deal?
Whatever gets delivered as GreenLake falls into that [17 percent up-front rebate] category. So you as a partner the more you can put into that bucket the more lucrative this thing gets for you.
What are you seeing in the midst of the pandemic with regard to the financial health of the channel going into the new fiscal year?
One of the challenges that customers are having responding to this is that with the uncertainty there is some reluctance to spend money. In some cases, they don’t have the money. The liquidity isn’t there. Through HPE FS [Financial Services] we have the unique ability to create capacity to invest. So if you want to go on this digital journey with us and you don’t think you have the financial capacity to do it, [we can help with HPE FS asset management services and funding]. If you have unused or stranded assets in your environment, then we can give you money for them. [That will] free up money to spend and double down on other things that are critical to your digital transformation. We have enabled a lot of customers that didn’t think they could do it to actually realize that vision.