Joybrata Mukherjee, Director – Channels, SMB, Services, HPE India explains HPE’s Strategic Direction especially in the post-pandemic era.
What are the solutions and services currently in the HPE platform for the Indian market? How much has this portfolio been bolstered inorganically?
HPE is now in the fifth year running as a standalone company when it was formed after the demerger. Today we are an edge to cloud platform as a services company, which means we are committed to provide a cloud platform to all our enterprise customers on a subscription based service model. Our entire portfolio is offered to a customer as a subscription-based pay per use services. So the focus is on offering everything as a service.
Last year we made three strategic acquisitions of Cray, BlueData and MapR. These are all very complementary acquisitions and they have to a great extent strengthened our integrated data management portfolio overall. What it actually means is that it has strengthened our data management, as well as our artificial intelligence and analytics solutions across data management. That along with our software platform, the only software platform for enterprise, the highest range of storage platform which we call Primera actually offers to our enterprise customers a 100% uptime. There is nobody, no other competition who offers that.
Apart from that in the mid range and the upper entry range for storage platform, our acquisition two years back was Nimble. Now Nimble has unique AI-based predictive analytic tools with which we can look at the customer’s overall environment and platform and predict the overall performance as well in terms of any services issue which can occur in that future so that we can proactively take action. Nimble is also one of the leading offerings across the globe. These are all to do with our overall integrated data management platform.
The third thing which we are focusing on to a great extent is GreenLake. This is our on-prem cloud offering to our customers. The new GreenLake spans from container management to machine learning operations, to virtual machines, and also to our hardware portfolio like storage compute, network among others. This entire portfolio of services and products are being offered to a customer on-prem as a cloud service, pay-per-use with the highest level of services. These are primarily either on-prem or co-located. This is basically giving the most mission critical workload of our customer on an on-prem cloud like model. These are primarily the top three or four solution areas, which we are focusing on.
What has been HPE’s strategy with respect to software-defined and hyperconvergence?
What we have been seeing in India and across the globe is that hyperconverged is very relevant and it has been very popular in the lower rung of enterprise, mid-market and SMB customer base. Our platform is SimpliVity which we acquired three years back. We have done phenomenally well with SimpliVity in the country in the SMB and mid-market space. It is technically a very sound product with integrated storage and compute put together. In terms of performance, whenever we have done benchmark for a mid-market kind of a workload for our customer against competition, it comes up as a winner. So whenever there is a benchmark, we go on winning because a customer gives us premium overall over our competition.
SimpliVity is a very good and sturdy product, with great references across the country and worldwide. We have created great use cases with SimpliVity in healthcare. We see a great future with SimpliVity as a hyper converged platform with almost 40% year on year overall growth. This is completely software defined and that is our platform of choice moving forward.
What all have been the impact of changing workloads in a predominantly WFH environment both from the technology and business perspective?
Your most mission critical applications which need ultimate security workload will be on-prem but the user experience has to be the same. It will be in a hybrid environment overall which will be both on-prem and multi-cloud, depending on the kind of application, the workload and also the strength of the various cloud service providers. So there will be public cloud, on-prem and overall it will be a hybrid facility.
Secondly, irrespective of where your applications are, whether they are on-prem or whether they are with an AWS or Azure of the world, the user experience has to be seamless and the same. That is very important. Hence the orchestration in between and the user experience wherever your application lies is very important.
Because of the pandemic, first and foremost, whether it is a WFH environment or your supplier and partner are actually accessing your application over a cloud and working on your application or your customers are getting into your mission critical application and working on it, the experience has to be the same. In terms of the service level, it has to be the highest level of services and that is where precisely HPE comes in.
We have decades of experience in terms of catering to mission critical applications across, whether it is banking like SBI Core Banking running on HPE platform, or the telcos, or any high level manufacturing customers. We also have decades of experience not only in catering to these customers but also maintaining those kinds of service levels. Hence we have those engineers, tools, best practices and whether it is on-prem or cloud, we will be able to give the maximum service level and customer satisfaction and user satisfaction.
How did HPE manage to deliver good customer experience even during this challenging situation?
