Techaisle Blog

On 11th March 2020, HPE announced its latest Small Business Solutions, leading with its next-generation HPE ProLiant MicroServer Gen10 Plus featuring remote management and security capabilities, with a choice of Intel® Pentium or Intel Xeon E processors. Solutions tailored for small businesses includes Office in a Box, Scalable File and Backup as well as Edge to Cloud for simplified access to cloud services.

Tough economic times bring investment decisions into sharp focus. The result is typically lower investment levels. It also sharpens medium- and longer-term priorities. That leads to smart investments. But also, investments made at this time become longer term drivers of investment for adjacent areas. Techaisle believes that the recent economic implosion acts as a catalyst for such action and change among SMBs. In a digital economy, SMBs are able to expand reach and engagement with customers and prospects, while also locating and integrating with suppliers to improve scale-out options. 79% of SMBs are on the road to digital transformation. The roadmap to successful digital transformation begins with the creation of a sound physical infrastructure - the ‘building blocks’ or ‘foundations’ of business infrastructure. Core infrastructure devices need to be kept in sync with the requirements of digital transformation initiatives; servers, storage, networking and security need to advance with the needs of the organization. The most advanced and transformative SMB firms are looking to improve IT sustainability – their ability to effectively manage IT delivery into the future – customer intimacy, operational excellence and IT’s speed and agility. And they are seeing better business outcomes than those which are not fully committed to the core physical infrastructure modernization.

HPE solutions lay the foundation for effective, agile and secure modernization.

First Impression

HPE ProLiant MicroServer Gen 10 Plus and companion offerings should be no-brainer for small businesses and channel partners. Techaisle data shows that 83% of SMBs consider technology contributing to business success but they also find technology to be kinetic, complex and risky. Regardless, 31% of small businesses want to modernize IT infrastructure and HPE offerings help in overcoming cost of implementation (34%) and security concern (32%) inhibitors of embarking on IT modernization initiative. Techaisle data also shows that a growing percent pf SMBs are using both on-prem and cloud servers, but hybrid is where they are headed. Workloads from public clouds are transitioning to hybrid clouds with 70% of small businesses are either implementing or planning to use basic hybrid cloud with workloads assigned to different cloud/on-prem environments. Techaisle segmentation data reveals that there is a higher demand for on-prem solutions within SMBs that are intermediate and mature cloud adopters as well as those who are in the basic and advanced IT maturity segments. HPE ProLiant MicroServer Gen10 Plus and Office in a box can also be easily adopted and deployed by the Pre-IT maturity segments and passive cloud followers.

HPE ProLiant MicroServer Gen10 Plus

About the size of a typical hardcover book (4.6-inch x 9.65-inch x 9.65-inch) and as quiet as a library (36db) the server packs enough power and storage for a small business prompting HPE to call it “small and Mighty”. The form factor size is volumetrically 3X less than that of Dell PowerEdge R240. As-a-service server pricing starts from at less than US$20 per month. The list price varies from US$$709 to US$899, for Entry to Performance level configurations.

Three key features of HPE ProLiant MicroServer Gen 10 Plus worth calling out are:

1. HPE-exclusive silicon root of trust that provides 360-degree protection, detection and recovery from malicious cyberattacks. Techaisle SMB security adoption survey data shows that for 53% of SMBs cyberattack security is either the most critical or among the top three critical issues facing their organizations but 78% are not confident that they can recover from a cybersecurity incident. With HPE silicon root of trust they may have one less issue to worry about.
2. HPE ILO 5 that delivers server health and operations insights with secure remote monitoring and management. With an average of 3.8 IT staff within upper-small businesses, SMBs need help in remote monitoring of IT infrastructure. Manageability is an important solution selection criterion for SMBs which typically have relatively small IT workforce but expansive IT/digital transformation goals. In this environment, it is essential that solutions work seamlessly and without a great deal of hands-on management.
3. HPE InfoSight for Server that predicts and prevents IT disruptions before business operations are impacted. In the context of growth, cloud is seen as a means of facilitating expanded reach. And SMB cloud adopters are looking for capabilities that contribute to growth: 79% report that cloud enables them to be more agile in their business operations. Cloud built on a strong core technology is not only an essential IT infrastructure but it is also an imperative business infrastructure.

