Rewarding Partners For GreenLake ‘Land, Adopt, Expand or Renew’: HPE’s Jesse Chavez

HPE’s new everything-as-a-service ecosystem program rewards partners for the full customer lifecycle with incentives for ‘land, adopt, expand or renew,’ says HPE Vice President Jesse Chavez, a key architect of HPE’s new everything-as-a-service ecosystem channel program.

An As-A-Service Program That Rewards Partners For Entire Customer Lifecycle

HPE’s new everything-as-an-ecosystem program lets partners participate in the entire customer services lifecycle with an aim to reward “land, adopt, expand or renew,” said HPE Vice President of Worldwide Partner Programs and Operations Jesse Chavez.

“Our program recognizes that a partner participates in the entire lifecycle – unlike other programs- that you have seen in the marketplace,” said Chavez.

Providing partners a framework to participate in the full customer lifecycle from landing the deal, to adopting and implementing, to expanding with additional cloud services and finally to renewing the customer relationship is a central tenet of the new ecosystems program, said Chavez. “We are going to reward partners for the customer lifecycle whether it is land, adopt, expand or renew,” he said.

“Partners have to build out their skill sets to be able to deliver that customer lifetime value,” said Chavez. “At the end of the day a partner wants to acquire the customer but they want to own them for life. They want to have a relationship for life.”

The new program does not yet include new incentives but is rather the starting point of a three year “North Star” vision and framework for the GreenLake ecosystem, said Chavez. He said the program will be rolled out in phases, HPE said, with the first details coming at the start of HPE’s new fiscal year on November 1.

In the meantime, HPE is maintaining what it calls its industry leading Partner Ready program for the foreseeable future with traditional robust GreenLake incentives like the 17 percent upfront rebate on GreenLake deals.

The GreenLake ecosystem channel program is centered around building, embedding and providing services and business outcomes with GreenLake rather than selling hardware solutions, said Chavez.“We are the edge to cloud platform as-a-service company and we are now introducing an edge-to-cloud partner program,” said Chavez.

How long have you been working on the new GreenLake ecosystem channel program?

We have been working on a three-year vision. We started that probably about 18 months ago. We continue to revise it and enhance it.

With the trends that we were seeing we knew we were going to need to start to take a look at what we needed to do different from a partner perspective.

What we wanted to put together is a three-year vision. We wanted to share that with the entire company with regard to what we are trying to do from a partner perspective. We wanted to broadcast exactly what is the three-year vision and what is the partner experience that we wanted to go deliver on.

What is key as you look at the three-year vision?

I am trying to get everybody to move away from classifying partners as partner types: being a solution provider and put in that box, or an SI and being put in that box, or being a developer and ISV and being put in that box. At the end of the day, partners are going to have multiple personas as we go forward and multiple business models to support that. That is going to be a critical piece that we need to start recognizing. It is not about what they are called but what they do. They either embed, they build, they provide services, they are selling, they integrate. It is more of the vebs we are moving to versus the classifications we give partners. That’s one key thing you’ll start seeing from a program perspective that we are trying to recognize.

What does the new ecosystems program say about the margin potential for services?

Obviously as we all know the margins are not in hardware. That is becoming more and more commoditized, but obviously from as-a-service as we bring those things together selling solutions is the key and not selling the components is a way to increase the margins.

Having the partners delivering their own branded services on top of GreenLake is going to be the key as we go forward. We have to recognize the fact that those partners that can actually deliver their branded services on top of GreenLake but we also want them to deliver the experience we want from a customer perspective. We set the bar there. We want to make sure the partners delivering the services on GreenLake are meeting that bar.

What is the opportunity for advisors and influencers in the new ecosystem program?

Most companies have struggled with recognizing the fact that there are a bunch of advisors in the marketplace that are advising customers that don’t want to get involved in the transaction. Most programs the way they have been designed in the past is mainly transactional. At the end of the day we recognize the resell component but it is very hard to recognize the influence component. So we know there are a lot of influencers. When it comes to ass-a-service there are people that are born in the cloud don’t want anything to do with the hardware transaction.

Obviously the SIs (Systems Integrators) which are typically the ones that didn’t want to (resell hardware) in the past – although many of them are developing their own managed services and buying the gear – so there is a sell to motion there that we can recognize. But there is going to be an advisory component that we have to actually recognize.

What kind of different sales motions do you see with the new ecosystem program?

At the end of the day we want the customer to consume it any way they want to and we want the partner to be able to deliver it any way they need to. So the program needs to be able to have the partner offer the customer choice whether it is a traditional model, a subscription model or a consumption model. You’ll see that as part of the design.

What are the new incentives or terms of new unified ecosystems program?

We are not going to be announcing commercial terms. We are announcing the vision of where we are taking the program. We are going to maintain the traditional industry leading (Partner Ready) program as it exists today that everybody knows and loves. That is going to continue for the foreseeable future: two to five years.

What are some trends that you are seeing in the market with regard to everything-as-a-service?

Our ARR customer success managers are becoming a really defining attribute on driving the customer lifecycle. Partners have to build out their skill sets to be able to deliver that customer lifetime value. At the end of the day a partner wants to acquire the customer but they want to own them for life. They want to have a relationship for life. I think that you’ll also see that our program recognizes that a partner participates in the entire lifecycle – unlike other programs- that you have seen in the marketplace

So the land, adopt, expand and renew is a layer model that many of us are landing on. That is the standard that CISA (Cybersecurity and Infrastructure Security Agency) has come up with that the industry is using. We feel that the partner has a role in all four if they are driving the customer experience of that lifecycle. So the program will recognize that.

