HPE Will Have ‘Highest Profitability Of Any Of The Cloud Services’: HPE GreenLake Partner Pledge

‘We are going to continue to make sure that GreenLake provides partners with the highest profitability of any of the cloud services that are out there,’ says White in an interview with CRN. ‘So we want to continue to invent. We want to continue to partner. We want to continue to co-sell and really drive leads, drive incentives and drive capabilities through that ecosystem.’

Hewlett Packard Enterprise GreenLake General Manager Keith White has pledged that the GreenLake on-premises cloud platform will continue to beat any and all comers when it comes to partner profitability.

“We are going to continue to make sure that GreenLake provides partners with the highest profitability of any of the cloud services that are out there,” said White in an interview with CRN. “So we want to continue to invent. We want to continue to partner. We want to continue to co-sell and really drive leads, drive incentives and drive capabilities through that ecosystem so that they see the profitability and then they have the longer term relationship with the customer whether that is consumption based or subscription based.”

White, who has redefined the GreenLake on-premises cloud services model since joining the company from Microsoft 19 months ago, said partners can expect “much more” lead generation and co-selling as HPE accelerates its edge to cloud platform as-a-service sales charge.

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“The (as-a-service partner) pivot is going to continue,” said White, who has built a broad GreenLake ecosystem. “It is going to deepen and it is going to expand so that we can make sure we continue to accelerate growth together. It is all about joint growth but it is also about solving these business problems for our customers. When it is HPE plus our ecosystem one plus one equals three.”

White’s pledge of expanded partner commitment comes with the competition heating up in the channel as-a-service market. For the last three years, HPE has been offering partners a robust 17 percent up-front rebate on the full size of the GreenLake multiyear deals. What’s more, HPE offers partners the ability to participate in recurring revenue upgrades from the customer along with the ability to layer in their own managed services.

“GreenLake was built to partner,” said GreenLake Global Channel Chief George Hope. “GreenLake 3.0 was available to sell through partners and through distribution with a unique value proposition. That is a two-fer for partners…. We give them an up front 17 percent rebate like it was a (capital expenditure) sale. So they get basically a check for what they would have made in margin if they had sold it (as a capital expenditure project deal). But then they still get to participate in the recurring revenue stream by being in the monthly billing process as well. They get them both. That has been available to partners for a couple of years with GreenLake.”

Dell Technologies, which launched its all-out as-a-service charge with the release of its Apex cloud services portfolio at the Dell Technologies World conference in May, is offering partners up to 20 percent on a storage deal but only 10 percent on a server deal.

White, for his part, said HPE competitors are in the “early days” of as a service, while HPE is putting its foot on the gas and accelerating its edge to cloud platform as-a-service partner commitment.

“You saw last quarter we grew GreenLake (as-a-service order growth of) over 40 percent which is fantastic,” said White, who tripled the GreenLake channel investment for the current fiscal year, put GreenLake at the top of the 5x top sales compensation multiplier and for the first time added new GreenLake sales quotas for HPE sales reps . “The channel continues to grow in the high, high percentage range which is fantastic to see. That’s because again the competition is so early days.”

The Dell 20 percent storage as-a-service rebate falls short in terms of what customers are looking for in an on-premise pay-per-use cloud services platform, said White.

“What (Dell) Apex talks about is storage as-a-service,” he said. “That is one of the core baseline things that you can do. That is not what customers are looking for. Customers are looking to digitally transform. They are looking to modernize their infrastructure. They are looking to solve their business problems. What we are delivering is not just that base foundation, not just the platform components but all of these workloads and all of these industry solutions with an entire ecosystem.”

As for the HPE Aruba networking as-a-service model, White said it continues to pick up steam and gain share against rival Cisco which unveiled its Cisco Plus as-a-service model for partners in March. Cisco is set to deliver hybrid cloud as-a-service at mid-year and then follow it with a network as-a-service offering later this year.

“We have seen a huge increase in our Aruba environment for quite some time,” said White. “In fact, it has been one of the shining stars if you will of our earnings releases the last couple of times. We are starting to see market share increases. That is because customers are now going in and they are modernizing what they had in the past. They might have been running Cisco or something else in the past. Now they are saying what is the best option for me? Aruba has really provided that new cloud

Partners, for their part, said HPE has maintained the highest profitability and most robust channel go to market model for GreenLake on-premises cloud services model versus other as-a-service channel competitors.

“HPE has the most partner friendly as-a-service solution from a manufacturer in the industry- period,” said Joe VanPatten, vice president of cloud consumption for Advizex, one of HPE’s top GreenLake partners. “There is no question about that.”

There is a “new excitement and buzz” around HPE because of its GreenLake on-premises as-a-service cloud pay-per-use prowess, said VanPatten.”Customers are curious and interested in GreenLake,”he said. “HPE has customers looking and paying attention when it comes to these new solutions.”

One of HPE’s biggest advantages versus competitors is that it has built out a broad ecosystem of multivendor workload optimized solutions, said HPE partners.

“HPE has solutions built our for every major workload that you can list or think of,” said VanPatten. “You can’t do that with anyone else. I haven’t found a workload that GreenLake can’t handle yet. HPE has created holistic solutions for all of these workloads. It’s very important that we talk about workloads, use cases, vertical markets and the value to the business.”

HPE has “clearly made significant strides in distancing themselves from the competition,” said Advizex President C.R. Howdyshell. That said, Howdyshell said HPE is going to have to move faster and continue to invest to stay ahead of competitors.

“The competition has figured out that customer adoption in as-a-service is faster than anticipated,” he said. “Everybody else is going to invest. What we are seeing is HPE making the investments to continue to maintain the lead when it comes to consumption and everything as a service.”

HPE is “far ahead of other competitors in this everything-as-a-service space,” said Erik Krucker, CTO at Comport Consulting, an HPE Platinum partner, No. 302 on the CRN SP500. “They have a very well-baked offering. I think they are going to retain that lead for quite a while. It is going to be interesting to see how this develops over time and how the market matures. But they are far far ahead of other competitors.”