HPE sheds layers of management in global restructure

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HPE sheds layers of management in global restructure

Hewlett Packard Enterprise has removed layers of management in Australia and worldwide in a bid to flatten its structure, reduce complexity and lean more heavily on partners.

The sweeping changes include shedding two tiers of its global leadership, breaking up the Asia Pacific & Japan region and merging its channel and alliance teams into a single organisation.

The company's far-reaching HPE Next program was revealed in September, with plans to cut 5000 jobs or 10 percent of its workforce. It comes 12 months after the company's previous restructure, when it combined its server, storage and networking units into one business group.

Hewlett Packard Enterprise executives told CRN about the local impact during last week's 2017 Canalys Channels Forum in Perth.

Phil Davis, who was promoted in September from APJ managing director in Singapore to take up the role of enterprise chief sales officer based out of HPE's Palo Alto headquarters, has been spearheading the overhaul.

HPE previously operated as three geographic regions: APJ, Europe, Middle East & Africa (EMEA) and Americas, but has now moved to 11 geographic clusters that each report into the headquarters.

Japan and India have become their own geographies, while Australia is part of the Asia-Pacific cluster.

The change has seen HPE trim the levels of management leading up to the CEO. For example, Australian country manager Stephen Bovis previously reported into Davis in Singapore, then into chief sales officer Peter Ryan, then into Antonio Neri then into Meg Whitman, who will step down as chief executive on 1 February.

With Whitman's departure, Neri's promotion to CEO and the geographic restructure, those five layers of management have been trimmed to three, with Bovis reporting into Narinder Kapoor, GM and VP of Asia-Pacific.

Country managers can now "have a lot more autonomy and can make decisions more quickly", Davis said.

"That old regional structure made sense when we were a US$110 billion company; now we are a US$28 billion company. 

"You ask the country guys, they love it. They want to be quicker, they want to make their own decisions and be more autonomous."

Australian impact

HPE has restructured locally as well as globally, Bovis explained to CRN on the sidelines of the Canalys conference in Perth.

"We have also consolidated management roles in-country. In the past I had about 13 or 14 direct reports then some indirect reports now I have about eight business direct reports and a couple of smaller supporting functions – so a much smaller team, and fewer people are accountable for a much larger portfolio."

In response to a question on redundancies, an HPE spokesperson told CRN: "HPE Next is a three-year program that will fundamentally redesign the company. The program includes both making investments and finding savings across our operations, manufacturing, IT systems and go-to-market, with the goal of setting HPE up to compete even more successfully in the years ahead. 

"While we did not disclose a global headcount target, we said that about two-thirds of the overall program will be associated with workforce restructuring.  These decisions are reached after careful consideration of a number of factors and every attempt is made to minimise the impact on employees.

"Australia continues to be an important market for HPE and we remain committed to our customers, partners and employees here," the spokesperson added.

The shake-up sees the channel team expanded beyond its traditional focus of resellers, distributors and service providers to also encompass original equipment manufacturers (OEM), independent software vendors (ISV) and the channel sales of HPE Pointnext.

HPE announced the channel reorganisation in September, and this has now rolled into Australia, where it is led by newly appointed channel chief Marina Fronek.

"We have simplified that structure so it is a lot clearer for partners in how we segment the market," Bovis said.

"In Australia we have some top accounts, which are our large enterprise accounts and federal government. Beneath that we have an area of the market we are calling 'acquisition', which is any organisation over 1000 seats where our share of wallet is relatively low. That space is where we want to grow with our partners."

Bovis said HPE's intention in the acquisition space was "to drive 100 percent partnering model".

"Beneath that we have 1000 seats and below, which we classify as true SMB. That becomes a partner market where we support the partners with programs. As far as resourcing in that space, we don't have dedicated sales people."

Steven Kiernan attended the conference as a guest of Canalys

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