Most partners are transforming. Some of them will continue to remain where they are but many of them are transforming. As we start thinking about the enablement and how we go forward, we have to be able to enable partners to develop these skills. That is more of a visionary thing that we have in mind. We are talking about an edge to cloud environment where there are going to be continued shortage of skills and we are trying to determine how we are going to enable not only our partners but our customers in that. So that’s some of the things we’re thinking about here in the future.

How is the enablement going to work?

We’re going to develop our enablement both on the Pro Series with (HPE) Sales Pro, (HPE) Tech Pro and Marketing Pro. It is going to be persona based not (partner) type based so whether you are a saleperson, advisor, consultant or integrator in those personas as individuals within the company. Not only is the company going to have multi-skill sets and business models but people obviously will have multi-skill sets. We are going to recognize that through Tech Pro as we go forward.

What does this mean for midmarket and SMB sales growth?

Obviously we are going to be pushing for continued growth in midmarket and SMB. You’ll start seeing as-a-service offers especially when you start thinking about block storage and compute ops. Those are all really targeted into the commercial midmarket space overall.

We are working really closely with the distributors. They have been evolving overall in their marktplaces. The way they have been designing those marketplaces some are making a lot of progress. Certainly we want to play in those marketplaces and we are working closely with them.

What is the structure of the ecosystem program?

What you’ll see is more of a framework than all the commercial terms. It is about the vision of the program to be able to recognize this ecosystem under one program, not separate programs the way that programs are designed today. They are evolved into one that recognizes all these different business models. That is what we are trying to work towards.

Obviously we want to radically simplify as much as we can with our operational systems to improve the partner experience and therefore continue to improve and enhance the customer experience.

What are some of the dynamics with regard to customer choice as partners build out their services?

At the end of the day customers are going to want choice. They can consume it any way they want whether it is capex or opex. They can manage it themselves, they can have a partner manage it or they can have us manage it. Those are the three choices. We want to offer choice.

Today the GreenLake offer is we manage it. But in the future you will see that the customer can manage it or a partner can manage it. It is really by a three by two which is those three options and the two would be the capex – opex consumption.

What is the partner opportunity in a powered by GreenLake model?

The beauty of that model is partners are training their own people and paying their own people on their own digital services built on the GreenLake platform. So we don’t have to go train their people on GreenLake. They are training their own people on their own service.

What does this ecosystems charge ahead mean for current HPE partners in the Partner Ready program?

The bottom line is we are not abandoning our partner base at all. There is a home for them in the traditional program and if they are evolving to as-a-service and developing their own services around it they can evolve into the new program.

We are announcing the framework of the program. We’re not announcing the terms.

It will become operational in phases starting November 1. Aruba will go first with its Services Track which was announced at Atmosphere.

How does the new program work for Partner Ready partners?

The new program basically allows our partners that have the skill sets and expertise to go into the new program. We can now capture partners that do not want to transact which is the traditional programs. They are the born in the cloud influencers like the SIs and some of the software companies that don’t want to sell any hardware.

We have an ecosystem. At the end of the day we already have a pretty broad ecosystem and what is happening with that ecosystem today through acquisitions or organic change they are modeling themselves to sell as-a-service. So CDW bought Sirius (last October in a $2.5 billion megadeal). Why did they buy Sirius? They bought Sirius because Sirius has a services arm that has 2,900 consultants that they want to evolve to as-a-service and ARR (Annualized Revenue Run Rate). CDW is already part of our ecosystem,. What we want to recognize is Sirius as having those services capabilities for as-a-service,

So we’re not going to go after a bunch of new partners . We do have the capacity to go do that if they want to join our program. But we already have partners in our ecosystem that are evolving that we want to recognize their evolution and the acquisitions they are making to grow ARR.

What is the bottom line impact on partner profitability in the new ecosystem model?

If a partner has expertise and services capabilities that can deliver the experience in as-a-service for GreenLake the profitability is on their services.

A lot of partners like Advizex, PKA and CPP already offer their own services around GreenLake. What changes here?

Now they are going to be recognized for that capability. The thing they love about this is the fact that they can now be recognized under the program that they in fact have their own GreenLake services.

We are going to promote them under the new Partner Connect portal that we designed as part of this overall program. We are going to combine five global partner locators.

We are taking the (HPE) Cloud 28 (service provider program) that has been around for a decade that actually promoted all the service providers and their service catalogues. We are taking that technology and we are now evolving it to include all our partners. That includes the new partners that are in the program to highlight the fact that they have service catalogues that can drive as a service specifically around GreenLake, So an Advizex, CBTS, or PKA like this because now the field is going to know about them and the customers are going to know about them.

We are creating an environment where not only do we promote that from a customer perspective wherever they do business but we promote them from a field perspective and from a go to market standpoint. They can also be recognized by other partners that see their skill sets and may need them because we are also trying to create a partner to partner network.

How big an impact is this going to have on the channel’s ability to accelerate everything-as-a-service and drive GreenLake recurring revenue?

From my perspective I think the fact that we are now coming out with offers that get partners to scale and offer more as a service is a big key piece of this along with the fact that partners can build services on top of GreenLake.

The fact that partners can go into new markets with their offers now through the program I think is going to be key. Everybody right now is pushing for ARR (annualized recurring revenue and annualized run rate).

We are THE on premise as a service offer. We are the edge to cloud platform-as-a-service company and we are now introducing an edge to cloud partner program. Partners can participate through all of that. At the end of the day what we are doing now is opening that market for them so we can recognize their expertise.

So what is the call to action for partners as you bring to market the new ecosystem program?

Build your services and expertise on GreenLake as a service and be recognized for that. As we come out with new commercial terms of the program in the future we will reward you for the customer lifecycle whether it is land, adopt, expand or renew.