HPE's new chief executive Antonio Neri begins next era with storage, networking and server growth

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HPE's new chief executive Antonio Neri begins next era with storage, networking and server growth

Hewlett Packard Enterprise's new chief executive Antonio Neri kicked off his first quarter at the helm by blowing past Wall Street expectations with a whopping 24 percent increase in storage sales; a 27 percent increase in networking sales and an 11 percent increase in compute (server) sales.

Neri thanked HPE partners for the blockbuster quarterly sales performance with sales out through partners up year-over-year in every segment of the business.

"We would not have been able to deliver this performance without the channel," Neri told CRN USA in an interview after the company bested Wall Street earnings per share expectations by 12 cents.

"Most of our business goes through the channel and the results speak for themselves. We saw great performance across every segment of the market in the channel with double digit growth."

The channel growth was particularly strong in core industry standard server market and Aruba, said Neri.

HPE shares soared 12 percent or US$2 per share in after hours trading to US$18.41 after the company reported first quarter non GAAP diluted net earnings per share of US$0.34 per share on sales of US$7.7 billion. That was well above the Wall Street consensus of US$0.22 per share on sales of US$7.07 billion. Overall, HPE sales for the quarter were up 11 percent from the year-ago period.

The strong results are a testament to HPE's innovation and the flat out most profitable partner program in the industry, said Neri. "Our Partner Ready program is the industry leading program for channel partners," he said. "It is stable and predictable. They know it. Think about our competitors: they keep trying over and over, they keep flipping the programs, more rebates here, less rebates there. Invest here. Move there."

Neri said the company's "channel first"  model is only going to get stronger going forward. He said now is the time for partners to "double down" on HPE and drive forward with the company with game changing innovations like GreenLake consumption based computing and HPE OneSphere SaaS multicloud management platform which was made generally available this week.

Neri, who has architected HPE's game-changing Next initiative aimed at making the company more nimble and agile, took the helm on 1 February. A 22-year HPE veteran who started as a customer service engineer for the company in EMEA (Europe, Middle East and Africa), Neri is credited with making massive changes that have streamlined the company's go-to-market sales model.

The Next restructuring, for example, has reduced the number of internal HPE sales plans from 400 to 25. It has also reduced the number of HPE internal sales reps that can be compensated on a deal from as many as 30 on a single deal to a maximum of three reps comped on a deal.

In addition, the Next initiative has reduced management layers from as many as seven to four.

Neri told analysts that the "simplification" of the HPE sales model is accelerating execution in the field. He said HPE Next is an "opportunity" to establish a new "culture" at the company.

"This is architecting the company from the ground up with a clean sheet approach," he said. "This is going to change the culture of the company. What I have learned is that you can push more and do more. The organization is actually very excited about what we are doing. They see an opportunity to improve the way we serve our customers."

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