Hewlett Packard Enterprise Company (HPE) Earnings Call Transcript & Summary

Please welcome President and Chief Executive Officer, HPE, Antonio Neri.

Good morning, and welcome to HPE Discover 2022. -- wow, look at the amount of people we have today here. After 3 long and challenging years, we are back together meeting in person in Las Vega. How cool is that -- it is great to see many of you here. We have more than 8,000 customers and partners across hundreds of enterprises from 97 countries all coming together under one roof. And I would like to extend our warm welcome to the hundreds of thousands of people joining us remotely from around the globe. What a joy is to be able to connect so seamlessly with all of you, both near and far. On behalf of Hewlett Packard Enterprise, we are honored that you chose to spend your time with us today, and I'm personally excited to share more about what is coming next. But before we dive into the future, I want to take a moment to reflect where we are right now. As I look at our audience today, I'm reminded that how far we have come from those early days of the pandemic. In the face of uncertainty and business disruption so many people exhausted and honestly, pushed to the brink, we adapted collectively, we adapted to the new situation. This very gathering is a testament of human perseverance, innovation and flexibility, a sign of what we can do when we all come together and work together. Of course, we continue to face challenges. We see rising prices, supply chain disruptions, geopolitical issues and even as recently as last week, developments that threaten the advancement of women. Our value as a company as well as the significant impact derived from diversity and equality in the workplace, compel HPE to stand up for a women's right to choose. And yes, while we face those challenges, the lessons we have learned together have made us stronger. We know the world has changed. And with it, so we. The pandemic was a catalyst to accelerate digital transformation, fundamentally resetting and redefining how enterprises, governments and societies work together towards common goals. The private and public sectors are not competing. Today, we are strategic partners in moving humanity forward. We have an amazing opportunity to drive the adoption of new technologies that are inclusive, accessible and sustainable. What was the future is now reality with more opportunity in front of us than ever before. In this new digital economy, connectivity is an absolute necessity. And data is the new currency. But data alone is not enough. Think about this for a minute. -- inside create innovations with the power to advance the way we all live and work. We can reinvent health care to extend the person's life with more years of healthy productive living, providing essential technology, we can also explore space in new ways to return it to the moon and then even to Mars. We can go beyond harnessing power of the wind turbines, analyzing the oceans natural cycles to unlock unlimited supplies of clean renewable energy. We can power real-time decisions to make full autonomous driving possible and safer than ever before. And these are just a few examples of the future that HPE customers are making possible. 4 years ago, I declared that the enterprise of the future will be H-centric cloud-enabled and data-driven. And as a result, we launched HP GreenLake. The crux of our strategy from the beginning has been to make data an asset and help you leverage it for your modernization needs. So you can choose what need to do and also give you the ability to complete your hybrid cloud transformation. 3 years ago, as we continue our own transformation journey, I promised to deliver everything as a service by the end of 2022. Thanks to the HP GreenLake, I can proudly say we have achieved our goal -- before HP GreenLake, the experience with HPE depending on which product you purchase. We have been on what I call a Journey 21 by adopting an edge to cloud architecture. Today, we give you one platform, one experience from edge to cloud. When we first launched our platform, it was described as the Holy Grail for enterprises looking for hybrid cloud solutions. And yes, they were right. We were very, very ambitious. Yes, here we are. HP continues to accelerate its transformation, now powered by software and services. We are the world's leading edge-to-cloud company and innovating faster than ever before. We are truly honored to be working with amazing organizations to bring revolutional ideas to life, and we will not be here today without our customers and partners. So to all of you, thank you. When we work side-by-side to solve province and build solutions, incredible things happen, and we can change the world together. Let me tell you more about why HP GreenLake. I'm often asked by customers what workload should we move to the public cloud and what should stay on premises. I only say that's the wrong question. We think the better question is, how do I bring a consistent cloud operating model across all my workloads and data. And to do that, you need to start with an edge-to-cloud architecture and a platform built specifically with a highly -- for a highly distributed enterprise. This is why the platform not only complements your public cloud capabilities, it also completes your hybrid cloud strategy by addressing your biggest data first modernization challenges. Here is what it makes us different and unique. First, many customers struggle with workloads that have data gravity and data compliance issues, which prevent them