HPE Storage Throwdown: New GM Fidelma Russo Says HPE Is ‘Poised To Take Share’ From Competitors

‘Since its launch, HPE Alletra has seen the fastest customer adoption of any storage platform in HPE history,’ said incoming Hewlett Packard Enterprise Hybrid Cloud General Manager Fidelma Russo. ‘In addition to our product leadership, we are also increasing investments in our go to market, both in our direct sales force and in the channel, and with these investments we are poised to take share from our competitors.’

Incoming Hewlett Packard Enterprise Hybrid Cloud General Manager Fidelma Russo Thursday told Wall Street analysts that the company is “poised” to gain storage market share as a result of its Alletra storage product leadership position and new go-to-market investments.

“Since its launch, HPE Alletra has seen the fastest customer adoption of any storage platform in HPE history,” said HPE CTO Russo in her first public comments since being named, effective Nov. 1, as the head of the HPE hybrid cloud business unit, which now includes storage. “In addition to our product leadership, we are also increasing investments in our go to market, both in our direct sales force and in the channel, and with these investments we are poised to take share from our competitors.”

[Related: HPE Restructuring: 5 Things You Need To Know]

With the Alletra storage portfolio, HPE has a storage value proposition that “none” of the competitors can match, asserted Russo.

“We have engineered a truly modern, scalable platfom with unified support of block and file that is capable of meeting the most demanding requirements for AI [artificial intelligence],” she said at HPE’s annual securities analyst meeting in New York. “It has been engineered for a true hybrid cloud experience, and it is made possible with an architecture that is built from the ground up to be cloud-native and software-defined. We continue to deliver industry-leading uptime and resilience enabled by our market leading AIOps capabilities.”

Russo said she sees the opportunity to gain share from not just traditional storage competitors but also public cloud providers.

“We have got about a 10 percent market share within storage,” she said. “We have got a lot of runway to go, and we are very confident about the cloud-enabled and the platform-based attractiveness of the architecture for our customers. We see this not just against traditional players but also with customers who are thinking about, ‘Should I put my data in the public cloud or should I put my data on-prem?’ With AI being more top-of-mind for storage buyers, we are seeing more and more conversations [with customers] about how do they expand their storage footprint on-prem.”

The Battle With Dell

Russo’s market share throwdown comes in the midst of an intensely competitive storage battle between HPE and competitors, most notably Dell Technologies.

HPE this week said it is implementing a new speciality-led hunting model that includes plans to hire new sales specialists to drive core market share gains in storage, compute and high-performance compute/AI.

HPE partners told CRN they expect to see a huge influx of new storage specialists in North America in the wake of the specialty-led hunting transformation, which comes with layoffs of some territory account managers, enterprise account managers and partner business managers.

Dell Technologies, meanwhile, which also recently had layoffs, is stepping up its storage channel charge with a new partner-led storage strategy unveiled last month that pays its direct sales reps more if they move its storage products through the channel.

Dell Technologies CEO Michael Dell, for his part, told investors at an Oct. 5 securities analyst meeting that his company has a No. 1 storage market share position in external RAID [redundant array of independent disks] enterprise storage, high-end RAID storage, mid-range RAID storage, storage software, as well as all flash array RAID.

“No. 1 in external storage, No. 1 in high-end storage, No. 1 in X86 servers, No.1 in mainstream servers, No. 1 in client revenue, and many, many more. And with all these leading positions in so many areas, we make it easy for customers to choose Dell. And we’re extending those leading positions through consistent share gains,” he said.

Dell Technologies just this week introduced a new version of its PowerMaxOS, the operating system that runs the infrastructure giant’s crown jewel PowerMax storage offering. That update included improved data compression, performance per watt and cyber-intrusion detection, and it comes laden with services and expansion work for channel partners.

Dell storage revenue in the most recent quarter was $4.2 billion, down three percent from a year ago, while HPE storage revenue in its most recent quarter was $1.1 billion, down 5 percent compared to the year-ago quarter.

Russo said HPE has made big storage investments in its new architecture with a robust block storage buildout. “We are really poised in the block space to take share,” she said. “Our investment in the go-to-maket side is now complimenting the engineering investment we have put in. There is continued investment in new protocols and the go-to-market side.”

Partners See An Alletra Advantage

Patrick Shelley, CTO at PKA Technologies, Montvale, N.J., No. 441 on the 2023 CRN Solution Provider 500, said he is “extremely optimistic” about HPE’s ability to gain storage share given the one-two punch of Alletra’s strong product position and Russo’s leadership.

“Alletra has leapfrogged comeptitors,” he said. “It is truly innovative. It is hybrid-cloud-enabled, very easy to use and set up with a consumption model with GreenLake with block and file as a service offerings. These are big differentiators for customers. This is what customers are looking for in their storage solutions.”

HPE’s partnership to provide file storage with Vast Data has also been a big competitive differentiator, said Shelley. “HPE now has a great file [storage] offering with the Vast partnership,” he said. “I absolutely see HPE gaining share with Alletra. We are seeing more customers looking at Alletra. It is one of our lead product offerings. We are big believers in Alletra and the HPE storage portfolio.”

Shelley said a PKA customer that made the move to Alletra was especially impressed with the ease of installation, setup and management of the product. “The customer told me, ‘It’s so easy my five year old could run this storage,’” said Shelley.

As for Russo’s leadership, Shelley called her a technology visionary who is sure to put her stamp on HPE’s storage portfolio now that it is part of the hybrid cloud business unit. “[Russo] is a technology visionary,” he said. “She is an amazing leader who is focused on driving technology innovation.”

HPE announced last month that Russo next month at the beginning of the new fiscal year will become general manager of a new hybrid cloud business unit that now includes the HPE Storage Business, which accounted for $4.7 billion in sales in the last fiscal year.

HPE’s Hybrid Cloud Strategy

“To capitalize on the market opportunity, our strategy is to take share in storage, scale private cloud with the momentum we have with HPE GreenLake and expand into infrastructure software,” said Russo, addressing analysts. “Ultimately this strategy starts and ends with our customers. We offer the most differentiated customer value proposition among our competitors, including cloud providers. We have a growing portfolio of market-leading offerings, and we are seeing strong customer adoption.”

HPE’s hybrid cloud strategy is centered on data transformation, said Russo. “Everything starts with data, which is the most valuable asset companies have,” she said. “It is at the center of any digital transformation. It’s gravity and distributed nature are what drive enterprises to embrace the hybrid cloud. This is why storage is foundational to our hybrid cloud strategy.”

Russo’s comments came with HPE providing a fiscal year 2024 non-GAAP diluted net earnings per share outlook of between $1.82 to $2.02 on revenue growth of 2 percent to 4 percent in constant currency.

HPE shares Thursday were down 2 percent, or 38 cents per share, in after-hours trading to $15.92. HPE shared closed Thursday down two percent, or 38 cents, to $16.30.

“We have a highly differentiated value proposition that is grounded in a deep understanding of our customer’s evolving needs with respect to data, infrastructure modernization and hybrid cloud operations,” said Russo. “The differentiation comes from being a pioneer in as a service with HPE GreenLake and our unrivaled HPE edge-to-cloud portfolio. It is further enhanced by years of curated M&A, organic investments in our SaaS portfolio and our HPE GreenLake platform. The value proposition is clearly resonating with our customers, and our continued success will fuel sustained growth and profit expansion for our shareholders.”

Additional reporting by O’Ryan Johnson