Hewlett Packard Enterprise is stepping up its no-holds barred everything-as-a-service software pivot for fiscal year 2021 with robust compensation and field sales investments tied to its US$1 billion incentive-packed Partner Ready program.
First off, HPE has added its Ezmeral container and AI operations software platform to its 5x top sales compensation multiplier for partners alongside the GreenLake pay-per-use cloud service and its HPE OneView software management platform.
As part of the stepped-up GreenLake sales offensive, HPE is tripling its GreenLake channel investment and for the first time ever adding a GreenLake sales quota for HPE sales reps.
“GreenLake is the biggest opportunity for the partners,” said HPE Worldwide Channel Chief George Hope in an interview with CRN. “It is margin-rich and it is sticky. If you get GreenLake into an account and you start showing the value to the customer in that account you are immovable from that point forward. You are their strategic vendor and it is just a matter of time before they move more workloads onto GreenLake.”
HPE's local channel chief Julie Barbieri said in a statement that the revamped program would give “greater alignment and collaboration with the channel around key focus areas with increased investment from HPE for the channel to drive incremental business opportunity resulting in even greater benefits for our partners."
"I believe the strategy and partner ready program presents an even greater opportunity for our partners to drive success with HPE in FY21," Barbieri said.
In order to fuel the GreenLake sales charge, HPE is investing in new GreenLake business workshops for partners and maintaining its long-standing 17 percent robust upfront rebate for GreenLake channel deals.
“Obviously GreenLake is more lucrative and a lot of partners are headed in that direction,” said Jesse Chavez, vice president of worldwide partner programs and operations for HPE. “We’ve done a lot of surveys talking to partners and those that have not yet made the move have it in their plans to start moving more to GreenLake. It remains very lucrative.”
HPE’s investment in GreenLake field sales specialists and the new HPE sales rep incentives for selling GreenLake are going to have a “huge” impact on the channel, predicted Chavez.
“Everybody (at HPE) knows that GreenLake has got to be part of their (sales) portfolio,” he said of the compensation and GreenLake field sales changes. “They have to understand the (GreenLake) message and be able to deliver that message, talk to the customers about it, talk to their partners about it. All the PBMs (Partner Business Managers) and all the reps will have this compensation metric.”
GreenLake is powering add on sales on top of the multi-year deals at a 25 percent rate, said Chavez. Furthermore, he said, partners are benefitting by driving long term, strategic recurring revenue relationships with customers.
“Customers that go to GreenLake, stay on GreenLake,” said Chavez. “The stickiness is there. Partners realize that. Once they establish a beach-head (with the customer) it is very sticky for them.”
A key part of the new Partner Ready go to market is a sizable investment in an inside sales organisation that is charged with driving digital marketing demand generation, working hand in hand with partners to drive new logo account wins.
The reward for those new account logo wins in what HPE is referring to as its “growth” account engagement model is an additional six to 12 percent margin focused primarily on SMB accounts, said Chavez.
Vencel said he is fired up by the new account growth margin, sales targets and field changes. “There is additional emphasis this year on new logos,” he said.
On the storage front, HPE is providing a 3x compensation multiplier for partners with a focus on Primera, Nimble, SimpliVity, and dHCI. 3Par is not included in the 3x compensation multiplier.
The storage sales effort includes a Primera Storage Opportunity Engine (PSOE) which uses the AI based InfoSight platform to provide recommendations on migrating workloads from 3Par to Primera. “That will result in a reduction in time partners need to spend to move 3Par to one of those platforms,” Chavez said.
HPE is mining its 3Par installed base data to help partners drive the migration to Nimble and Primera. HPE estimates 70 percent of the 3Par installed base will move to Nimble with the remaining 30 percent going to Primera, said Chavez. “We are seeing a huge increase in Primera sales in the channel,” he said.
The lowest 1x compensation multiplier is for compute products including Synergy, ProLiant, Apollo and Mission Critical Systems.
HPE is also “amping up” its inside sales operation to drive digital marketing leads to partners particularly in the SMB market, said Chavez. “You’ll see a lot more digital marketing and more leads going into the SMB space,” he said. “That is also going to help with the new account logo acquisitions.”
The new Partner Ready incentive blitz marks the third consecutive year that HPE has invested US$1 billion in the channel program including payouts and market development funds.
HPE said it is not making any changes to revenue thresholds, sales and technical certifications, continuous learning requirements, or competency requirements.
Ultimately, recurring revenue services are a key to driving growth for partners, said Chavez. “For partners that go down the GreenLake path that is the biggest thing for them,” he said. “It really changes their EBITDA (Earnings Before Interest, Taxes, Depreciation and Amoritization).”
HPE – which first and foremost has remained a partner-led company under HPE CEO Antonio Neri- is committed to helping partners make the profitable everything-as-a-service transition, said Chavez.
“We still think there are going to be a lot of partners that will be attracted to this overall program and GreenLake as we go forward,” he said. “Of all the surveys we have done, close to 100 percent of all the partners said they needed to go to GreenLake.”
Hope, for his part, said partners need to embrace the HPE everything-as-a-service vision. “It may not be for every customer today, but for some customers it is going to be a game changer,” he said. “Partners need to get used to positioning GreenLake because that is where the business is going…Everybody is going to have to get there. We believe we are a couple of years ahead of everybody else with our approach to it.”