Hewlett Packard Enterprise CEO Antonio Neri has intimate knowledge of COVID-19 since he was infected. Now he's directing HPE's supply chain, employee base and culture amid a pandemic.
I caught up with Neri to talk demand, edge computing, the promise of HPE software and the company's pivot to selling its entire portfolio as a service. Recent events from HPE's last earnings report:
Here are a few themes and highlights from our talk with the full conversation in the video.
Returning to work during the COVID-19 pandemic. Neri had COVID-19 and was able to recover quickly. HPE has been able to recover its supply chain and has been able to work through the backlog from last quarter. Workers have been able to work remote in HPE's 172 markets and customers are looking to support employees with a "cloud native approach."
"We have reopened 93 sites around the globe, but none in the United States it's zero. And we are what we call in phase one, which is up to 20% of the employees are allowed to come back to the office, but we're working through that.
The future of work. Neri said:
We are not going to be going back to the way we used to where people will have a desk and come and do the job. I think the office will be totally redesigned to provide a more collaborative and innovative experience. Probably up to 50% of the workforce will never return to the office to do their job on a daily basis. Obviously, all of them would come back to the office to do innovation center sessions, collaboration sessions, and then ultimately for social aspect of it. It is an opportunity to change the way we work and to provide a better experience, but also to rationalize our footprint.
Neri added that every worker has a different family situation and school arrangements are going to be challenging. HPE and other companies will have to support those employees with flexibility while retaining the corporate culture.
The demand picture for HPE. "Demand has been steady, but what we see is the demand is shifting to new areas or different areas for that matter," he said.
Neri said any infrastructure or software that covers IT resiliency is garnering attention. Security is another key area as well as the cloud and virtual desktop infrastructure as well as high-performance computing. "Then you have the campus and then you have the branch. And now you have these micro branches, which is all our offices around the globe, our home offices. And so security is essential," said Neri.
These branch offices also serve as edge locations. HPE bought Silver Peak to complement its Aruba portfolio. Neri noted that the edge will provide data for analytics and ultimately new business models.
HPE as an edge company. Neri said:
We want to be known as the edge-to-cloud platform as-a-service company. And in that there are three major components. One is, as-a- service because obviously customers want to consume their solutions in a more consumption driven, pay only for what you consume. And that experience, at the core is simplicity and automation for all the apps and data, wherever they live.
Obviously, the edge is the next frontier. And we said two years ago that the enterprise of the future will be edge-centric, cloud-enabled and data-driven. Well, guess what? The future is here now. The edge is where we live and work. And so for us, as customers accelerate the digital transformation the first step in that journey is connectivity. And this is where being an edge platform is essential.
What about compute and storage? Neri said compute and storage is still the core business for HPE and has become important due to the importance of data and how it is proliferating.
HPE as software firm. Ezmeral, HPE's new software brand, is an alternative that can compete with VMware and Red Hat OpenShift. There are other software assets in the portfolio such as GreenLake and HPE InfoSight. I asked Neri about the challenge of seeing HPE as a software firm.
Our strategy is to be true open source, autonomous, intelligent, and secure, and be able to connect all their edges and all their clouds in a very automated way. And we have already won quite a significant number of customers because of HPE Ezmeral. There is a large financial institution here in the Bay area that need to run Splunk as a workload on prem because of the amount of data. They don't want to pay the cost of egress and data back and forth, and they want a true cloud native approach. And by the way, we deploy that because of HPE Ezmeral with our compute and storage solutions, deliver as-a- service to HPE GreenLake. Those are the type of customers we're going to track going forward.
It's about land and expand with new workloads and be able to provide managed services for the entire estate.
Can everything-as-service drive revenue growth? Neri said:
It's a journey. Obviously, there is a component of customer acceptance. But the fact that customers have already embraced the consumption model through shifting some workloads to the cloud that tells you the OPEX model is something that's being adopted more and more than just a CAPEX model.
We see the growth, we see the momentum, but obviously when you are (a large) company, to pivot everything in that model will take time.