HPE Partner-Led GreenLake Deals Up 53 Percent In Second Quarter
The number of partner-led HPE GreenLake deals was up 53 percent in the most recent quarter with the annualized revenue run rate (ARR) for the edge-to-cloud service hitting $1.1 billion for the second fiscal quarter ended April 30, said HPE President and CEO Antonio Neri.
In addition, HPE GreenLake ARR for the quarter was up 38 percent as HPE continued its pivot to drive higher-margin software and services with HPE GreenLake.
“We already have 66 percent of the contribution in ARR coming from software and services, which obviously by industry standards have higher gross margin,” said Neri. “For partners, when they sell their own services on top of GreenLake there is a better return.”
The pivot to higher-margin software and services paved the way for HPE to report record non- GAAP gross margin of 36.2 percent for the quarter, up 360 basis points from the year-ago period.
The number of partners selling GreenLake is up 55 percent year over year, another testament to GreenLake’s momentum, said Neri.
HPE also delivered strong AI results in the quarter, booking an incremental $800 million in AI orders in the wake of the ChatGPT AI boom.
In addition, HPE’s intelligent edge business posted its 11th consecutive quarter of growth with sales up 50 percent to $1.1 billion. The intelligent edge business now makes up about 20 percent of HPE’s revenue.
“We are very pleased with the momentum we have in hybrid cloud with GreenLake; AI, which is a massive, massive opportunity for the company with our unique differentiation; and obviously the intelligent edge, which is delivering standout performance quarter after quarter after quarter,” said Neri.
Overall, HPE reported better-than-expected earnings of 52 cents per share on lower-than-expected revenue of $7 billion, up 4 percent from the year-ago quarter. The Zacks consensus estimate for the quarter was 44 cents per share on sales of $7.28 billion.
Below is an excerpt from an interview with Neri Tuesday as HPE reported its second-quarter results.
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Steve Burke has been reporting on the technology industry and sales channel for over 30 years. He is passionate about the role of partners using technology to solve business problems and has spoken at conferences on channel sales issues. He can be reached at [email protected].
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