from moving to the public cloud. HPE GreenLake solves that problem by bringing the cloud operating experience through your data. Because of this flexibility, you can deploy your cloud anywhere. Second, as more and more of your data requires real-time processing at the edge, you can actually extend your hybrid cloud to your many edges. It can be in your factories, your cell towers, schools, branch offices anywhere else your workloads need to run. You can create cloud-native private clouds, so you can employ adjacency to the public cloud as a part of the hybrid environment and still allow your developers to use the public cloud services and deploy them to run on HPE GreenLake. Another key differentiation for HPE is that we see sustainability as a major catalyst for game-changing optimization, the economics and also being a force for good. Our biggest opportunity to have a positive impact on the planet is by enabling you to transform and modernize sustainably. The move to the public cloud has been a key lever, but sustainability must reach all applications and data wherever they are, whether I'm in a multigenerational IT kind of environments, hybrid clouds and of course, the edge. Another key attribute that makes your hybrid cloud model unique is predictability. When you choose HPE GreenLake, you have a consumption agreement, including the precise service level agreements you want. It is a hybrid cloud platform that comes with a shared risk model, backed up by HP services and support expertise. If you don't succeed, we don't succeed. With HPE GreenLake, you get your own modern cloud platform without the upfront investment. So you can apply the entire operating experience and refocus your team's time on creating value that differentiates your business and not on the heavy lifting of the infrastructure. Additionally, with no data egress fees or lock in. You can recognize why your hybrid cloud strategy is not complete without HPE GreenLake. But the bottom line is we give you a powerful new choice to help your business transform by bringing the cloud to you. With HPE GreenLake, you can build your hybrid cloud your way that fits the needs of your data and your mission without compromises. And I have to tell you, I'm incredibly pleased with how the market has reacted to our strategy. I want to say customers have voted with their workloads and data. Today, 65,000 customers and 120,000 users are on the HP GreenLake Cloud platform, consuming 70 unique cloud services with an over exabytes of data under management with customers worldwide. This demonstrates how customers are increasing and expanding their reliance on HPE GreenLake for their workloads and data. We're helping you transform your business and enable the data-first modernization. While our competitors focus on building new financial constructs to deliver traditional products, we continue to invest in our platform, which is enterprise tested, sparring workloads from traditional mission-critical, AI, advanced analytics to cloud native, edge IoT and many more. We continue to expand our growing partner ecosystem that includes distributors, value-added resellers, solution integrators, ISVs and service providers. We are placing partner capabilities at the center of our platform through our strategy to open our unique APIs. The bottom line, there is a growing partner ecosystem, building on the HPE GreenLake ready to help you. In fact, I believe that's another big difference from our competitors. We are winning with our growing partner ecosystem. We are helping our partners build their business on top of HPE GreenLake, and many of them are with us in person this week. I would like to take a moment to thank all our partners around the globe. As the world becomes more and more distributed, more than 70% of the data is outside actually the public cloud. And more than 50% of that data is created at the edge. And that is why in 2018, we announced that we will invest $4 billion in the edge over 40 years. By 2025, the world we have 150 billion connected devices, generating 175 zetabytes of data, of which more than 30% of that data will need to be processed in real time. Managing complexity at this scale for our customers is another strength of the platform, and we have demonstrated throughout the pandemic, supporting many customers with their edge operations, whether in schools, mobile hospitals, in home offices around the globe. During the last 3 years, actually, we have spent an unprecedented amount of time inside our homes. When you think about making those spaces more comfortable, efficient and personal, we think of the Home Depot. Millions of people start the home improvements during the pandemic, creating a huge surge in sales, both online and in person. Because of the strategic investment in secure connectivity based on the HP Aruba solutions, the Home Depot team was able to accelerate what they call the One Home Depot initiative and drive unprecedented growth during a time of great uncertainty. Last year alone, the Home Depot saw it's sales increase by more than 14%, while the 2 years, the 2 past years brought business growth of $40 billion. Think about that. None of it will have been possible without delivering a safe and interconnected retail experience to their customers. And here we are to share more with you, we have with us, Daniel Grider, the Vice President of Technology for the Home Depot, who is accountable for the company's strategic technology footprint that supports more than 400,000 associates and 2300 stores. Daniel, welcome to HP Discover... Good to see you.

