HPE GreenLake and PointNext: The Partner Play

LAS VEGAS —  The inaugural HPE GreenLake Flex Capacity for partner program, announced this week at HPE Partner Summit 2018, opens the door to new partner opportunities, and that’s good. But when it comes to other HPE GreenLake and HPE PointNext offers, those doors are closed.

Take, for example, the HPE GreenLake Hybrid Cloud offer, announced today at HPE Discover 2018. The new cloud management service is only being sold by HPE’s direct sales force.

Flynn Maloy

Flynn Maloy

“We’re starting with the basics, with infrastructure-as-a-service, for our partners,” Flynn Maloy, vice president, marketing HPE PointNext, told us. “If partners are successful with the seven packages that we introduced [with the HPE GreenLake Flex Capacity for partners offer] we’ll add more packages and we will climb up the stack to other parts of GreenLake such as workloads — there’s backup-as-a-service, SAP HANA-as-a-service or hybrid cloud, for example.”

The new HPE GreenLake Hybrid Cloud offer is a customized offer sold by HPE.

Jesse Chavez, vice president of worldwide partner program and operations at HPE, said that a lot of work and effort went into developing the seven prepackaged HPE GreenLake Flex Capacity offers — HPE ProLiant for Microsoft Azure Stack; HPE Synergy 480 compute modules; HPE 3PAR StoreServ 8200 and 9450; HPE SimpliVity 380; HPE ProLiant BL460c server blade; and HPE StoreOnce 5100

Jesse Chavez

Jesse Chavez

“From a PointNext perspective, they’re making a shift to being more partner-centric,” he said. “There is a percentage of the PointNext business that goes through partners, but we want to see more growth.”

Maloy said that partners were clamoring for GreenLake Flex Capacity. “They saw that one of the fastest growing areas in the industry today is consumption, so they were telling us, ‘Don’t just sell me servers, but sell me 400 servers under a consumption model or infrastructure-as-a-service, or pay per use,'” he said. 

GreenLake is the fast-growing business inside HPE, with $2 billion in contract value today. Rebranded last year, GreenLake was previously called Flex Capacity, and it was a co-sell option for partners.

“But they couldn’t do it,” Maloy explained. “A partner finds a customer who wants Flex Capacity and we sell it together. Once the deal is done, HPE works with the customer and gets the annuity stream — it wasn’t good for the partner.” 

With the new GreenLake Flex Capacity for partners, HPE figured out a program that offers rebates, incentives, enablement and quoting tools so the partner can front the customer, own the relationship, sell it, get the annuity stream themselves and participate in delivery if they want to. Within HPE Partner Ready, the vendor has sell-only partners and sell-and-deliver partners, the latter being certified to deliver HPE Datacenter Care Services or HPE Proactive Care Services as part of the vendor’s partner delivery network.

“The way we figured out how to do GreenLake Flex Capacity for partners – we have about a 5X rebate that a partner gets when they sell the technology, a rebate on the whole deal and profitability climbs throughout the whole year; our commitment to partners is a break-even point on margins in about 12 months,” he said. “After that — years two, three, four, five — the partner will make more margin than if they sold the hardware straight up.”

Under the previous Flex Capacity program, only 1 percent of flex capacity was sold with partners. “We’d like to see partners embrace our new standardized model and see 5 to 15 percent growth in the channel,” said Maloy.

When HPE rebranded all its service business under the PointNext umbrella, about a year ago, they fell into three buckets: advisory, professional, and operational. Services such as Proactive Care Services, Datacenter Care Services and now the GreenLake Flex Capacity for partners offers all fall under operational services, which make up the lion’s share or $7 billion of the total $8 billion PointNext services sold, according to Maloy.

Now, partners should know that the door isn’t locked when it comes to selling custom GreenLake flex capacity offers but it’s tough and is a co-sell with HPE that reverts to the past flex capacity type model.