Pre-configured small business solutions on HPE ProLiant MicroServer Gen10 Plus

Office in a box: is a pre-configured solution that includes HPE ProLiant MicroSever Gen10 Plus with built-in security, Aruba Instant On (wireless access point), and HPE RDX removable disk system which can be scaled when required. It is ideal for very small businesses, small offices, small workgroups for up to 10 users. Office in a box also comes with Windows ROK (Reseller Option Kit) and storage controller. Pricing starts at US$125 per month. As per Techaisle’s SMB buyers’ journey and technology research data, nearly 2/3rd of small businesses use existing IT budgets and about 1/5th use CAPEX dollars for IT purchases. For these small businesses, HPE has a list prices for Office in a box. For example, a configuration consisting of MicroServer Gen10+, 4 1TB drives, iLO enablement, Next Business Day support, one Aruba WAP (wireless access point), the list price is approximately US$3,500 before discounts. Only 3% of small businesses have full-time IT staff (Source: Techaisle SMB and Midmarket research) and very small businesses manage workloads with a much smaller staff, typically comprised of IT generalists, and have limited infrastructure resources available for exploration. There is a very short line between acquisition and deployment of new technology and they have fewer chips to place on the table, and need to quickly reap return from their investments. Office in a Box is suitable for both segments of small business – with internally-managed-IT and un-managed-IT.

Scalable file and backup: is a pre-configured solution for centralized access to files for easy and secure collaboration. Scalable up to 16TB the solution enables secure onsite backup and recovery. Businesses are heavily invested in IT, with IT-dependent processes throughout their operations. This ubiquitous dependence on technology means that any systems failure will reverberate throughout all of a company’s daily operations. There is no way to disaster-proof against IT failure with insurance. Appropriate investment in IT backup/DRS, security processes, technologies and management strategies are the only ways to capitalize on the productivity benefits of IT without creating exposure to organizational paralysis in the event of a malware invasion, a hacker attack or an employee’s negligence or malfeasance. Techaisle’s SMB and midmarket security adoption trends research shows that 53% of small business and 48% of midmarket firms prefer less than 1 hour of backup recovery time. Not all SMBs have a backup/DRS strategy because they find it either too expensive or worry about security in the cloud or even find a solution too complex. HPE’s pre-configured solution addresses the needs and objections.

Edge to Cloud: is a pre-configured solution for remote office, branch office (ROBO) deployments. The solution includes optional cloud services for connectivity to the core data center.

Techaisle Take

Techaisle believes that the 34% of SMBs that are prioritizing growth are much more likely to thrive in today’s unpredictable economy than those that focus primarily on cost reduction or other ‘business as usual’ objectives. In the digital world, growth is more than simply increasing the top line. Today, growth is important to both expansion and to maintaining viability. Techaisle’s SMB research has found that the need to be more efficient in operations is the single most compelling reason for SMBs to embrace digital transformation. But there have to be points in the system where the capabilities of core infrastructure connect to the promised benefits of digital transformation solutions. The days of using lengthy, detailed cost analyses to justify new IT systems are disappearing in favor of a more agile approach in which businesses are encouraged to try new approaches and to rapidly wind down these initiatives if they do not deliver anticipated benefits. This may sound like a recipe for an out-of-control spending, but there are options that can protect the cost line. HPE ProLiant MicroServer Gen 10 Plus is one such options which is mind-blowing and should be a no-brainer.

Intense India Focus

Indian government's Digital India campaign is getting the attention of almost everybody in the IT industry, be it the multinationals or the local players. Sensing the vast potential, Dell started early with its governing body inaugurating the entire launch of Digital India in Delhi. Summing up his excitement, Alok Ohrie, President, Dell India said, “It is one of those campaigns which I believe is going to really position the country to a point where clearly it will continue to become stronger as an economy and would help realize the dreams of the nation with regards to it being a knowledge based economy. This is one initiative from the government that's going to really energize spend on IT and it is also going to be a big play for most of the players in the IT industry”.

Dell in India is also beyond just domestic operations. Almost all business functions that exist globally are represented in India including an R&D setup of about 2,500 engineers and PhDs. The India-based R&D unit seems to have played a big hand in the development of Dell’s 13G server technology.

Capitalizing on privatization

Immediately after privatization, Dell executives saw the potential for an accelerated pace of execution of various initiatives at a global level as well as a whole lot of flexibility and encouragement to try new go-to-market models. This agility is what Dell India needed and as per its executives “has benefited Dell India big time”. In fact, they are quick to point out that the India operations have grown a little faster than the global business, “our growth in India versus the competition is five to six times faster”.

Midmarket businesses in India are listening and are accepting Dell’s end-to-end solution story and are expecting an advisory role and a consultative approach from Dell in their engagements. Many digital commerce businesses are also looking for Dell to help them define a blueprint for future with regards to IT deployment. Being private with an end-to-end solution orientation Dell’s India sales organization is neither getting limited nor getting constrained in its alignments with customer business objectives, nudging the customers to a future ready infrastructure capable of delivering a future ready enterprise. Playing an advisory role is also forcing the sales organization to be creative in its solution design, unrestricted as it does not have any legacy to protect.

