Hewlett Packard Enterprise CEO Antonio Neri Thursday told partners that he does not expect a swift “V-shaped” rebound for the global economy from the coronavirus pandemic.
“I don’t believe we will recover quickly,” said Neri in a conference call with top partners to discuss the global economic fallout from the pandemic.
“I think this is going to be a longer journey. We analyzed different scenarios where there is what we call the L shape, the U shape and the V shape. This is not a V-shaped scenario for sure. This is a mix of L- and U-shaped [recovery]. I subscribe more to the U-shaped [theory]. The question is how deep the bottom of the U is and how wide the two sides of the U are.”
Neri, who has implemented a wide range of HPE charitable and partner relief efforts, said he expects a “new normal” that is going to have lasting effects on the workplace and how customers buy technology solutions.
With that in mind, Neri, who has pledged to deliver the full HPE portfolio as a service by 2022, has directed his team to put the pedal to the metal on the company’s edge-to-cloud platform-as-a-service strategy.
“My focus with my team is to accelerate this strategy and make it a reality sooner rather than later and obviously continue to prioritize the R & D investments,” said Neri, who has set up a special coronavirus team to work in tandem with HPE’s crisis management team to focus on the rebound.
“We have a lot of learning from the 2008-2009 crises that will be applied in our plans.”
One of HPE’s strengths that is coming to the fore in the midst of the pandemic is the company’s “solid balance sheet” with US$3.2 billion in cash and a “pretty significant” ability to raise capital, said Neri.
HPE has, in fact, leveraged its financial strength to help partners with a wide range of relief efforts including a US$2 billion coronavirus payment relief program from HPE Financial Services. That program allows customers to defer over 90 percent of the total contract value of products and services until 2021.
HPE has also stepped up with liquidity programs for distributors aimed at helping small and medium business-focused partners. Those initiatives include suspending or significantly reducing strategic development initiative targets and providing extended payment and early payment discount terms. Those cash relief offers run from May 1 to July 31.
Neri said the current environment makes it more critical than ever that customers are able to “scale up and down quickly,” with GreenLake Central and Aruba Central playing a key role as customers move to “pay for what they consume with specific workload-optimized solutions.”
In the midst of the pandemic, HPE has seen a “huge demand” for Aruba remote access points, said Neri. “What we have seen in the last few weeks is huge demand at the edge with connectivity,” he said. “Obviously every step of the digital transformation starts with connecting things. As people have stood up hospitals, clinics, points for testing, connecting all these devices requires connectivity.”
Neri has also taken a leading role in helping to resolve supply chain issues that were impacting product delivery even before the coronavirus crises. He has met with more than 80 suppliers and sub-suppliers to ensure HPE is getting its share of critical components. “Obviously our priority No. 1 is to clear the backlog,” he said.
Neri expects an improvement in May in the supply chain with an eye toward a “normal level of performance” in June and July. “In the end it is all about getting the orders in quickly, prioritized correctly and continuing to deliver with a consistency that we need to,” he said.