HPE produces financial results that encourage the financial
community; other communities take note – when it comes to mission critical
servers, NonStop continues to excel!
Combine these results for Q1 with the recent news of the big win for HPE’s supercomputer with US agencies and the launch of a COTS server into space, and HPE looks to be reasserting itself as an industry leader. And by this, I mean, the technology originating at HPE has always been superb, but penetrating the marketplace hasn’t always been a good reflection on the development work being done by development teams. No, it hasn’t been smooth sailing for HPE over the past two years but now, with just one quarter completed, it’s beginning to look a whole lot better.
So, what were the figures and why should the NonStop community take notice? HPE never showcases financial results for individual product lines but the good news here is that when it comes to Servers and Networking, both did a whole lot better this quarter. However, before getting into the meat of what HPE conveyed to the investor community on their Q1 2018 Results - Earnings Call, it is important to remind ourselves that NonStop is on a journey.
One that will take it down two roads – a continuation of NonStop as usual, with system upgrades plotted on a product roadmap that shows no indication of ending any time soon, and the beginning of a virtualized NonStop (vNS) that in time will be an option within the hyper converge roadmap. Becoming another virtual workload, solutions developed for NonStop and supported by the L-Series operating system can opt to go down either path and this represents a whole raft of new opportunities for NonStop, not the least being able to address SMB with solutions running on managed and public clouds.
The first item that caught my attention on the earnings call was the top line figure. As Tim Stonesifer, HPE EVP and CFO, noted on the call, “Total revenue for the quarter was $7.7 billion, up 11% year-over-year and 9% in constant currency.” A little later he then said, “By region, HPE’s performance in the Americas continue to improve, growing 3% with strength in core compute and campus switching combined with a recovery in the organic storage results. Revenue in Europe was even stronger, up 11% in constant currency, driven by an acceleration in core compute and storage with double-digit growth in Germany and Scandinavia. Asia-Pacific grew almost 20% in constant currency, delivering solid core server revenue with double-digit growth in Japan, China and Australia.”
I have highlighted the references to both core compute and core server as this is truly the center of HPE’s product portfolio as everything else are more or less satellite products circling around this core. There are customers of Aruba networking products just as there are customers of 3PAR storage where HPE has no core compute presence, but in general, core compute continues to be the engine driving HPE forward and part of the core compute is core server that includes NonStop. And for the NonStop community, any time there are “new logos” added to the NonStop user base it is cause for celebration. Last year we heard that there were more than a dozen such new logos and looking ahead to what we can expect to see this year, I am hopeful that this number climbs to twenty plus new logos.
Returning to the earnings call, Antonio Neri talked more about core compute, telling the audience of financial analysts how, “In compute, revenue grew 11% year-over-year, driven by growth in core ISS, High Performance Computer, Hyper Converge and Synergy.” Furthermore, “In datacenter networking, revenue grew 27% year-over-year, driven by strong execution within our install base. Our differentiator in Hybrid IT is our software defined services led approach, which helps customers navigate through the transformation challenges.”
At some point, with the work that has been done to support vNS, I see no reason why virtualized NonStop workloads will not be supported by Synergy. I don’t want to get too far ahead of myself and I have been cautioned about appearing too optimistic, but the truth is that with Synergy, there is tremendous scale-up opportunities whereas NonStop, as we know so well, is master of the scale-out architecture. But from where I sit, any enterprise that deploys large-scale Synergy chassis / servers will have room enough to spare for virtualized NonStop workloads to leverage the many physical servers in the Synergy chassis.
And my point here is that from just a single piece of glass, managing operations may be a whole lot simpler with everything out there running on racks of servers as this or that workload! Of course, why wouldn’t you prefer to provision a vNS environment in support of your most important applications – those mission-critical, real-time, transaction processing solutions!
