The XaaS opportunity for partners: Is it infinite?
AUGUST 3, 2021 • BLOG POST • XAVIER POISSON GOUYOU BEAUCHAMPS, VICE PRESIDENT, WW SERVICE PROVIDER BUSINESS AND Cloud28+ AT HPE
IN THIS ARTICLE
- Customers are embracing vendor’s initiatives to shift toward recurring or subscription models and partners hold the key to the deal
- Partners are becoming Service Providers or XaaS aggregators to build their own provisioning capabilities based on HPE GreenLake
- Partners in Portugal, Brazil, Czech Republic, Poland and the US are already seizing the opportunities successfully
The partner landscape is taking advantage of XaaS models, Xavier explores the endless opportunities that can be embraced today
We are seeing more and more evidence that consumption-based, choice-centric business models are the future of IT services and products. According to Gartner®1, “by 2025, at least 50% of enterprises will shift toward operating expenditure (opex)-based storage consumption models, compared to less than 10% today. The overall IT market continues to shift away from capital and toward operating spending. In 2020, about 77% of IT spending was operational (opex), compared to 73% in 2016. This shift has been driven not only by infrastructure-as-a-service products such as public cloud, but also by customers embracing vendor’s initiatives to shift toward recurring or subscription models.” Here is how one of HPE’s partners did it:
Sercompe in Brazil announced the expansion of its existing partnership with HPE to help grow its market offering and further drive core operational efficiencies. With HPE-powered storage as a Service solution (through HPE Nimble Storage), Sercompe are able to quickly scale up its capacity and resources to serve a greater number of customers, while also retaining financial flexibility, preserving cash flow, and reducing the cost of over-provisioning. HPE GreenLake Central will also provide Sercompe a platform to manage costs, utilization, compliance, and security across its entire multi-cloud estate – through a single pane of glass.
“The HPE as-a-service solutions have been a game changer for us as they allow both our business and our customers to benefit from pay-per-use billing, rapid scalability, and transparent resource management” said Rafael Reimer, Managing Director at Sercompe
The Partner Journey to XaaS
The partner landscape is taking advantage of XaaS models to transform. Survey findings from 451Research, part of S&P Global Market Intelligence,2 suggest that Service Providers will embrace the XaaS opportunity. 42% of service providers surveyed need to completely transform their own IT over 3 years, and 56% of them must do it partially. We believe the XaaS model will help them transform. There are 3 different components that encompass the XaaS journey:
1. XaaS offerings: IaaS, PaaS, SaaS, DaaS (Data as a service), Desktop as a Service and more are different flavors of what customers will refer to when purchasing XaaS
2. The buying process: pay per use, beyond the offering itself, is a buying process shift from capex to opex as the move to XaaS occurs
3. The responsibility shift: in the XaaS model, partners will potentially outsource Metering and Billing, Automatic Hardware provisioning as per the demand, and sometimes compliance processes, either to a Cloud supplier or to an existing HPE Installation with critical support services. Partners transforming to be Service Providers will be focused more on business and applications, size and usage commitment levels, security tools and practices, and vertical industry focused needs.
More and more Resellers and Value Added Resellers along with System Integrators are offering customers dedicated or mutualized infrastructure powered by HPE XaaS (HPE GreenLake). They are also taking the opportunity to transform to become either a Service Provider or an XaaS aggregator. We find these partners building their own service provisioning capabilities based on HPE GreenLake or partnering with various XaaS players (Hyperscalers or HPE GreenLake powered Service Providers to offer to their customers XaaS models). We’ve seen several partners engaging on these new paths, read about the Central European case below.
Beyond.pl, a leading data center and cloud service provider in Central Europe founded in Poland, was the first service provider in the European Union, and remain the only one in Central Europe to hold an ANSI/TIA-942 Rated-4 Certification, delivering the highest safety standards for design, mechanical engineering, power configuration and telecommunications and the highest levels of availability to end users. Beyond.pl recently launched a new suite of cloud services for clients powered by HPE GreenLake and will further leverage HPE GreenLake to transform part of its existing IT estate. HPE has also selected Beyond.pl to serve as a HPE GreenLake colocation facility for HPE-managed customers, who require off-premises as-a-service solutions. Together, this agreement will allow customers to take full advantage of a hybrid cloud model, either by having all of their infrastructure hosted by Beyond.pl, or part of it at their own data centers, via private cloud, public cloud or a mixture of both.
“At Beyond.pl, we want to offer customers a solution that meets any workload or compute requirement, ensures security and compliance, and provides flexibility, scalability and transparent cost management,” said Wojciech Stramski, CEO, Beyond.pl. “We believe that our joint agreement with HPE to leverage HPE GreenLake as the platform for hybrid cloud services and to host HPE GreenLake in our data center facilities will provide our customers with all the benefits stemming from the hybrid cloud experience and allow them to accelerate their innovation and growth. We are very proud to partner with HPE to enhance our offering and provide Polish and European enterprises with this industry-leading solution.”
The Opportunity for Channel Partners
Datacenter consolidation & cloud migration are key trends in the market where System Integrators and Value Added Resellers are well positioned given the trusted relationship they have with their customers. Most of these projects will have an XaaS component that partners can use to differentiate themselves through.
- In some cases, the customers will want to stay with on premise IT in their datacenters and at the same time they will look for a cloud experience. Channel partners can seize the opportunity by positioning HPE GreenLake in answer to the customers’ needs.
