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HPE’s GreenLake strategy pays off in APAC

HPE’s transition to an as-a-service company is paying off in Asia-Pacific where it witnessed one of the strongest quarters, thanks in part to rising demand for services

In 2019, Hewlett Packard Enterprise (HPE) boldly declared that it would become an as-a-service company over time. This includes a commitment to provide its entire portfolio through a range of subscription-based, pay-per-use and as-a-service offerings by 2022.

The move, which led to the creation of its GreenLake portfolio, came at a time when interest in consumption-based offerings was brewing among enterprises that were looking to consume and operate their IT infrastructure through an everything-as-a-service model to reduce IT staff workloads and budget complexities, among other goals.

In an exclusive interview with Computer Weekly, Narinder Kapoor, HPE’s senior vice-president and managing director for Asia-Pacific, talks up the company’s GreenLake strategy, the growing traction of the GreenLake portfolio in the region, and plans to expand HPE’s regional footprint to tap new growth areas.

Could you give me a sense of HPE’s overall business in the Asia-Pacific region, particularly with regards to GreenLake which appears to be gaining traction in the market?

Kapoor: HPE’s strategy seems to be resonating with our differentiated portfolio. We were worried about the supply chain issues and slowdown from Covid-19, but since then our recovery has been really fast. During the third quarter, our revenue was $6.9bn as per expectation and from an orders perspective we had year-to-date 11% growth compared to last year. Our profitability is also improving while revenue is holding.

We see two growth areas across our portfolio. One is the intelligent edge, where we had a record quarter with 23% year-on-year growth. The other area is high-performance computing with our acquisition of Cray. Mission-critical workloads are also moving from Unix to Linux and that’s a high-growth business for us. As for our core compute and storage business, we had a robust, year-on-year growth in terms of orders, with profitability improvements.

“Data now spans the edge, datacentres, hosted environments and the cloud. That’s why HPE’s strategy is to create an edge-to-cloud platform and deliver it as a service with a seamless cloud experience”
Narinder Kapoor, HPE

At least one positive thing that came out of Covid-19 for the IT industry was that digital transformation accelerated. The world is becoming much more cloud-enabled and data-driven, and this is what we’ve been talking about for the past five years. Data now spans the edge, datacentres, hosted environments and the cloud, and you need to be able to manage data wherever it resides.

That’s why HPE’s strategy is to create an edge-to-cloud platform and deliver it as a service with a seamless cloud experience. We continue to have close to 50% growth in terms of the new orders for as-a-service, with around 1,100 customers globally.

In Asia-Pacific, we experienced one of the strongest quarters, contributing around 24% of our global business in the third quarter. Digital transformation is really fuelling the growth and some of the key themes which have become important are secured connectivity, data and having the cloud experience everywhere through GreenLake cloud services.

We continue to enhance our GreenLake portfolio, having launched GreenLake Lighthouse in the middle of this year, to help enterprises optimise different cloud services and workloads. Leveraging our Ezmeral portfolio, we’ve recently added unified analytics capabilities, including a data lakehouse and the industry’s first Kubernetes-native object store optimised for high-performance analytics.

On the data protection side, we acquired Zerto, the industry-leading disaster recovery software, which can protect service providers against ransomware attacks. We also announced cloud services for backup and a cloud adoption framework to help customers in their migration to public and hybrid cloud.

In Asia-Pacific, what’s the typical entry point for your customers into the GreenLake portfolio? What sorts of problems do they come to you with?

Kapoor: Customers are very thoughtful in terms of how they move towards cloud before they even start to transform and modernise their applications. That’s where we bring our advisory capabilities to help them build up a roadmap, but after that it’s about providing them with a cloud model where we help them define a set of workflows in the public cloud, or in a hosted or private cloud environment, which GreenLake can offer along with cloud bursting capabilities.

Another area we’re seeing is partners who engage with us on GreenLake to become a service provider. As they launch new services, they come to us as they want to offer a pay-per-use pricing model.

There are also customers who start with specific workloads such as VDI [virtual desktop infrastructure], backup-as-a-service, as well as infrastructure-as-a-service. The good thing is we’re seeing a lot more stickiness with GreenLake, because once they have a good experience, they’ll start adding more services.

