In a somewhat surprise move, HPE announced that it is going to make its entire portfolio available in a consumption-based procurement model in the next 3 years. Every product, every category. While the company will continue to offer traditional capital procurement, the shift to subscription is big news for the company.
HPE has been on the path to consumption-based IT for the past several years. Back in 2017, the company rebranded its consumption offerings as HPE Greenlake and began working with larger enterprise accounts to transition to op-ex procurement for its IT resources. The company announced that as of HPE Discover, it is working with around 600 customers and about $2.5 billion in revenue.
The move to consumption-based IT will occur over the next 3 years, encompassing all product lines and offerings according to company staff. This change also moves the target from the high-end addressable market to the entire market by opening access to the small & medium business markets.
Subscription models are not new – companies like Microsoft and Adobe has successfully navigated the transition to subscription model businesses away from traditional acquisition models. But the shift of an entire company and product line in the hardware space is a first. HPE staff say that the company is best positioned in the industry because of the work and learning they have done with HPE Greenlake in the last two years.
The advent of cloud-computing brought consumption-based IT to the masses. It opened up a ton of new capabilities that were previously cost prohibitive to customers who could not afford to deploy their own analytics infrastructure or specialized services – that could be consumed by cloud.
Consumption-IT models open up lots of capabilities that may not be available otherwise to smaller customers. There are many examples of analytic services and capabilities that were out of reach of smaller SMB customers prior to cloud computing. Greenlake could present opportunities to companies that may not be able to afford the on-prem solution.
HPE has confirmed that they will offer partner solutions as part of the offerings with Greenlake. Nutanix, Commvault and Veeam are all partners offered in the Greenlake consumption model paired with the HPE hardware solutions.
Disclaimer: HPE paid for my trip to attend HPE Discover. All thoughts and writing in this post are my own views and opinions and not reviewed or dictated by HPE.
