Terry Richardson: HPE ‘Really Gets’ The Shift To The Pay-Per-Use Services Channel Model

“We have committed that every single offering in our portfolio will be available via a consumption model, essentially allowing customers to only pay for what they use [with HPE GreenLake)],” said HPE North America Channel Chief Terry Richardson.

With the shift from product-led to services-led business models transforming the channel landscape, Hewlett Packard Enterprise North America Channel Chief Terry Richardson told several hundred partners at Xchange 2019 Tuesday that HPE “really gets” it and is leading the charge on the shift to a consumption-led pay-per-use model with HPE GreenLake.

“HPE really gets it,” said Richardson of the dramatic “transformation” that is changing the legacy product-led relationships between solution providers and vendors and distributors. “In fact, we have committed that every single offering in our portfolio will be available via a consumption model-- essentially allowing customers to only pay for what they use [with HPE GreenLake)].”

Richardson pointed out that HPE CEO Antonio Neri has staked out the high ground in the pay-per-use consumption battle declaring that HPE is aggressively adopting an “Everything-as-a-Service” model with its entire product portfolio to be delivered as a service in three years.

In fact, Neri expects as much as 50 percent of HPE’s sales will come from as-a-service consumption-based offerings by the end of that period.

“GreenLake is highly differentiated and unique, it gives customers a public cloud-like experience, but allowing them to do it on-prem, whether that decision is made for security, data sovereignty or other reasons,” said Richardson. “It is typically 30 percent less than the public cloud.”

Richardson’s HPE “Everything as a Service” GreenLake channel call to action struck a chord with some partners attending XChange 2019, who feel that vendors have not done a good job aligning compensation to the new as-a-service models.

In fact, David Powell, chief revenue officer for Corsica Technologies, one of the top MSPs in the country, got a rousing round of applause from XChange attendees when he proclaimed during a panel discussion that the “power dynamic” has shifted to partners in the as-a-service model era. “I think the vendors have a lot of work to do to understand the consumption model,” he said.

Richardson – who was recently named one of the Top 25 Channel Sales Leaders by CRN, stressed that HPE continues to be a “partner first” company as it makes the shift to the consumption-led model – empowering partners to lead with the pay-per-use GreenLake channel model.

In fact, many HPE partners are flocking to the HPE GreenLake pay-per-use model powered by a 17 percent up-front rebate combined with the ability to add in their own managed services.

Today over 400 partners sell the as-a-service portfolio with the HPE GreenLake channel business growing over 275 percent year over year.

“Everything we do is in the spirit of being a channel-led, partner-first company,” he said. “GreenLake is not just for the largest enterprises – although they are adopting it very rapidly. We are continuing to make GreenLake easier to understand and transact with us.”

At HPE Discover in June, HPE unveiled new version of HPE GreenLake for the midmarket targeted at a sweet spot of $300,000 with the ability to stretch down to $100,000. HPE also unveiled an Aruba network-as-a-service offering for GreenLake.

HPE also unleashed at HPE Discover a new GreenLake Quick Quote sales tool that takes quotes from 15 hours to 15 minutes.

Emanuell James, CEO of Edgesys Consulting, in international IT consulting and services provider based in Hasbrouck Heights, N.J., said he sees HPE GreenLake as a pay-per-use game-changer for the channel.

“Public cloud prices are skyrocketing,” said James. “This is a model that is worth showcasing to a number of customers who are tired of the inconsistency of the other big cloud models in terms of pricing, cybersecurity and customer service.”

James said he is hearing increasing complaints from customers regarding the “inconsistencies” in the public cloud pricing models that are driving up cloud costs. “The way the service packages are set up, every time data is moved there is volatility in the pricing and the bottom line cost to the customer,” he said. “We will definitely consider adding GreenLake to our portfolio. This is hitting the market at the right time.”

James said key to customer satisfaction is a consistent predictable pricing from cloud providers. “Downstream when the bills start coming and they look like a cell phone bill with additional services and items, customers are frustrated,” he said.

James said he is seeing a public cloud backlash with a number of customers opting for the security of holding their own data. “The hybrid model is key,” he said. “Nobody has data fully on the cloud. Customers want a hybrid model.”

Nalit Patel, CEO of All Solutions, a Livingston, N.J-based solution provider, said HPE’s partner-led model is driving tight partnerships with partners and robust cloud savings for customers. “What we are seeing is 30 percent-plus cost savings with HPE GreenLake versus public cloud providers,” he said.

One of the keys to HPE’s cloud success versus AWS is HPE’s long history of providing top-notch infrastructure and services to corporate customers, said Patel.

“HPE has been a trusted name for customers long before AWS existed,” he said. “For any corporate customer, adopting HPE GreenLake is not an issue. It is a brand name migration with security and respect, knowing that HPE is standing behind them to protect their data and provide services.”

For solution providers, one of the keys to partnering closely with HPE is its partner-led model. “HPE is a partner-led organization, they are always in the trenches whether it is with small or large partners,” said Patel. “I am looking forward to doing POCs [Proofs of Concept] with HPE GreenLake.”