thanks for having person.

Yes. Can you imagine that, right? I always go to the home deeper to find my needs when I have my own project, but I mean it has been a remarkable journey over the last few years working with you. And one of the things I mentioned during my opening remarks here, I said that you were driving this One Home Depot initiative, and we talk about the interconnected retail experience. What that does mean really? What was the thought around that? And how you went about it.

Yes. So the One Home Depot was really coined several years ago. And it came from the fact that we saw online sales at a good trajectory growing. -- in-store sales, a good trajectory still growing, but the experiences weren't the same for our customers. And so how do we merge those so they were seamless between online and in-store. And then Antonio, I think I've shared this with you the statistic before, but it's still mind bogging today. For every order that's placed online at homedepot.com, 50%, so more than half of those orders, our customers want to come into our store to pick it up. So we have to continue investing in that experience, both in-store and online. And so when they come into our stores, it's important also to let them shop how they want. It's very apparent to us. Our customers want to shop whenever, however and anywhere they want. And so when you come in to do what we call buy online, pick up in store, you can do that by going to the customer counter. You can use one of our lockers in the vestibule or now curbside. So the connectivity outside is allowed us to do curbside delivery. So -- and if you look at inside of a Home Depot store, it's basically 100 square feet of retail space in a warehouse. And you have over 50,000 unique items within that store and then millions online. So conversion those is no easy task. But we know that we had to do that. And so the journey began several years ago to start merging that. And from our associate standpoint, it was really about giving them the confidence to serve our customers, right? How do we give them the tools. So when a customer does come in, they can help them with that product knowledge. They can help them with understanding what they're looking for. I mentioned how many items are in our store. From a customer perspective, our Home Depot app has an in-store experience that when you come in, if you're looking for a certain product, you want to be able to find it quickly in that 100,000 square feet. We can give you now turn-by-turn directions of how to find that product. And then once you get there, you can look at reviews, you can look at YouTube videos or videos online of how to use it. Is it the right product. And then now our associates are there with them to meet them in the aisle to do that. Mobility in our stores has been around the better part of a decade. But where we are now, we're actually deploying we're refreshing this year and rolling out over 100,000 new mobile devices to our store associates to really arm them to be able to help those customers in the aisle where they want to meet us. So for that, we're feeling really good about that from the associates. From the first phones that we call them, the mobility, all the way to the app that we have for our customers. But like you said earlier, I heard you say connectivity is key, right? So we got to do that with connectivity in our stores inside and out.

Yes. One of the things that really attracted me when we are talking about this vision you had, right? -- is the mobility aspects, the ability to empower the associates to do the job, right, and the physical and digital world coming together. I thought that was really a bold vision, and you guys are making it happen. Now you're using HPE GreenLake for Aruba, right? So how our offer with the GreenLake place in this vision you're deploying today?

Yes, I'll give you a couple of examples. I mean one is around just speed and flexibility, right? So having that centralized management there to react quickly to whatever it may be that comes up. And one example that comes to mind is during the pandemic, curbside was there, but the demand went through the roof for curbside Well, to do that, to release orders, you got to be outside the front of the store. Well, we had limited coverage, like just the speed and the flexibility to change signal strengths, identify gaps, deploy additional APs that was obviously interestingly, transparent to our customers and our associates, but it allowed us to serve those customers, whether they were forced to from a municipality standpoint or was their own choosing to do curbside delivery. So I mean, speed and flexibility has been a big piece of it. Another key driver and the reason we did as well is letting the product specialists who build the product, they're the experts. So let them deploy it, manage it, care and feed it and then have that decision-making analytics that feeds back for those decisions. When we do that, it takes the burden off of our engineers at Home Depot, and it frees their time to work on business-critical solutions that we have to deliver. What does the future look like? So it really allows them to do what we want them to do all along, not be distracted by what it is with the GreenLake helping us out.

Yes. I think we talk about digital transformation. The first step is the connectivity as the digital on-ramp, right, and then free up the people from all this burden tasks they have to do to manage infrastructure with HPE GreenLake, all of that is done for you. So you can focus those associates to serve the customers and then the IT department to really drive the innovation on the data.

Real quick in Antonio, I can tell you there's one more that I missed that's really important is around the financial, right? The financial forecasting, the ease that's made up for us because we were used to the peaks and the valleys of hardware refreshes. And planning for those were very lumpy. This gives us a consistent forecast in our financial planning. So I'll tell you what our CFO like's it, I like it, our financial planners like it...

Well, that's why I talk about one of the benefits of HPE GreenLake is predictability. We agree with you on a service level, whether it's in the 2,300 stores, and we give you that predictability on experience and financial. So you know what you're getting for your service...

Absolutely.

As I think about the future of Home Depot, what is in store for that? Because this is just the basic foundation to keep building these new experiences and new innovation.