With GreenLake, we are not just converting our infrastructure into a lease model. We also offer managed services and host infrastructure for our customers, in their datacentres or in a hosted environment. And if required, we can have GreenLake software on top of that, whether it’s virtualisation software, or in some cases, the applications associated with a workload.

Regarding the Zerto acquisition, I understand that HPE works with ISVs (independent software vendors) to deliver services as part of the GreenLake platform, while other times it acquires companies to build up specific capabilities. How does HPE strike that balance between maintaining a healthy partner ecosystem versus striking out on its own?

Kapoor: Ultimately, it’s about customer choice. We want to focus our intellectual property on high-growth areas and at the same time partner with ISVs that have sufficient mindshare in the market. As you know, backup has been a growing area and we have developed some good partnerships there. At the same time, we are also providing cloud-native services while ISV partners tend to offer on-premise solutions.

Do the 1,100 GreenLake customers tend to be the largest enterprises? Is HPE targeting SMEs (small and medium-sized enterprises) too, since they often benefit more from the as-a-service model?

Kapoor: The majority would be large enterprises, and a lot of them would be the 100 global accounts. Then there are local enterprises where we’re seeing some good penetration, though that varies depending on the maturity of the country they are in.

What we are not counting are the service providers who have gotten into our GreenLake as-a-service model and are providing that as a service to their customers. That is our main model for addressing the SME market. We are also exploring partnerships with key distributors and resellers to offer GreenLake services in selected markets.

You mentioned market maturity – what’s the appetite for as-a-service offerings like GreenLake in the Asia-Pacific region?

Kapoor: Mature countries like Singapore and those in the South Pacific are seeing more traction. These are markets where people understand the public cloud and a lot of large customers have moved onto the public cloud bandwagon.

“As [companies] move more and more workloads to the public cloud, to a point where cost is rising, they are looking at moving some workloads back on-premise and considering hybrid cloud opportunities. That’s where GreenLake adoption tends to be very high”
Narinder Kapoor, HPE

But as they move more and more workloads to the public cloud, to a point where cost is rising, they are looking at moving some workloads back on-premise and considering hybrid cloud opportunities. That’s where GreenLake adoption tends to be very high.

In countries that are slightly late but are maturing in their use of public cloud, we have seen customers getting smarter and being very thoughtful before they move their workloads to the public cloud. That’s where we lead with our hybrid cloud advisory services from our acquisition of Cloud Technology Partners, which is the biggest implementer of Amazon Web Services (AWS).

We’re also seeing good opportunities among web tech companies that have started on public cloud, but as they launch new services, they’re exploring the hybrid cloud environment and GreenLake for new workloads which they want better control of.

HPE has launched a data lakehouse, which I assume is based on the technology acquired from MapR. What’s your reading of the market for data lakehouses?

Kapoor: That’s part of GreenLake’s unified analytics offering, and it’s based on a couple of acquisitions, including MapR, which provides a data fabric, BlueData, which automates machine learning operations, and Ampool, which provides high-performance analytics for engineering and business analytics based on interactive SQL workloads. We’re combining all of that into an as-a-service offering.

The pipeline is growing, but in terms of closure of deals it’s still in the very early stage because we materialised the offerings only during the year and we’ve just built up the team as well. Until recently, we were selling the offerings through our SQL sales team, and this will be expanded to the broader team with the inclusion into the GreenLake portfolio.

Are there plans to expand HPE’s footprint in Asia-Pacific to support the growth you’re seeing now?

Kapoor: Asia-Pacific is a very unique market. We have the emerging markets like Indonesia, Thailand and Vietnam which are experiencing really high growth because of Covid-19, which has increased internet penetration substantially. That is driving a lot more demand for edge experiences. Our focus in those countries would be to continue to lead with the infrastructure.

The next group of countries are the mature markets which are much more digitally ready, such as South Korea, Taiwan and Singapore. Everybody is expanding capacities so we see huge growth in IT infrastructure to meet the demands.

Another area that we will be investing in is high-performance computing which is going through the roof. In the past nine months, there were six or seven mega deals of between $10m and $50m in the region, and we won all of them.

Finally, we’re seeing a lot more movement on the 5G front. Telcos are looking at how to monetise their networks so we are working with them on 5G radio access networks (RANs) as well as multi-access edge cloud services.

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