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“I can count the number of customers on one hand who thought they were going to go completely to the public cloud,” says Keith White, who leads Hewlett Packard Enterprise’s GreenLake product line, which bundles hardware, software, and services to make cloud-like experiences but on-premise.
White was telling ZDNet why 70% of all workloads are going to remain on-premise rather than go to the public cloud.
A lot of it comes down to economics. Costs of cloud rise sharply when one moves extensive workloads to cloud. Conversely, HPE’s financing arm has the balance sheet to make it possible for companies to acquire and use only as much compute as they need, but within the walls of their own data center.
For seven years, White was head of Microsoft’s Intelligent Cloud effort before coming to HPE this year.
Even though that means he was “the Azure guy,” as he puts it, responsible for developing and promoting the public cloud as well, White has seen that most companies never expect to go all-in on public cloud.
“Every customer I talked to were planning on a hybrid implementation,” he told ZDNet, referring back to his time at Microsoft. White spoke to ZDNet by telephone following Hewlett Packard Enterprise’s annual analyst day meeting on Thursday.
To White, hybrid cloud is not a stepping stone to public cloud, it is where most of computing will continue to live for the foreseeable future.
“The world is going to be hybrid, it’s going to be multi-cloud,” he insisted.
White’s view is in accord with HPE chief Antonio Neri’s effort to refashion the company, to turn it from a vendor of discrete assets to an as-a-service company, as Neri has put it.
In Neri’s vocabulary, the company has shifted the meaning of cloud computing from a centralized repository of resources on the public Internet to something more like a genre of computing.
“As Antonio says, the cloud is an experience, not a destination,” White recalled in the interview.
To make that view a winning view, GreenLake is the tip of the spear. GreenLake is HPE’s purest view of a managed services future across the acquisition, maintenance, and management of both hardware and software, all purchased by clients on a consumption basis.
“We still own the asset, and so in essence, you’re using it, that enables customers not to have to write a check up front,” explained White. “We are managing it for you, monitoring it from a performance standpoint, and as part of the contract, we have the ability to pull the usage data so that we can charge you on a monthly basis for what you use.” In other words, the billing replicates with on-premise equipment the billing model of public cloud where it’s pay as you go.
At the same time, the economic advantage extends to removing what HPE claims are prohibitive egress charges to move data into and out of public clouds.
“When people start to dig in, and they start to see what the data egress charge is, or they see they don’t have the flexibility to use the tools that they want, then it becomes a different dialogue” with respect to public cloud, said White.
Flexibility is important, said White, because there are whole industries such as manufacturing and healthcare that can’t simply shove everything into public cloud.
“If you are doing a robotics arm in a manufacturing plant, the key is, you have to be able to target the manufacturing component at a local level, you can’t do that in the cloud because of latency,” he said. “Any small delay causes an efficiency decrease that can affect revenue.”
Examples of applications that may never move include those of Epic, the forty-one-year-old firm based in Verona, Wisconsin that manages electronic health records for 250 million hospital patients. “They want to be super-secure, so they’re running things on prem, but they want to have that cloud-like experience for that solution, the patient health record.” Epic is a client of GreenLake.
Even beyond sensitive industries, on-premise cloud computing is a way to modernize the corporation, the rubric of digital transformation. The company yesterday announced Wells Fargo is the biggest deal yet obtained for GreenLake. The bank is building a unified data repository, White told ZDNet, for compliance and regulatory data.
“The cool thing is, it’s not just this old stuff that is staying on prem because it’s old, we’re seeing a lot of digital transformation and modernization efforts of our customers in the cloud experience.”
GreenLake is the model for how managed services spreads across much of the HPE portfolio of offerings.
“Think about it about as not just your basics, which are storage, compute and networking, but really broadening to migrating your data center, re-factoring your applications using containers,” said White.
Newer use cases include virtual desktop interface, or VDI.
“All of a sudden, everyone is working from home, and all the corporations want to have a home desktop that their users can still be very productive on, but they still have that secure piece of it.”
“So, VDI is a good example of a secure workload that we’ve enabled on GreenLake.”
It also includes putting into containers large existing enterprise applications such as those of SAP. “We are now the provider for SAP Hex Customer Edition, their on-prem edition,” he said, referring to SAP’s HANA Execution Engine that front-ends the HANA database.
But the financing part of HPE is where the most intriguing possibilities may lie. Because HPE is carrying the up-front capital cost of acquisition of any kind of hardware, it’s feasible for a client to obtain a supercomputer on-premise.
With the acquisition last year for $1.3 billion of supercomputer maker Cray, HPE is positioned to make high-performance computing something that is within every company’s grasp, not just Los Alamos and Lawrence Livermore.
“We’re now in a position to commoditize supercomputing, because now we can provide supercomputing to customers who only pay for what they use,” explained White.
“They can run those advanced models and algorithms in an effective way.”
When White was asked to assess the prospect of newly emerging public cloud applications, in particular Snowflake, the database startup that spans Azure, AWS, and GCP, White did not try to dismiss such offerings. He sees Snowflake, and others, as part of the mix.
“It’s a huge market, and what they deliver will be a great solution for a certain set of customers, and actually the same customer will probably do both things,” said White, meaning, both use their on-premise applications and consume new applications in the public cloud such as Snowflake.
“That’s why I like to use the phrase that the world is going to be a hybrid scenario; it just is dependent on what is the most effective and efficient way, and cost-appropriate way, to do those things they need.”
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