The Six Five hosts sit down with HPE CEO and President Antonio Neri as he shares more on the latest developments and outcomes the HPE GreenLake platform is delivering, from personalized experiences with real time analytics to accelerating time to market for new products.
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Patrick Moorhead: Hi, this is Pat Moorhead and we are here on the brand new HPE headquarters here in Houston, Texas. I’m here with Daniel Newman, Antonio Neri, gentlemen it is incredible to be here. We’re face to face with no mask.
Antonio Neri: Finally.
Patrick Moorhead: Can you believe that?
Antonio Neri: Finally.
Patrick Moorhead: I absolutely love the new place. I see some inklings of the prior headquarters in the way that it looks, but that’s a compliment because I like that headquarters when we did that opener, but it is beautiful and the best part for Daniel and I is we can drive here.
Daniel Newman: Yeah, that’s good news.
Patrick Moorhead: The previous headquarters was a little bit more of a longer drive and probably an airplane. But listen, we are here to talk about some incredible HPE GreenLake announcements that you made earlier today. We’re going to break this down, analyze it a bit, ask you if you… Not so hard questions maybe. But we’ll see.
Antonio Neri: Uncharacteristic from you.
Patrick Moorhead: Exactly. Now I know. Daniel it’s good to see you buddy.
Daniel Newman: It’s great to be here. It’s great to be at the headquarters. Just walking up first time seeing it. It’s been a weird couple years. I mean, we’re close by but it didn’t matter because you couldn’t see anybody anyway, but we’re kind of getting back in person. I’m hearing Discover this year, going to be in person.
Patrick Moorhead: On my calendar.
Daniel Newman: It makes me smile because I think we all miss that camaraderie. I think we miss the chance to sit down. We had one chance, I think over the last three years to actually see each other in person in Las Vegas.
Antonio Neri: That’s right.
Daniel Newman: And that was right before the next wave. We thought we were in the clear last time, we’re never in the clear but-
Antonio Neri: Were in the valley and then we got the peak again,
Patrick Moorhead: Cross fingers that we are back, but I love having the chance Antonio, to sit down with you to talk a little bit about what’s going on with the announcement. But before we get into the announcements themselves, you sitting in the role you said, and I like to maybe ask the one hard question or maybe just the big macro question. Talk to us about the trends that are driving your overall strategy. What are customers saying? What is the market saying that’s driving your overall strategy right now Antonio?
Antonio Neri: Well, welcome to our new home. I mean, as you said, we love this new home and they had a lot of similarities Pat because obviously I was in the design team that built that beautiful San Jose.
Daniel Newman: Absolutely.
Antonio Neri: And I learned a few things which I applied to this new design, which obviously I led with a group of very, very talented people. The difference between there and here is that here you move way faster, definitely that’s an advantage I will say. But it’s an amazing side. We’re super proud that we have delivered for our employees. And I hope to host you many, many times here. So going back to the trends, the trends are kind of interesting and a lot of them are now accelerated because of what we saw in the last two years. The first trend we see is the need for connectivity.
If you are not connected, you’re not participating in this new digital reality. The new digital economy with data is the new currency. So secure connectivity is a massive need. And I personally believe connectivity is going to be not different than water and electricity. Everybody have to have access to it. If you’re not connected, you’re not part of what the world is doing. And to me is a big worry in one end and a big plus on the other end. The worry is that we cannot create a digital divide, because otherwise that will be totally unfair. On the other hand listen, there is a lot of work to be done. You won’t believe during the pandemic what we have done for customers. Here in the United States, you would think about it one of the most advanced countries, if they not the most advanced country on the planet.
But think about it as some examples with schools when the pandemic hit. They didn’t have wifi connectivity, they’re students, they needed to drive through the parking lot to download the homework, go home, do the homework and drive back to the parking lot to upload the homework. That’s totally unacceptable. We’re talking about 2020 and the 21st century and that’s not great. But to me, that’s a massive trend.
And we are at the center of that trend with our Aruba set of services. The other obvious is cloud, but for us cloud has always been an experience, not a destination for all your workloads and data, wherever they live and more and more at the edge obviously. And so that’s another very important trend and that’s where GreenLake plays a big, big role because it’s a cloud that come to you and we can offer a true hybrid experience for it.
