HPE CEO Antonio Neri On GreenLake Momentum, Edge Growth And Keerti Melkote’s Departure

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HPE CEO Antonio Neri On GreenLake Momentum, Edge Growth And Keerti Melkote’s Departure

Hewlett Packard CEO Antonio Neri said the recent as-a-service launches from rivals Cisco and Dell are a validation of the HPE GreenLake strategy.

“The fact that Cisco and Dell are entering the as a service market is a good thing because it validates our strategy,” said Neri.

“We have been saying this for several years. For me, it is a validation of our vision and strategy. The good news is we have years of a leadership position here and a business that is already reaching an inflexion point in terms of scale.”

Neri’s comments come after Dell last month announced general availability of its Apex as a service offering at its Dell Technologies virtual conference.

Cisco took a giant step forward with its as-a-service model in March with the announcement of a Cisco Plus hybrid cloud solution which is slated to be available in mid-2021 and a Network as-a Service model, starting with Secure Access Service Edge (SASE) later this year.

Under Neri’s leadership, HPE was the first legacy infrastructure vendor to stake out the everything-as-a-service market as far back as three years ago. Neri has pledged to transform the entire HPE portfolio to as-a-service by 2022.

In the most recent quarter, HPE reported an impressive 30 percent year over year growth in its annualized revenue run rate – a critical measure of HPE GreenLake cloud service pay per use sales – to US$678 million. HPE’s total GreenLake as a service order growth was up 41 percent with more than 900 partners now actively selling HPE GreenLake.

“The momentum (for GreenLake) continues to be very, very strong,” said Neri in an interview Tuesday with CRN US following the release of HPE’s financial results for second fiscal quarter, ended April 30.

“It is testament to the fact that we are offering the partners a true hybrid (cloud) experience (for their customers) with an open approach. And they can add their own (managed services) experience on top of that. I’ve been talking about that for a long time.”

To what do you attribute the strong quarterly results with the company once again raising Fiscal Year 2021 earnings and free cash flow guidance?

"I think it’s a combination of multiple things coming together. Obviously, we are seeing a recovery in the market which is driving more demand. Number two is our innovation is perfectly timed for the customer needs we are seeing today in a more distributed enterprise which is becoming more edge-centric, cloud-enabled and data-driven.

"Number three is our execution. Our execution is very strong whether it is in R&D, supply chain or sales and marketing. That combination despite the fact that we have an industry tightening of the supply chain gave us the confidence to raise guidance for both EPS and free cash flow for the year."

How did the channel perform in the quarter?

"The channel performance was very, very strong. Look at the numbers for GreenLake- our as a service North Star: 900 partners are now selling GreenLake and the top five distributors have GreenLake in their (cloud) marketplaces.

"The momentum continues to be very, very strong. It is testament to the fact that we are offering the partners a true hybrid (cloud) experience (for their customers) with an open approach. And they can add their own (managed services) experience on top of that. I’ve been talking about that for a long time."

Talk about the reasons for the 17 percent sales growth in the intelligent edge business.

"In the intelligent edge, we had a fantastic quarter with 17 percent growth in constant currency, 20 percent in actual dollars. And remember 90 plus percent of that business goes through the channel. That tells you the channel understands that Aruba as a (cloud) experience is unique.

"The Aruba cloud- which runs on three clouds and on premise- is at scale. We have 100,000 customers, we are adding 150 customers everyday. Aruba Central already has more than one million devices whether it is access points, switches or gateways which are managed by Aruba Central. These devices actually connect over 16 million edge clients daily, whether it is cell phones, computers, cash-registers or IoT devices. And ultimately each device generates 1,000 messages. So we manage per hour more than 1 billion messages. That is unique data. We have pedabytes of data that we manage on behalf of the customer. In the end it is all about improving the experience (of customers) and gaining insights from that data.

"We update these (Aruba cloud) locations four times a day. When people say we don’t have a cloud they should think about that data we are managing. Aruba supports the edge to cloud platform that we have been working on."

You put the stake in the ground on GreenLake and as a service years ago. Now Cisco and Dell have announced as-a-service offerings. What is your reaction to those companies getting into the as a service game?

