Partners Expect To See Bigger Payoff For HPE Software- Defined Stalwarts OneView, OneSphere

Hewlett Packard Enterprise partners say they expect to see bigger incentives for the company's software- defined backbone -- OneView and OneSphere -- in the revamped Partner Ready program that goes into effect in the new fiscal year beginning Nov. 1.

Partners said the lucrative new incentives on the software-defined stalwarts is part of HPE's no-holds- barred push to drive the channel to the high-value, high-margin products that are providing a foundation for digital transformation for a fast-growing number of enterprise customers.

[Related: Chief Sales Officer Phil Davis: HPE Is 'Rock Of Gibraltar' With A Winning Portfolio For Partners]

"It makes sense that HPE is going to pay us more for OneSphere and OneView -- that is the underpinning of the overall HPE strategy that is delivering the maximum value to customers," said a partner close to HPE who did not want to be identified. "This is about paying more for value products and solutions that are driving business outcomes for customers. It is something all of us need to do. Software-defined is the future."

Partners say OneSphere, HPE's multi-cloud management SaaS offering, and OneView, a long-standing network management standout that has been transformed into a dynamic composable infrastructure engine, are providing them with a significant competitive advantage in the race to software-define corporate infrastructure.

OneView, which recently reached 1 million software licenses, has become a staple for top partners that are helping customers move to next-generation software-defined infrastructure.

HPE has been moving aggressively to offer higher incentives for partners around fast-growth, high-value offerings rather than transactional products like industry-standard servers.

Among the products driving fast growth and high margins for partners are SimpliVity hyper-converged infrastructure, Synergy composable infrastructure, high-performance compute including SGI, and the robust storage portfolio including Nimble, 3Par and StoreOnce. "This is about paying more for the value and growth part of the portfolio," said another partner who did not want to be identified.

Phil Davis, chief sales officer and president of Hybrid IT for HPE, signaled the move to higher compensation for high-value software-defined offerings in an interview with CRN earlier this year.

At that time, Davis told CRN that he is firm believer in compensation that is aligned with customer benefits, with software-defined being a prime example. "Software-defined is good for customers and good for HPE so we are going to make it good for our partners as well," he told CRN.

Davis also reaffirmed HPE's commitment to keep the Partner Ready program the No. 1 program for partner profitability. "Partner Ready is consistently voted the best partner program in the industry," he said. "That is critical. This all has to start with how we continue to help partners be profitable with the portfolio."

Finally, Davis committed to making it "easier and more lucrative" for partners to participate in fast-growth opportunities.

To that end, HPE is expected to make its Partner Ready back-end program simpler and more predictable by moving from a quarterly growth accelerator rebate structure to a simplified pay-from-dollar-one program.

Partners said that change will help drive more recurring revenue with stickier, long-lasting relationships with customers. "The whole point is to help us sell recurring revenue solutions that are sticky and not transactional," said a solution provider executive who did not want to be identified. "For us, it is all about moving away from project-based sales to become a true partner with the customer sitting at the table with the CEO and CIO. It is a completely different way of selling. It is not easy."

HPE is also continuing its drive to incent partners to sell GreenLake Flex Capacity, which has been hailed by partners as the first-ever pay-per-use model built from the ground up for the channel.

The public-cloud-busting channel compensation model for GreenLake Flex Capacity provides partners with a whopping five times the rebate incentive they would get for a traditional Capex deal.

At HPE's Discover conference earlier this year, HPE Vice President Jesse Chavez, who is leading worldwide partner programs and operations for HPE, also signaled the move to enhance partner benefits for the "value" part of the HPE portfolio. "We'll be spending over $1 billion on rebates and MDF in fiscal year 2019," he said. "We'll start rewarding more for the value part of our portfolio. You'll see some changes around that."