Since the lockdown, we have been managing it all seamlessly. We have not experienced any major downtime in any sector. We have formed a crisis management team across the country, which is an accumulation of HPE’s own staff as well as from our partner ecosystem across the country. We were already equipped with remote management infrastructure and appropriate tools. So of almost 70-80% of the tickets which were raised, we could cater to online. Remotely we entered into the customer system and rectified the faults. Maybe 10-15% demanded an engineer’s visit where we have made provision with the state government.
We always had about 8-10% of our employees, those engineers who had those passes and who could travel in case of emergency and cater to the customer’s infrastructure requirements. A combination of remote management, as well as people visiting along with our partners is what we have been catering to. We look at all those tickets, the severity and the criticalness of those complaints and accordingly we have been catering to them. Fortunately in the last 5-6 months, whether it is in mission critical banking or telco, we have not seen any downtime at all because of these efforts despite this pandemic.
How is the HPE partner ecosystem structured in India?
In India, about 85% of our overall hardware revenue is indirect and goes through the partners. Our partner categorization starts with our Tier 1 partners, who are the distribution partners. We have about 4-5 top distribution partners. HPE does business directly with the different distribution partners.
Then we have our Tier 2 partners like the resellers, system integrators who work closely with end customers, understand their requirements and do the system integration and deployment part with the end customers. Along with HPE, they do implementation, overall deployment, project management with customers.
Within Tier 2 partners, we have 3 categories. One is our Platinum partner, then we have the Gold partner, then Silver and below that what we call the Business partner. Between Platinum and Gold, who are our top partners, we will be having about 75 partners within India. And then we will have about 300-350 Business partner where a few of them is managed directly by HPE and the long tail part is managed by our distribution partners. As a part of the SIs, we have the large SIs and India SIs among others.
How did HPE support the partners through financial incentives or relief packages during this crisis situation?
When we actually analyze the situation, the biggest problem which all our partners were facing, whether Tier 1 or Tier 2 partners, was a complete cashflow choke. The end customers were deferring payments to the Tier 2 partners, and the Tier 2 partners were not paying to the Tier 1 partner.
Overall Tier 1, i.e. the distribution business, is completely on a return on working capital. So the cash flow is the most important part of that business. If there is a cash flow choke, if the Tier 2 partners are not paying them margins they operate at, the cost of interest, as well as the margins the business operates becomes pretty insignificant and they came under a lot of pressure. The credit insurers also took a very cautious stand in terms of coming out with credit rating for most of the large enterprise customer, which was much worse than before the pandemic.
The business was not happening because of the cash flow issues. So as part of a worldwide initiative, we came out with a financial package which was a kind of moderation on the payment system. This was very well appreciated by our partner ecosystem. Generally Tier 1 partner does business with us at 45 days credit. We came out with a much better overall deferred payment solution along with our Tier 1 partner, which really helped that business for the Tier 1, as well as that between Tier 1 and Tier 2, because the moment we are giving a deferred payment solution to our Tier 1 partner, they can pass that over that to the Tier 2 as well. That helped a lot in terms of ensuring that business flow is there and also they can come out of that cashflow choke situation.
What are the cornerstones of HPE’s cloud gameplan in India and how has it got impacted in the current situation?
Our focus will be to ensure that we give the best solution to our customers. GreenLake as a platform, as an overall subscription based pay-per-use service has been preferred by customers for the most mission critical kind of applications, provided they have the right kind of commercial people and use excellent service levels. They will prefer those workloads to be on-prem which are basically the workflow kind of workloads. For other workloads they will prefer them on public cloud.
As HPE, we work very closely with our enterprise customers, being overall service provider for them across that hybrid in infrastructure. We will be working with them ensuring that the right architecture has been selected, the right kind of user experience ensured and the right service level overall across the entire workflow map is implemented. Platform as a service, everything as a service is what we will be offering. We do not have an aspiration to be in the public cloud place. However, we will be working with our enterprise customer for hybrid environment experience overall.
What has been the vertical wise impact on cloud consumption in the current situation?
BFSI is least effected and we are seeing good business flow and new projects coming up. That has been intact for us. Telecom has requirements, there are new projects, expansions, but the problem with most of the large telecom players is that there is a credit issue and working on the right kind of cashflow is actually the challenge. We are working closely with our large customers overall and the cashflow issue is something which is bothering them.
