Whitman: HPE Is Set To Unleash 'Market-Changing' Hyper-Converged Product With Pricing 20 Percent Below Nutanix

Hewlett Packard Enterprise CEO Meg Whitman says HPE is set to unleash a "market-changing" new hyper-converged product that will be priced 20 percent below market leader Nutanix's product.

"Later this month, we will announce a new market-changing hyper-converged offering based on our industry-leading ProLiant virtualization server," said Whitman in a conference call with Wall Street analysts after HPE posted better-than-expected results in its first quarter as an independent company. "Our new solution will offer customers installation in minutes, a consumer-inspired, simple, mobile-ready user experience and automated IT operations, all at 20 percent lower cost than Nutanix."

Whitman says she expects the new product, which was developed internally by HPE engineers in record time, will open the door for HPE to be what she called a "leader" in the $5 billion fast-growth hyper-converged market.

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"We very much like this product from a side-by-side comparison in features and functionality to our competitors," she said. "I feel really good about it. I think it means that we can be a leader in this quite large and fast-growing part of the market."

Whitman said she is "excited" about the potential for growth from the new product. "The hyper-converged market is big," she said. "It is growing fast. It is also getting pretty crowded. You have seen a lot of announcements over the last couple of months."

HPE, which became an independent $53 billion company as of Nov. 1, is set to release the new product at the same time rival Cisco is getting into the game. This week, Cisco announced its own HyperFlex Systems product, calling it a more economical and better-performing alternative to Nutanix.

In an email response to the soon to be released HPE product, Nutanix President Sudheesh Nair said: "It’s been an exciting two weeks, with the entire IT establishment turning their attention toward Nutanix while validating that hyperconverged infrastructure is the new reality of the datacenter. Winning the enterprise cloud market requires sustained innovation and commitment to customer value -- not just competing on price alone. Nutanix continues to raise the bar by going well beyond hyperconvergence.’

HPE solution providers, for their part, see the soon-to-be-released hyper-converged product as part of an innovation renaissance driven by deep R&D investments made by Whitman since she took the helm four and a half years ago.

"Our engineers see the next generation of HPE products leapfrogging the competition," said Kelly Ireland, founder and CEO of Orange, Calif.-based CB Technologies, an HP Platinum partner, No. 258 on the CRN 2015 Solution Provider 500. "We are super-exited about the new hyper-converged product. We are already working on specialized, highly engineered solutions for our top customers that would fit really nicely on a hyper-converged HPE system. We can't wait to get our hands on it."

The new hyper-converged infrastructure to which Whitman referred is likely a continuation of the company's CS-line based on its StoreVirtual software-defined storage solution, said one solution provider who requested to remain anonymous.

"StoreVirtual is a mature technology, and HPE is expected to add a new simplified user interface," the solution provider told CRN. "The goal is to simplify the user interface with industry-standard components like HPE's ProLiant DL380 rack-mount servers. It will start small and leverage StoreVirtual." HPE is also likely to make the new offering compatible with its OneView unified management system, the solution provider said.

Another HPE solution provider told CRN that HPE has been moving in the right direction in the hyper-converged infrastructure market, and that a lower-cost, simplified solution would definitely grab the attention of customers eager for an HPE hyper-converged product.

The second solution provider, who also requested anonymity, said HP's Converged System CS-line of StoreVirtual hyper-converged infrastructure appliances, especially the CS 250 with its 2U chassis and four server nodes, has done well in the market.

"We're seeing momentum with the CS 250 from HPE," the solution provider said. "We won two or three deals this quarter with the CS 250 after going head to head against Nutanix."

CB Technologies' Ireland said she sees the hyper-converged product as the first of a new wave of breakthrough offerings from HPE. She said CB Technologies is benefiting from HPE's R&D investments, with sales up 22 percent in 2015 and projected sales growth of 42 percent in 2016. "We're having fun," she said. "It is really exciting. HPE is a well-oiled machine."

Whitman confirmed that HPE is set to deliver a new product blitz over the next several quarters. "Our innovation engine is firing on all cylinders," she said. "You are going to see some amazing new introductions in the coming quarters in key areas of the portfolio, including servers, cloud, high-performance computing, IoT [Internet of Things], all-flash storage, Aruba and converged systems."

The HPE converged system throw-down came after the company posted non-GAAP diluted net earnings per share of 41 cents on sales of $12.7 billion for its first fiscal quarter ended Jan. 31, just above the Wall Street consensus of earnings of 40 cents per share on sales of $12.68 billion.

The results marked the third consecutive quarter of year-over-year sales growth in constant currency for HPE, said Whitman, noting that every business segment grew at constant currency levels excluding recent mergers and acquisitions. "We have now completed our first full quarter as an independent company and we are off to a very strong start," she said. "We are already seeing the benefits of being a smaller, more focused and agile company."

Kevin McLaughlin contributed to this story.