Data Centers

Why HPE Discover is the company's last opportunity to tell its story and prove its value

With a shrunken portfolio, HPE will need to use the HPE Discover conference to explain its value to enterprise customers.

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Image: iStockphoto/monsitj

The 2017 HPE Discover conference is a critical proof point in HPE's journey to communicate their value to their customers and their position in the industry.

Highlighting the scope of change is important. Before the separation, HP had a market capitalization over $100B. HPE, as of this writing, has a much smaller market capitalization of $28.6B. By comparison, majority Dell-owned VMware has a market cap of $38B. What does this all mean for the CIO/CTO?

The changes

As an organization, HPE has undergone a tremendous amount of change in the past couple of years. Then-HP CEO Meg Whitman separated the end user and enterprise businesses. Furthering that split, HPE the enterprise company spun off large portions of the operations as well. HPE has sold off half of their services group and software business, while also making some significant purchases in the form of hyperconverged infrastructure (HCI) company SimpliVity and storage company Nimble.

Dell EMC has made light of the changes. One of the advantages of a large enterprise IT company is pricing synergies. Large enterprise vendors use their scale as a moat around their businesses to stifle competition. For example, Dell EMC is well known for heavily discounting existing storage solutions to sell their HCI platform into an existing customer. It's difficult for single product companies such as Nutanix to penetrate large Dell EMC customers based solely on pricing.

With the purchase of SimpliVity, HPE can offer similar discounts across their portfolio of products. The difference between HPE and Dell EMC is the scale of the portfolio, as Dell simply has a larger set of tools with which to fight against Nutanix and a SimpliVity-armed HPE.

Hybrid IT

HPE's conversation is no longer about the scale of the product and services portfolio. Before the split and subsequent divestitures, the communication with customers was all about leveraging the scale of the HPE portfolio of goods and services. An HPE technology strategist could talk anything from HP printers and laptops to servers and networking, all managed by HP Enterprise Services (HP ES). Whitman, however, noted that HPE is now no longer all things to all customers—the focus is on hybrid IT.

If you've followed me at all, you know I'm all about hybrid IT. Enterprise IT vendors must have a strategy of how to provide the integration of public cloud services with the on-premises enterprise IT stack. As such, HPE needs to clarify their hybrid IT strategy.

Early last year, I understood the technical approach to be a combination of HPE Synergy and OpenView, sprinkled with HP ES. Though, HP ES is now a partnership with CSC and a separate company with its different hybrid IT offerings. HPE rolled out HCI 380 based on the DL380 platform, which didn't integrate into Synergy. HPE later purchased SimpliVity, which also doesn't integrate with Synergy.

Software is a tremendous part of tying all of this together. HPE has ejected the software business and transferred their OpenStack team over to SuSe. On the other hand, Dell EMC has both Pivotal and VMware as the software glue. Not that it's all roses for Dell. Pivotal is just a tiny piece of the cloud native conversation and VMware is still finding its way in a cloud-first era. But, I don't readily see HPE's software play.

SEE: Most HCI isn't true hybrid cloud, despite what vendors may tell you (TechRepublic)

HPE has some serious communicating to do during HPE Discover. Even as much as I follow this space, even I don't understand the strategic direction.

I'll be participating in Blogger discussions with HPE. You can join the conversation. HPE puts on a series of Blogger Coffee Chats. They will be streamed live this year. You can ask questions via #HPECoffeeChat hashtag on Twitter.

Day 1: https://www.youtube.com/watch?v=b0XZXbc4cT0

Day 2: https://www.youtube.com/watch?v=hDvtHxjyxHo

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About Keith Townsend

Keith Townsend is a technology management consultant with more than 15 years of related experience designing, implementing, and managing data center technologies. His areas of expertise include virtualization, networking, and storage solutions for Fo...

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