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Driving Momentum for the Hybrid Cloud World with HPE GreenLake Cloud Services – Six Five Insiders Edition
by Daniel Newman | March 22, 2022

Come join HPE’s Senior Vice President and General Manager Keith White where he will share an update on the momentum HPE is experiencing with HPE GreenLake Cloud Services solutions and how the company’s Partner Ecosystem model is setting new industry standards across the hybrid world.

To learn more, visit HPE GreenLake.

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Transcript:

Daniel Newman: Keith White, welcome to Six Five on the Road, GreenLake live edition. So good to see you, my friend.

Keith White: You too, Daniel. Fantastic to be here. And thanks so much for having me. As usual, I’m excited for our conversation.

Daniel Newman: It’s progress. We’re doing some of these live in the studio, and that feels like progress given all that we’ve been through over the last few years. A little sad that we didn’t get the chance to do this face-to-face, but I think that time is coming.

Keith White: Soon enough. Yeah, we actually had our first HPE event. It was an internal event in Anaheim with all of our GreenLake leaders, Point Next leaders, 250 people. And it went really well. I think the biggest surprise that everyone had was how tall people were. They didn’t realize how tall or short they were based on video. So it’s going to be fun for people to get back together and meet each other face-to-face.

Daniel Newman: Yeah, we actually met during the pandemic. Are you super tall?

Keith White: No, not at all. 5’11”.

Daniel Newman: Oh, me too. Cool. So it’s not going to be awkward.

Keith White: Not at all.

Daniel Newman: We’ll just see eye-to-eye. No, that’s good stuff. So listen, you guys have a lot going on, and I am really excited to have this conversation. I want to talk to you about the GreenLake business. Anyone that’s been tracking my work has followed from basically the onset, and this is a rubber-meets-the-road minute because it was about three years ago that Antonio got on stage at Discover talking about moving the business to everything as a service, vision starting to come to life, brought you on to help lead the business during the COVID-19 pandemic.

Every quarter, as I try to explain to the market what’s going on with HPE, I always say, “Look at that as-a-service number. Don’t just look at the big revenue number. Look at it as-a-service growth number, because that’s where the company’s focused. That’s where the company’s commitment has been.” And then this last quarter, just tremendous.

Keith White: Yeah, we were psyched. The reality is typically Q1 is a slow one, because everyone’s pulling things into Q4, wanting to end the quarter great. But we came out with a bang, 136% year-over-year growth. We added over 100 new customers, well over $500 million, our first half a billion dollars in orders. And so now we’re seeing just significant momentum in the marketplace. It’s just been fantastic. So yeah, exciting first quarter and strong momentum heading into Q2.

Daniel Newman: And talk a little bit about that, Keith, because I certainly, as an analyst, can ascertain where that momentum is coming from. We know hybrid cloud has become the architecture of choice, which was the right bet. You guys made the right guess, the right bet, the right play. But what’s really contributing to the momentum? Because it’s not like you’re the only game in town.

Keith White: No, I think it’s a great question. And I think it’s threefold. One is, to your point, we’re really focused on those mega trends. So hybrid cloud is here to stay. Everyone’s looking for a hybrid solution. And to your point, we’ve made a strong bet to do that hybrid cloud with partners like Microsoft Azure, like Google Cloud and Google Anthos, as well as working closely with AWS. So we want to provide customers that integrated hybrid cloud experience. So I think that was one.

Two is we’re really starting to get momentum in the marketplace around what we’re doing with respect to providing that cloud experience to customers. I think that’s what’s differentiating us is, hey, we want things to be automated, self-serve, capacity available on demand, only paying for what we use, an open platform so we have flexibility, and then, of course, the idea that it’s managed for you so you can take and get rid of those daily, keep-the-lights-on type tasks and really focus your critical resources on those value-add scenarios.

And then I think the third thing is we’ve really opened up the partner ecosystem. So I mentioned open platform, but to be able to run a wide variety of applications, now that we have a strong container platform, a strong VM platform and a strong bare metal offering, it provides us the ability to run SAP or to run Nutanix or to run Citrix or to run Veeam in order to provide those real solutions to our customers. So we’re excited about the focus that we’ve taken and what’s now accelerating into just a fantastic business.

