CRN Exclusive: HPE Creates New Hybrid IT Business Unit With Chief Sales Officer Davis As Interim President

Hewlett Packard Enterprise is creating a new Hybrid IT Business Unit with Chief Sales Officer Phil Davis doing double duty as interim president while the company searches for a top executive for the new organization, according to an internal memo seen by CRN.

"We have created a Hybrid IT business unit that will bring together all of our hardware, software, and services capabilities into a single organization, effective immediately," said HPE CEO Antonio Neri in the memo. "This new organization will be focused on the services-led and software-enabled infrastructure and solutions we need to deliver on our promise of making Hybrid IT simple."

[Related: CRN Exclusive: CEO Neri On HPE's 'Industry-Leading' Partner Program, Dell EMC's 'Confusing' Storage Lineup, And HPE's Spectre-Meltdown Response]

Neri made the formal announcement at an HPE all hands meeting just one day after the company posted first fiscal quarter earnings and sales growth well above Wall Street expectations.

HPE shares were up 11 percent or $1.73 to $18.14 on Friday after the company reported a whopping 24 percent increase in storage sales; a 27 percent increase in networking sales and an 11 percent increase in compute/server sales for its first fiscal quarter ended Jan. 31.

Neri said he chose Davis as interim president because he wanted someone with "Phil’s customer-centric and partner-focused view" to lead the Hybrid IT business while the company searches for a permanent president.

Separately, Neri named HPE Aruba senior vice president Keerti Melkote, the co founder of HPE's fast growing Aruba business, as president of the Intelligent Edge Business Unit.

Melkote has been the driving force behind breakthrough software innovation at Aruba that is driving robust wireless and intelligent edge sales growth.

"As you know, HPE’s vision is to accelerate profitable growth through a focus on higher margin services and solutions," said Neri in the memo. "We are redesigning the company to deliver Hybrid IT and Edge innovations tailored to our services strengths, including our ability to create consumption opportunities for customers."

HPE partners said the new hybrid IT business unit and Melkote's appointment as president of the intelligent edge business unit align with how customers are buying next generation software defined and internet of things solutions.

Dan Sytsma, vice president and general manager of Melillo Consulting, one of HPE's top enterprise partners, said he sees the changes putting HPE in direct alignment with how customers are purchasing software in the hybrid IT-intelligent edge era. "You have to give HPE credit," he said. "The company is aligned completely with how customers are buying IT right now. This is all about being customer first."

Kelly Ireland, founder and CEO of Orange, Calif.-based CB Technologies, an HPE Platinum partner and No. 245 on the 2017 CRN Solution Provider 500, said the changes are in line with the business model that CB Technologies has been building for the last two years centered on cloud, software defined and internet of things with a tight-knit ecosystem of partners.

Ireland credited Neri with driving a next generation operating model that is helping to propel dramatic sales growth for partners like CB Technologies. "Our committed sales funnel for current clients right now is equivalent to our total fiscal year 2017 sales," she said. "There is nothing but upside for us for the remainder of the year."

In the memo, Neri said that Ana Pinczuk will continue to lead HPE Pointnext, Alain Andreoli will lead Hybrid IT Infrastructure, and Ric Lewis will lead Software-Defined & Cloud Group, all reporting to Davis.

Neri said Irv Rothman will continue as president of the HPE Financial Services business unit.

"With this new operating model in place, we are in an even stronger position to execute and I am confident that this is what we need to propel HPE into our next chapter," said Neri.