The third one, which I think is the most important one in my mind is data. We enter the new age of insights. And to me, data is the most treasure asset you have today. So for me, customers now need to extract the value that data at the pace we haven’t seen before. Those who are digital, is in their businesses, who are becoming way more sophisticated on data are becoming the winners. And last panel list, one thing that the pandemic taught us is the ability to consume my team in different ways. And that’s why the [inaudible] service model is taken off for everything they do, because they realized I don’t need to spend all that CapEx upfront. I can only pay for what I use and that’s built in our experience with GreenLake. So that’s why we have a strategy called HP GreenLake. The H2 cloud platform that we can deliver as a service.
Patrick Moorhead: It’s been a crazy 10 years. If I look back in and where we were when the public cloud rear its head, and I remember the demise of all these vendors, that was going to happen. My firm made a bet a decade ago on the private cloud. And I think we were called cloud deniers or something like that. And it was really this inevitability that not every workload makes sense in the public cloud. And three years ago you got up on stage and essentially said, “We’re going to do everything as a service. From this day on everything is going to be as a service.” And I think a lot of people who in the know were like absolutely Bravo, some others were just like, “What’s going on here?”
And from everybody, every vendor in your category you set the pace, you came out first that everything was going to be there. And last time I checked when I looked at the offering is especially this latest menu that you have, you do have more services than anybody else in your category. So congratulations on that. And nothing lasts forever so I know you’re working hard to get there. But I want to ask you what is probably a very simple question, what differentiates GreenLake from everybody else right now? And if you want to tell us about the future, you can do that too.
Antonio Neri: Well, I argue that HPE GreenLake is the only platform on the market that deliver cloud services across edge to cloud. And that to me, is inclusive of the connectivity service, the computer and the storage and the data services that you need to run your business, that you can consume as a service to your point. Just this morning, we announced 12 new cloud services. Now in the platform, we have more than 120,000 customers, obviously a lot came through to the Aruba integration. But the fact of the matter in the GreenLake now we have 120,000 plus customers with more than 50 cloud services relevant. Because the fact of the matter when you go to the public cloud, there may be hundreds of them or thousands, but the fact of the matter only maybe 50-80 makes the hundred percent of usage.
So we are really focused on what are the biggest problems customers have? Well, first I need the need for connecting things. Well, now through the platform, you can deploy a WiFi, WLAN and one port, and also all the protocols for running IOT in the same platform. Obviously with security analytics that deliver secure connectivity and unique experiences, particularly in a mobile first approach. Second is I need a bunch of storage and compute to run specific workloads, whether it’s VM containers or workloads, optimized solutions, that’s now part of the platform.
If you recall, last year we introduced Lighthouse. Lighthouse is a fully optimized stack with compute storage, networking, and the run time for a specific workload with automation. That’s part of the platform. And then this morning, we introduce new services particularly in the HPC space, because AI is exploding. AI is exploding everywhere including other functions where customers need a lot of new capabilities like GPU or a data fabric to connect the edge to the cloud. So those are all part of the GreenLake. But in the end, that was the unification really of edge to cloud with all the services that you need to run your day one and your day two operations.
Patrick Moorhead: That’s great story. And it’s a great story now and excited about the future too.
Antonio Neri: In the end, now we are in an environment where all ARED teams, all our businesses are developing in a cloud-oriented approach. Fidel Russo, our new CTO has brought a new perspective and she’s leading this transformation from the platform-centric approach. And Tom and Phil today were kind of the two big ones announcing their services with block of storage, geo data services or Phil with the network as a service aspect of it. But the same with Neil McDonald on the computer operations managers. You know Prolia very well Pat because-
Patrick Moorhead: Invented here in Houston, Texas.