Perhaps most insightful of all in the earnings call were the comments made by Antonio Neri when at one point, he took time to explain to the financial analysts how, “As you know, we have defined our strategy, built our portfolio based on the market disruptions we’re all experiencing, driven by the digital transformation and the resulting explosion of applications and data. At HP, we help our customers extract critical insights from their data to accelerate business outcomes. We enable our customers to harvest, store and analyze the critical data that improves customer experiences, drive new business models and increases employee productivity.”
When it comes to helping their customers extract critical insights, in my conversations with Ric Lewis, HPE Senior VP / GM, Software Defined & Cloud Group, during his coffee talk at HPE Discover 2018 Madrid, he reiterated that when it comes to data analytics, HPE would be turning to the partners for support. I find this response extremely encouraging as the more HPE drives its core compute / core servers programs, the better they will be to channel their energy into partnerships for other components than trying to go it alone and play catch-up. That isn’t to say that at some point HPE will not make an investment or acquisition in this space, but for the time being, I see this as being a further example that times are a changing within HPE – and for the positive!
Perhaps the most important aspect of the information coming from HPE as it wraps up its first quarter under new leadership is that HPE does have a vision and is executing to a strategy. HPE executives have said it many times and I think the message is now being understood by financial analysts and the IT industry – empower the edge, IoT and simply the transformation to hybrid IT. It may be a stretch but for those who have been around NonStop for many years, there is an appreciation that NonStop can definitely play a significant role within hybrid IT and given the right situation, even at the edge.
After all, it was Gartner that suggested the edge would eat the cloud, a reference to the eventual demise of the data center and yet another stretch, but worth considering all the same. Yes, a big edge will be as big a target for NonStop in time as the cloud, but at least, we have in NonStop and vNS options and the NonStop community relishes being given a choice!
HPE Discover 2018, Las Vegas, is now four months away and I am thinking about what we can expect to see from HPE. I have already made it known to those sorting out the program that I would like to see more references to how HPE compute is being used in the real world, going so far as to suggest setting up an aisle in the “transformation zone” showcasing real customers with real applications running on select products from the HPE product portfolio – including NonStop.
It has been good to see NonStop at the center of Blockchain / DLT demonstrations – excelling at what it does best; transactions leveraging NonStop SQL- and as pleased as I was to see its presence, I want to see even more! So, who knows – maybe we will see a greater presence of the “applied HPE” as we do the “pure (technology-centric) HPE” we see today.
By June, we should have seen results for Q2, 2018, and like many of those I have talked to over the past couple of days, I am hopeful that momentum continues for HPE. Just as importantly, I am hopeful too that momentum continues for NonStop. I am often asked whether we have seen acceptance of NonStop having turned a corner and whether the plans many current NonStop users have for migrating to other systems have lessened of late and while I don’t have access to real numbers, anecdotally I sense we have turned that corner with NonStop.
But if you really want to see the full picture then make sure you plan on attending HPE Discover 2018 and perhaps we will both get the opportunity to hear the full story for ourselves! Until then, let’s just all sit back and appreciate just how well HPE has performed out of the gate under the leadership of its new CEO, Antonio Neri!
I know there are still a number of months that need to
pass by before we all start making our plans to attend HPE Discover 2018. It
will be held, yet again, in Las Vegas and will run from June 19 to June 20.
According to the advance promotion of the event, it will showcase just how best
to, “Simplify Hybrid IT, innovate at the
Intelligent Edge and bring it all together with HPE Pointnext services. Explore
new, powerful methods of handling your data. Learn how to take advantage of the
next big idea, seize the next new business opportunity and leapfrog the
competition.”
For the past couple of years I have been a guest of HPE, representing Mission Critical Systems and NonStop Systems, as an independent blogger and part of the group that HPE calls the “influencers” – and yes, a huge thank you to HPE for including me in the program! HPE has to be congratulated for reaching out to folks like me and including someone from NonStop as part of the twenty-plus such influencers they bring together for these HPE “big-tent” occasions. Collectively, we represent every facet of HPE within IT and as part of the program HPE ensures all influencers are treated to separate “coffee talks” by HPE’s senior management. Of course, there is always the photo opportunity and at last year’s HPE Discover in Las Vegas, the guest HPE executive the HPE team brought along just happened to be then newly-named HPE President, Antonio Neri.
