Reflections From HPE Discover 2017

Eveline Oehrlich
Vice President, Research Director
June 12, 2017

From June 4 to 6, 2017, Hewlett-Packard Enterprise hosted an analyst summit in hot Las Vegas as part of its HPE Discover 2017 event. After a five-year journey of splitting, spin-merging, and getting smaller, CEO Meg Whitman and her staff took stage announcing their strategy and innovations to 9,000 attendees ranging from partners and customers from all over the world. This calls for some reflections about HPE’s journey, its past achievements, and its current focus areas and will help us understand where HPE is heading in the future.

I have been following HPE for almost 11 years and had a chance to meet Meg Whitman in September 2016 in Boston right after the company acquired SGI. I have seen HP split into HPE and HP Inc., creating two powerhouses and then again spin-merge its services teams into CSC (now DXC) and HPE Software into Micro Focus, which should be finalized by September 1, 2017. Meg has created four new companies out of one giant company, with each focused and poised to innovate, add value, and deliver outcomes to its installed base and new customers. In the past 12 months, HPE grew both organically and inorganically via good (and attractively priced) acquisitions such as Aruba Networks, 3Par, SGI, Nimble Storage, CloudCruiser, and Niara — all purposeful and aligned with two of its key strategies, supported by the 25,000-strong PointNext service organization.

HPE is clearly focused on all verticals and large enterprises of the world that face challenges in transforming towards a digital business all at different speeds. The spin-merging of HP Enterprise Services into what Meg calls its “cousin” DXC allows it to be even more partner-open, and the new GM Ana Pinczuk is eager to march her PointNext organization along HPE’s solutions as well as create additional competitive advantage with new service offerings.

Here is a summary and some of our thoughts around the announcements:

  1. Making hybrid IT simple. Compute, storage, and networking themes remain in HPE’s DNA. The event built on digital transformation outlining how critical it is for tech management organizations to leverage fast, secure, agile software-defined architectures to enable a hybrid IT world. The announcement included enhancements to HPE Synergy, made possible by the introduction of HPE ProLiant Gen10 servers; HPE OneView 3.1, an update to HPE’s infrastructure management tool that helps organizations manage their entire infrastructure; and Project New Stack, which allows organizations to compose workloads and applications across on-premises infrastructure to multiple clouds. HPE emphasized that making hybrid cloud simple is moving center stage, backed by a partnership with Microsoft Azure (i.e., HPE ProLiant for Microsoft Azure Stack is a hybrid cloud solution that allows organizations to run Azure-consistent services in their data center, providing a simplified development, management, and security experience that is consistent with Azure public cloud services); a cloud aggregator program called Cloud28 Plus and by a strong pitch from Meg on key concerns regarding the migration toward public cloud computing around trusting public cloud computing with respect to security, reputation, reliability, privacy, certificates, and data ownership, cloud openness in terms of open standards, ecosystems, scalability, APIs, migration, hybrid clouds, and cloud integration.
  2. The official launch of HPE’s PointNext service organization. This organization is focused on helping firms enable their digital transformation initiatives and transforming customer experiences through IT solutions. PointNext highlighted popular services offerings such as Flexible Capacity which was launched a year ago and is one of HPE’s most successful business now and supports the  hybrid IT strategy. PointNext executives stressed the need to accelerate enterprise clients’ digital transformation endeavors and the customer journey, all in cooperation with partners such as Wipro and PwC because they can and because the partners want to — very different from the times when HPE still had a huge enterprise services team.
  3. Intelligent edge and IoT strategy. The edge is the world outside of the data center which interacts with customers and where employees sit and where digital transformation has a profound impact. These interactions transform operational processes, create new customer experiences, and expose enterprises to security risks due to the breadth and variety of IoT-enabled intelligent devices and exploding volumes of captured data. HPE provided floor demonstrations of key IoT use cases requiring intelligent edge solutions, including factory floor automation, smart cities, and intelligent spaces to improve health care processes and patient care, leveraging a variety of solution components from Aruba Networks, HPE Edgeline Converged Edge Systems, and IoT software platform partners such as PTC ThingWox and GE Predix, in addition to the HPE Universal IoT Platform to enable successful deployment of various enterprise and industrial IoT use cases.

Data is important 

In the world of IoT devices, it is critical to make decisions in real time where the data is created; data does not have to travel as it must be captured and analyzed at the edge. However, the data center at the core is still important and the acquisition of SGI will enable enterprises to scale their core towards high-performance computing for key areas. HPE is a provider of IoT components and network products, including PointNext offers end-to-end IoT consulting and integration services. The HPE Universal IoT platform is central to its strategy and provides open APIs to implement connection with upstream and downstream IoT products.

Networking is just as important

Working with manufacturing customers, HPE has recognized that network control and access is moving into the hands of other departments like manufacturing engineers.  Networking professionals can’t be the gatekeeper IoT devices. This why HPE Aruba’s ClearPass eliminated technical network jargon and created a network access control interface geared toward manufacturing and process engineers to onboard manufacturing equipment.  The company has started to develop interfaces for other verticals, such as healthcare.  

The future of HPE as we see it

The next big tasks as defined by HPE are to ensure that the company can transition to a solution sales model, continually drive innovations through organic and inorganic growth, and stay focused on how technology can be an enabler in the age of the customer, where everything computes thanks to constant connectivity, exponential increases in data, easy access to massive computational power, and the growth of human/machine interaction.  However, the areas that I feel will be most critical for HPE’s success relate to HPE’s own internal customer obsession as well as its ability to own and drive customer obsession toward this new world of combined IT and operational technology (OT) to solve real-world problems. This means combining traditional IT data with new sources of OT data and supporting this with innovative technologies and services across new products and services that optimize business operations, address engineering challenges, and accelerate scientific discovery with all of their already existing technologies and services. If successful, this will create a completely different HPE which will enable new top-line and bottom-line growth for enterprises of all types in collaboration with partners, customers, and employees — a win for all. I consider both issues as two sides of the same coin, as:

  • HPE’s ability to become the trusted advisor and technology provider for IoT should be its true identity. HPE has made good inroads with OT buyers, who are typically outside of IT.  Innovations such as smart cities and intelligent buildings are driven by operations leaders including facilities managers and plant managers who often work in silos, separate from their IT colleagues. OT stakeholders do not recognize that successful IoT solution deployment hinges on including IT and security executives in requirements discussions to ensure operational requirements are aligned with corporate network architecture and security requirements. Implementing comprehensive IoT solutions requires various technology elements including network, software, hardware, security, applications, and analytics, almost all of which are capabilities that are somewhere to be found within HPE’s walls or via its expanding partner ecosystem. The opportunity for HPE will be to bring them together, coordinate and assemble them to a use case enabling both IT and OT working together toward value and outcomes.
  • HPE’s customer engagement model needs to shift toward enabling outcomes. Customer-obsessed organizations are defining what they want and no longer just accept what vendors such as HPE are offering. HPE will need to move beyond its hardware and software capabilities and engage with clients around their desired business outcomes based on strategy and vertical focus. This requires for how HPE messages and talks to clients, how it equips and trains its sales people, how it engages with customers, and how it changes the mindset of its employees to solve problems and deliver outcomes instead of solving small server or network capacity issues. Based on our conversations with leaders in HPE, they are working hard to make this transition as a company. HPE’s own transformation will be all about embracing a true customer-centric, outside-in perspective.
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