When things go right!

A trip to the west coast that crosses both the Rockies and the Sierras is always fraught with potential disaster but this time, a little snow didn’t deter us and things just went right for us …

This time last year I wrote the post, What does Sydney bring to the table … as Margo and I were wrapping up a three month stay in that most magical of cities. We had made it “down under” for the traditional New Year’s fireworks celebration on Sydney Harbor, my daughter’s birthday, and the SIBOS Sydney 2018 financial institution conference. I had also managed to arrive in time for my High School fiftieth reunion even as we found time to visit the farm of my sister-in-law. In other words, this time last year a period of full immersion in all things Australia was coming to an end. But this year, it’s time to head to America’s West Coast.

It’s early in the year but it’s an ideal time to spend a few days in Silicon Valley before heading south to tinsel town and to that other big tech center that has basically arisen overnight, driven by the gaming industry. The worlds of film, television, amusement parks and yes, gaming platforms are morphing in ways that challenge reality. Just watching the advertisements for some of the latest games during the run-up to Christmas was enough to leave me catching my breath – did I just see that? Just as interestingly – have we entered a new realm of mission critical applications where the follow-on effects from any outage is a substantial loss of audience to where business can fold with just one outage?

Perhaps, a little extreme and yet, when things go right for all involved, the excitement and thrills being created can be seen whether those interacting with a screen or whirling around on a stage. Getting to where amusement can be sustained is every bit as important as delivering a handful of banknotes at an ATM. Perhaps too it has a lot to do with the time of year, with snow on the ground and shorter daylight hours, but heading to sunny California always proves hard to resist at this time of year and yes, we succumbed to a number of invitations to visit that came our way and despite the weather, we drove our beloved Li’L Pumpkin, (our orange Range Rover Evoque ragtop) the 1,300 miles to the coast.

Refueling the Evoque in windy Wyoming, where the temperature hovered around ten degrees Fahrenheit, was not pleasant. Then again, when is Wyoming anything other than windy? As for that first driving stint we had to negotiate slick roads and blowing snow with the occasional light snow falling. On the other hand, what else could we have expected to encounter and besides, we were truly looking forward to being back in the Bay area just as we were looking forward to seeing former business colleagues! Yes, California, here we come! In a last demonstration of nature’s wrath, we had to weather snow falling in the Sierras that gave us a slick ride down the mountains!

One request we received that we dutifully delivered upon was a tour of Silicon Valley – our guests was a former Managing Director of a major European tech company in South Africa and later, in Australia / New Zealand. Not sure whether or not it was a case of following the Rugby, but his time leading the Australasian operation turned into a lifetime commitment to the country and he and his wife have remained in Sydney to this day, but the lure of Silicon Valley loomed large as it has been twenty plus years since he last visited San Francisco and even then, there wasn’t time to drive down 101 or even I 280. This all changed this time around, as we put plans in place to visit a number of the campuses of companies that essentially anchor the valley these days.

Despite the tricky drive into California, we took time to do a number of things we hadn’t previously done. This included visiting the HPE garage - the birthplace of Silicon Valley. It also included a side visit to the offices of Kleiner Perkins on Sand Hill road as well as a visit to the garage that was “borrowed” by the founders of Google as they kicked off their search engine project. And, of course, we took in the sight of “Spaceship Apple” even as we lamented the loss of much of the former campus of Tandem Computers. Biggest surprise? Go behind the Facebook sign on their campus and it still reads SUN …    

What really stood out for Margo and me is the complete fluidity of the place. Not just with the names on the buildings or even the focus of the companies themselves, but rather, the mass movement to both ends of the valley – San Francisco and San Jose. It’s as if the valley was looking more and more like the bone your dog might chew on. Yes, there are some major campuses in the middle – Apple comes to mind – but with the towering skyscraper in San Francisco that is home to Salesforce to the sprawl of new buildings spreading north and west of downtown San Jose, the once mighty clock tower of Stanford University seems to be little more than a central pivot point anchoring these two ends.

HP Inc. can still be seen but, unless you know the actual address, you really don’t stumble onto HPE by accident and perhaps this is a story in its own right. HPE is redefining itself in a very big way and it’s taking a while for the industry press to catch up. Taking note of the fact that HPE is exiting the low margin, high volume white box business even as it continues to gravitate towards much higher margin software and services businesses, you could be forgiven thoughts you may have that HPE was perhaps less interested in selling boxes any more. Up to a point this has a ring of truth about it but on closer inspection, it’s just that HPE views the Core more cloud-like even as it promotes the importance of the edge.

“HPE today remains a hardware company, as evidenced by the profile of its revenues, but the future looks software and services shaped,” noted The Register in a December 23, 2019 article HPE goes on the warpath, attacks AWS over vendor lock-in. “HPE seems to have a much clearer strategy since its split with HP Inc., and the sale of the Enterprise Services and Software sides of the house,” noted the reporter who then added, “But this isn't necessarily feeding through into the financial results yet.” 

On the other hand, it’s becoming clear even to jaded publications like The Register that even as there has been a “fall in sales of servers to tier one cloud builders” when it comes to the big picture, “Operating margins were, however, up in the hundreds of basis points, and were up to 13.2 per cent in Hybrid IT, a historic high.” Strategy is clear; the exit from tier one cloud builders is almost complete; company trajectory to “everything-as-a-service” is continuing – and now financial analysts are beginning to take note and to reassess their recommendations for HPE.

On December 12, 2019 Deutsche Bank resumed coverage of HPE “with a Buy rating and $19 target, a 20% upside.” Furthermore, analyst Jeriel Ong thinks “the core revenue declines are ‘likely overstated’ and sees a multiyear growth market for the core Total Addressable Market (TAM).” In combination, the press acknowledges that HPE has a strategy that it is pursuing that is making more sense by the quarter and now financial analysts are not only resuming coverage but see positive outcomes ahead. All of which is to say that yes, keeping the NonStop products as part of the mission critical product portfolio and embracing mission critical systems as a key contributor to Hybrid IT is certainly good news for the NonStop community! And yes, for the NonStop community, things can go right for the product line after all.

Finding HPE’s head office in Silicon Valley may not be as easy as it once was; a vast sprawling campus on the south side of Page Mill Road. But in a world that is increasingly virtual and where the cost of CPU’s is heading to zero, and where “Services companies give away the hardware because of the non-existent cost of CPU” should we be surprised to find HPE looking more and more like an Adobe or a SAP or even Microsoft? A company where HPE’s product portfolio is being offered on a consumption basis – essentially pay-per-use? A company, as Jeff Kyle, VP & GM HPE Mission Critical Systems, pointed out during his presentation at the November NonStop Technical Boot Camp, overseeing the transformation given how “Hybrid IT is the new normal – and it’s complex; (it’s a challenge) to deliver new products and services faster (while) keeping the business running?”

It is in such an environment that we find HPE becoming the systems integrator, on our behalf, that we have demanded over the decades. Providing solutions on commodity hardware utilizing industry-standard interfaces supported by open software – isn’t that what we wanted? What we are seeing today is the emergence of a new HPE with a product portfolio better aligned with business needs and that includes NonStop – as software, and virtualized. And with a new head office, in Silicon Valley where it truly belongs! The drive to the coast may not have been easy and the time we spent cruising Silicon Valley may have taken more time than we planned but even as we may miss the old Tandem Computers campus (and the swimming pool), as a community we all have to thank HPE for the investment it has made in NonStop and in making NonStop a part of a strategy that is now delivering for HPE!      


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