For the past couple of years I have been a guest of HPE, representing Mission Critical Systems and NonStop Systems, as an independent blogger and part of the group that HPE calls the “influencers” – and yes, a huge thank you to HPE for including me in the program! HPE has to be congratulated for reaching out to folks like me and including someone from NonStop as part of the twenty-plus such influencers they bring together for these HPE “big-tent” occasions. Collectively, we represent every facet of HPE within IT and as part of the program HPE ensures all influencers are treated to separate “coffee talks” by HPE’s senior management. Of course, there is always the photo opportunity and at last year’s HPE Discover in Las Vegas, the guest HPE executive the HPE team brought along just happened to be then newly-named HPE President, Antonio Neri.
Combine these results for Q1 with the recent news of the big win for HPE’s supercomputer with US agencies and the launch of a COTS server into space, and HPE looks to be reasserting itself as an industry leader. And by this, I mean, the technology originating at HPE has always been superb, but penetrating the marketplace hasn’t always been a good reflection on the development work being done by development teams. No, it hasn’t been smooth sailing for HPE over the past two years but now, with just one quarter completed, it’s beginning to look a whole lot better.
So, what were the figures and why should the NonStop community take notice? HPE never showcases financial results for individual product lines but the good news here is that when it comes to Servers and Networking, both did a whole lot better this quarter. However, before getting into the meat of what HPE conveyed to the investor community on their Q1 2018 Results - Earnings Call, it is important to remind ourselves that NonStop is on a journey.
One that will take it down two roads – a continuation of NonStop as usual, with system upgrades plotted on a product roadmap that shows no indication of ending any time soon, and the beginning of a virtualized NonStop (vNS) that in time will be an option within the hyper converge roadmap. Becoming another virtual workload, solutions developed for NonStop and supported by the L-Series operating system can opt to go down either path and this represents a whole raft of new opportunities for NonStop, not the least being able to address SMB with solutions running on managed and public clouds.
The first item that caught my attention on the earnings call was the top line figure. As Tim Stonesifer, HPE EVP and CFO, noted on the call, “Total revenue for the quarter was $7.7 billion, up 11% year-over-year and 9% in constant currency.” A little later he then said, “By region, HPE’s performance in the Americas continue to improve, growing 3% with strength in core compute and campus switching combined with a recovery in the organic storage results. Revenue in Europe was even stronger, up 11% in constant currency, driven by an acceleration in core compute and storage with double-digit growth in Germany and Scandinavia. Asia-Pacific grew almost 20% in constant currency, delivering solid core server revenue with double-digit growth in Japan, China and Australia.”
I have highlighted the references to both core compute and core server as this is truly the center of HPE’s product portfolio as everything else are more or less satellite products circling around this core. There are customers of Aruba networking products just as there are customers of 3PAR storage where HPE has no core compute presence, but in general, core compute continues to be the engine driving HPE forward and part of the core compute is core server that includes NonStop. And for the NonStop community, any time there are “new logos” added to the NonStop user base it is cause for celebration. Last year we heard that there were more than a dozen such new logos and looking ahead to what we can expect to see this year, I am hopeful that this number climbs to twenty plus new logos.
Returning to the earnings call, Antonio Neri talked more about core compute, telling the audience of financial analysts how, “In compute, revenue grew 11% year-over-year, driven by growth in core ISS, High Performance Computer, Hyper Converge and Synergy.” Furthermore, “In datacenter networking, revenue grew 27% year-over-year, driven by strong execution within our install base. Our differentiator in Hybrid IT is our software defined services led approach, which helps customers navigate through the transformation challenges.”