Daniel Newman: Yeah. You mentioned a number of partnerships in there. You mentioned partnerships up and down and across. You guys have made some moves horizontally focusing on some regulated industries where compliance is going to be hyper important and creating some smart partnerships, companies like Splunk that you announced some big partnerships with last year. You mentioned the hyperscalers, which you have varying degrees of partnership.

And of course, those are very interesting because you know they’re competing with you on some fronts. Everybody’s moving in the direction where they’re not. So if they’re public cloud, they all want to get more on-prem. All of the on-prem providers are trying to take a little bit more. But really, you guys are the right mix company, and I’ll give you credit for that. You’ve done that right mix offering for a long time.

And I like that vernacular, because I think when you really care about the customer, in the end, you’re going to get that best outcome and you’re going to get growth. But of course, you guys are going to have to compete fiercely and make those partnerships work. So let’s start with the partnership thing, Keith. Early on, you came on. You’re a synergy guy. Everybody has seen one plus one equals three. That’s your partner philosophy.

Keith White: That’s right.

Daniel Newman: How is that evolving? How is that going? You mentioned a few, but really let’s get beneath that a little bit. How is the partner model going? Are you seeing that synergy?

Keith White: No, I think it’s a great question, because it’s pretty easy to say, “Hey, the partner stuff runs on our platform.” That’s one thing. But what we’re seeing now is we’re actually going into customers together, so it’s selling through and with our ecosystem arm-in-arm, so joint account calls, joint account solutions. And you look at someone like a Nutanix where we’ve now become the majority of their business on top of some of our competitors. Or you look at an Azure Stack scenario that we’re now announcing the fully-integrated platform with Azure Stack, so customers can use that in a hybrid scenario.

We had our first SAP win with Hyundai out in Korea where SAP RISE is now running Hyundai Korea, and GreenLake is the underlying capability of that piece of it. I mentioned all the Veeams of the world, if you will, Scality, Cumulo, a lot of additional storage capabilities. But what’s happening is because of, to your point, the customers wanting an end solution. And so you can’t just be a bunch of silos walking in there. You have to walk in there together.

So it’s even interesting to see what I’m calling one plus one plus one equals five now, because it’s multi-partner solutions. Just like it’s multi-cloud and multi-vendor, it’s really multi-partner scenarios that are walking in. And frankly, that’s what customers are after, and they want it to be solved. They don’t want to have to deal with each and every individual component on that piece of it. And this is where our advisory and professional services, along with our solution ecosystem, comes into play to come in and deliver that for our customers in a very effective way. So we’re excited about getting an ecosystem behind us, which I think has really driven that forward.

Daniel Newman: Yeah. I think the right partnership is certainly an important aspect. I think having the right mix of services. Because this on-prem cloud concept, it really does come down to being able to deliver a subset of services that look a lot like the public cloud.

Keith White: That’s right, yeah.

Daniel Newman: And so we’re seeing a number of companies enter this space, and we all know how the story materialized. It started off with an Amazon having one service for storage, for instance, and then, oh, we’re going to add networking, and then, oh, we’re going to add compute. And you guys have really been through that.

I use the word provenance or pedigree quite a bit when I talk about it, because this has been evolving over quite some time. And the qual charts that show the evolution of your products and services on GreenLake are pretty impressive. So you mentioned a lot of them. That has to be way in terms of getting that adoption, getting that critical mass, growing that order book, all those things, because now companies are coming to you and saying, “Okay, we really can’t have an on-prem cloud.”

It’s not about a storage solution. Or it’s not just about getting some compute resources. It’s about being able to have the whole mix of services, containers, a control plane that’s central, being able to spin up workload seamlessly. That’s what the customer engagement right now is all about. But I have to imagine that you’re literally in real time watching the customer engagement strategy evolve and how you’re attracting, winning, keeping, elating customers into being your partners. So how are you seeing that evolve in the time that you’ve been here?