- In some other cases, customers will ask to get rid of their datacenters for a given percentage of their IT. Channel partners can answer these latest needs by partnering with colocation services companies and sell to their customers an HPE GreenLake powered architecture, especially when the customers are asking for dedicated resources.
- Channel partners can also build their own cloud offering, powered by HPE GreenLake, and offer it to their customers directly.
- Finally, they can also partner with a National Service Provider powered by HPE GreenLake and provide a full answer to the customers’ needs. Channel partners have a full range of opportunities, beyond the primary one that would consist of reselling to their customers Hyperscalers public cloud services.
Channel partners are also the first IT advisor of the Commercial/SMB/MM segments. The COVID-19 pandemic has definitely accelerated the move to consumption based IT in these segments. In order to keep their customers, it is important that partners keep driving the conversation and do not hold back from the XaaS movement. This is a key reason why HPE has launched programs to connect the reseller community with HPE certified service providers across the world. Through Cloud28+, resellers can identify National Service Providers who offer channel programs enabling resellers to keep their customer relationships while offering end customers XaaS offerings from these certified HPE Service Providers, in trust. As every service company moves to XaaS, we can see a great example in this Portuguese case3 below.
Altice Portugal, is a major telecommunications provider that serves the needs of an entire country and sees the impact of digital transformation across a wide range of industries. This includes how cloud adoption has varied based on issues such as regulation and data governance.
“Some verticals like healthcare, banking or public administration have tight requirements on compliance, security and control,” director of B2B product and pre-sales at Altice Portugal Paulo Rego said. “They want simplified IT, provisioning and operational elasticity but nevertheless are compelled to keep data close to home when data protection is critical in compliance and data governance is crucial. The right partners’ tools, like HPE GreenLake Central, will be the key to achieving a single as-a-service experience from edge to cloud.”
The global pandemic has hit home for Portugal, yet the country’s business leaders are already planning for a post-COVID world, one that will likely include increased reliance on digital solutions to steer through whatever difficulties lie ahead. Altice has relied on HPE GreenLake to help manage its own cloud journey. The organizational structure of a major telecommunications provider can be extensive, with many different stakeholders and IT needs. HPE GreenLake Central has allowed this business to centralize operations and insights across a hybrid estate, using a single intuitive self-service platform.
The Endless Opportunities to Capitalize Now
As per my previous remarks, XaaS is a polymorphic model that can take many different and combined options. Yes, the possibilities are endless for channel partners, as the market progresses and the channel is capitalizing on the various opportunities it brings to them. Some of them will focus on a specific customer segment, others on given industry verticals or on new emerging technologies, and finally all of them have the opportunity to build a differentiated and competitive value proposition. The two use cases below showcase these different possibilities, and how all channel partners can capitalize today.
Orock Technologies in the USA has focused its business on delivering to their customers HPE GreenLake powered Data Science as-a-Service offering, leveraging the HPE Ezmeral Container Platform capabilities, including Kubernetes as-a-Service and Big Data as-a-Service, to bring cutting-edge experiences to empower entire IT teams and drive business innovation. As announced earlier this year, the HPE Ezmeral Container Platform combined with the ORock Cloud and HPE GreenLake, provides an agile, lower cost, and consistent cloud experience that delivers greater speed and simplicity to modern application development and DevOps agility to the ML lifecycle.
“We continue to extend our strong relationship with HPE to deliver innovative open-source cloud solutions that offer tremendous business value to the market,” said Gregory Hrncir, President and CEO, ORock Technologies. “Our new Data Science as-a-Service solution is fundamental to how organizations can consume AI and ML technologies at speed and scale. This is a much easier way for IT teams to experience popular AI and ML tools that they love, with the most secure cloud in the market utilizing HPE ProLiant Gen10 servers.”
SafeDX, a European provider of data center, cloud and IT services, recently selected the HPE GreenLake edge to cloud platform to support its new hybrid cloud services offering and drive business growth. SafeDX will use HPE ProLiant servers for a trusted, high-performing computing platform, and HPE Primera for intelligent storage for mission-critical applications, delivered as a service through the HPE GreenLake cloud platform.
“We wanted to provide our customers with a unified cloud solution that allows easy and flexible software development, fast deployment and seamless management. The HPE GreenLake cloud platform enables us to offer our customers just that – in a secure and robust IT environment,” said Miroslav Černík, CEO at SafeDX. “With HPE, we know we have a reliable partner with the technological expertise and customer-centric focus that fits SafeDX’s business model and can support us in bringing new solutions to market quickly and efficiently.”
By selecting the HPE GreenLake cloud platform to power its services, SafeDX enables its customers to quickly develop, deploy and easily manage a large number of applications across multiple clouds and save up to 35% in comparison with global public cloud providers. The offering will combine the benefits of the SafeDX Cloud Platform, that enables organizations to streamline operations using containers and pre-built Kubernetes, along with the flexible IT infrastructure that can be tailored according to customers’ needs - all delivered through the HPE GreenLake cloud platform. With this HPE as-a-service solution SafeDX will be able to rapidly scale the IT infrastructure at any time while acquiring new customers. All possible while keeping financial flexibility and eliminate overprovisioning costs with the pay-per-use model built into the HPE GreenLake offering.
1 Gartner, Market Guide for Consumption-Based Pricing for Data Center Infrastructure, Daniel Bowers, Kiyomi Yamada, Henrique Cecci, Jeff Vogel, Robert Preston, Rob Schafer, Andrew H Kim, Suzie Low 1 March 2021 GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.
2 451 Research, part of S&P Global Market Intelligence, Voice of the Services Provider - Workloads, Key Projects & Infrastructure Evolution 2021