Digital transformation, Internet of Things poised to drive a leaner HPE

Meg_Whitman

With a full year as an independent company under its belt, Hewlett Packard Enterprise Co. will convene its Discover Europe user conference this week in London as an unquestionably leaner company.

Whether it’s meaner is still to be determined.

In reporting revenues that slightly underperformed expectations last week, HPE executives said all the changes that were necessary to slim down the company and position it for growth have been completed. Key events during its first year were the spinoff of its services business to Computer Sciences Corp. and sale of most of its software holdings to Micro Focus International plc.

However, the company also issued somewhat disappointing earnings guidance for the current quarter and said sales of its core integrated server business have lagged plans. Nevertheless, the company was bullish about the future, saying its high performance computing, hyper-converged server, storage and networking businesses are booming.

HPE remains the world’s largest server vendor worldwide, with 25.4 percent market share, according to International Data Corp. Its strategy, said Wikibon Chief Analyst David Vellante, “is to be the arms dealer to the cloud.” (Wikibon is a sister company of SiliconANGLE).

Keynote sessions at this week’s conference (* disclosure below) won’t involve much about servers, however. Rather, they’ll focus on bigger strategic plans. On Tuesday, Chief Executive Meg Whitman (above) is scheduled to spotlight companies that have embraced digital transformation and “hybrid IT,” which is a catch-all phrase encompassing hybrid clouds, rapid application development and deliver of applications as collections of services.

Intelligence at the edge

On Wednesday, Whitman will return to promote HPE’s Internet of Things initiative, which it calls Intelligent Edge. IoT is a potential $100 billion market, HPE Enterprise Group Executive Vice President and General Manager Antonio Neri said in an interview at last year’s HPE Discover conference. “The ability to process data in real-time is a significant challenge,” he said. “To me, IoT is a big data problem.” McKinsey & Co. has estimated that impact of IoT on the global economy could total $6.2 trillion by 2025.

HPE’s strategy is in sync with a growing consensus of opinion that IoT will require significant computing power at the edge of the network to make on-the-spot decisions about data coming in from devices and pass only the most important information on to central servers. “Edge computing will be a vital component of IoT,” wrote Wikibon Chief Technology Officer David Floyer in a recent report.

HPE executives believe they have a unique story to tell in the area. The company’s early 2015 acquisition of Aruba Networks Inc., a maker of enterprise wireless and edge access networking equipment, gave it the tools it needs to go up against enterprise networking heavyweights like Cisco Systems Inc. while leveraging its server strength. Aruba provides “a complete solution to use beacons to understand where the data sits and to process it at the edge,” Neri said. “You can process bigger amounts of data.”

Among the featured customers on the agenda are DreamWorks Animation LLC, DS Virgin Racing, Sogeti S.A.S., Suunto USA Inc., ePlus Inc., HudsonAlpha Institute for Bio Technology, Paddy Power Betfair plc, Adform ApS and Canisius-Wilhelmina Hospital. Senior executives will also be on hand from Intel Corp., Silicon Graphics International Corp. (which HPE recently agreed to acquire), Mesosphere Inc., Aruba and Docker Inc.

TheCUBE, SiliconANGLE’s live-streaming platform, will provide two-and-a-half days of continuous coverage beginning at 9AM EST on Tuesday. (* Disclosure: TheCUBE is a paid media partner at the conference. Neither HPE nor other sponsors has editorial oversight of content on theCUBE or SiliconANGLE.)