Just a single digit percentage of Hewlett Packard Enterprise’s annual sales come from stuff sold as-a-service – that is, products you pay for depending on how much you use them.
So, in a bid to get in step with the industry, the IT goliath on Monday launched on-premises infrastructure bundles charged based on consumption. Research from IDC indicated that by 2020, 40 per cent of enterprise spending on bit barns will be transacted as-a-service, so HPE is arriving at this party rather later than some of its rivals.
These GreenLake Flex Capacity “packaged solutions” will be sold directly by HPE's sales force and by the legion of channel suits, also known as services-based resellers – which are third-party companies that account for 70 per cent of HPE’s annual revenues.
The bundles includes ProLiant for Microsoft Azure Stack; HPE Synergy 480 compute modules; HPE 3PAR StorServ 8200 and 9450; HPE SimpliVity 380; HPE ProLiant BL460c server blade; and HPE StoreOnce. The configurations are well defined and price banded, so the sales bods flogging the gear should be able to easily convince customers to sign on the dotted line, HPE said.
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Max Ramos, a senior sales manager within HPE's Technology Services in the Americas, said the consumption-based model will help data centre admins “avoid the vicious cycle of over provisioning [and] being out of capacity.”
Channel middlemen who choose to sell these bundles can expect hefty rebates of 17 per cent from HPE, and they are allowed to set the final price and therefore the margin they squeeze from their customers.
HPE has sold Flex Capacity for some years: it has over $2bn of business under contract. However, in December, the tech giant introduced the GreenLake brand, which now sits in the PointNext division. PointNext is HPE’s consultancy-slash-advisory arm for professional services.
And here’s the rub: just 40 per cent of PointNext turnover was, until last year, transacted by channel folk, the same channel folk who account for almost three quarters of HPE's total sales. Many just haven’t got on board with PointNext because they want to sell their own managed services rather than resell someone else’s.
This is despite repeated attempts by HPE to bring these companies into the fold, including the launch of the Partner Ready program in autumn 2016. HPE said today it couldn’t confirm if partners, as it refers to them, now account for more than 40 per cent.
One change introduced under GreenLake Flex is that the channel seller holds the customer contract, not HPE, the enterprise giant told us.
Paul Hunter, HPE’s global channel boss, admitted that only five per cent of its annual revenues were generated by consumption-based services. He urged more channel sellers to get on board.
"We are looking for a scalable consumption offer. We have started with the infrastructure, and then will look to build [it for] specific workloads," he told The Reg. He also acknowledged that public cloud has been driving the market in this direction. ®