James Thew - Fotolia

HPE points to a high value and hybrid services strategy

The vendor is making some progress with its services strategy according to the numbers shared in its Q3 results

From the very start of Pointnext, the HPE services business, the vendor has stated an ambition to make it an area that delivers revenue through the channel.

The plan, which emerged in March last year, was to give the channel the services support that they can scale to meet customer needs, with a large amount of flexibility built into the offering.

The key focus of Pointnext was to give users the support needed to accelerate their digital transformation, starting from planning right through to deployment.

In June, HPE rolled out a packaged approach with Greenlake Flex Capacity, which was designed to make life easier for partners with pre-packaged options that would speed up quote times.

HPE also made a couple of acquisitions, with RedPixie this April and Cloud Technology Partners last September, to add more support for those customers looking at moving to the cloud.

Antonio Neri, president and CEO of HPE, provided an update on the progress of the services business in the firm's Q3 earnings call with analysts and talked about the future prospects. In Q3 Pointext delivered a 1% decline in revenue year-on-year, although orders grew by 4%.

"We continue to strengthen our HPE Pointnext services business, and we see significant opportunity as we execute our services-led go-to-market strategy," he said.

The firm is looking to put the focus of the services business on the most profitable areas and in that space revenue increased by 1% in Q3 and orders improved by 8%.

"This growth is largely due to strong improvement of services intensity as we shift our focus in more value-added offerings, high-growth in HPE GreenLake and some larger deals. Advisory and professional services revenue was down 10%, largely due to our intentional exit of more than 40 companies as part of our HPE Next plan," said Neri.

He signaled that that the current focus was on hybrid cloud solutions and it had been investing in that area.

"Overall, our Hybrid IT portfolio of products and services is stronger than it has ever been, and continues to help our customers manage and simplify their IT in a hybrid world," he said.

HPE reported a fairly flat quarter revenue wise with Q3 turnover up just 1% year-on-year to $7.8bn. The vendor also continues to deliver on Meg Whitman's last big plan before she stepped down, the Next initiative, which is right sizing the business for the future. These were also the last quarterly results to have a commentary from Tim Stonesifer as he stood down as CFO. 

Read more on Managed IT Services