Keith White: No, that’s a great question. And in essence, we’re seeing a 96% retention rate for GreenLake. So once people are on GreenLake, they’re seeing the value. And then frankly, 80-plus percent of our pipeline is of existing customers expanding their usage or going to that next workload or next solution, if you will.

So you look at someone like Danfoss, large manufacturer out in Denmark, who basically focused on SAP originally. And so once we could run that tier-one workload, they said, “Well, hey, can you run our private cloud? Can you run our networking architecture?” And now they’re talking to us about high-performance computing. And again, this allows us to really take over a lot of that running of the day-to-day scenarios and then move forward with the solutions that they want to go to help solve their sustainability challenges, their customer issues, if you will.

The other big thing we’re seeing is people wanting to move out of the data center management business and really moving into colos. And so we just announced Digital Realty as one of our key partners from a colo standpoint, along with Equinix. And so now we have significant relationships with these colos to help, again, customers with a one-stop shop to deliver that solution in a colo.

And then you and I have talked a lot in the past about the edge and that real push to get to the edge solutions. That edge might be a branch office or a campus, which is typical, but now we’re seeing things like the factory of the future with ABB and robotics as a service. Or you’re seeing autonomous driving through Volvo and Zenzic who are trying to deliver that capability. Or you’re seeing 5G type opportunities happen that are popping up with a variety of those folks as well, who want to have that regulatory. They have the control, they have the on-prem, they have the performance capabilities required, but they’re still getting that cloud experience as you talked about.

And we’re going to continue to grow, and you’ll see a lot of the announcements that we just did around more capabilities across basic storage compute and networking, but also into these customer solutions like Azure Stack, like Digital Realty and like others that’ll help bring these partner solutions to our customers.

Daniel Newman: Yeah. You’re definitely spanning your wings in terms of the offering. Edge to cloud, it’s got a bit of a marketing cliche thing going, but it’s also very real. You know what I mean? Everybody’s saying edge to cloud, edge to cloud, but that really is the world we live in right now because the edge is the accelerator of all this. It’s growing so fast. That’s where data is exponential right now. I think we’ve seen these ebbs and flows historically from compute being centralized, then compute going back out. It makes me think of old terminals and such.

But nowadays, the architecture has got to be supportive of data growing so fast at the edge, and that is something you guys are definitely thinking about in every part of your development.

I think, as I mentioned, Keith, that we’re in a world right now where everybody’s trying to converge on this hybrid architecture. Public providers are like, “Yeah, we’ve got this public cloud thing down, but we’re going to start rolling out edge offerings. We’re going to start rolling off on prem.” You guys, of course, you recognized very early, we’ve got to go to as-a-service. We’re not going to grow the way we need to grow focusing on selling big iron. We’ve got to as-a-service-ify everything, and you’ve done it. And like I said, you’re spanning the wings now with edge services, SAP services. You’ve got co-location services. It’s really been good to watch this materialize. And of course, like I said, it’s good to watch the order book follow. You’ve got to build it. They will come, right?

Keith White: That’s right.

Daniel Newman: That’s very real. But I think one of the things you’re going to have to explain more and more as time goes on and your competitors are all formidable. And so you do know if they’re not there now, they will get there. And so unique differentiation is always something, as analysts, we focus on. What do you see the unique differentiators of today and then maybe in the near future for customers that pick to go with GreenLake?

Keith White: Yeah, I think it’s a great point because again, there’s a lot of choice out there, and you’re seeing this with the public cloud vendors as well. What’s truly the difference between Amazon, Azure and Google from a services standpoint? So this is why I like to really focus on two things.

One, the holistic offering that HPE has to offer to our customers along with the ecosystem that we bring forward as well. And I think that’s important because, in essence, we are having to change the way that we sell. In fact, I was on a call yesterday with a large pulp and paper mill factory in Chile, who’s a worldwide group. And they were like, “Keith, help me solve my business problems. We’re trying to digitally transform. We’re trying to solve these new scenarios.” I talked to them a little bit about what’s happening with things like autonomous driving and factory of the future, et cetera.

