CRN Interview: HPE Aruba President Melkote On The 'Urgent Need' For Partners To Respond To Digital Transformation

Keerti Melkote, co-founder and president of HPE's Aruba networking business, says the next five years will be critical for solution providers as customers get serious about digital transformation.

High Impact

The market for intelligent edge solutions and the partner-led services that support them is moving fast, and picking up speed. Keerti Melkote, co-founder and president of HPE's Aruba networking business, argues that the next five years will be critical for channel partners as customers get serious about digital transformation.

HPE Aruba's strategy centers on the intelligent edge, the ability to gather and act upon data coming from all points in a business's network, and Melkote said the rush to those capabilities means "the faster our partners can transform themselves to offer a managed service around the solution, the more impactful it will be for customers," he said. "It's very timely. The market is moving now. The next five years is where most of the money is going to be made here."

What follows is an edited excerpt of Melkote's conversation with CRN.

What's your call to action for partners around building an intelligent edge managed services business model?

It's to start building the managed service practice that brings the intelligent edge to life for our customers. It's about the connectivity infrastructure -- Wi-Fi, wired and WAN. It's about connecting to the clouds and bringing it all together in a secure manner. To me, that is a massive opportunity. Customers want to move quickly.

They don't have the staff to move quickly. They're looking for a trusted partner that can walk them through this journey.

That translates to not selling boxes. It's about selling a service. The faster our partners can transform themselves to offer a managed service around the solution, the more impactful it will be for customers. It's very timely. The market is moving now. The next five years is where most of the money is going to be made here.

What's your message to partners on the intelligent edge opportunity you see going forward?

It's very straightforward. Almost every business we talk to, there is a very fast-paced transformation to digital that's happening. The bottom line is if you don't transform your business, you're likely to be out of business. There's a very, very urgent need to implement the technologies needed to make that transformation happen and happen really fast. That's the customer demand that is driving the adoption of a bunch of our technologies. To transform to digital, you need an intelligent edge, which is where the action actually is, where people connect to networks, where IoT devices are generating a boatload of data. The focus is on how to create and optimize new digital experiences for your customers at the edge. We call it ’smart digital.' It's about the data. Where does it live long term? How do you create value with data at the edge? A lot of that is connectivity to the cloud.

What impact is the intelligent edge strategy going to have on the network of the future?

It's not only about using the data for insights for our customers, but turning it around to improve the network and the infrastructure on a self-driving basis. Google and Amazon and others are developing consumer technologies that are learning and self-driving. How can we bring a similar idea to networks, where you can create a network that is self-healing, self-driving and self-securing? The data layer that we're building is going to serve that ability to create a more self-healing, intelligent network as well.

What differentiates HPE's Aruba approach to the intelligent edge from Cisco's approach?

The difference is fundamental. If you talk to Cisco, basically the heart of any Cisco proposal is around a wired switch. It's all about campus switch refresh. A lot of Cisco products are end-of-life, and there's value in end-of-life refresh opportunity. They're doing it in a smart way by going to a subscription-based service on the software attached to the switch, but it's still very much a switch-centric sale. What we are saying is it's not about the switch. It's not even about the network. It's really about the business. More and more, businesses are gravitating toward a mobile-first approach at the edge. The other side of the coin of the mobile-first approach is IoT. When these two trends come together, it creates a whole new opportunity that is not switch-centric. It is centered much more on users, on devices, on the data that is generated and how the new architecture serves the mobile-first, IoT-ready infrastructure at the edge.

How will HPE Aruba approach the SD-WAN market?

That is an area of growth for us. We'll be unveiling our solution at Discover. The edge is getting more and more distributed at more and more locations, and the data and applications are getting more and more distributed. The problem is, how do you create a secure connectivity fabric that brings all of this together in a simple manner? That is the promise of SD-WAN. What is unique about our SD-WAN solution will be that it will be integrated with the infrastructure. The LAN, the Wi-Fi, the WAN and security all coming together with this context I talked about. You have the ability to get connected and make it secure, but the uniqueness will be the data we are able to generate from the connected infrastructure giving customers insights into their network performance, business and security.

What makes HPE Aruba's software-centric approach a superior strategy in the market?

The difference is in the intelligence layer. We all sell software. It's about what is the intelligence we are giving our customers? At the heart of our architecture is a contextual intelligence that we can create about real-time situations that are happening inside the enterprise.

