Getting smaller to get bigger. This is Hewlett Packard Enterprise's (HPE) guiding mantra as it transforms into a tech company fit for the 21st century.
The prescient fix
Spurred on by digital disruptors and discerning customers, Hewlett Packard Enterprise (HPE) is pivoting to become more nimble and customer-centric.
Since 2014 the 80-year-old IT giant has been in a state of flux. First came the split into two separate companies: HP Inc. and Hewlett Packard Enterprise. Then came the divestitures, acquisitions and restructures within HPE. Now it finds itself in the early stages of an exciting digital transformation.
But before any of this began Hewlett Packard was at the top of its game. It was a trusted, $119 billion business with global brand recognition that had achieved market saturation. Hardly a reason to downsize and reboot.
So if HPE wasn't broken, then why choose to fix it?
Why old business models are no longer relevant
HPE could see its transaction-oriented business model was no longer going to cut it. Digital-first organizations were revolutionizing the business landscape and winning the war for customer loyalty. Liquid expectations and personalized solutions, driven by data, were becoming the norm. Customers were expecting outcomes, services and delightful experiences. Most of all HPE wanted choice and control. All of this requires speed of thought, flexibility and innovation. Qualities HPE, at the time, couldn't provide due to its size and culture.
"They were too big and bureaucratic, transaction-oriented, product-focused and features-led. They were hampered by distractions with all these different businesses that weren't core to where they wanted to go, which was to become more services-based," says Greg Roberts, Managing Director, Communications, Media & Technology, Accenture.
At the risk of becoming a relic of a bygone era, HPE set out to reinvent itself.
Making a wise pivot
First of all, HPE didn't throw out the baby with the bathwater. It trimmed some fat off their organization and refocused on its core business. At the same time, it began shifting towards a solutions-centric, outcome-focused and services-based business model.
"They've removed all the baggage that was slowing them down and made some strategic acquisitions in the space of the new, where they want to go to."
This is called a wise pivot. It's a calculated and gradual transformation from the current core business to a new model. By the time the transformation is complete, the new has become the core.
"Basically they've removed all the baggage that was slowing them down and made some strategic acquisitions in the space of the new, where they want to go to," says Roberts.
This put HPE in a much better place to begin digitizing, and not without a little help from some friends.
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Rotating to the new with Accenture
Three years ago, Accenture went through a similar pivot to HPE and is helping it rotate to the new business model.
"Our company was built with partners in mind and Accenture is a solution integrator and a critical strategy partner for us."
"We were one monolithic company that was broken into five federated businesses. We then did this pivot where we went from transactional-based sales to selling digitized solutions and outcomes. We're leveraging that experience and that knowledge as HPE goes through their journey," says Roberts.
Accenture is providing HPE with thought leadership, innovation and helping with product-solution integration. It's also helping improve and drive efficiencies in HPE's quote and order management, facilitating tighter integration of its services into its products, and linking those to Accenture's own.
"Our company was built with partners in mind and Accenture is a solution integrator and a critical strategy partner for us. Together with our technology and their solutions we can actually solve customer problems better than anyone else," says Antonio Neri, Executive Vice President and General Manager, HPE.
So what does the new customer-centric HPE look like?
How the new HPE is improving customer experience
A leaner, sharper and more innovative HPE is now providing hybrid IT solutions to customers. This is where the customer is offered a mix of cloud or onsite technology services and support. Customers get greater flexibility, more choice and personalized experiences. Data is at the heart of this new approach.
"What we aim to give the customer is those capabilities, but in a way that allows them to meet their exact needs."
"When you think about data, it's got to be computed, stored, analyzed, secured; you want value from the insight that you get. What we aim to give the customer is those capabilities, but in a way that allows them to meet their exact needs," says Peter Ryan, Head of Sales, HPE.
This is best achieved when the product, being sold as a solution in the market, is part of a larger ecosystem.
"If you think of IoT or data analytics, it's about bringing together other software solutions on HPE's hardware to provide a service in the market. This is probably the biggest pivot they are making," says Olan Kenneally, Managing Director, Communications, Media & Technology, Accenture.
Aruba, a HPE company, used this layered approach to provide a seamless digital experience for fans at San Francisco's Levi's Stadium during Super Bowl 50. Data collection began the moment they connected their devices to the stadium's free Wi-Fi. Push notifications made them aware of the stadium's online merchandise store. Through the network they were even directed to their seats where, if desired, they could order a snack. Underpinning all this was HPE's IT infrastructure.
"Imagine yourself at the stadium and you want to order popcorn. The stadium knows where you are through location services and it automatically gets delivered to your seat. What HPE can do is work with our customers to enable that experience, and in the backend we provide all the IT, infrastructure and capabilities to enable that," says Ana Pinczuk, Senior Vice President, HPE Pointnext Services.
Where does HPE go from here?
You're only as good as the next best alternative
Without a doubt, HPE is on its way to achieving its aim of becoming an experience company. While the initial transformation is scheduled to take three years, in this new customer-driven age, you're only as good as the next best alternative. Staying still will not be an option.
"You've always got to look and see who the competition is. In this new world of pivoting to the new, the business model is always going to be evolving and refining as solutions get more complex and easier to buy," says Roberts.
It won't be technology that drives this evolution, but talent. An ongoing focus for HPE will be to invest in the right people with the skills to achieve its aims. This will allow it to remain nimble, innovative and aggressive in the marketplace.
"We've got computes, we've got connectivity in the network, we've got storage in the cloud and we've got the skills to turn all this data into business value. So we're very excited about the possibilities," says Ryan.