And they want to say, “Hey, how do you apply that to my mills? I want to get to an autonomous mill. We want to be safety factors as we have forestry and we’re cutting down trees. And how do we optimize that? How do we get to sustainability with respect to our data centers and the mills we have around the world?” So we had to change the way that we’re approaching our customers to really have that digital transformation, modernization, how do we solve these business problems and accelerate your business discussion. And that’s where our advisory and professional services capabilities come in along with our partner ecosystem.

And then we had to pivot start to talk about the solutions that we could offer with our ecosystem, either ISV apps or solution providers or colos, as you mentioned, to be able to bring to them these capabilities across edge, across data and across the high cloud that you mentioned. And then you look at what we have with our HP financial services and the ability to actually help fund that transformation by buying back capabilities, as well as the sustainability with asset management that they can start to address their sustainability challenges that they have in place.

And then at the end of the day, we’re then managing all that for them. So we have our GreenLake Managed Services that says, “Hey, we can manage and pick up a lot of that day-to-day capabilities.” And so when you look at that holistic package, that’s truly differentiated. People might have different components of it. And you mentioned edge to cloud, but when you look at what we’ve done with Aruba down to the access point, networking connectivity piece, all the way up to Cray and what we can do with our supercomputers, our analytics, our high-performance compute capabilities, that’s edge to cloud in its holistic sense.

And so I think Antonio’s done a really nice job of really looking at our portfolio, getting the platform in place, which you heard a lot about today and you’ll continue to hear more about, and then look looking at the holistic capabilities of HPE and the ecosystem to bring that differentiation to our customers. And that’s why people are engaging with us because we can help them solve those problems. We can do a lot of the work for them. We can get experts from our ecosystem to help fulfill specific areas. And we’re doing that in a way, like you said, with the public cloud, so that they’re a partner and we’re providing that hybrid solution. Or with someone who someone might think of us as a competitor. Maybe that’s a third party that we need to plug in that maybe we have a similar container platform like Ezmeral, but we’re finding that OpenShift is actually better for this customer in this scenario.

So we’re going to continue to make sure that we’ve got an open platform and we’re solving those customers’ problems. And that’s when the order book continues to expand and our customers are seeing the benefit to say, “Okay, well, what’s the next problem? What’s the next solution? What’s the next workload? And how do we continue momentum there?” So it’s exciting. And again, the Nutanix of the world, the Veeams of the world, the SAPs of the world, the Digital Realties of the world, everyone’s jumping on board to help us with that solution. And that’s where it becomes exciting for our customers.

Daniel Newman: Yeah. I like something you said about thinking about competition and thinking about cases where HP has part of the answer, not all the answer. One of the trends I’ve noticed, especially in enterprise technology, is that the companies that recognize that they can build a solution for everything, but don’t always have to win every part of every deal, but doing remarkably well. Your former company is remarkable at that, by the way, which by the way, for everyone out there, you were with Microsoft for a long time. And you guys are a good partner with them, but I’m saying they tend to have something for everything, but also, you listen to Satya, he almost always is very open. He never really says, “You got to …”

And in time you get at gravity. In time, if you have the best solution for the company, you’re going to win. And sometimes you’re going to have their best solution for part, and sometimes you’re going to have it for all. But I like that mentality, Keith, because I do think it’s risky. And in consumer tech, sometimes you can get away with saying, we want to own the whole stack. I can think of maybe one company that’s really working in that direction right now. But in most cases, open tends to give people confidence. It gives people choice. People love to choose to buy. People hate to be sold. We all know how that goes.

And you guys are a customer centric organization, which takes me to the last question I want to ask you is, you’re sitting down with many partners and customers. And as you’re talking to these enterprises and they’re trying to maximize the opportunities with their data, they’re trying to build an architecture that’s scalable, they’re trying to remove latency from decision making, especially at the edge, they’re trying to implement AI and ML at scale, just lots of things. Security, they want to secure their networks. How are you talking to them? What is the critical thinking path that you’re working them through that helps them get to solutions that, like I said, maybe are all yours, maybe are partially yours, maybe they’re not yours at all, but that you continue to be seen as a vendor they want to talk to?

