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Interview: Hewlett Packard Enterprise CEO Antonio Neri on edge computing



As the five-year anniversary of the Hewlett Packard outbreak is approaching, there are reasons to celebrate at Hewlett Packard Enterprise, one of the offspring of the legendary technology company's division.

Earlier in February, Antonio Neri completed his first year as CEO of HPE, after replacing the prominent industry figure of Meg Whitman. HPE has beaten analysts' earnings expectations for the past four quarters, its revenue grew by 7% in the 2018 fiscal year, and announced only a new dividend yield. It moved to a swimming new San Jose headquarters, reflecting the plans to grow after a period of shrinkage.

At the same time, there are still reasons to be skeptical. When HPE reports revenue on Thursday, Wall Street expects the company to report $ 7.6 billion in revenue and a $ 0.35 per share profit ̵

1; roughly flat from the previous period. At about $ 16 per share, HPE is valued at $ 22 billion. The stock is up around 14% since the beginning of the year, but still below 52 weeks high at $ 19.48.

Broadly speaking, the growth of cloud computing vendors such as the market leader Amazon Web Services has created a shadow over HPE, and any other data center hardware manufacturer – the more customers move the IT infrastructure to the cloud, the less they are I need expensive servers, storage arrays and network equipment. It's a trend that has previously eaten significantly in HPE's business.

Tell, Neri Business Insider says there's plenty of reason to be optimistic too. He believes that HPE is ready to take over Amazon in the next few years when it comes to edge computing, a technology that some see as the next big market for cloud computing.

Before that happens, Neri says he is focused on reinvesting in HPE's culture, including practicing what the company does by modernizing its internal IT systems. The general startup, he says, is that the HPE will always be competitive as long as it has the "best talent and the best innovation" – two things that are a hallmark of Hewlett-Packard's 80-year legacy, one of the very first Silicon Valley -company.

And investors, he says, see the light beyond dividends and stock quotes, he suggests that the markets will appreciate HPE for its future-oriented nature, the quality of the workforce, and the ways in which it sees technology working to make the world a better place .

"Investors will work with companies that care about the future and care about society," says Neri.

Starting from the bottom

Neri joined Hewlett Packard in 1995, in a role that goes as far down the business ladder as it is possible to go – to answer phones in the customer service. As Bloomberg reported last year, his beginning-from-bottom story, and his long-term employment in the company through thick and thin, made him very popular with HPE employees.

He says his time in customer support taught him some lessons he uses to inform his decision making today. Specifically, your best intentions like a company don't matter – things are going to break. What defines you as a company is how seriously you take the feedback and what you do with it.

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

Another advantage of his long duration, says Neri, is that he "knows every process in every part of the company." It is part of why he has launched a sweeping initiative to modernize the way the company does business. The finance group, for example, is in the process of standardizing on a single financial tracking system, down from ten.

Antonio Neri replaced long-term leader Meg Whitman, who oversees the split of Hewlett Packard Enterprise.
AP Images

Instead of just an administrative reform, Neri sees this pressure as a "strategic weapon". For starters only, it means that the company can move faster – in terms of the financial team, standardization on one system means that it can close the books much faster than before, says Neri.

More existentially, Neri says, it only makes HPE a better place to work and a living example of what the company is trying to do – helping companies reinvent the way they do business using technology. That is the same reason why Neri's personal attention was given to the design of the new headquarters: He wants to attract and retain the very best talent.

"This is a hub for employee morale," says Neri.

The Great Opportunity

Back in 2015, not long after the big split that created the HPE, the company pulled the plug on HP Helion, its home competitor to Amazon Web Services, Microsoft Azure and other shadow giants.

Now Neri sees HPE carving out a new niche in the so-called hybrid cloud, where customers keep some of their data in their own servers, and some in the cloud. For this purpose, HPE launched the Greenlake Hybrid Cloud last year, a service that helps businesses manage their infrastructure, across AWS, Azure, and their own data centers.

This is a great effort for HPE: Large companies, especially in regulated industries – such as finance, for example, or retail – cannot or won't move all data to the cloud. Neri says the company is committed to helping these companies modernize their infrastructure without having to make the big switch.

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

Ultimately, however, Neri has his views on the shift to so-called edge computing, which he expects to play out more fully over the next 3 to 10 years.

HPE Nimble Storage All Flash Array.
YouTube / HPE Technology

The basic idea behind edge display is that in a brave new world of internet connected gadgets, and even cars, it's just too inefficient to send data up to the cloud over the Internet for processing. A self-driving car, for example, needs to know about stopping right now, than waiting for a response from the server.

The answer is to make the so-called edge – that is, the device itself – smarter, in the sense that it should be able to do a lot of computing on its own hardware, just relying on the cloud for the most part intensive calculations.

HPE is a good place to conquer this market, argues Neri, because the hybrid hybrid game already helps customers handle and process large amounts of data on their own servers.

Unlike Amazon Web Services, which now only empties the toes of the hybrid cloud market, HPE is well positioned to move data back and forth from hardware and cloud, Neri says. He also points to Aruba Networks, a network company that it bought in $ 3 billion in 2015, providing the basic infrastructure to help these devices connect to each other and the cloud.

As the number of connected devices in the world is increasing, Neri expects that the edge estimates to be a $ 400 billion market, reflecting that almost everything is going to be "smart" in at least one capacity. For HPE, it's "the greatest opportunity," says Neri – much more than the shooting market, which was put by $ 180 billion analysts in 2018.

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

Underestimated

As HPE moves to exploit this opportunity, Neri says he must learn some lessons in leadership. In general, he says the move to replace Whitman was "the smoothest transition we've ever had" – before becoming CEO, Neri had served as president of the company and received lots of mentoring from his predecessor.

In many ways, his strategy continues with a game book originally created by Whitman, who left HPE once and for all in January after stepping down from the board.

However, he says he still had some 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 he is most at home when it comes to making product decisions; He knows how to work with engineering and sales teams. "One who teaches," he said, was talking to investors and giving them "clarity of the story" on what HPE is about.

"I think we are undervalued," says Neri.

To Neri, everything goes in HPE in the right direction: It continues to attract doctors and other industry experts, the basics of business are strong, and it does smart games where it fits into the future of computing.

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


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