HPE’s Strategy for Battling Amazon and Google: Don’t

(Bloomberg Businessweek) -- Since 2015, when HP split into HPE (networking and consulting) and HP Inc. (PCs and printers), Neri has helped define the enterprise business’s scope, leading key acquisitions and the development of advanced servers while shuttering underperforming product lines.

What challenges do you see at this company as you look at how things are rapidly changing and moving to the cloud?

The cloud has to move closer and closer to where the data is being generated. It’s cheaper to move the cloud to where the data is, not the data where the cloud is, so we promised last year, at HPE Discover in Las Vegas, to invest $4 billion to develop that set of road maps and technologies.

How much pressure are you feeling from Google, Amazon.com, Microsoft, these big companies that have really put their stake in the cloud?

There’s no doubt that many of the workloads have moved to the public cloud. But big customers realize it’s cheaper for them to run things on their premises in their data center or in a sort of hybrid model. We believe that’s going to be the world as we go along, and there is a ton of opportunity to modernize that infrastructure and help customers decide what is the right mix.

Do you feel pressure, though, from some of the other competitors out there?

Well, listen, we’re competing with everybody, you know? We compete on one spectrum with the public cloud vendors, on the other spectrum with the equipment vendors. But we have a clear understanding and strategy. And if you look at our latest results, we’re making significant progress.

You guys have manufacturing in Mexico. You’re in 172 countries. How do you view the trade wars under way, and how might they affect you?

The situation we’re in creates uncertainty, and when there is uncertainty, customers tend to step back a little bit. Obviously, there needs to be a fair approach to trade, but we live in a global economy, and the supply chains we’ve put in place over the last few decades are complicated.

You’ve acquired a lot of companies, including a recent $1.4 billion deal for Cray Inc. Is there another piece you need to add on?

More and more intelligence comes through the security analytics that make infrastructure more autonomous. Valuations tend to be a little bit erratic of late, but if it makes sense, we’ll consider it.

There’s a lot of money out there in the world, especially in the private equity market. Anybody knocking on your door to maybe buy you?

No, not at all. We’re focused on executing our strategy and making this company relevant for the future, to become a trusted adviser to our customers. And I have to say, we’re having a ton of fun.

You’ve been at HPE for a quarter of a century. What’s the best advice you got from a mentor?

First, you have to have a clear vision for yourself, where you want to be, and establish clear milestones. Second, you have to deliver what you say. Build a network of people who will take an interest in you. And then, taking risk is important. Sometimes you have to move sideways to move upward.
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To contact the editor responsible for this story: Jeff Muskus at jmuskus@bloomberg.net, Howard Chua-Eoan

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