Keith White: No, I think it goes back to the approach that we have and how we’ve changed pretty dramatically with respect to our customers. So we’ve really focused our account teams to be much more focused on that end customer’s business outcomes, as well as their industry and the vertical that they participate in so that we can provide some value-add to the discussion, versus, hey, we’re just responding to an RFP for some additional compute capability or some storage. So that’s one.

The second is we brought in, and we’re training our field, and we brought our advisory team in to do what we’re calling these digital transformation workshops, these insights into what’s really the customer key challenges and what are we trying to solve for them. And then we can go into what’s your hybrid cloud strategy, what’s your data strategy, what’s your ed strategy. And that’s outputting a number of opportunities for us to say, okay, where can we add value with respect to that piece of it?

And so I think that’s where that advisory professional services piece comes in to play to these mega trends that the customers are after. And then that provides us the ability to say, “Let’s provide you an integrated cloud experience.” And again, the cloud’s not a destination, it’s an experience. Some of that destination might be public because it makes the most sense. That’s the most cost-effective. It’s the best place for you. It gives you the scale that’s required. Or it might be on-prem because, like you said, regulatory X or latency Y or control and security, and you want to have that piece of it. And so, because we’re approaching it that way, customers are looking at us and saying, “Wow, you’re truly a partner.”

And then once you start running someone’s data center for them, whether that’s LyondellBasell, whether that’s our friends at Wells Fargo, once you start running those capabilities, you become a deep integrated piece and a partner to what they’re trying to do to help solve their business problems. And that’s a very different dialogue and very different relationship and highly more relevant to what the customer is trying to do versus, hey, I’m just one of those vendors that’s popping in trying to sell my stuff.

And again, that long game is way more interesting to me, because those are the fun conversations. When you see people drive their sustainability targets down and they beat their goals, when you see them accelerate their business, when you see the cost savings that comes in that they can then reinvest into growing their business, those are the things that to me are way more exciting than just the sales numbers and the units that we might be flowing through.

So I think that mentality has to be the approach in you, and you said it. At Microsoft, at first we wanted to beat everybody. And then I think over time, as Satya took over and really instilled this idea of open platform and partnership, you realize, hey, there’s a big pie out there and there’s a lot of opportunity for people, but what’s most important is that long-term customer relationship and value. And that’s what we’ve been focused on. And that’s with our ecosystem, that’s with our HPE folks, and that’s sometimes, as you said, with our competition. But again, if that’s the best thing for the customer, that’s going to play much more longer term.

Daniel Newman: Absolutely, Keith. I can’t take credit for the quote, but there’s a quote that says something along the lines of, “People don’t buy technology to solve technology problems. They buy technology to solve business problems.” And at the heart of a lot of what you just said was really that, is when you become a strategic advisor, knowing that technology is exponential to a company’s strategy and growth. And right now that’s really what the digital transformation is.

And you can call it the digital transformation. You can call it evolution revolution. You can call it creating a sustainable company that can stick with the future and stay relevant to customers. All those things that are going to be foundationally shifted by the ability to utilize technology in your internal and external practices.

And so I think you said it really well, Keith. I’m going to wrap up here. It was awesome having you at GreenLake Live. The Six Five on the Road team, we love doing these interviews. We love these conversations. I do want to do it live one of these days, but for now it was great to have you here. It was a really, really great event, and we’re excited to continue to monitor and watch the future for HPE. And congratulations on all the success you’ve had with the HPE GreenLake business.

Keith White: Hey, thanks so much. Yeah, we’re really excited about the future. And we’re still just at the early stages of what’s going to happen with respect to how we can help our customers and how we can help drive our ecosystem forward. So really appreciate the opportunity, and it’s always a pleasure to chat. So talk soon. Thanks so much.

Daniel Newman: See you later.

 

About the Author

Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio