HPE outlined its goals for its channel for the year ahead, together with new and planned initiatives to help them get there.
LAS VEGAS – Hewlett Packard Enterprise will deepen its commitment with channel partners, provide them with more resources, make it easier to do business with them, and increase the amount of business that the drive through partners. That was the core messaging that HPE’s sales leaders related to partners at the HPE Global Partner Summit here, which kicked off the company’s HPE Discover event.
This kind of talk is pretty much par for the course at this type of event, and many times in the past, vendors like HPE with hybrid go-to-market models have disappointed partners when it got down to actual execution. However, Paul Hunter, attending his first Global Partner Summit as HPE’s Head of Worldwide Partner Sales, outlined HPE’s strategy to invest more in its partners, and ramp up their go-to-market capabilities.
“Our aim, at this 11th Global Partner Summit, is to give you an update on our strategy and direction, to help partners align to the direction that we are taking,” Hunter told the 2000 plus partners in attendance this year at the Partner Day keynote. “We will help you understand the investments you need to make, because we are in this journey together.
“My commitment to you is to make HPE the best company to partner with – to give you the opportunity to put your trust in us,” he emphasized.
“The first half of the year was terrific, and we’ve had a great start to the year,” Hunter stated. “The channel is our fastest growing route to market. It grew at 18 per cent, ahead of overall growth rate of 11-12 per cent.
The highlight announcement of the event to increase that business further was GreenLake FlexCapacity for partners, a change to the GreenLake flexible capacity pricing model available through HPE Pointnext that will allow partners, for the first time, to sell the pay-use-use service to customers themselves rather than through HPE on a referral basis. This is almost entirely a futures announcement, as the amount of channel business sold through GreenLake today is microscopic. However, Hunter said that the potential here is vast.
“Today, about 5 per cent of HPE’s total business is through GreenLake, and since most of PointNext is direct, the amount of this business that goes through the channel now is tiny,” he said. “However, we have been collaborating with the services organization for the last four months to give partners what they want.”
Hunter stressed how the partner compensation model for GreenLake had been jigged to provide partners with an immediate return, rather than just collecting the incremental revenues that are part of this sales model.
“We pay a rebate up front – our competitors don’t – and it is significant,” he said. “Partners also get the monthly revenue stream that comes from selling a consumption model, and they have an opportunity to layer their own services on top. While GreenLake is not really for customers with less than 100 users, a typical GreenLake consumption deal will be about $100,000, which makes it pertinent for medium-sized customers.”
Hunter also emphasized that while channel revenues will be starting from next to nil, HPE has very high hopes for the new GreenLake model – and for this year, not just in the mists of time.
“We have high aspirations for 2019,” he said. “I don’t want to put a number on it, but we haven’t spent five months building this for it to be a small part of revenues. We expect that it will be a meaningful part of our business in 2019.”
Hunter pledged further additional investments, building on things that HPE has already been doing.
“A vital part of working with us is ease of doing business, and velocity is completely critical to execution,” he said. “In the past year, we have made big improvements in processes and systems. We introduced a new online configuration advanced tool, and in the future, this will be configured to next generation quotes, so quotes will be linked end to end. We also rolled out rolled out two new pricing pilots, Rally and Medallion. We will be priced to win on all deals under $100,000.”
Hunter also outlined HPE’s plans to become simpler, more predictable and faster in the process of pricing, and returns experience.
“We will be faster to quote and faster to price, and HPE Pointnext will be fully integrated – not two separate systems like now. We also will provide self service capabilities to design systems in our APIs, and will be more predictable around shipping.”
Hunter also indicated more Partner Ready competencies are on the way, with HPE Aruba and their ClearPass competency being the clear model.
“Aruba has led the way with ClearPass, and 300 partners have achieved that competency,” he said. “In 2019, we will continue to invest in the kind of things Aruba has done, in order to reward time to value and deliver business outcomes.” He said to look for these in the November time frame and afterwards.
“Aruba will continue to have a separate channel program, but you can expect the two orbits to be closer together,” Hunter added. “There are very few partners today that are Aruba only. Most partners buy from both parts of the portfolio.”
Phil Davis, HPE’s Chief Sales Officer, also emphasized the intent to grow the HPE channel business, which today is north of 70 per cent.
“As many of you know, I came from the APJ region,” Davis told partners in the keynote. “In APJ, over 80 per cent of the HPE business goes through the channel. Partners in Asia are an extension of HPE and our sales force. My goal is to get the channel to 80 per cent of the business everywhere in the world.”
Davis also outlined short and longer-term market opportunities that HPE partners should be exploiting.
“We call these the Super Six market opportunities – what’s on the back of the truck that we can sell today and tomorrow,” he said. “These are six huge transitions we see happening right now in the marketplace, which together are $65 billion plus of opportunity.”
Three of these opportunities Davis identified as short-term with a window of perhaps two to three years, which partners need to jump on quickly. The other three are longer term, extending over the next decade.”
The short term ones begin with the HPE Gen 10 server transition.
“This is a $20 billion market opportunity,” he said. “The key is to lead with HPE OneView. We just shipped our one millionth license of OneView, in four years, and our goal is to ship the next million in one year.”
The second category is blade servers.
“We created the category and have led it every single quarter,” Davis said. “The second player is Cisco UCS, but it really seems to us like they are pulling back as they double down on security and other places. It looks like Cisco isn’t willing to invest in the future here.”
The third short-term opportunity is the transition to flash storage from spinning disk. Davis sees HPE InfoSight as a key competitive advantage.
“InfoSight will predict and resolve 86 per cent of problems before the customer knows about them,” he said. “Deals that lead with InfoSight are 12 per cent larger, and close 28 per cent faster.
The long-term opportunities are Everything-as-a-Service, software defined, and the intelligent edge.
“The public cloud has changed expectations, and it is critical that we lead with as-a-service,” Davis said, highlighting why HPE has such high expectations for partners around the new GreenLake consumption model. That’s what customers want, so it’s critical that we start with a consumption discussion.”
Software-defined, Davis said, presents one solution for all customer workloads, with HPE’s recent Plexxi acquisition designed to play a key role in bringing composable computing to to rack level and hyperconverged. Davis termed the intelligent edge a massive disruptive opportunity in a $26 billion TAM by 2020.