Interview: Antonio Neri, CEO of Hewlett Packard Enterprise, about state-of-the-art computing



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With the approach of the fifth anniversary of Hewlett Packard's breakup, there are reasons to celebrate this success at Hewlett Packard Enterprise, one of the offspring of the legendary technology company's split.

Earlier in February, Antonio Neri had ended his first year as CEO of HPE, after replacing Meg Whitman. HPE has exceeded analysts' expectations in terms of earnings for the last four quarters, it has increased its business by 7% during its 2018 fiscal year and has just announced a new round of dividends. She has just moved to a new upscale headquarters in San Jose, reflecting her plans to grow after a time of contraction.

At the same time, there are still reasons to be skeptical. Wall Street expects the group to announce a turnover of $ 7.6 billion and a profit of $ 0.35 per share, which is about stable compared to the same last year period. At about $ 16 per share, HPE is valued at $ 22 billion. The stock has increased about 14% since the beginning of the year, but remains below its peak of $ 19.48 recorded in 52 weeks.

More generally, the rise of cloud computing providers, such as Amazon Web Services, a market leader, has cast a shadow over HPE and any other data center hardware manufacturer: more customers move their IT infrastructure to the cloud, the less they do it. need expensive servers, storage arrays and network equipment. This is a trend that has already weighed heavily in HPE's business.

Nevertheless, Neri told Business Insider that there were many reasons to be optimistic too. He estimates that "in the next few years, HPE should surpass even Amazon with respect to advanced computing, a technology that some consider to be the next big market after cloud computing."

Before that happens, however, Neri says he wants to reinvest in HPE's culture, including putting into practice what the company preaches by modernizing its internal computer systems. The overall result, he says, is that HPE will always be competitive as long as it will have the "best talent and the best innovation" – two elements that, in his view, are the hallmark of Hewlett's legacy -Packard over the past 80 years. one of the first companies in Silicon Valley.

And investors, he says, are beginning to see the light – beyond dividends and stock prices, he suggests that markets will come to value HPE for its forward-looking nature, the quality of its workforce work and its vision of technology. to work to make the world better.

"Investors want to work with future-minded companies and communities," Neri said.

Started at the bottom of the ladder

Neri joined Hewlett Packard in 1995, occupying a position as important as possible in the corporate hierarchy: answering the phone in her customer service division. As Bloomberg reported last year, its story that started from the ground up and its long tenure in the company, over the years, made it very popular with HPE employees.

He says his time spent in customer service has taught him lessons that he uses to inform his decision making today. More to the point, your best intentions as a business do not matter: things will break. As a company, what defines you is the seriousness with which you take your comments and what you do about it.

"What I took with me was the customer's point of view," says Meri. "Customers are the source of the truth."

According to Neri, another benefit of his long tenure is that he "knows every process in every part of the business". This is partly the reason why he launched a large-scale initiative to modernize the company's work methods. The finance team, for example, is in the process of standardizing its financial tracking system compared to ten previously.

Antonio Neri replaced Meg Whitman, who chaired the Hewlett Packard Enterprise split.
AP Images

Instead of a simple administrative reform, Neri considers this thrust as a "strategic weapon". For starters, this means that the company can act faster. In the case of the finance team, standardization on a system means that it can close accounts much faster than before, Neri says.

In a more existential way, says Neri, this makes HPE a better place to work and a living example of what the company is trying to do: help companies reinvent their way of doing business using technology. That's the same reason why Neri paid special attention to the design of the new headquarters: he wants to attract and retain the best talent.

"It's a capital for employee morale," says Neri.

The great opportunity

In 2015, shortly after the split that created HPE, the company ended its business with HP Helion, its local competitor to Amazon Web Services, Microsoft Azure, and other cloud giants.

Neri now sees HPE conquering a new niche in the hybrid cloud, where customers keep some of their data on their own servers and on the cloud. To that end, last year HPE launched Greenlake Hybrid Cloud, a service that helps businesses manage their infrastructure, through AWS, Azure, and their own data centers.

This is a big bet for HPE: big companies, especially in regulated sectors – like finance, for example, or retail – can not or do not want to transfer all their data to the cloud. Neri says the company is betting that she can help these companies modernize their infrastructure without having to make this important change.

"The world will always be hybrid," says Neri.

Ultimately, however, Neri's goal is to move to so-called on-board computing, which he hopes to play more in the next 3 to 10 years.

The HPE Nimble Storage flash memory array.
YouTube / HPE technology

The basic idea of ​​Edge Computing is that in a new and brave world of devices connected to the Internet, gadgets and even vehicles, it is simply too inefficient to send data on the cloud via the Internet to process them, for example an autonomous car. , needs to know when to stop now, rather than waiting for a response from the server.

The solution is to make the edge, ie the device itself, smarter, in the sense that it should be able to process a lot of data on its own hardware, relying on the cloud only for the most intensive calculations.

According to Neri, HPE is well positioned to conquer this market because its hybrid cloud system is already helping customers manage and process huge amounts of data directly on their own servers.

Unlike Amazon Web Services, which is only just starting to get interested in the hybrid cloud market, HPE is well positioned to help move material and cloud data, Neri says. He also pointed out that Aruba Networks, a network company that she bought in 2015 for $ 3 billion, gave her the basic infrastructure to help these devices connect to each other. and the cloud.

According to Neri, as the number of connected devices in the world increases, he expects that advanced computing will become a $ 400 billion market, reflecting the fact that almost everything will be "smart" for at least some capacity. For HPE, it's "the biggest opportunity," says Neri – far more than the cloud market, estimated by analysts at $ 180 billion as of 2018.

"No matter how you cut it, it's bigger than the cloud market," says Neri.

Underappreciated

While HPE is preparing to take advantage of this opportunity, Neri says that he had to learn some leadership lessons. In general, he says, the decision to replace Whitman was "the smoothest transition we've had" – just before becoming CEO, Neri had been president of the company, enjoying abundant mentorship from the from his predecessor.

In fact, in many ways, his strategy pursues a game book originally created by Whitman, who left HPE once and for all in January after resigning from his board of directors.

However, he says he still had lessons to learn about what it meant to be the boss.

"The CEO is the most lonely job on the planet because everything ends with you," says Neri.

He says that he is most comfortable making product decisions. he knows how to work with engineering and sales teams. The "way to learn," he said, was how to talk to investors and give them a "clear story" about what HPE is.

"I think we are underestimated," said Neri.

For Neri, everything at HPE goes in the right direction: it continues to attract PhDs and other industry experts, the fundamentals of the company are strong and it allows to wager smartly on its place in the future of the computer.

"I think it's damn good," Neri says.

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