Antonio Neri: Well, we’ve been reinvented now because while the ProLiant it is obviously a compute platform, a server of sorts which is very, very powerful in his own merit. But now it’s being deployed and lifecycle managed from the cloud. And that also serve of us to build other aspects of solutions with the rest of the businesses. So for me is great to see the vision as you asked early on coming together. And to me, it’s important that we continue that momentum
Daniel Newman: By the way, congrats on the early prognostications. For a few years, not only have we been saying that the on-prem workloads would remain significant, but that the hybrid architectures would ultimately worn out. The data and even the research we did indicated remember only like 30%, it’s more or less have moved to the public cloud. But you’re also talking about this rapidly expanding Tam. And we all know where data’s expanding the fastest and that’s at the edge. So having that whole edge to cloud story is becoming exponentially more important, not just the volumes of data. So you got a lot of things right and clearly that’s being seen in the growth, 136% last quarter. So I’m not going to let you use that to answer the next question. But I am going to ask you about momentum because that number to me was a very strong indicator that the momentum is here. So talk a little bit about that because I think you’ve felt for three years now, you’ve had the right idea. What are those proof points?
Antonio Neri: Well, obviously is great to see the numbers itself. What Omar really more pleased about it is the type of customers will bring it to the platform. So one thing is the numbers and the growth and translating all of that momentum intro AIR, which is our metric, which we disclose, none of our competitors are, I will say,
Patrick Moorhead: Noticed that. We’re noticing.
Antonio Neri: And so for me, it is super important that we keep that financial momentum, but more important is what customers are we bringing it to the platform because that tell us what problems we’re solving for them. And if you see some of the customers like Barclays, they have already world loads in the public cloud, but they realize not of the world loads can be there and they need a through hybrid control plan. GreenLake gives that and when the world load lands on Preem, we’re going to deploy a hundred thousand plus VMs on Preem for them but then be able to move things back and forth. Obviously you’re aware with NSA, which announced a couple of quarters ago, and this year is going to be the ramp of that, which is all in the deferred back by the way and that will translate in AIR. But think about it, a custom like NSA, which obviously runs a very, very mission critical mission where we are actually not only building it, but running it.
That’s a big vote or confidence on our platform. And then when you think about the Aruba platform, including NAS, we just announced also a quarter or two ago, the deal with Home Depot. And what they’re doing is a true age cloud architecture. They have this stores, they have more than 2200 stores that ultimately need a cloud in the store plus the connectivity. So you go show up in the Home Depot close to you with your mobile app, as long as you have an account, they recognize, “Well, Daniel or Pat is walking in the store.” Keep that experience going through the store. They can guide you where is the stuff you’re looking for. But at the same time, all the point of sales transactions are processed at the edge, in a cloud architecture.
And then only the differential parts of the data they need to run in a badge, in a AI centric approach, we move it to their, whatever core businesses. It can be one of the clouds, or it can be their own data center. So that’s where I’m really excited. And by the way, you see now the momentum with payment systems too. We have few customers running their entire payer system of GreenLake. We had few customers in Japan and in Australia, and so we have a lot of momentum. And what you can see from us is more cloud services and more load up to my solutions as we go forward.
Patrick Moorhead: That’s good. I’m glad he added that about us working in a retail store because if this thing doesn’t work out, we’re there.
Daniel Newman: I was actually thinking too, the Home Depot walking in the store, it’s like, do they know how terrible I am and actually trying to do any Home projects? But eventually the data will tell them that.
Patrick Moorhead: Exactly. And maybe they’ll be as a service there too.
Antonio Neri: They need to recommend handyman for it
Patrick Moorhead: So throughout this entire conversation, I’ve heard a lot of really good metrics, but I would like to capture it all in one place. How do you measure progress for HPE GreenLake? I’ve seen customers, I’ve seen crawl charts, revenue charts, AR like you said, but how do you do that? How do you measure that?
Antonio Neri: For me, it’s number of customers on the platform. It’s a very simple thing. And then are we growing customers on the platform now the fact that we have more than 120,000. And it is quite interesting because on the connectivity side, through the Aruba integration, think about it. We add more than 14,000 devices and things every week.
Daniel Newman: Every week?
Antonio Neri: We process on an hourly basis more than 2 billion data points because these devices which are now exceeding 2 million devices generates on an average an amount of data that has to be processed. So we are managing a very large cloud on behalf of customers and they rely on us because they need that data to run their operations. Whether it’s a Home Depot to collect all the analytics, to build through the applications or whether it’s lows or whether it is Bank of America, whatever it is, they rely on us.
