Antonio Neri: HPE Expects To Gain Share Versus Cisco, Dell

‘We think we are gaining share across the entire portfolio,’ says Neri in an interview with CRN. ‘We expect to gain share in switching and wireless LAN. We had high-single-digit growth year over year in switching, and we had 20 percent quarter-over-quarter growth in wireless LAN. We expect to gain share versus Cisco.’

With quarterly revenue returning to pre-pandemic levels, Hewlett Packard Enterprise CEO Antonio Neri says he expects HPE to gain share against rivals Cisco Systems and Dell Technologies.

“We think we are gaining share across the entire portfolio,” said Neri in an interview with CRN after HPE posted a 6 percent gain in sales from the preceding quarter to $7.2 billion. That is essentially flat compared with the year-ago quarter before the onset of the global pandemic.

In the intelligent edge business—which competes with Cisco—HPE reported sales for the quarter ended Oct. 31 of $786 million, up 15 percent from the preceding quarter and 6 percent from the year-ago period.

“We expect to gain share in switching and wireless LAN,” said Neri. “We had high-single-digit growth year over year in switching, and we had 20 percent quarter-over-quarter growth in wireless LAN. We expect to gain share versus Cisco.”

Cisco’s infrastructure segment, which includes the core switching and routing businesses as well as wireless and data center products, continued its double-digit decline in the most recent quarter, falling 16 percent to $6.34 billion.

[Related link: Antonio Neri’s 10 Boldest Statements From Best Of Breed Virtual 2020]

CRN reached out to Cisco and Dell but had not heard back at press time.

HPE’s intelligent edge momentum is growing, with 65,000 customers now on the Aruba Central platform, said Neri. “Now we’re going to get a turbo acceleration from the Silver Peak acquisition,” he said.

HPE just two months finalized ago the $925 million acquisition of SD-WAN highflier Silver Peak, which partners said takes direct aim at Cisco.

“Silver Peak brings that incremental growth that we are looking for in SD-WAN,” said Neri. “I’m very bullish about that business. Obviously, we want the partners to come along. More and more partners are selling Aruba.”

With high-performance computing and mission-critical systems growing 25 percent to $975 million compared with the year-ago quarter, HPE also expects to gain share against Dell in servers, said Neri.

With the strong growth in high-performance computing and mission-critical systems combined with stabilization of the HPE server business, HPE’s server business grew year over year in a market that is declining, said Neri.

“If you look at the combined server view across compute and HPC/MCS businesses—which is how the market tracks server performance—our total net revenue in the server market will be up 3 percent sequentially and 1 percent year over year,” said Neri. “As a result, we believe we gained share in the total server [market] for the second consecutive quarter.”

Dell’s server and networking revenue, meanwhile, dropped 2 percent year over year to $4.16 billion in the most recent quarter. “We expect to gain share [there],” said Neri.

In the pay-per-use Everything-as-a-Service GreenLake business, HPE reported a 20 percent increase in orders. HPE’s annualized revenue run rate was $585 million in the quarter, up 30 percent from the year-ago period.

GreenLake channel orders were up 62 percent year over year with the number of active partners selling GreenLake up 68 percent, said Neri.

Paul Cohen, vice president of sales for New York-based PKA Technologies, one of HPE and Aruba’s top partners, said PKA is seeing momentum with both Aruba and GreenLake pay-per-use service.

In fact, Cohen said PKA has seen double-digit Aruba sales growth in the past several months carrying over into the current quarter.

Neri’s intelligent edge vision—which began when he engineered the acquisition of Aruba in 2015—has paid “huge dividends” for HPE and its channel partners, said Cohen. “That Aruba business is stronger than ever, and it is only getting stronger,” he said.

PKA is also seeing a strong GreenLake pay-per-use sales pipeline, said Cohen.

“Our GreenLake sales pipeline is growing, and we are doing a lot of internal and external training on GreenLake,” he said. “We are evangelizing the GreenLake model, and it is resonating with customers who are still in preserve capital mode but also need to move their business forward by leveraging IT to remain competitive. The way to do that is through a consumption model in which you only pay for what you use. If you don’t use it, you don’t pay for it.”

HPE’s heavy investment in new GreenLake resources and sales compensation along with new field support like East District Manager of Channel Sales Kevin Blaine is paying off, said Cohen.

“Kevin has the respect of both the HPE sales team and the channel,” said Cohen. “He knows enterprise accounts and how to get deals done. He is going to be a big asset to the channel, ensuring tight alignment between HPE sales reps and the channel.”

Cohen said the corporate IT buyer climate is improving. “A lot of customers are looking at being more active in 2021 with IT projects,” he said. “People are adjusted and acclimated to working at home. We see businesses starting to wake up and come out of the cocoon they were in.”

Rob Schaeffer, president of CBT, Orange, Calif., No. 148 on the 2020 CRN Solution Provider 500 and one of HPE’s top Platinum partners, said he sees 2021 as a breakout year for the GreenLake on-premises pay-per-use cloud service for HPE and the channel.

“What we are going to see in 2021 is Antonio’s Everything-as-a-Service vision really come to life,” said Schaeffer. “This is the year that edge to cloud delivered as a service moves from a strategy to an execution model that produces success.”

Schaeffer said there is simply no other “OEM in the world that can deliver what HPE can deliver” with GreenLake. “All of the other OEMs are in chase mode,” he said. “GreenLake is an on-prem consumption model that gives customers choices so they don’t have to just go to the public cloud. What’s more, they can leverage the public cloud through GreenLake for all the benefits the public cloud can deliver. When you go to a consumption-based IT GreenLake service, it does not limit you to just on-premises. It allows you to leverage all parts and pieces of on-premises cloud and public cloud.”

Key to the GreenLake success for the new fiscal year is a heavy HPE investment in resources, training and a new compensation plan with a GreenLake sales quota for HPE sales reps, said Schaeffer. “It’s no longer a strategy or a slogan,” he said. “This is the year to make GreenLake an industrywide term.”

One of the reasons CBT is bullish on the outlook for the new fiscal year is how technology came to the fore to help customers navigate the pandemic, said Schaeffer.

“2021 is the year to move forward,” he said. “The good news from the pandemic is we learned a lot. We learned that technology is really important and can allow companies and their respective workers and clients to pivot quickly and to act and react in a very agile way that allows for workers to be productive and companies to advance and conduct commerce. That is a really good thing. The new normal is technology-laden with requirements that make every company a technology company.”

Overall, HPE reported results above Wall Street expectations with non-GAAP earnings per share of 37 cents, above the Wall Street consensus of 34 cents per share. HPE’s revenue of $7.2 billion was also above the $6.89 billion Wall Street consensus.

Neri, for his part, said HPE has made “tremendous progress” over the past year. “We finished the year very strong,” he said. “Obviously, Q4 was marked by a strong revenue rebound.”