That's the key is just building those foundations so that like I mentioned, the customer demand is changing at a pace we've never seen before and what they expect. And so meeting them where they expect with speed is going to be key. So I don't know necessarily where the customer journey is, but what we want to do is be placed so that we can remove the friction points so they can shop with us seamlessly across all the channels. If you think about same-day next-day delivery for Home Depot, the goal is for us to get to 90% of households in the United States with same-day next-day delivery. And they're really taking that customer feedback on what's working and what's not and then really quickly responding to it, like not taking the weeks and months it would have taken, but real-time changes based off that feedback.

Well, we love working with you because one of the things that Home Depot does for us is pushing us to innovate faster to use infrastructure and the services and the software to deliver outcomes. And everything you talked about was about the experience, whether the customers or the associates. And for the Home Depot, obviously, to continue to attract customers in stores and online to buy what they need and continue that journey to improve their life and make their homes more comfortable as we work in this new world. So thank you very much, Daniel -- a pleasure to work with you. We are going to continue to work in the next...

Thank you...

In the next few quarters to come -- as for all of you here, please make sure you check the Home Depot station in the showcase I know Daniel will be very happy if you stop by the way, to your local home people for your next home improvement projects, so you can buy something along the way. So listen, I'm really truly inspired by the innovation our customers are creating with HP GreenLake to transform and run their business. This is a great example, one example of how we're helping customers. But we're helping many, many customers to do what they need to do and most importantly, manage their workloads. Take, for example, Carestream Health, a worldwide provider of medical imaging systems that use is HPE GreenLake as the powerful AI tool to reduce cycle times for testing AI models on clinical data, bringing their AI solutions for patient care to market much sooner. And we know what that means. We, today, in the health care space, we have to move faster. And so today, Carestream is now executing training models over 70% faster and capturing valuable machine learning data while keeping sensitive patient data secure and private. Late last year, the National Security Agency of the United States Department of Defense awarded HPE a decade-long contract to deliver HPE's high-performance computer technology as a service. The NSA is now using HPE GreenLake to address its growing data needs. The new solution actually is being hosted in a brand-new data center and managed by HPE. They are gaining leading HPC technology solutions to tackle a range of complex data needs, but with a flexible as a service experience. Another great example is the BMW Group. They selected HPE GreenLake, the platform to streamline and unify data management across its global locations and the cloud. HPE will provide cloud services for big data, backup, recovery and compliant archiving, enable BMW to manage distributed data from one single platform with a global consistent cloud experience. As you can see, our ability to address workloads and enable what we call the data first modernization from edge-to-cloud is very unique in the market. Let me show you a typical example of an enterprise using HPE GreenLake as a hybrid cloud to support and run their business. Let's play the video, please. [Presentation] It looks like Patrick is also -- plays the band, but also is kind of an IT administrator there. To show you more, I would like to introduce our very own Chief Technology Officer, Fidelma Russo. Fidelma joined HPE last -- late last year to help us unify our innovation road map and essentially build HP GreenLake, the platform. Fidelma is going to share more about the HPE GreenLake platform and the new services we're announcing today. Fidelma, welcome. Good. Welcome. over to you.