And that’s where I like this approach because now we’re becoming relevant. It’s not just important because you have the best technology. No, you are relevant because you’re helping run my business. And it comes all through the data. The data that we run through the platform is the key advantage. Now the experience comes with it, and that’s why the full integration of our workloads and cloud services in an automation way, in an automated way through the platform on the back end of this I think is a key differentiation for us because that’s not easy to do, especially at our scale with our portfolio complexity. If you are a SaaS company which you have a software, you were born that way but you have only one thing, when you ran an access point on the ceiling to a very large super computer, that’s very different. That’s very different. That’s why I believe we are just in the beginning and the value will accelerate from here on for the years to come.
Patrick Moorhead: So you said customers, but I also heard engagement. Like a lot of data, a lot of things you’re doing with them, and I think that’s great Antonio, congratulations on everything.
Antonio Neri: Yeah. Well, thank you. The other thing I’m really proud this morning we announced is the addition of our channel partners, as you know. And you have followed us longer than Daniel, this…
Patrick Moorhead: I am. I was in the makeup chair for a long time this morning.
Antonio Neri: But I will say this company was built with channel partners. And more than 70% of our business is run through channel partners. They also need to transform. They also need to become relevant. And today they either sell systems at volumes or they resell cloud services from the public cloud. But they realize to become relevant they need to add their own services, which means they know how the expertise, the skills are really important. And that’s why we integrated four large distributors to HPE GreenLake. Their marketplace and our marketplace are fully integrated through the APIs. And by the way, what that does for us, it’s not just preference which is important in a profitable growth for them, but also the fact that it expands that to 100,000 plus value other resellers, the reach through them is very, very massive. And what they get from us is the full integrated, automated experience from the platform, which is very hard to do if they do it themselves.
Daniel Newman: So we’re coming upon time, but I do want to channel the audience and ask a question. I just know they’re thinking this. Three years ago roughly, you got up on stage and you said, “We’re going to deliver our whole portfolio as a service.” I’m maybe quoting you wrong but I think that was more or less the gist of what you said.
Antonio Neri: No, it was correct. I said by the end of 2022, we’re going to offer everything as a service that we do.
Daniel Newman: So we asked you about progress and the business, the growth, the customers, the engagement, the amount of data, did you meet that or will you meet that? I guess you do have till the end of the year, do you feel you did?
Antonio Neri: We will. In fact, we are right where we want it to be. First. We have now a true plot platform-oriented approach, which is GreenLake and is across the edge to the cloud with a full business process and automation built into the platform, which in order to transact, you have to transact in a different way. That to me again, is a point of differentiation. I argue that’s our secret sauce on the back end. And it’s very propriety because obviously it’s something that we’ve built ourselves over the last three years. But then again, going back to what we offer our customers. Now we have more than 50 plus services. Think about by line of business. Compute now has the entire software in the platform is called the Computer Operations Manager. Whether you deploy up a [inaudible] it is deploy a life cycle from the cloud inside GreenLake, whether you buy a consumer that’s a service or you buy as a CapEx, doesn’t matter.
It is transacted through the cloud inside GreenLake. The connectivity side with Aruba is also subscription-based, 100% subscription-based. I can subscribe to an access port or in a port in the closet. And now with the silver peak acquisition, we integrated the wide area network side of the house, which obviously is a market growing very rapidly because it’s more and more applications of developing a cloud native way. The traffic goes through the internet, not to the fixed networks. And that’s why we also have a big differentiation with the CSPs because they need something like that. Otherwise they would be cannibalized.
Then on the story side, you know what Tom and team are doing right, is really with the instantiation of a letters. The first cloud native run through GreenLake. Now with the block of storage and all the data services, they’re all run through GreenLake as well. And even Justin on HPC, we offer HPC as a service, we introduce new capabilities with GPU and data fabric, but also payment workloads which obviously now is just nothing more than a cloud workload that you can run anywhere, including the public cloud. So we are well underway, Daniel and more than 50, but way more coming. And to me, this is what excites me is not the past three years, is the next three years.
Patrick Moorhead: Now, this is great. Antonio, I want to thank you for spending time with here with Six Five on the road at HPE headquarters, the new headquarters here in Houston, Texas. And if I have some time, I might take that car in the lobby for a spin here. We can get that thing started. So this is Pat Moorhead with Daniel Newman and Antonio Neri signing off for HPE GreenLake announcement, deep dive, have a great day.
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