HPE made a big play in 2018 around servers in the SMB space, followed up by solutions related to hybrid cloud. While those will continue in 2019, the company is also looking to roll out similar initiatives around simplification around storage and hyper-converged solutions for SMBs.
Tim Peters, VP and GM of HPE’s SMB Global Business Unit
MADRID — Earlier this year, HPE launched an adaptation of their HPE Next initiative to simplify and right-size costing models into the SMB space, with the focus on the ProLiant server unit. In the latter part of this year they extended that, around hybrid cloud, and around their Smart Office initiative and networking. In 2019, the target will be doing the same around their SMB-focused storage business. Tim Peters, VP and GM of the SMB Global Business Unit talked with ChannelBuzz at the HPE Discover event here about the initiative’s impact this year, and where it is headed next year.
“Early in the year the focus was on improving the effectiveness of our server unit to create greater efficiencies for partners to sell through,” Peters said. “We had just launched our Gen 10 servers, and our objective was to create greater partner sell-through efficiencies, by simplifying things, positioning around capabilities tailored to specific workloads, and creating more efficiency in the supply chain. My focus was on targeted segments around SMB, especially customers with a 10-250 person size. This is a market where their advocate for IT is the reseller. My objective with the simplified portfolio was to create simplified offers in areas like virtualization, web hosting, and backup and recovery that were hybrid cloud-capable – workable both on-prem and off-prem. The plan was also to make it more recipe driven.”
Peters said they have come a long way on servers, but are not done yet.
“When I started with this, we had 632 configurations,” he said. “We now have 49 configurations. Customers are asking us to keep going. Most of the customer demand is coming from 15 to 20 specific configurations. My job is to build a business model and operational model where the demand is, and create these recipes and building blocks to be sold through the channel.”
The greater simplicity impacts the price point.
“Our model is everyday low prices, through creating an operating model that’s efficient, and the new model gives us efficiencies there,” Peters said. “We also don’t want resellers negotiating prices with distributors, or with us. We do competitive index positioning, going through a lot of data on a weekly basis, in order to position value advantages. When pulling from stock, you need to move fast.”
The increase in efficiency brings other advantages, Peters stated.
“As we reduce complexity, we have more efficiency in the supply chain, and a more consistent and reliable inventory position,” he said. “We create monthly solutions offers that become likely shelf space for upstream partners – memory makers, NIC card makers and the like. They want in. That gives us negotiating power there.”
More recently, the same themes that were the focus of HPE Discover in Madrid – hybrid cloud, and the extension of InfoSight more broadly into the infrastructure – relate to what HPE has been doing recently in the SMB space.
“InfoSight and hybrid cloud are important for us because they automate, and give insight into how to comprehend incidents before they happen,” Peters said. “That’s especially important for MSPs serving small business customers. Last month, we used Spiceworks’ SpiceWorld event as a launch pad for five hybrid cloud solutions, that combine our servers, our Aruba wireless networking products, and Microsoft’s hybrid cloud software into “wireless office in a box” solutions. We have a reference architecture for cloud and on-prem across unified threat management, that is prepackaged, with aggressive every day pricing. Shipping in December is Small Office Deployment, which takes those hybrid cloud solutions and adds Aruba wireless cloud and Pointnext services.”
Pointnext’s services are now very relevant to the SMB space, Peters said.
“Historically, they have been focused on the enterprise, but we have worked to develop configuration prices for the SMB, which include every day consumption-based pricing as part of an offer. Including the services as part of an SMB basket means that they can be discounted more aggressively. What I’m after is margin dollars, not margin rates.” Peters said that the services aren’t just break-fix, but include educational services as well, which are relevant to the SMB space.
HPE is also looking to simplify the hyper-converged space using their SimpliVity offering in the same way.
“We are running some pilots in different parts of the world, playing at deep discounted price for partners to bundle,” Peters said. “They are easy to deploy and easy to consume. Complexity shows things down. We want to help resellers do more sophisticated things by simplifying the recipe with HCI. We aren’t quite there yet.”
Looking to next year, Peters said partners can expect similar simplification efforts around SMB storage.
“This past year, we focused on the compute side,” he said. “Now we have added hybrid cloud and Small Office with Aruba. Next year, it’s storage. It’s making the same kind of changes to the operating model as we did with servers, and with software. It’s more than delivering a lower price. It’s delivering it in a fast, easily deployable way, so the reseller spends less time fiddling with it, and more time solving their customers’ problems.
While arch-competitor Dell EMC has had a strong year in servers and storage, Peters said that HPE’s strategy, combined with their intrinsic advantages over Dell in the SMB space, will give them the advantage there.
“In SMB, we spend our energy building trust with customers,” he stressed. “The reseller is the focus of our strategy for small business. Small businesses tend to stay with a partner. It’s actually larger businesses that are more deal-based. So us being channel-focused is very meaningful for partners. We are 100 per cent channel-focused. Dell sells online into this space, and their channel there has to compete against that. It puts us in a better position.”