Hi, everybody. And it's so great to be here at Discover. Welcome to everyone in the audience, and welcome to those folks on the live stream. This is just amazing. It's, as Antonio said, my first Discover, and it's really been fantastic to listen to the stories of how our innovation is transforming our customers' businesses. So -- let's shift gears a little bit and talk about the technology architecture behind GreenLake, what it brings to your business, and then we're going to talk about some exciting new services we're bringing to the platform and to you. So from a technical standpoint, we've been working on enhancements to the platform experience. And if you look at the base of the slide, you will see our cloud platform. This provides customers with a single sign-on and a single way to consume and manage subscriptions. It is the one place where you manage your HPE GreenLake Cloud. It is the fundamental substrate on which everything else is built. Now the HPE GreenLake platform delivers services in 4 broad areas. They are core services that can be accessed via the single common URL. We've unified identity and account structures to ensure the experience is seamless across all of our offerings. What that means is whether you're consuming a compute offering, a storage offering, an AI/ML offering, a workload offering, you easily access it with an identical experience. The platform also provides operational services and experiences for system administrators and IT managers, allowing them to provision devices, manage subscriptions and manage on behalf of MSP partners. All of this, again, is with the same common experience for whatever resources you are using. Next, we have a real focus on roles and personas because as everyone knows, one size does not fit all. So whether you are a developer or in a business function like finance within an organization, you could have a tailored experience based on what you're interested in and what your history has been. And then we are bringing commerce onto the platform. This service enables self-service subscription, expansion and renewal. Now as we all know, we provide all of this through the user interface, but we have a commitment to be API first. And so all of these services are available through APIs that we will share with our partners and share with our customers to allow easy integration into your IT ops systems and also to allow our partners to add value-added services on top of our platform. We are also integrating into people's marketplaces, and we are continuing to add more capabilities to our marketplace. Now today, we're rolling out a series of enhancements and new functionality to the platform itself. Notably, the HPE GreenLake Developer portal. It will help developers easily access our APIs and our CLIs and our documentation. We are adding the ability to create multiple workspaces within your organization, the ability to purchase directly within the platform, and more ways to do show-back and charge-back at a business level, so you can become a more flexible service provider to your business. Now one of the biggest requests we hear from customers is that they want their own cloud that delivers a modern cloud experience. And today, I'm excited to announce HPE GreenLake for private cloud enterprise. This new service provides a modern cloud experience built on a modular infrastructure, and it supports bare metal deployment, virtual machines and container workloads from one shared environment. This enables you to run traditional and cloud-native applications at scale without moving your data or refactoring your applications. HPE GreenLake for private cloud enterprise is delivered with enterprise-grade service level agreements covering the full life cycle from day 0 to day 1 to day 2 activities. And what that means is your team can focus on your strategic priorities and your business and leave the infrastructure to HPE GreenLake. Now as Antonio has said, it's all about the data. Data fuels your operations and is also one of the most valuable assets that need to be protected. So today, we're announcing 2 new platform services. focused on protecting and accessing your data from anywhere. First, Data Fabric, then Backup and Recovery for on-premise and for public cloud, initially AWS. But we all know, Seeing is believing. And so as you know, with HPE, all good things start in the garage. And so I'm going to turn it over to Brian Thompson, my colleague and Head of Products for HPE GreenLake, to show you the experience. Over to you, Brian.