Contextual experiences could be a shopper in a store. As you walk in and walk the aisles, there's a lot of data that a store owner can gain from that. What's the route you take? Which aisles do you frequent, what produce or cereal do you pick up? There's a lot of contextual data there that is today thrown away. We provide the ability to collect that data intelligently so we know a lot of information about the stores, the devices around the store, the paths people take, the applications being used inside the store. The heart of the differentiation for us is that we collect this data in a privacy-friendly, anonymized fashion and are able to generate insights.

What kinds of insights are you gaining?

The insights are network insights to optimize the network environment for a better user experience. The insights can be around business, which gives you a better sense for optimizing store operations. Insights can be around security. Without security, you really have a compromised situation for the enterprise. It can be multiple dimensions, and you don't need to have silos. You can have insights into all domains. That saves money, makes it easier and makes your business more intelligent.

That's our promise. That's really what we want to deliver to our customers, and we're better at doing that with our software-defined architecture than anybody else in the market. That's the core of our differentiation when it comes right down to it. When you strip out all the hardware and product names, it's contextual intelligence that delivers business value.

HPE Aruba and Cisco have both made several acquisitions. Is there an advantage to the way you've approached building your portfolio versus the approach that Cisco has taken?

Absolutely. We've taken a partner-centric approach. ... With the software model, our partners can have realtime insights into how the solutions they've provided their customers are actually working and can proactively work with customers to improve service levels. This is a fundamental capability if you want to transform your business. If you don't have that level of intimacy, and insight about your customers, you become a transactional vendor. If you become transactional, you end up not being able to sustain long term. That world is about discounts, the lowest price and the customer just buys the cheapest product and moves on.

You don't believe that strategy will be sustainable for customers or partners?

It really has to be a sticky relationship. It's about creating that connectivity through using the data we get from our customers. That's really where we're focusing to differentiate ourselves from what's happening out there in the market. I think a lot of next-generation partnerships are going to be built around the data that the customer infrastructure can generate. It's important to figure out how to do it in a manner that is most appropriate for the customer in various stages of the life cycle. They don't necessarily have the budget to replace everything. You have to go in and put in something lightweight that works with the investment and the budget they've already put in place.

Is that where your acquisition of Cape Networks comes in?

Cape gives you the ability to work inside a customer environment that is maybe Cisco-centric. It's a multivendor platform. It'll work with Aruba, obviously, but it will also work with Cisco, and that's the promise of our software layer. We are going to be multivendor. Our customers embrace multivendor. They have Aruba, they have Palo Alto [Networks], they have Arista, they have Cisco, Juniper. There are a number of partners they rely on in various stages of the life cycle. The footprint a customer owns is a living, breathing thing. What you need to be able to do as a partner is work with what they have and provide value on top of it. That's one of the key tenets of our software layer, to be open and be multivendor so they can take advantage of everything they've made investments in.

It sounds like your SD-WAN solution will integrate ClearPass, Niara and Cape Networks. Will they all be part of it?

We are building it on a cloud platform, and it's all going to be part of the cloud platform. The idea is that it's all going to be integrated. ClearPass, Meridian, Cape, NetInsight, all of this will be part of the story. The goal is to make it simple to deploy. The world is getting agile. Customers need to turn up a store very quickly in a new market. They want to move fast. Fast is key, and simplicity is key to that. Second is to ensure that it's super-secure. All your traffic is going to be not only on private lines, but it will be in a hybrid environment with private lines and the internet. When you're on the internet, you want to make sure security is paramount to any solution you create. The third piece is intelligence. That's ClearPass, Meridian, Cape, NetInsight all coming together on top of the solution.

Compared to the traditional Aruba opportunity, is the SD-WAN opportunity just as big, or bigger?

What's happening is you have the WiFi opportunity, which is big. It's a $7 billion TAM. The switching opportunity is about $15 billion. The SD-WAN product opportunity is in the billions-of-dollars. It's still early days. People say it's a billion or two. My personal take is that it's probably closer to $5- to $7 billion for the gateways and the services that come on top of it. The partner opportunity is to layer on services. There's a $100 billion amount of money getting spent on the bandwidth to get it automated. We have MPLS pipes, broadband connections and LTE. There's lots of money being spent on the connectivity itself. So, all-in, for a partner, the opportunity is to bring it all together. We see this as a huge opportunity beyond the box and being able to provide the actual service. For managed services partners in particular, it's a massive, massive opportunity.

