Speaking exclusively to CRN India, George Hope, Worldwide Head of Partner Sales, HPE underlines from a global channel perspective, the focus is to pivot to as- a- service, which is key to the company’s new strategy
CRN India: What are some of the key initiatives taken by HPE to mitigate the impact of the Covid-19 pandemic for channel partners?
George Hope: Firstly, we wanted to bring some liquidity to the market. We knew that the small and medium partners, and the SMB customers were going to struggle, and distribution would have some challenges. So early on, we wanted to make sure that we added some liquidity to it in terms of financing from HPEFS (HPE Financial Services). We extended some of the early pay discounts so we give the distributors longer time to pay. We have a benefit called SDI (Strategic Development Initiative) that we give some rebates on.
We also try to create capacity for transformation. What’s happening is that the pandemic has brought our vision to life faster than we expected. Antonio (President and CEO of HPE) has always talked about the world being hybrid, and he talks about it is being edge centric, cloud enabled and data driven. So, as we start to evolve as the edge-to-cloud company, it has come out as faster. To be competitive, a lot of our customers need to transform a lot faster than they normally would have.
And what HPEFS does, it looks at different assets that the customer has, any stranded assets that they’re not using or any underutilised assets. We have the ability to buy these from them and give them the money to apply to transformation and drive their business. And that’s also a differentiator for HPE GreenLake. We can give you the ability to add capacity to your HPE GreenLake by buying other assets or buying existing assets that you have, which you are going to use and providing them back to you via HPE GreenLake.
CRN India: There has been a lot of push from HPE towards the edge-to-cloud company delivering its full portfolio as a service. What are the opportunities for the channel?
George Hope: It is a combination of a lot of different things that we have built out. The strategy is pulling together all of our technologies for the edge to the cloud. The edge piece includes a lot of the Aruba offerings that we have. And it’s bringing together the same experience regardless of where your workloads are run. So, if you think about what Antonio, says, “The cloud is not a destination, it’s an experience.” And customers are looking for that ease of use and that consumption-based experience. They’re looking for an experience that transcends location. And what we’re finding is that, despite the fact that the public cloud has been around for a long time, 70 per cent of the workloads are still not in the public cloud. And it’s not for the lack of trying.
What we’re doing with HPE GreenLake and all the different consoles, is we are bringing the cloud experience to your workloads, whether they’re in your data centre, or in a colocation or at the edge. You want to be able to have the same experience with your apps and your data, regardless of where they live. The edge, is the biggest opportunity. As applications move to the edge, more data is created. 75 per cent of the data moving forward is created at the edge. Moving compute to the data, or moving the experience to the data, versus trying to get all of the data at the edge and moving into the data center and processing it, is a huge opportunity for us. And you’ll see with HPE GreenLake, we’re making it a reality with now HPE GreenLake being the umbrella brand with the Data Services Cloud Console, the compute console, the Aruba console, all sitting underneath as part of a common cloud platform to give a native experience, at the edge, in the cloud – in colocation, private and public.
CRN India: What are some of the new skillsets that are required for partners to develop edge focused solutions?
George Hope: In general, we’re seeing a lot of partners evolve, becoming more cloud centric and becoming more services centric, and we’re seeing a blurring of lines between different partner types. In the older world it was any of the following reseller, service provider, system integrator, ISV, or OEM. We are starting to see more of businesses is services led, the partners looking into creating services catalogue and customer experience, and leading with their IP. We’re looking at an open ecosystem that has a single relationship with a partner that contemplates multiple personas. So we’re looking for partners to have services capabilities, assessment, and looking at HPE GreenLake as something that they lead with their IP, and they bring the HPE GreenLake experience. We’re looking for partners that have capabilities to do integration with other ISV’s layer on their services, replicate some of the services that we deliver as well as offering some other highly differentiated services.
CRN India: How do you see the transition for HPE’s entire product portfolio moving towards as a service model by 2022?
George Hope: 2022 for us is coming up pretty quick. I just want to be clear on what expectation Antonio said. What he declared that everything that we sell will be available as a service by the 2022. A lot of people unfortunately think that, that we’re going to force them to buy everything we sell, as a service. And the attempt isn’t to sell everything as a service, it’s to make everything available as a service. We want to be clear that we’re assisting partners and customers transform at their pace, not everybody is ready to go 100 per cent as a service tomorrow, but all of our portfolio will be available as a service.
