HPE's Rothman: Financial Services Unit Unleashes Innovative Cloud Era Subscription Offerings

HPE Discover
Irv Rothman

Among the ­financial products changing the game for partners and customers: Flexible Capacity, which provides the power of a pay-as-you-go cloud model with private cloud; subscription offerings with compute, storage, networking and services options; pre-provisioning, which allows customers to access additional capacity; and a breakthrough proof-of-concept ­financing that allows customers to test HPE products and return them with no penalty after 12 months.

"We want partners to deliver solutions with a subscription payment model," said HPE Financial Services CEO Irv Rothman, who has completely revamped the company's financial products for the cloud era. "We want them to go talk to customers about using IT — not owning IT — and we have the tools and technologies to help them do it."

HPE Financial Services has an extensive worldwide asset management capability with half of the $13 billion in assets on its books coming with residual risk. "We have become excellent asset managers and that gives us an ability to take the risk associated with the consumption model," said Rothman. "We're giving partners additional arrows in their quiver."

[HPE Discover Coverage 2017]

One of the biggest innovations for partners and customers has been the widely praised Flexible Capacity offering aimed at driving public cloud economics with HPE private cloud offerings. Flexible Capacity — which provides flex up and flex down bursting capabilities — is seeing a more than 30 percent increase in this fiscal year compared with the year-ago period, said Rothman.

Overall, HPE's subscription offerings for the cloud era now account for 15 percent of the unit's overall business, up from 1 percent three years ago. "It's all about economics, agility, flexibility and security, which is what customers are looking for," he said. HPE Financial Services also is offering partners the ­financial muscle to transform to the service provider business model. In the last fiscal year, HPE Financial Services' service provider business was up 13 percent, according to Rothman, and it now accounts for 20 percent of HPE Financial Services' overall business.

HPE Financial Services is providing those partners with an arsenal of tools to "accelerate that transformation," including increased credit and a broad array of financial products.

Rothman tells his team that leasing is a four-letter word in the HPE Financial Services lexicon. "We don't want partners to think of us as a leasing company," he said. "Partners don't want to hear it. We are bringing our financial services expertise so they can sell an as-a-service solution."

In regard to public cloud, Rothman said HPE Financial Services is seeing a "reversal" of the public cloud momentum with some customers "disenchanted" with public cloud pricing and looking to adopt more of a hybrid model. "People initially thought public cloud was going to be the answer to their prayers and it turned out that is not exactly the case," he said. "We are seeing more hybrid and private cloud."

The onus is on HPE Financial Services working with partners to provide customers with public cloud economics, he said. Partners, in fact, are now winning over customers doing detailed comparisons between private and public cloud.

The transition to the cloud era is just another in what Rothman calls a continuing evolution. Just a decade ago, HPE Financial Services was powering data center transformation with products aimed at allowing customers to move to fewer and more efficient data centers. "We have a background for transformation," said Rothman. "That is something we have been heavily engaged with around the world for the last 10 years. All we have done with the move to cloud is to take the next step by broadening our scope of offerings. To us, it doesn't seem that radical. To us, it just seems like the next stage in our evolution."

Rothman sees that evolution continuing with an increasing number of customers opting not to own physical IT assets. "In our view, customers are going to be more interested in going forward using equipment rather than owning the equipment and we are providing the financial solutions that enable that," he said.

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