The segment which has been mostly affected by this pandemic has been the SMBs. It has been otherwise the profitable business for most of companies like us. Because of the cash flow issue, because of lack of transportation, the movement of groups, we have been seeing that most of the SMB customers are actually shelving their projects, or postponing their project. Whenever there is a requirement of an automation, they will rather like to provide salary for their employees first before getting into any new projects. We have seen within SMBs in the last couple of months slowly the demand again picking up.
If you look at overall, online transaction is booming. Most of the banking is happening online, most of the telco authentication too. So I think security and biometrics will be one segment, which will surely do very well going forward. That includes your biometric security, your identification online, your accumulation of multiple security signatures like your facial recognition, finger print. That part of IT will surely flourish and it will grow much faster moving forward.
What are the new solutions from HPE on the anvil?
We have to look at certain horizontal solutions, which most of the industry will be requiring in these times, whether it is banking or telco or manufacturing. Along with our partner ecosystem, we came out with 5 solutions which is focused for both enterprises and SMBs overall. One solution is a social distancing tracing and tracking solution which is basically based on certain sensors, which we are putting in, in an extension of our IoT as a vertical. This is ready and we are going to market with that.
The next one is a touchless entry solution where without touching anything or without touching the door knob, etc, just by facial recognition or by retina recognition, people can be in access for any access control. That would be a phenomenal solution for any industry segment. The third one is a thermal camera based fever detection solution, which is integrated with the back-end database for every individual, whether it is a visitor or an employee where we will be tracking the temperature level at any point of time, whoever are inside the premises.
The fourth one is basically working together remotely, an augmented reality solution, which we have worked out which helps in a seamless workflow, communication flow and so on and so forth. And finally there is the workplace alert and information setting which is kind of an advanced workflow solution.
These are the 5 solutions which we have come up. We have done a prototype. We have already communicated to our partners. This will be delivered initially by HPE Pointnext Services. However we will be selling it through our partners and moving forward, we will enable our partners to sell and deliver those services as well. We will be launching all of these in India very soon in a month’s time for sure.
How was HPE providing support to SMBs in the current situation?
SMBs have been the fastest growing and a completely partner led motion. HPE only governs it but partners create opportunity. And that business growth is dependent pivoted around the partner. There is a problem in terms of a cashflow choke that we faced in the last three months. Now slowly it is improving.
In terms of giving financial support to our partners overall, HPE Financial Services came out with $2 billion package during lockdown. Primarily, we utilized that funding to help our partners in terms of providing them as well as our end customers with deferred payment solution. Secondly, using consumption based payment models also helped the SMBs. The third thing which became very popular is infusing cash or capital by buying back assets. If anybody wants to do a refresh on old infrastructure, what we do is that we assess those infrastructure, attach a commercial value, take back or buy them back and infuse cash in the system. The SMB customer or the enterprise customer can utilise that cash to actually invest in new projects or do whatever, because he wants that cash. Then for the new infrastructure, we provide them a deferred payment solution. Plus three months payment holiday and a series of things, which we announced for our partner, as well as for end customers.
How does HPE see the emerging technologies becoming more mainstream as an impact of the pandemic?
Edge to Cloud platform as a services is our pitch. Recently we announced the portfolio of product which is actually a container orchestration and management software, which y gives you the end to end solution for digital transformation, application modernization and container management system. It will be a series of software. It is a brand which we are creating.
New GreenLake spans from container management to machine learning operations to virtual machines and to our entire hardware portfolio, which is being provided to our end customer as pay per use subscription based as a services model with the highest service levels. That is our pitch, which has pivoted around machine learning, AI and consumption as a service.
Last year we have touched upon all segments, whether it is very large public sector unit PSU, interesting startup companies, great fintechs and also the entire mid market. So across all segments, customers have been embracing this services offering from us.
Who are some of your marquee customers and what are their use cases?
