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September 20, 2023

HPE reorganises with new hybrid cloud business unit as software chiefs depart

The tech vendor hopes the changes will help it deliver cloud services in a more streamlined way.

By Matthew Gooding

A shake-up at HPE will see the tech vendor create a new business unit focused solely on hybrid cloud services. Two senior executives with responsibilities for cloud products will also be leaving the company in the coming months, its CEO has announced.

HPE is setting up a new hybrid cloud business unit. (Photo by Sundry Photography/Shutterstock)

The changes will come into effect at the start of HPE’s 2024 financial year, which begins on 1 November, CEO Antonio Neri said in a statement late on Tuesday.

How HPE is reorganising to focus on hybrid cloud

The new hybrid cloud business unit will bring together all the parts of HPE’s cloud portfolio, Neri said. Like many established IT vendors, it has been attempting to persuade its customers to transition away from on-premises infrastructure to embrace more cloud services but faces stiff competition from the cloud hyperscalers, as well as traditional rivals such as Dell and IBM.

HPE’s solution has been to offer a hybrid of cloud, on-premises and edge infrastructure, which customers pay to use on a consumption model. This package, HPE GreenLake, has proved popular with businesses since its launch in 2019, the company says, and is deployed by 27,000 customers with 3.4 million connected devices.

However, the shift to a hybrid cloud has yet to drive growth, with annual income flat-lining in recent years. In 2022, HPE’s revenue was $28.49bn, up slightly from $27.78bn the previous year. Its most recent quarterly financial results, reported in August, also showed only a modest 1% year-on-year revenue bump, to $7bn.

Neri said the company is now “evolving” its operating model “to accelerate our execution, deliver a superior customer and partner experience, and drive growth for the company and value for our shareholders.”

The move will “further unify our portfolio and enhance the delivery of a true cloud experience for our customers and partners,” Neri said, adding: “They will enable tighter integrations that benefit our customers and partners and spark innovation.”

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As well as GreenLake, HPE Storage, HPE GreenLake Cloud Services Solutions and the company’s CTO office will all be part of the new business unit.

Changes at the top for HPE

The Hybrid Cloud business unit will be headed by HPE CTO Fidelma Russo, who has led the team that built GreenLake over the last two years, Neri said.

But there is no place in the new set-up for Vishal Lall, the company’s general manager for GreenLake cloud solutions and HPE software, who will be leaving the company in the coming months. Lall has been with HPE and Hewlett-Packard since 2012.

Also departing is Pradeep Kumar, head of HPE Services, who is retiring after 27 years of service to the company. His responsibilities will be handled by Mark Bakker, HPE’s executive vice president and general manager for global operations.

“As I’ve said many times, I’m confident that we can accomplish anything with the right team guided by the right leaders,” Neri said. “I believe we have both.”

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