How will HPE Aruba approach the SD-WAN market?

That is an area of growth for us. We'll be unveiling our solution at Discover. The edge is getting more and more distributed at more and more locations and the data and applications are getting more and more distributed. The problem is how do you create a secure connectivity fabric that brings all of this together in a simple manner. That is the promise of SD-WAN. What is unique about our SD-WAN solution will be that it will be integrated with the infrastructure. The LAN, the WiFi, the WAN and security all coming together with this context I talked about. You have the ability to get connected and make it secure, but the uniqueness will be the data we are able to generate from the connected infrastructure giving customers insights into their network performance, business and security.

How big is the opportunity for partners in a platform approach to SD-WAN?

We have a TAM of $25 billion. It's a massive, massive TAM. For SD-WAN, there's a transformation of $100 billion-plus revenue. All-in, it's one of the single largest opportunities that we see over the next five years. Our customers are all clamoring for a solution that brings it all together for them in a manner that doesn't bust their budgets, but yet gets them to the next generation architecture. I think it's the right time for partners to jump in with a proposal and an architecture that helps them differentiate over time, as well. It's massive. We're making a big bet on it. That's the reason we're coming out in force at Discover.

Compared to the traditional Aruba opportunity, is the SD-WAN opportunity just as big, or bigger?

What's happening is you have the WiFi opportunity, which is big. It's a $7 billion TAM. The switching opportunity is about $15 billion. The SD-WAN product opportunity is in the billions-of-dollars. It's still early days. People say it's a billion or two. My personal take is that it's probably closer to $5- to $7 billion for the gateways and the services that come on top of it. The partner opportunity is to layer on services. There's a $100 billion amount of money getting spent on the bandwidth to get it automated. We have MPLS pipes, broadband connections and LTE. There's lots of money being spent on the connectivity itself. So, all-in, for a partner, the opportunity is to bring it all together. We see this as a huge opportunity beyond the box and being able to provide the actual service. For managed services partners in particular, it's a massive, massive opportunity.

How do you compare Aruba's approach to WiFi to what it's doing now with SD-WAN?

The heart of the architecture is still the Aruba secret sauce. From the first day, we built this idea of a contextual engine that is inside our controllers. It's about the user, the device, the application, the location and the data. That was the heart of the Aruba architecture even back in the day when I started the company. When I started the company it was about applying it to WiFi connections, and it was only about moving packets. Today, it's about applying it analytically to connect users. Today the opportunity has expanded to not only WiFi connections, but connections of any kind. The opportunity has expanded to include not only users, but IoT devices. The opportunity has increased to include security. The heart of the engine is still very much what we invented back in the day, but I think the applicability of the engine to various scenarios in the market has grown dramatically.

What's your strategy for the cloud?

The strategy for the cloud is distributed. The edge is distributed because it's where your people are, where your customers are, where your IoT devices are, and it's getting hyper-distributed at that end. The data center, which used to be this single, monolithic thing, is also getting distributed into virtual private cloud infrastructures inside AWS, or Azure, or Google Cloud, as well as getting distributed into SaaS solutions with [Microsoft] Office365, with Salesforce, and so on. You can imagine on one hand the edge is getting hyper-distributed. On the other hand, the applications and the data are getting hyper-distributed on the data center side. The trick is how do you bring these two together to enable that digital transformation to happen, and happen really fast?

Would you say that's the mission of the new HPE, and what does that mean for partners?

That really is the mission of the new HPE. It's to bring the intelligent edge and the hybrid cloud together in an edge-to-core-to-cloud architecture that ties it all together for the customer. That's the strategy, and for partners, they are the first line of defense for our customers. When they have this fast-paced transformation that they need to enable, they go to our partners and ask that they help enable the transformation. There's an opportunity to guide them through this transition very rapidly. It requires a) knowledge of what the business transformation is that the customer wants b) knowledge of the technologies that allow them to enable that transformation, and c) the service delivery capabilities to make it real. I see opportunity in all three domains.

Can you expand on that? How can partners capitalize on opportunities across those three areas?

It's in the ability to do the business advisory piece, sell the technology and then bring it all together for customers. It's the next generation up. It's not just about I need 20 boxes of server, or access points, or switching. It's about how do you bring the business together to make the digital transformation happen. Partners that can step up to this level of the game, I think there's a lot of money to be made, a lot of differentiation and a lot of sticky value.