HPE CEO Whitman Highlights Dropbox Move Of Some Business From Amazon Web Services To HPE Cloud Solution

Hewlett Packard Enterprise CEO Meg Whitman Tuesday used her Discover conference keynote address to shine the spotlight on a breakthrough deal that led Dropbox to move of some of its huge cloud storage services business from Amazon Web Services to a scalable HPE cloud solution.

HPE took the lead on the Dropbox move to a hybrid cloud model with an "open architecture approach and a custom server solution" with HPE ProLiant and Cloudline service provider systems -- all financed by HPE Financial Services, said Whitman.

[Related: HPE Steps Up Innovation Offensive: 10 Hot New Product/Sales Plays From Discover 2016]

HPE, meanwhile, has become a Dropbox customer with more than 100,000 employees using the storage service even before the move to scale up the service within HPE. In addition, HPE is working with Dropbox to drive joint go-to-market plans on the Dropbox solution for enterprise customers.

Drew Houston, founder and CEO Of Dropbox, who joined Whitman on stage, told the 10,000 Discover attendees that the move to a hybrid cloud model was driven by the "performance flexibility and, most importantly, the security" Dropbox could get from an HPE cloud solution -- all at a lower cost.

"We are a little unusual because we started in the public cloud, but we realized moving to the hybrid infrastructure brought a lot of the [Dropbox] accounts -- all that performance at a lower cost and a lot more flexibility," he said. "So it has been great."

Dropbox needed a partner like HPE that could provide a scalable cloud solution for one of the biggest cloud storage providers, said Houston.

The new HPE architecture meant migrating "hundreds of petabytes of data with nobody noticing," said Houston. "It is like trying to swap out the engines on a jet midflight without any of our customers -- passengers -- knowing. It was a technical challenge, but we are really proud of the results and it has made a huge difference and given us a major competitive advantage."

The Dropbox HPE win underscores the fact that public cloud is more expensive for many businesses, said Rich Baldwin, chief strategy officer at Nth Generation Computing, a San Diego-based HPE partner.

"The public cloud is not the right solution for a major corporation," he said. "You can't afford it. You are giving the [public] cloud operators a fortune based on the way they charge. That Dropbox win for HPE is an amazing story. If you are in continuous growth mode and you can't buy hardware fast enough the public cloud may work, but once you plateau and have a normal growth rate the public cloud is not the right solution."

Baldwin said he sees the many HPE innovations being spotlighted at Discover helping to drive 20 percent sales growth rates over the next several years for Nth Generation. "The channel is alive and well thanks to HPE," he said. "They are providing us the tools to help customers on the journey to the cloud."

In addition to the Dropbox deal, Whitman shined the spotlight on a blockbuster pact with Docker to put the Docker engine pre-installed on all HPE servers starting in the fourth quarter.

Whitman has singled out the advent of software containers as a disruptive trend that over time will make VMware -- which is being acquired by Dell as part of the EMC acquisition -- "almost irrelevant."

"I think the VMware asset will be not be as strategic an asset and it may actually shrink over time," Whitman has said.

Docker CEO Ben Golub, who joined Whitman on stage, balked initially when asked about the potential implications for virtualization over the long run.

"Can I take the fifth?" Golub asked. "Virtualization is a fantastic technology but it was designed really for building, modifying and moving around servers. If people want to build and modify and move around a simple application, Docker is a much better solution."

Research firm Gartner has predicted that 50 percent of all software code will be in containers by 2018.

Golub said he expects Docker to be used in public, private, bare-metal and virtualized environments but with hybrid as the "most common" model in the future.

Dan Molina, chief technology officer for Nth Generation, said he sees the Docker partnership with HPE opening up more software container sales conversations with customers.

"Many customers have gone down the container route and they are starting to see the benefits," said Molina. "There is a tremendous opportunity for containers. It makes developing a lot more flexible, a lot faster, a lot more efficient. Believe me, after today's announcement a lot more customers are going to be looking at containers and potentially considering changing their architecture going forward."

Stan Galanski, senior vice president of engineered solutions for CB Technologies, an Orange, Calif.-based HPE partner that was showcasing a breakthrough asset management solution on the Discover show floor developed in conjunction with HPE, said he sees HPE driving "game-changing" solutions with partners.

"HPE is giving us the minerals and resources to charge forward and solve customer problems," said Galanski. "We are the integral link to help customers. We know what the technologies are and how they are being deployed."

Galanski said he is more optimistic than ever about CB Technologies' sales growth potential given the HPE portfolio. "I have galactic optimism right now," he said. "We are using HPE software tools and analytics to help customers collect and analyze information so they can go get more customers."