When Antonio Neri takes the reins from Hewlett Packard Enterprise (HPE) CEO Meg Whitman in February, he’ll inherit a company that has undergone a tumultuous couple of years. HPE under Whitman’s leadership saw layoffs and spinoffs. It also saw some smart acquisitions and the launch of a new IT services organization.
“The intent of the company is to be much more services led,” said Ana Pinczuk, who leads HPE Pointnext, the company’s IT services division. “Look at what we’re doing with our GreenLake offerings,” she added, referring to the suite of pay-per-use IT options for workloads. “Customers are coming to us really wanting a consumption model. A big portion of our edge business is really turning to services as well.”
HPE launched Pointnext in March. Its stated purpose is to “to make hybrid IT simple and power the intelligent edge.” In addition to GreenLake, this business division houses HPE’s consulting services and the recently acquired Cloud Technology Partners, a cloud services firm. The new pay-as-you-go managed private cloud, offered in partnership with Rackspace, is also a Pointnext service.
At a reception in San Francisco earlier this week with Pinczuk and Rackspace EVP of Private Cloud Scott Crenshaw, Pinczuk told SDxCentral that enterprise customers want managed services and pay-as-you-go pricing. She also said Pointnext represents about one-third of HPE’s business.
“So think about $27 billion for all of HPE,” Pinczuk said. “My business is about $7 billion. And we’re over 50 percent of the profit for the company. It will grow over time. I think the interesting thing here is we’re at an inflection point with these services.”
Global Data Analyst Chris Drake said the industry is moving to more of a Pointnext model. “It’s in line with the trends that we’re seeing, which is this demand for more flexibility, cost management, and paying for what you use rather than over provisioning [infrastructure],” he said. “I can see it doing quite well for HPE.”
And as with most — if not all — of HPE’s successful ventures, Neri’s fingerprints are all over Pointnext.
“PointNext was conceived and formed when the Technology Services Group was part of the HPE Enterprise Group (which Antonio was running at the time),” said IDC Analyst Crawford Del Prete. “He was the key architect of the group, oversaw its formation, and hired its current leader, Ana Pinczuk.”
Man Behind the Curtain
Neri, an engineer, joined HP in 1995. After the company split, he became executive VP and GM of the enterprise group at HPE. In June, he was promoted to president — a newly created position seen as setting him up to be the company’s next CEO.
At the time, Whitman said Neri has “led some of the most important businesses and initiatives at HP” during his tenure. She cited the acquisitions of Aruba, SGI, SimpliVity, and Nimble Storage. “Antonio has been invaluable to me as we have worked to establish the new Hewlett Packard Enterprise,” Whitman said.
HPE this year launched its hyperconverged infrastructure (HCI), using SimpliVity software, which means it can compete in the highly profitable HCI market. Last month it announced its latest Superdome server, with real-time data analytics and in-memory computing, using technology from the SGI purchase.
“And Antonio was very much behind the creation of Synergy product that now has over 1,000 customers,” Del Prete said, referring to HPE’s composable infrastructure product.
“I’ve known Antonio for over 10 years and I am really confident that he is a strong choice to be the CEO,” Del Prete continued. “The playbook that HPE has been running for the last five years is really a playbook that he put together. What’s different about Antonio running this business: he is not coming in from the outside. He is an HPEer who has climbed the ranks and knows what the company is. He has a vision of where the company can realistically go and be successful.”
Neri Has Challenges Ahead
Another piece of that playbook that’s not as popular with HPEers, however, is the layoffs that started under Whitman and will continue with Neri.
“This company has had round after round of layoffs,” Del Prete said. “[Neri] has to get the rank-and-filers excited about the future of HPE, and prove that the company is going to be relevant in the next chapter of IT.”
The staff cuts are part of HPE Next, the company’s plan to save $1.5 billion over the next three years. Last month, during the company’s fourth quarter fiscal 2017 earnings call, Whitman said Neri will continue spearheading HPE Next.
“The strategy will remain entirely consistent,” she said. “It was crafted by Antonio and I. He has been leading HPE Next. And we are completely aligned on the strategy, as is the sales team, as is the entire organization. And by the way, it’s working. So, you can expect entirely consistent strategy from Antonio.”
Global Data’s Drake said he expects to see more “risk taking” under Neri. “As a company, arguably they’ve gone through one of the biggest restructurings of all the major infrastructure vendors we cover,” Drake said. “Big priorities under Antonio Neri are going to be edge computing and Internet of Things.”
Cloud will likely be another priority for Neri as companies move to multi- and hybrid-cloud environments. This makes products like its OneSphere hybrid-cloud management tool and the Rackspace managed private cloud increasingly important in HPE’s lineup, Del Prete said. “Antonio has to build products that are relevant in both [all-cloud and hybrid-cloud] worlds,” she explained.
It won’t be an easy job. But by all accounts, it sounds like Neri is up for the challenge.