If you’re ready to go all as a service, you can buy everything as a service. If you just want to buy storage as a service with us, maybe you want to own the service, but you just want to use the data services cloud console for a cloud native management experience you can do that. If customers want all the infrastructure, workloads or platform it is available for them to buy it any way they want it and partners can deliver it in any way they’d like as well.
CRN India: How many of HPE’s offerings are available as a service through the channel?
George Hope: All of our storage and compute products are available as a service. In the HPE GreenLake portfolio, you’ll be able to buy HPE Nimble or HPE Alletra as a service. If you want to build a configuration that has a server and storage and network, we can customise that for you specific to whatever application that you want to solve for. If you want specific solutions that are already purpose built for different workloads, we have those as well. We have VDI as a service, we have HPC as a service, we have ML Ops as a service. We also have multiple partnerships where we bring third party solutions as a service.
CRN India: How does HPE ensure that partners can really grow with these opportunities?
George Hope: From a profitability standpoint, there are two sides of it. There’s the buy side and the HPE GreenLake side. On the buy side, we already have rebates and new business opportunity incentives, so partners can make more money. The further down market you go, the more money you can make.
In the SMB and mid-market space, we have taken that space and have converted it to partner led HPE supported. We have opened up that mid-market SMB space for partners to kind of control their own destiny, it’s a margin rich opportunity, partners can control it, if they need help from us, we have specialty organisations and we have inside sales representatives that can support them on that, but they get an opportunity to control their own destiny in the sense that they can set their own margins.
There are additional incentives for new customers that are not existing customers, because we have an installed base, we’ve refreshed programs, both from a support perspective, or to bring new technology. And so, we’re actively working with our partners to refresh our storage base, very aggressive backend rebates. If you flipped to HPE GreenLake, there are huge opportunities. There is a 17 per cent rebate for the resellers and very competitive rebates for distribution as well.
From an incentive perspective, HPE GreenLake offers the best perspective. If you think about the transition from customers to as a service and to recurring revenue, right, they sacrifice a deal today for future business. For example, if you know, if you’re going to do a $300,000 deal, if you sell it at $300,000, if you provide it as a service, it’s maybe $3,000 a month or, or $10,000 a month as an example, or $100,000 per year over three years. The not so good news is you only get $100,000 this year. The good news is you get $100,000 a year for the next two. But a lot of people and a lot of partners want the instant gratification of that $300,000. Now, what we do with our program is we give them a rebate today on total contract value, which is the equivalent of making the margin like you sold the whole $300,000 now, but you’re still selling a monthly, recurring revenue recurring bill to the customer, which gives you recurring revenue as well. So, you get the now and you get the later combined, which is pretty unique. Nobody else is offering that.
CRN India: As the global worldwide head of partner sales for HPE, what are your key priorities?
George Hope: Our strategy and our vision is around being the ‘edge-to-cloud company’. And there are three pieces to it – enhance our core business which is our compute and storage business and continue to make that more relevant from a cloud perspective. Secondly, double down on high-growth business and lastly pivot to ‘as a service’. These are the three biggest priorities, all underpinned by reshuffling our resources to make sure that they are product specific and enable our investment that are more solution centric.
My job is to help our partners be able to help our customers transform like our sales organization does. From a channel perspective, the big three for us is to pivot to as a service, which is the key to the whole company strategy.
The next piece for us from a channel perspective is storage. It is a huge margin opportunity both for us and our partners in changing our mix. And we have an enormous 3PAR install base that needs to move to HPE Alletra, the new cloud programs and as well even HPE Nimble or HPE Primera.
Another area is the mid-market or SMB business, if that’s going to be channel lead, then we have to equip the channel there to be autonomous with automation, tools, support and resources and incentives to make that whole thing work.
So those are kind of the big three, while we still have a billion dollar HPC business with partners. So that’s still a huge opportunity for us as AI capabilities start to come further down market, the channel can help us extend that bringing our software vision to market connecting cloud and edge together. There’s certainly a lot of work to do across all of them.