The new GTM

In early 2014, Dell India rolled out a new GTM strategy for the India market. The new GTM strategy was first piloted in India and provides customers with a choice of being with Dell, either direct or indirectly through a partner. It is a GTM model that lends itself extremely well to improving Dell India’s engagement across different customer segments. This strategy brings a change from Dell India’s direct approach in the past with Dell introducing three RTMs: 1/Dell Led for direct sales engagement, 2/ Partner Led for business accounts with special pricing and products; and 3/ Distribution Led for consumer IT products.

Within the GTM model there are three different RTMs (routes-to-market). First is the Dell-led RTM which is Dell’s direct engagement with end-customers. Some of the account managers’ training modules have been modified to help them have deeper, richer, more mature conversations with customers in the form of advisory roles and consultative approaches. However, Dell-led RTM does not mean that partners are shut out from engaging in the same account along with Dell. The partners bring complementary skill-sets to work along with Dell solution experts. Dell asserts that it is more than willing to work with a partner and hence Dell has named the RTM as Dell-led and not Dell direct.

Within the Dell-led RTM, Dell has further segregated accounts into two: one that is more of reach, development & penetration consists of Dell India’s existing accounts and where a lot is already known about the customer; and in the other are those accounts that Dell calls as activation. There are close to 2,500 accounts in Dell-led RTM which are split into four geographies - the north, south, east and west.

The second RTM is the Partner-led RTM for business accounts with special pricing and products. Apart from the 2,500 accounts, the rest of the named accounts have been identified for partners to engage with by identifying, developing and addressing the opportunities. Dell is in a support mode in these opportunities.

The third RTM is distribution-led RTM focused on consumer IT products. This RTM was developed to expand reach into customers in tier 3/4/5 cities as well as customers who are not IT savvy. Dell currently has five distributors in India and a web of local distributors to reach into remote areas of India.

Disappearing Partner Conflict

Dell is recognizing the need to erase the perception of consistent channel conflict and hopes that the three different RTMs will help. Alok Ohrie points out, “anomalies have been removed through the new GTM model and it is a very, very predictable model for the partners”.

Techaisle’s India analyst, Gitika Bajaj and Arun Mishra crisscross the entire country directly meeting with channel partners. Not every Dell channel partner is happy but from an overall perspective there is obviously tremendous momentum and Dell’s RTM has legs. Comparing Dell with its closest competitors, channel partners say that “Dell's responsiveness is impeccable when a deal is being struck at the end user level”.

HP has split into two – HP Inc. and Hewlett Packard Enterprise (HPE). Almost all SMB relevant products and solutions (except PCs and printers) now reside within the HPE organization. The global small and midmarket businesses, SMB (1-999 employee size) market has been the growth engine for the IT industry at large. The reason is quite simply that SMBs account for over 80 percent of businesses in any country – developed or developing. As per Techaisle, SMBs are forecast to spend US$597 billion on IT in 2015. Their IT requirements range from servers, networking and storage to cloud, mobility, analytics, managed services and collaboration solutions. Today, most SMBs are looking towards IT suppliers that offer appealing value propositions in either of three IT delivery models – traditional infrastructure built on-site from hardware and software components; hosted solutions and/or applications most often purchased on a “pay as you go” model; and, cloud infrastructure delivered on-demand.

HPE – the new incarnation of HP and its focus on SMBs with Flex solutions

Since the launch of its “Just Right IT” portfolio (September 2010) for SMBs, HPE has been striving to better serve its SMB customers by consciously lowering cost of solutions, improving agility in deployment and enabling faster time to value in managing IT assets. Just Right IT includes products, services and solutions specifically engineered for SMBs. The portfolio offers management, data protection, communications and connectivity solutions that are designed and priced "just right" to deliver affordability and value to SMBs. These solutions revolve around HPE’s core offerings of servers, storage and networking which comprises of:

• Servers: ProLiant MicroServer, ProLiant 10 Series Servers, ProLiant 100 Series Servers, ProLiant 300 Series Servers
• Networking: 1950 Switch Series, R100 Wireless VPN Router Series, Cloud Managed Networking, and 2920 Switch Series
• Storage: Solutions for the virtualization, SQL Server, Exchange, File sharing and Backup

In November 2015, soon after the split, HPE announced a new portfolio of ProLiant Generation 9 (Gen9) Servers (ProLiant DL20 Gen9 and ProLiantML30 Gen9) that are specifically engineered for SMBs to help reduce cost and complexity to run the new style of IT, web, collaboration, and business workloads. HPE is hoping that the new server portfolio advances its vision for compute and the future of data center technology.

HPE also announced its Flex solutions which bundles various services around its server, storage and networking products including support services, financial services, ISV software, distribution services, and management. It is specifically targeted at three different segments of SMB market at the low end of which are the SMBs who are “starting out” and at the high-end are the SMBs who are “expanding their business”. This does align well with what Techaisle analysts find in Techaisle’s SMB & Midmarket IT Sophistication Segmentation as shown below.