- June 7, 2023
- Posted by: lmwalsh
- Categories: Changing Channels, Podcasts & Videos
Paul Hunter, managing director of North America at HPE, joins Changing Channel’s Larry Walsh to discuss the traditional data center hardware company’s transition to the Everything-as-a-Service model and what it meant to its channel program.
In recent years, vendors across the tech industry have wholeheartedly embraced the Everything-as-a-Service (XaaS) model. This revolutionary approach involves selling technology in various forms through subscription and consumption-based models, which offer numerous benefits. The appeal of this model is undeniable: It generates recurring and predictable revenue while eliminating the uncertainties of sales cycles.
While companies that were born in the cloud or have a service-based foundation find it relatively straightforward to adopt the XaaS model, traditional hardware vendors and some software publishers face significant challenges. These companies have long-established transactional sales practices deeply ingrained among partners and customers. Convincing sellers to shift their product positioning to a service-oriented approach and embrace new compensation plans is no easy task. Likewise, getting partners to adopt product sales that require presenting different value propositions and costs can be equally challenging.
However, the lure of capturing recurring revenue is simply irresistible. As a result, many hardware vendors are undertaking the transition to XaaS sales models and channel programs, albeit at a slower pace than anticipated due to change management complexities.
Hewlett Packard Enterprise (HPE) stands out as a prime example of a company that has strategically embraced the service-based model. HPE introduced its cloud-based GreenLake platform in 2017 and set a primary objective of generating the majority of its revenue through service and hybrid infrastructure sales. Over the past five years, HPE has continuously restructured its internal organization and external channel programs to align with the XaaS model. Its efforts are paying off, as the company is well on its way to achieving its revenue goals through service sales in the near future.
HPE’s accelerating transition to XaaS couldn’t come at a better time. According to IDC, a considerable 71% of enterprises are shifting their workloads from public clouds to hybrid and on-premises infrastructure. This move is driven by the desire for enhanced administrative capabilities and cost control. Simultaneously, partners are identifying increasing opportunities to provide managed and professional services alongside XaaS and hybrid engagements. HPE recognizes these trends as significant drivers of growth.
In this edition of Changing Channels, we bring you an insightful discussion between Paul Hunter, the managing director of North America for HPE, and Channelnomics Larry Walsh. They delve into the vast opportunities presented to vendors and partners by the XaaS model, highlighting the successes and setbacks that HPE has experienced during the transition process. Moreover, they provide invaluable insights into how businesses can capitalize on the flourishing XaaS and hybrid infrastructure markets.