Thanks, Fidelma. Good morning. I am really excited to be here to show you around the HPE GreenLake Cloud platform and actually give you a little bit of a preview of some of these services that Fidelma just shared with us. We start with the GreenLake Cloud platform, that portal experience, as my entryway into discovering, exploring and interacting with this GreenLake cloud services. It's very easy to access my core services as well as discover new services that are available on the platform. Now Fidelma also spoke about the new developer portal -- developer community. And maybe a quick shout out to all of our HPE developer community that may be here in the audience with us or watching via the live stream. Great. Again, this developer portal is a great place to learn and consume it access to information on how do I interact with these GreenLake services. documentation, user guides. Most importantly, as we know, no self-respecting developer wants to interact through a GUI. Access to things like CLI API documentation. How do I help facilitate those integrations and leverage infrastructure as code types of interfaces to leverage this? Now on the platform itself, Fidelma mentioned about the unified identity management. So again, as an enterprise solution, we can support single sign-on integration with your corporate identity management systems or you can leverage these services available from the platform, again spanning across all of those GreenLake services. Adding a new user is as simply as adding their e-mail address and choosing that initial starting role, giving them the access or visibility that they need. Organizations -- of course, there is no one size fits all. We have a role-based access control that spans across these services. So providing predefined roles based on the GreenLake services that you're subscribing to or giving enterprises the ability to create their own roles if they need to manage or change the visibility or access to different systems. Now really excited to share one of the key announcements that Fidelma shared is the HPE GreenLake for private cloud enterprise. This is bringing that public cloud experience to where you need it, at the edge, in colocation, on-prem. The key with this service is delivering those cloud services and that same user experience, not just serving an IT administrator but empowering and enabling end users, developers, application owners to in a self-service way manage deploying and working with their various workloads. As Fidelma mentioned, we provide this service across those cloud modules that can deliver virtual machines, containers, bare metal services. Within that experience based on role-based access control, you can be presented with a very tailored user interface, surfacing those things that are relevant to your role or things that use frequently, including access to, again, those libraries of information, the API, CLI guides, or in this example, even the TerraForm -- HPE GreenLake Terraform provider, so I can manage my integrations and deploy that infrastructure. If we think about those provisioning experience, serving those end users, in this example, I can spin up a new bare metal node just as simply as if I was spinning up a virtual machine in a public cloud. I simply give it an instance name, choose from the available instance types that are available within my cloud. So the hardware profile, those compute nodes that I can now self-service provision. Choose my host operating system that my organization has made established, published whatever the service packs, et cetera, choose the networks that I'm going to deploy it to and bind so that I can work with -- or deploy those workloads. Even add storage capabilities to it, right? Add new volumes, depending on the storage tiers, and storage types that have been presented in my private cloud. If I think across the other types of applications or workloads that I might deploy, I have the same type of self-service capability for containers in deploying container-based workloads. Standing up a new container cluster, again, very simple, give it a name, I'm choosing the region that I'm deploying it to, and I choose from predefined blueprints, which will have my starting points in regards to size, scale, controller nodes, worker does those types of scaling and quota policies. Looking at an existing cluster, I see information about that cluster. What are the resources it's consuming? How is it scaling access to the API endpoint, where I'm going to be publishing my workloads to publishing those on a even as a developer, I can download that cube config file, which will give me all the information I need the access name space information, user data, whatever I need to actually publish my containerized workloads into that environment. And of course, as any type of a private cloud, I, of course, need the ability to deploy and manage virtual machines. So you have rich capabilities here rolling up and showing across my private cloud, what are the VM's that have been deployed, what state are they in, what sizes are they, what's the overall resources that I'm consuming. We have a service console that allows you to have very fine-grained control of deploying and managing new VM workloads, creating blueprint templates for repeatable or maybe more complex cluster deployments, managing software-defined networking, all sorts of controls over that. One of the other key things in the value of GreenLake, in this consumption model I'm charged for what I use. We also provide rich information for those users to be able to see and understand what are their consumption patterns, what are the resources that are being consumed. And I can use things like smart tagging or other metadata to establish custom reports to enable a charge-back or show back what resources are being used by certain applications or workloads or cost centers or projects. I have that capability and visibility to that information. Now as I get back to my GreenLake Cloud platform, I look across some of the other services that Fidelma had shared. And one of the exciting services as we think about that hybrid experience and data in particular. So we announced the HPE GreenLake for Data Fabric being a software-defined platform that I can deploy different clusters in private and public environments, allowing me to put together a fabric of storage and storage rules where I can ingest the data where I need it, have it available for processing or storage where I need it in a very seamless way. In this example, I have a number of nodes or clusters deployed across both private and public environments. If I drill into those nodes, I get all kinds of insights what is the NFS server endpoint, my object storage end point, right, the basic information on how I want to ingest data or access data from that, looking at insights of how is that cluster scaling, how is the storage being consumed what rules do I have that might be moving data between different environments. And then, of course, in this particular example, this is a node deployed in my private cloud, but I've established a mirror and rules of a node that I have in an AWS West region. So I can now ingest the data, have it seamlessly replicated across that API and interface into my private cloud for processing without absorbing those egress charges that would come from traditional means of moving that data around. As we think about our Home Depot example, a great scenario, as Daniel touched on, is how do I establish and manage network connectivity, profiles, et cetera, across 2,300 different locations. This is where, again, the HPE for Aruba comes into play and the management tools and services that we provide from the platform. So as an end user, as an administrator, as a regional administrator, I have access to view and manage things like network configuration, policy, device management, if I think about access points, establishing different traffic profiles and prioritization of traffic for the quality of experience for different applications, locations, even understanding that traffic patterns, thinking about those endpoints in those stores and understanding user behavior and the volume that goes through that. So very powerful tools that we extend there. Now again, I wouldn't be a very good IT administrator if I didn't address things like backup and recovery, disaster recovery. This is where we have some great new services being announced that really provide that hybrid experience. If we think about backup and recovery in the HPE GreenLake, for backup and recovery, this is a Software-as-a-Service delivered capability that allows me to establish protection rules for on-prem, in public cloud, where do I want to create and define those protection groups to back up and then have that capability to retrieve those. If I look at the capabilities within these, I can get very fine grain into my managing a VMware environment, choosing V-center folders, looking at different data stores, even down to fine grain individual machines, establishing my backup policy based on good, better, best, what do I need for those retention policies, where am I going to store that data. And then even fine-tuning that, what are the specific subfolders specific services that I want to back up and capture. In the same name, we have our new HPE GreenLake for disaster recovery. Being a hybrid experience, how do I look across disaster recovery policies managing my entire state, giving that single pane of glass experience to look across private and public instances, establishing replication and RPO types of policies that I need across those groups. In this example, again, I've got a specific application group I've established between my Toronto private cloud and an AWS Canada region, their central region, where I can establish and manage specific profiles, RPO that I need within that, my sources and destination targets, again, drilling down into a very fine grain as to what those recovery experience needs to be. Now I've gone through a whole bunch of information very quickly. And I gave you a bit of a blitz creek tour. I'd love to leave you with one final thought and that is come try these services yourself. Out here in the Living Labs, we have a number of test drives available where you can actually experience these new services as we've launched. This afternoon at 5:00 in the Innovation Theater 1, we'll be diving into more of these services as well. But that's the tour I wanted to provide you. With that, I'll hand it back to Fidelma and get back to working the garage here.

