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HPE: News from the very top …




At the latest Securities Analyst meeting held in New York HPE celebrated the occasion by ringing the opening bell. This is always a time of celebration along with the photo-ops that comes with it. What was a little different, and I have to believe unexpected by many HPE watchers, was that HPE CEO took advantage of the situation to introduce his entire team to those in attendance for the bell ringing.

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In staging the event, Neri reassured the financial analysts present that HPE was about more than just Neri and even thought Neri is a technologist having risen to the very top through the ranks after starting in the call center (in Boise, Idaho), he came up through engineering and views engineering as the key ingredient of all disruptive solutions HPE plans on delivering. More importantly perhaps is that when it came time to unload non-core products, Neri’s team elected to keep NonStop even as it lessened funding in its own technologies (PA-Risc and Alpha had long gone) including HP-UX and yes, even OpenVMS, neither of which were ported to the Intel x86 architecture.

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The PowerPoint slide deck that Neri used in HPE’s meeting with securities analysts is now in the public domain and can be viewed on the HPE web site. It makes for an interesting read as it really does show the progress HPE is making in support of not just open platforms and solutions but the edge and clouds. Surprising to see is just how well received the message from HPE is among enterprise users. Even more surprising to read just how extensive the changes Neri is making to the company – from HPE’s organization to its operations to its many locations around the world, Neri is leaving almost nothing untouched and yes, there’s nothing sacred within HPE these days. It’s become a very clear case of perform or else and to see NonStop thriving in this environment is encouraging to all working with NonStop.

Perhaps nothing sums up this new attitude than what Neri said at the security analyst meeting, as reported in many financial papers. According to what appeared on Bloomberg postings of October 25, 2018:

Chief Executive Officer Antonio Neri has sought to diversify HPE into faster-growing businesses. The company’s networking and services arms have shown traction, but they remain too small to meaningfully impact the company’s overall performance. Neri has also abandoned unprofitable segments, cut costs and increased dividends and share buybacks to please investors. But the efforts can’t mask the fact that in HPE’s main business of servers and data storage, rival Dell Technologies Inc. has generated rapid sales growth this year, increasing pressure on Neri.

Looking forward to 2019, Neri said HPE plans to shrink its global footprint by withdrawing from 74 countries and decreasing its manufacturing locations to seven from 17. This will let the company streamline its supply chain, unite its inventory and focus on accelerating growth in the “intelligent edge,” Neri said. The intelligent edge is a catchall phrase the company uses for hardware and software that can analyze data from sensors, cameras and other internet-connected devices in the field, rather than in a data center.

Surprised to read? When other CEOs pursue a global presence and growth at all costs, it is clear that Neri is applying just a tad more intelligence than other CEOs – looking at markets where HPE can thrive and building products where enterprises need solutions. The PowerPoint slides included two tables I think most members of the NonStop community will find impressive, the first of which highlights how strongly Edge Compute is growing. Even though the starting point may be lower than that of other groups, it’s still good news that enterprises are spending money with HPE as it does confirm HPE’s observation about the importance of the edge is resonating with enterprises everywhere.

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“HPE is committed to developing the breakthrough technology solutions that will advance the way we live and work, and drive our customers’ businesses forward,” said Neri. “With improved execution and a simplified operating model, we’re on track to significantly exceed our financial commitments in fiscal year 2018, and we continue to be well-positioned to create attractive value for our shareholders. Our priorities in fiscal year 2019 are to accelerate growth in the Intelligent Edge, deliver profitable growth in Hybrid IT, and grow overall operating profits and expand margins.”

Look too at the following slide showing the growth in Edge and Hyperconverged marketplaces – very impressive even if once again, the starting point may be lower than with other groups covered in the table. Point is, it’s all about the edge, the cloud and hybrid IT (and yes, private clouds); NonStop continues to be a strong performer in the Hybrid IT organization and with the NonStop Technical Boot Camp just around the corner, it will be very interesting to hear more about just how well NonStop systems and software have performed in 2018.

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“The edge is where the action is; it’s where the data is being created,” Neri said at the analyst meeting. “Ultimately, we see this new emerging world where there will be millions of clouds – small-sized clouds and big clouds – connected. Every edge to every cloud.” With the transition by NonStop to being a software solutions and to where now, it can run just as well on virtual machines as it has done for more than four decades on traditional machines and will likely be found out at the edge as in the cloud, the future looks very bright for NonStop.

The next couple of quarters may tell a more complete story of HPE’s transformation but for now, all the indicators point to where NonStop has landed in the right spot. And, as a community, we all knew NonStop would be playing an important role within the HPE product portfolio, didn’t we? It’s good to know we were all correct in assuring everyone around us that investments made in NonStop yesterday were going to position us well for tomorrow. Yes, it’s a good feeling to be right after all, isn’t it?