HPE’s Antonio Neri: Don’t Expect Economy To Recover Quickly

“I think this is going to be a longer journey,” says HPE CEO Antonio Neri. “We analyzed different scenarios where there is what we call the L shape, the U shape and the V shape. This is not a V-shaped scenario for sure.”

Hewlett Packard Enterprise CEO Antonio Neri Thursday told partners that he does not expect a swift “V-shaped” rebound for the global economy from the coronavirus pandemic.

“I don’t believe we will recover quickly,” said Neri in HPE’s first worldwide partner webinar in the wake of the coronavirus pandemic. “I think this is going to be a longer journey. We analyzed different scenarios where there is what we call the L shape, the U shape and the V shape. This is not a V-shaped scenario for sure. This is a mix of L- and U-shaped [recovery]. I subscribe more to the U-shaped [theory]. The question is how deep the bottom of the U is and how wide the two sides of the U are.”

Neri said priority “number one” for HPE is protecting its employees and helping communities recover from the pandemic. He thanked partners for their support for both their communities and HPE.

“We both have a long history of working together not just for our customers, but in the communities where we live,” he said. “I’m incredibly proud of how the company has rallied around the coronavirus challenges and the uncertainty we live in. But we can not do it alone. That is why I am super proud of working hand in hand with people like you who recognize this is an unprecedented time.”

HPE, which operates in 170 countries with more than 250,000 partners, implemented a “crises management” process at the end of January when the coronavirus began to spread more widely. That included a “structured and disciplined process” to provide each of the countries it operates in whatever they needed to respond to the crises, said Neri.

Neri, who has implemented a wide range of HPE charitable and partner relief efforts, said he expects a “new normal” that is going to have lasting effects on the workplace and how customers buy technology solutions.

With that in mind, Neri, who has pledged to deliver the full HPE portfolio as a service by 2022, has directed his team to put the pedal to the metal on the company’s edge-to-cloud platform-as-a-service strategy.

“My focus with my team is to accelerate this strategy and make it a reality sooner rather than later and obviously continue to prioritize the R & D investments,” said Neri, who has set up a special coronavirus team to work in tandem with HPE’s crisis management team to focus on the rebound. “We have a lot of learning from the 2008-2009 crises that will be applied in our plans.”

One of HPE’s strengths that is coming to the fore in the midst of the pandemic is the company’s “solid balance sheet” with $3.2 billion in cash and a “pretty significant” ability to raise capital, said Neri.

During the call, HPE Worldwide Channel Chief Paul Hunter detailed the relief that HPE has provided partners including a $2 billion coronavirus payment relief program from HPE Financial Services. That program allows customers to defer over 90 percent of the total contract value of products and services until 2021.

HPE has also stepped up with liquidity programs for distributors aimed at helping small and medium business-focused partners, said Hunter. Those initiatives include suspending or significantly reducing strategic development initiative targets and providing extended payment and early payment discount terms. Those cash relief offers run from May 1 to July 31.

Neri said the current environment makes it more critical than ever that customers are able to “scale up and down quickly,” with GreenLake Central and Aruba Central playing a key role as customers move to “pay for what they consume with specific workload-optimized solutions.”

In the midst of the pandemic, HPE has seen a “huge demand” for Aruba remote access points, said Neri. “What we have seen in the last few weeks is huge demand at the edge with connectivity,” he said. “Obviously every step of the digital transformation starts with connecting things. As people have stood up hospitals, clinics, points for testing, connecting all these devices requires connectivity.”

HPE has also seen a rise in virtual desktop infrastructure (VDI) solutions as customers moved quickly to work at home in the midst of the pandemic.

Last but not least, HPE has seen increased demand for artificial intelligence, machine learning and big data analytics as a response to the crises.

Erik Krucker, CTO at Ramsey, N.J.-based Comport Consulting, an HPE Platinum partner, No. 333 on the CRN SP500, said he expects more of a U-shaped recovery from the pandemic.

“I think we are going to see a slow go of it as the world starts to crank back up again and businesses start to get back to doing business with some semblance of normalcy,” he said. “It’s not going to be a V shape. You aren’t going to be able to walk into a restaurant and find 100 people sitting in the same room. There may be 30 to 40 people sitting in that same room having lunch or dinner.”

Krucker expects a “steady climb” toward economic recovery over the next 12 months or more. “It is going to be a gradual process where we slowly get back to a new normal, a new way of doing business that doesn’t look exactly the way it did before,” he said.

Comport, for its part, has aggressively reached out to customers with offers of support or assistance to help them get through the crisis. “The savvy leaders look at this as, ‘We need to be there for our customers,’” he said. “In the long term we need our customers to be there for us.”

Krucker praised HPE for rallying behind customers, partners and employees during the pandemic. In fact, he said, HPE worked hand in hand with Comport to prioritize some shipments of product for customers moving to work at home. “Antonio has shown a lot of leadership during this time,” he said. “He is really stepping up for customers.”

Neri has also taken a leading role in helping to resolve supply chain issues that were impacting product delivery even before the coronavirus crises. He has met with more than 80 suppliers and sub-suppliers to ensure HPE is getting its share of critical components. “Obviously our priority No. 1 is to clear the backlog,” he said.

Neri expects an improvement in May in the supply chain with an eye toward a “normal level of performance” in June and July. “In the end it is all about getting the orders in quickly, prioritized correctly and continuing to deliver with a consistency that we need to,” he said.

Krucker said HPE’s GreenLake pay-per-use model is a critical differentiator, especially during a crisis. “Antonio and HPE have recognized that we need to be able to provide this level of agility, choice and flexibility to our customers,” he said. “HPE is uniquely positioned.”

In closing the 45 minute call, Neri said as HPE looks toward recovery from the pandemic the company is thinking about its partners and the entire “ecosystem” as an “integral part” of HPE. “We think about you as an integral part of what we do,” he said

Neri also urged partners to provide feedback on the partner relief efforts and what more HPE can do to assist them. “Thank you for your partnership, your support and for what you do for our customers and the communities,” he said.