Give it up for Brian. So Brian really made it come to life. So today, great announcements, private cloud for enterprise, back up and recovery in a hybrid environment, data fabric in a hybrid environment, all of these built on top of the platform in order to make sure that you have a seamless experience across edge-to-cloud-to-data. So to learn more about this, and as Brian said, go try it yourself with our test drives. And you can find those in the showcase or you can find this at the url hpe.greenlake.com. And what these do is really show you firsthand how easy and quickly you can deploy applications no matter where you operate from edge-to-core-to-cloud. And there's much more to come. So for a sneak peek at what's coming next inside the innovation garage, please join me tomorrow morning at 9:00 a.m. in the Innovation Theater. We have a number of interesting innovations that we'd love to get your feedback on and show you a little bit behind what's coming next. In summary, I've never been so excited. This has been a great...

I'm sorry [indiscernible], I came early.

You came early? You're getting rid of me?

No. Give it up for Fidelma, Brian and entire team.

Thank you.

Thank you. I have to tell you, I'm so proud of the work we have done over the last couple of years despite all the uncertainty, facing the challenge we faced. I hope you see this is a whole different approach to our innovation, and I believe we are a different company. We are a totally different company. And as Brian and Fidelma said, please go into the test drive and log in and test the platform. It will be amazed and you will be able to think about what else I can go do in my business that I was not able to do today. But I said at the beginning, the enterprise of the future must be edge-centric and you saw the amazing experiences being created at Home Depot. I also said it must be cloud-enabled. And I'm proud to deliver the first true cloud-native private cloud with HPE GreenLake, so you can bring the cloud experience everywhere. Lastly, I said it must be data-driven, because the leading companies who are sprinting ahead of their competition, now that the data is the life force of development and data is essential to innovate what we call the next-generation business models. In some cases, actually creates new entirely industries. And one example today is the birth of a totally new kind of entertainment in a new global sports arena, in place where gamers find community, competition and career actually. And today, we are very, very excited to announce a new partnership with one of the world's most influential eSports organizations. It is the team that built the template for today's professional gaming landscape. I'm talking about Evil Geniuses. They are an esports innovator that know the power of originality, inclusion and invention. Let's take a look. We are thrilled to welcome the CEO of Evil Geniuses. Nicole LaPointe Jameson, to the stage to tell us more. Nicole, welcome to HPE Discover. Welcome. Welcome.

Thanks for having me. What an amazing event.

Yes. super exciting to have you and your originality here on stage with us. But maybe you should spend a couple of minutes telling more about you and Evil Geniuses, and give a little bit more insight about the eSports space.

Of course, so Evil Geniuses is an e-sports organization. And what that means if you're not as familiar as we are the competitive or athletic sector of the gaming industry. And so we build -- similar to a collegiate sports program, we have teams in distinct games that compete in their own leagues all under one banner, and that is Evil Geniuses. And so we really focus on making sure we curate a strong professional athletics program, and capture the unique audience of eSports, which is much more digitally native, global, young and diverse.

Yes. So we talk about this Sports, it's all about data, right, connecting the community, the fans and obviously, the gamers, right? How you think about leveraging data to drive the business forward, but also drive inclusion, which I know is core to your passion as it is for us one of the core values of the company.

Data and inclusion for us is intertwined. When I came into the space 3 years ago with EG, it was immediately evident that the opportunity to shorten the delta between the audience of who is a gamer and who might want to be a professional gamer and who is actually represented is there. A good example is 45% of U.S.-based gamers are women, but the height of professional play, it's less than 3%. And so using data, using empirical means to be intentional about scouting, recruitment, development to find the breadth of talent that could be in this space is how we operate. and much of what we've done with data to not only be culturally relevant, but actually commercially and competitively successful is use this data to build our rosters and find best-in-class talent from previously unknown sources that are not in the space to have them on and play under the under the EG team name.

So you think about data as the core of your business, right? What experiences you plan to enable once you get into the data insights and analytics? How the business model is going to evolve? I can tell you, my son is a gamer. Obviously, I'm sure there are many here. And he's always looking for different things that -- sometimes I walk in his room, I don't know what he's doing, but boys process a lot of data, I can tell you that. Not doing homework, but doing -- playing the game.

