HPE Financial Services Restructures To Attack SMB Channel Opportunity

‘The reason we did this is because it gives us an ability to focus specifically on the SMB channel business because we believe that is the growth area that we can really add some value to,’ says Hewlett Packard Enterprise Financial Services CEO Irv Rothman. ‘Five years ago, we didn’t have an SMB channel business. Now it’s pretty much one-third of what we do.’

Hewlett Packard Enterprise’s Financial Services’ business has undergone a massive “business model transformation” that for the first time ever sharply focuses the organization on the SMB (small medium business) channel market opportunity.

Under the restructuring – which was put in place for the start of the HPE fiscal year- the SMB channel is now one of three customer focused segments along with enterprise accounts and global accounts. Before the restructuring, the organization had a regional focused structure.

As a result of the changes, a full one third of the HPE FS team is now focused on SMB and the channel, said HPEFS President and CEO Irv Rothman.

“The reason we did this is because it gives us an ability to focus specifically on the SMB channel business because we believe that is the growth area that we can really add some value to,” said Rothman in an interview with CRN. “Five years ago, we didn’t have an SMB channel business. Now it’s pretty much one-third of what we do.”

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The massive structural change comes with HPE relying heavily on HPEFS as the financial backbone of the HPE GreenLake on premise pay-per-use cloud services business.

The restructuring opens the door for HPEFS to combine its asset management expertise and financing into an integrated solution aimed at helping SMB customers finance digital transformation, said Rothman. A big part of that wil be focused on helping drive GreenLake deals by helping SMB customers fund digital transformation through asset buyback and upcycling to retire underutilized, obsolete or redundant assets.

“What is going to make this successful is not just the front end with our offers, it is our ability to execute from end to end with what channel partners and SMB customers need in a way that is way more capable and way more differentiated than anything that has ever been done before or anything that is being done today,” said Rothman. “We realigned our systems. We retrained our people. We gave them all new jobs. This is a big deal!”

Under the restructuring, HPEFS’ asset management and financing groups are working hand in hand to drive digital transformation deals.

“Now we’ve got our people organized in end to end teams so the finance folks and the asset management folks are working together in a way to provide those solutions into customer specific market segments,” Rothman said. “We were never able to do that before this business model transformation.

Rothman called the business model transformation a “massive” change for HPE. “This involved the entire organization and it involved adapting to new organizing principles,” he said. “We have probably gone through seven major changes over the last 20 years, but this is the biggest and most significant thing we have ever done.”

The restructuring unleashes the HPEFS work force on the SMB market opportunity, said Rothman. “We are just as interested in the SMB business as we are in the enterprise and global accounts business,” he said. “It gets our full attention. We’re bringing an integrated set of products and offers to the SMB space that is dramatically superior to anything we have ever done before. We now have one thir\d of our organization aligned around this business.”

The restructuring comes with the need to drive digital transformation for SMB customers at a critical juncture, said Rothman. “Everybody is going through digital transformation,” he said. “Digital transformation requires operational flexibility and it requires the ability to respond rapidly and in a way that gives them on going flexibility. You can’t get flexibility without managing asset risk successfully. Nobody is better at that than we are. These offers that we provide into the SMB space which are a combination of financing and asset management solutions are dramatically better than anything partners can find anywhere else, 5,400 partners thought so in the last 12 months. We think that number gets bigger over the next 12 months because more and more people will be on board with what it is we are offering out there in the marketplace.”

Michael Goldstein, CEO of LAN Infotech, a Fort Lauderdale, Fla., solution provider, said HPE financing around GreenLake is a big boost for SMB customers looking to fund digital transformation.

“With SMB customers coming out of this pandemic year, this makes it much easier to fund the digital transformation that you have to do to keep your business up and running,” said Goldstein. “This is really helping SMB customers realize they can upgrade their infrastructure to provide better services for their customers. It’s exciting to hear about a new SMB option. We’ll definitely look into this. I give HPE and HPEF a lot of credit for thinking outside the box and bringing a program that allows us to bring something different to SMB customers. It is not the same old, same old.”

The SMB HPEFS focus comes at the right time given the work at home shift in the wake of the pandemic, said Goldstein. “These customers know they need the technology infrastructure to compete and even to attract employees,” he said. “Work from home has become a requirement just like offering benefits to employees.”

Douglas Grosfield, CEO of Five Nines IT Solutions, a strategic service provider in Kitchener, Ontario, said the HPEFS SMB focus could be a “boon” to MSPs. “If you are trying to put this together yourself as an MSP it would come with a high interest rate,” he said. “HPE has deep pockets, a massive footprint and the credit facilities to pull this off. It’s exciting to hear that HPE is doing this.”