Indian Oil Corporation is one. IOCL along with HPE fuels business performance and future growth. State Bank of India is another who is extending modern bank services to every citizen in Digital India. Force Motors has chosen HPE to forge ahead on its digital transformation journey. Sardar Vallabhbhai Patel Institute of Medical Sciences and Research Hospital, Gujarat’s largest public hospital, has chosen HPE Simplivity to host its mission‑critical applications.
What will be the key focus programs for partners in the next 2 quarters?
We will continue to be a partner led motion, bring attractive programs for our partners and they can make a lot of money by selling into the SMB segment. Secondly, consumption services, almost 90- 95% of our overall GreenLake wins, are through our partners. We will be studying whether it is an enterprise or mid market or SMB, we will be selling a green Lake, which is consumption services through our partner and there will be a lot of exciting programs coming. The third thing is that integrated data management and our storage portfolio, the entire end-to-end data management plus selling the most efficient storage solution, Primera, will go to our partner.
What have been the changes in the nature of the engagement with CIOs in the current situation?
We go and approach an enterprise or CIO by telling them that we are with you in partnership to analyze your workload, to look at the security aspect, the mission criticality aspect and the workflows, which can be safely put into a public cloud or in a multi-cloud environment. And we will partner with you and together develop the right kind of architect, a blueprint for you moving forward with a seamless end user experience. We understand that you have a very specific business from your business requirement onwards to your application, workload is something which we will partner with you and co-develop with our vast experience, architecture blueprint which will help your business as well as your user experience. That pitch is very well taken by all the CIOs.
What are HPE’s unique differentiators over its competitors?
If you are a CIO and you are making a decision, your focus will be how seamless is the experience. At the end of the day, there should be no downtime. If we look at it, user experience is a function of 2-3 things. One is the quality of product. The second aspect is the tools so that it can do predictive analysis, AI, machine learning and so on and so forth. The third aspect, which is very important is the best practices and the human factor, which sometime we do not understand. Because we cater to a mission critical environment, it takes decades of experience, it takes a culture to be able to cater to that environment. We have been manufacturing the most mission critical platforms, whether it is storage or server and it’s been tested. There is a long history of great products being deployed.
Secondly, everybody can have the right kind of the best tools, whether be it a public cloud provider or a private one. But where we score over is the best practices and the human experience. If you look at our engineers, the discipline with which we have been catering to the mission critical environment for decades and that is something which is very difficult for this newbies to match at this point of time.
What are going to be HPE’s key priority areas for the next 2 quarters?
We will leverage our overall user experiences and that is something which we brainstorm. We thought that is the way we can surely help our customers because it is horizontal and social distance in tracing and tracking and so on and so forth. So that will be one of the focus areas for sure. Secondly, working closely through our partner, working closely for the SMB segment and ensuring that to what extent we can help in terms of creating demand and also helping our partner on the cashflow situation will be priority for next 2-3 quarters.
Thirdly, we are trying to see that more and more enterprise customers and mid-market customers embrace, consumption services like GreenLake, which is your most mission critical on a pay-per-use model, on-prem. The workloads which are below can go to our multi-cloud environment. These are going to be the three focus areas for us.
How much is it a challenge to look at virtual meetings for deal closures?
With the experience for all of us in the last 4-5 months, we are convinced that quite a few maybe 60- 70% of our interaction, whether it is a service delivery or sales or marketing, or maybe managing event is as effective virtually as face to face. Few hours of a team meeting, which we used to do face to face, and the people traveling from all across the country and meeting and whatever was the outcome remains almost similar in a virtual environment also.
We would be ensuring that most of our interactions moving forward for the safety reasons remain virtual. However, there will be certain, exceptions like if somebody wants to do a prototype, somebody wants to do a POC before getting into or taking a major investment decision, we will have to do that. That is what we are provisioning slowly. In fact, 10% of our employees has already started working moving forward by October, November. Slowly the plan is that maybe by October end the leadership will start going to office. Slowly whatever is really required, we will do face to face with our customers, with our partners as well as internally.
I think 60% of our interaction can be virtual and can be as effective. So we will continue doing that. At the end of the meeting, when you are taking a flight back, you realize that, could have done the same thing, the same outcome if you have done a video conference. The good thing is that quite a few things will be accepted to be done virtually.