HPE restructures around hybrid cloud

Hewlett Packard Enterprise is undergoing a reorganization that includes the formation of a new hybrid cloud business unit and top-level executive shifts.

Fortunately, CEO Antonio Neri is going nowhere. Neri may not have a rock star profile, but his success as a leader is undeniable.

Two key executives are departing, however. Vishal Lall, general manager of HPE GreenLake and the cloud solutions group, is leaving the company. Pradeep Kumar, senior vice president and general manager of HPE services, is retiring after 27 years with the company.

With Kumar’s departure, all operational activities for HPE services, supply chain and quote-to-cash will now be handled by Mark Bakker, executive vice president and general manager of global operations.

“These changes to HPE’s organizational structure and executive leadership, which take effect at the start of our 2024 fiscal year on November 1, 2023, will further unify our portfolio and enhance the delivery of a true cloud experience for our customers and partners,” Neri wrote in a blog post announcing the reorg. “They will enable tighter integrations that benefit our customers and partners and spark innovation. And, they position us to continue to win in the market.”

The company is creating a new hybrid cloud business unit that includes HPE storage, HPE GreenLake cloud services solutions, and the office of the CTO. “This new group will accelerate our hybrid cloud strategy as we deliver one portfolio of storage, software, data, and cloud services on the HPE GreenLake platform,” Neri wrote.

Fidelma Russo, HPE CTO, will helm the new unit.

Neri noted that over the past two years, Russo led the team that created and grew the HPE GreenLake platform, which is now the central offering for all of the company’s hybrid cloud solutions.

“Fidelma is a customer-centric leader and will continue to bring revolutionary new offerings to bear for our global customers, helping HPE realize our distinct advantage as we pursue opportunities in the hybrid cloud market,” Neri wrote.

In addition, a new private cloud team has been created within the hybrid cloud organization, led by Tom Black, executive vice president and general manager of the storage business group.

So, what does this mean for customers? As it turns out, not a whole lot, says Matthew Eastwood, senior vice president with IDC. It’s not uncommon for top-tier executives, as they consider their own career aspirations and path to a CEO role, to move on from a company. With Neri staying put, ambitious senior-level executives will look elsewhere.

That’s the story behind the departure of former executive vice president and CFO Tarek Robbiati, who left HPE in August to become CEO of RingCentral. “I believe that Vishal Lall has similar aspirations. This is not unique to HPE, but it does set up the need for additional succession planning,” Eastwood told me.

Eastwood also said he believes HPE’s reorganization is financially motivated. HPE’s very large but somewhat low-margin computing business is something of an anchor, in terms of financial reporting. On the flip side, HPE’s intelligent edge business, with its Aruba networking business at its core, is doing exceptionally well, Eastwood says. The reorganization could be a way to shift the reporting that financial markets use to calculate HPE’s valuation.

“I believe that the hybrid cloud business – which includes storage and HPE’s software and GreenLake platform assets – is intended to shine a light on its growth and margin potential. This will provide HPE with another growth story to tell [Wall Street]. They will no longer report storage on its own and will instead be breaking out hybrid cloud each quarter,” Eastwood said.