"The fact that Cisco and Dell are entering the as-a-service market is a good thing because it validates our strategy. We have been saying this for several years. For me, it is a validation of our vision and strategy. The good news is we have years of a leadership position here and a business that is already reaching an inflexion point in terms of scale.

"The difference between us and the others is the fact that we have architected this (as a service platform) as a truly cloud native experience versus trying to retrofit the old portfolio into an the as a service model.

"Aruba has done this for a number of years. It is a true cloud native, mobile-first, cloud-first approach. Therefore, we can actually upgrade these (edge to cloud platform as a service) systems four times a day. That’s unique. That is very hard to do at scale from an engineering perspective.

"We’ll continue to bring innovation to market with edge computing and 5G. Stay tuned. HPE Discover is coming up in three weeks and you will see a ton of innovation that align to customer needs, but most importantly at the same time positions the partners to compete and win in the market."

How critical is the Aruba platform to channel success given that it is also now the backbone of HPE storage and compute services, extending from edge to the core to the cloud?

"I think it is the key to our success. Whether it is connectivity or a compute resource or storing data or delivering a workload optimised solution customers want a consistent experience. That means the way you onboard those resources, the way you life-cycle manage those resources, the way you consume and pay for it.

"There has to be a consistent experience and it is not just at the edge or on prem. It also has to be in the public cloud because in the end, we bring them into a hybrid (cloud) experience and that back-end is essential, which by the way goes beyond that because the way we drive (cloud platform) quote to cash from the time you learn, try and buy, all the way to deployment is now fully-integrated (with Aruba).

"I believe that is going to be a core differentiator for us. It is very hard to do from an engineering perspective. The speed and agility that brings to us is unique. Then we can afford new cloud services whether it is a new connectivity protocol, a new workload, or whether it is new data services we can bring that (to customers) at a speed we never imagined before. That’s a unique point of differentiation for us."

With Aruba Networks founder Keerti Melkote (pictured) leaving is there any change in the strategy or organizational structure?

"Let me be clear: nothing changes. Obviously, I am incredibly grateful to Keerti. He gave us six years after the acquisition I did in 2015. He is an advisor to me and a dear friend. He spent almost 20 years of his life building this business. Obviously, people step back and look at what they want to do next. He decided to spend more time with his family.

"The Aruba culture and the customer-first, customer last mentality remains the same. Nothing changes. The structure is still the same.

"In fact, (New HPE Intelligent Edge President) Phil (Mottram) just sent a note to our employees saying he is humbled and honoured to lead this business, and in that basically reaffirming our strategy and organizational structure is the same. Nothing changes. It is a change in leadership.

"Phil is an amazing, transformative leader. He is fantastic with customers and partners and also has deep technology leadership.

"I feel that we have a new leader that will bring this to new heights and he has a fantastic team around him which was built from Keerti over the last few years. It is all about keeping our momentum and continuing to grow at a fast pace."

You just celebrated your 25th year at HPE, starting in the call centre and becoming CEO in 2018. What are you most proud of as you look back on those 25 years?

"I think it is the relationship with the people at HPE. I grew up within this company working with the people here, innovating with them and executing with them hand in hand. That is something I am really proud of.

"Also, I’m proud of living our purpose by example which is to advance the way people live and work. It is about creating a company that people can see themselves in and that resonates with them. In the end, it is the culture. There is a ton of innovation that I personally drove with the teams, transformative deals we have done.

"Obviously, shareholder value is key. Think about raising our guidance again. The momentum we have got back after a year of COVID is remarkable. In the end, the thing that I will take away is my relationship with HPE people and that includes channel partners by the way."

How do you feel about the pickup in IT demand with the economy opening back up after 15 months of COVID?

"I think it’s a little bit about what we are seeing in our personal lives. There is a renewed focus and energy and life coming back. You see it in our communities. The vaccinations are giving people new hope.

"In the end, business is recovering and when business recovers IT spending recovers with it. Every business is an IT business. Every business needs more IT. It is all about applications and data.

"All of that is driving great demand. We see the cloud momentum. I am actually very optimistic going forward. We now have a few quarters of strong momentum."

This article originally appeared at crn.com

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