HPE CEO Antonio Neri On GreenLake Growth, A ‘New Beginning’ And The Decision To Halt Shipments To Russia

HPE CEO Antonio Neri sounds off on the channel’s 115 percent GreenLake sales growth, a new era of edge to cloud innovation and the decision to halt shipments to Russia.

A ‘New Beginning’ With Breakthrough Innovation and Enhancements To HPE GreenLake

Hewlett Packard Enterprise is set to accelerate its transformation into an edge to cloud services powerhouse with groundbreaking enhancements to its HPE GreenLake platform set to be unveiled on March 22, said HPE President and CEO Antonio Neri.

“The beautiful thing about this is this is just the beginning,” said Neri. “We have been talking about this and see the momentum, but this is a new beginning to me, which is the next phase of who we are and how we are transforming ourselves.”

The HPE enhancements will help customers “manage the hybrid cloud more easily, protect and get more value from their data and securely connect at the edge,” said Neri.

Neri told CRN that the new GreenLake capabilities—which include the ability for partners to integrate their services in GreenLake through an API—represent a “huge” moment for HPE and its partners.

“It brings the unification of the [cloud] experience in a hybrid approach from edge to cloud, and it brings the partner ecosystem into the platform with that experience,” he said. “It brings partners all the hard work we have done in the last four years on our IT systems. It brings integration with the back end and all the as-a-service capabilities that channel partners will now have the benefit of. I feel very, very strongly about this.”

GreenLake represents the future of HPE as an edge to cloud innovator, said Neri. “Everything gets delivered through HPE GreenLake, whether it is connectivity to a subscription model, whether it is compute or storage that you can consume elastically with data services running on top of it, whether it is the services to operate in a hybrid world,” he said. “HPE GreenLake is becoming the platform of choice for many customers because it offers that flexibility in an architecture that is edge to cloud. That includes, by the way, the public cloud. That is why when you see the innovation we are going to bring in the next two weeks it includes the public cloud in the way we manage that.”

The HPE GreenLake enhancements come with HPE GreenLake momentum accelerating. For the first fiscal quarter ended Jan. 31, HPE reported a 136 percent increase in as-a-service orders. HPE’s annualized recurring revenue—a critical measure of GreenLake adoption—increased 23 percent to $798 million even in the face of supply constraints, said HPE.

HPE added 100 new HPE GreenLake customers in the quarter, accounting for more than $500 million of total contract value. That brings the total contract value of GreenLake to more than $6.5 billion with 1,350 total customers.

Talk about the quarterly results, particularly GreenLake momentum and what kind of role partners played there.

First of all, I am pleased with the quarter. We had robust demand across all segments. Orders were up 20 percent year over year with as-a-service up 136 percent. The channel grew 115 percent year over year with GreenLake. That tells you the channel is embracing GreenLake.

You will see here in three weeks [with the March 22 GreenLake announcement] when we talk about GreenLake innovation that there are specific channel partners coming on the platform, fully integrated with APIs.

I am particularly proud of the quality of the earnings and the profitability of the business. Our orders are growing 10 times faster than revenue. But when you look at the quality of the earnings with the mix, the discipline on pricing and the pull-through to as-a-service our gross margins are up year over year and sequentially.

Because of all of that it gives us the confidence to raise guidance for the fifth time in six quarters. We are very, very proud of that. I think it shows the strength of our strategy and the innovation in the market together with our partner ecosystem that obviously is a crown jewel and a big differentiator for us.

How big a leap forward will it be when you unveil GreenLake.HPE.com in a few weeks with API integration for partners?

I think it is a huge moment for us because it brings the unification of the [cloud] experience in a hybrid approach from edge to cloud and it brings the partner ecosystem into the platform in that experience. It brings partners all the hard work we have done in the last four years on our IT systems. It brings integration with the back end and all the as-a-service capabilities that channel partners will now have the benefit of. I feel very, very strongly about this.

The beautiful thing about this is this is just the beginning. We have been talking about this and see the momentum, but this is a new beginning to me, which is the next phase of who we are and how we are transforming ourselves.

Obvously, we have a record-breaking backlog. That gives me incredible confidence that this company is on the right path. And financially we are delivering strong results to our shareholders with our new guidance.

Is this the first time you have been supply constrained with GreenLake?

It has gotten clearly worse. It is inhibiting our ability to drive higher ARR [annualized recurring revenue] in the short term because we could not install everything we wanted.

You were in middle school working on an Argentine military base during the Falklands war involving Britain and Argentina in 1982. What impact is the Russia invasion of Ukraine having on you and the HPE team?

It is heartbreaking. I lived it on a military base. You can understand what is happening in the minds of these people.

We have a great crisis management team that is doing everything they can to support the people on the ground there. We don’t have full-time employees in Ukraine, but we have dozens of contractors that came through acquisitions. We are treating them like they are full-time HPE employees. Whatever we have to do we will do.

Our employees are all eager to help. In the last 24 hours, we enacted what we call the HPE Gives Campaign. HPE employees have already contributed $150,000, which the company is going to match and do more.

Based on feedback we have gotten from our employees, we are also increasing the number of hours for volunteering in those countries around Ukraine which are bearing the brunt of the humanitarian crisis. They want to go there to help families and the women and kids.

I am proud of the HPE culture and values and how we act in times like this.

What is the impact on the business side?

First of all, in Ukraine we don’t go direct. We don’t have a legal entity. We work through distribution and partners. So we are working with the partners and figuring out how we can support customers. Right now they are in crisis mode.

Regarding Russia, on the other hand, we stopped all shipments into Russia 48 hours ago.

It is very heartbreaking. We are doing what we need to do. I was reflecting in the last four years how many crises we have had to manage. Of course you think about cybersecurity, supply chain disruption and all the regions impacted. You need to think about Russia employees. We cannot pay them now because the whole banking system has been halted.

It is a disaster. But you have to step up and do what you need to do. More than ever we need to stand united as humanity against these things. We can’t go backwards here. We can only go forward. What is happening there is simply unacceptable and we need to take a stance.

You’ve driven a change in the HPE culture. How important is that transformation?

I am proud of what we have done, but it has nothing to do with me. It has to do with the people of this company, where they stand and the values they showcase everyday. We have large centers in Eastern Europe with Romania, Bulgaria and the Czech Republic. When you look at the demographics, it is on the younger side with Generation X and others.

We have given them the ability to come to work, learn and obviously make a contribution but also to give back to their communities, which is one of the principles of the legacy of HP. That is why it was not hard for me to give more time to employees to go help at the border. When you look at the images and footage, you can see these people don’t know where they are going. It is complete insanity.

We live in a crazy world. Only people can make it better.