At some point, with the work that has been done to support vNS, I see no reason why virtualized NonStop workloads will not be supported by Synergy. I don’t want to get too far ahead of myself and I have been cautioned about appearing too optimistic, but the truth is that with Synergy, there is tremendous scale-up opportunities whereas NonStop, as we know so well, is master of the scale-out architecture. But from where I sit, any enterprise that deploys large-scale Synergy chassis / servers will have room enough to spare for virtualized NonStop workloads to leverage the many physical servers in the Synergy chassis.
And my point here is that from just a single piece of glass, managing operations may be a whole lot simpler with everything out there running on racks of servers as this or that workload! Of course, why wouldn’t you prefer to provision a vNS environment in support of your most important applications – those mission-critical, real-time, transaction processing solutions!
Perhaps most insightful of all in the earnings call were the comments made by Antonio Neri when at one point, he took time to explain to the financial analysts how, “As you know, we have defined our strategy, built our portfolio based on the market disruptions we’re all experiencing, driven by the digital transformation and the resulting explosion of applications and data. At HP, we help our customers extract critical insights from their data to accelerate business outcomes. We enable our customers to harvest, store and analyze the critical data that improves customer experiences, drive new business models and increases employee productivity.”
When it comes to helping their customers extract critical insights, in my conversations with Ric Lewis, HPE Senior VP / GM, Software Defined & Cloud Group, during his coffee talk at HPE Discover 2018 Madrid, he reiterated that when it comes to data analytics, HPE would be turning to the partners for support. I find this response extremely encouraging as the more HPE drives its core compute / core servers programs, the better they will be to channel their energy into partnerships for other components than trying to go it alone and play catch-up. That isn’t to say that at some point HPE will not make an investment or acquisition in this space, but for the time being, I see this as being a further example that times are a changing within HPE – and for the positive!
Perhaps the most important aspect of the information coming from HPE as it wraps up its first quarter under new leadership is that HPE does have a vision and is executing to a strategy. HPE executives have said it many times and I think the message is now being understood by financial analysts and the IT industry – empower the edge, IoT and simply the transformation to hybrid IT. It may be a stretch but for those who have been around NonStop for many years, there is an appreciation that NonStop can definitely play a significant role within hybrid IT and given the right situation, even at the edge.
After all, it was Gartner that suggested the edge would eat the cloud, a reference to the eventual demise of the data center and yet another stretch, but worth considering all the same. Yes, a big edge will be as big a target for NonStop in time as the cloud, but at least, we have in NonStop and vNS options and the NonStop community relishes being given a choice!
HPE Discover 2018, Las Vegas, is now four months away and I am thinking about what we can expect to see from HPE. I have already made it known to those sorting out the program that I would like to see more references to how HPE compute is being used in the real world, going so far as to suggest setting up an aisle in the “transformation zone” showcasing real customers with real applications running on select products from the HPE product portfolio – including NonStop.
It has been good to see NonStop at the center of Blockchain / DLT demonstrations – excelling at what it does best; transactions leveraging NonStop SQL- and as pleased as I was to see its presence, I want to see even more! So, who knows – maybe we will see a greater presence of the “applied HPE” as we do the “pure (technology-centric) HPE” we see today.
By June, we should have seen results for Q2, 2018, and like many of those I have talked to over the past couple of days, I am hopeful that momentum continues for HPE. Just as importantly, I am hopeful too that momentum continues for NonStop. I am often asked whether we have seen acceptance of NonStop having turned a corner and whether the plans many current NonStop users have for migrating to other systems have lessened of late and while I don’t have access to real numbers, anecdotally I sense we have turned that corner with NonStop.
But if you really want to see the full picture then make sure you plan on attending HPE Discover 2018 and perhaps we will both get the opportunity to hear the full story for ourselves! Until then, let’s just all sit back and appreciate just how well HPE has performed out of the gate under the leadership of its new CEO, Antonio Neri!
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