Yes. So this is -- when you say what comes next for us with this partnership, I would say today, we've only scratched the surface. We're very -- we have great engineers and technologists, but what we can do with HPE and the GreenLake solution is revolutionary, not just to us but to the entire eSports ecosystem. Despite being a digitally native platform, gaming is not well utilizing the technology solutions that could exist that you even see in traditional sports like football, baseball or Formula One. And so being able to not only create and bring our edge, which is the stage on the road, the cloud and have real-time analytics, which hasn't been done before in eSports, opens up amazing new opportunities that transcends our current manual printed booklets and very predictive versus real-time opportunity to get smarter in game and out of them.

Yes. So what is next in our partnership? How you think this is going to evolve?

The sky is the limit for us to be able to not only have the opportunity of HPE's engineers, infrastructure GreenLake, and bring that in-house for us and really catapult and create dynamic long-term solutions around how we want to show up in all of our different titles and continue to not only lift trophies but bring in more women, LGBTQ, younger, older, multigenerational audiences, whether it's in-game to boardroom to the gaming space that's only done through data. So we're excited to work together.

Well, we are really excited to work with you to have choice in us to think about this new way to participate in a fun event, obviously, is not just about the entertainment part but it's the mission to make the world more inclusive. And for us, that's core to our purpose. So thank you very much for the opportunity, Nicole. And I can't wait what we see we can do together.

Thank you for having me. So good. Thank you.

Listen, when I think about some of these use cases, is amazing what we can do together. And it can be a severe thing, it would be a fun thing. But I believe our collective ability to unlock the power of data in the last few years has been a time of unprecedented progress. But still, I believe it's just a small step towards the ultimate goal to the ultimate potential. I said many times that today, we have data rich, but inside for -- we don't understand all the data. And the data problems of the future will need to be solved by combining the power of machine learning with large simulations to enter what I call the new age of insight. The powerful combination of HPE and the Cray acquisition we made a few years back has allowed us to take one giant step forward in that direction. Together with the Oak Ridge National Laboratory and AMD, we are bringing massive amounts of data in sites, powering what we call the next generation of AI at scale and machine learning analytics by introducing what we proudly call, Frontier. And the name says it all. Frontier promises to be the world's most powerful tool of discovery to advance the way we live and work. Last month, Frontier became officially the world's fastest supercomputer on the top 500 list. It also became the top green 500 supercomputer in the world. And Frontier, it's not just the greenest and just a little bit faster than the world's second fastest machine, it achieved something researchers has been waiting on for decades. Frontier is the worst -- is the first in the world across the -- all the supercomputers that actually cross what we call the exascale computing threshold. This is the supercomputing equivalent of landing on the moon. And by far, the greatest achievement in supercomputer history of a large time. Let me explain what this means so you understand what it is. Think about this. The top 500 computers combined delivered 4.4 exaflop of performance, Frontier alone generates 1.1 exaflops. That's 25% of the world's top 500 supercomputers all by itself. And I truly believe this could only be done from the innovations at Hewlett-Packard Enterprise. And I would like to take a moment to acknowledge the team, Justin Hotard, Nick [indiscernible], Gerard [indiscernible], and many, many others who worked so tirelessly with the Oak Ridge National Lab, AMD, working 24/7 for many, many months to deliver this unique moment. This is a unique moment in history that we should all celebrate because what it's going to do for society we never imagined before. And as Nick says to me all the time, "Listen, this took 13 years to get here. We crossed the petaflop barrier 13 years ago. It took 13 years to get to the exaflop. And I cannot wait to see when we get to the zetaflop." So let's give us a big round of applause to the team that made history. And we're going to talk more in the show case, but I just wanted to make sure that the team was here on stage to show this amazing thing that will go in the history of this company. Thank you, Justin, and Nick, and the entire team. And because of this innovation from HPE, AMD and the Oak Ridge National Laboratory, the United States is on the verge of unlocking the possibility of many things. Think about nuclear fusion, solving climate change at scale, improving the quality of billions of people around the globe. Now to talk more about how we're going to use this amazing tool. I'm pleased to have with me Dr. Gina Tarasi, the Director of the National Center of Computational Sciences at the Oak Ridge National Laboratory. Gina welcome to HPE Discover, and welcome to what we call the edge of insight. All right, Gina. Welcome on stage. Welcome to tell the story. Some amazing work we have done together. Maybe you should spend a little time talking about what the computational science does at the Oak Ridge National Lab.

Absolutely. But let me take a minute to absolutely tell you how proud the Oak Ridge National Lab is for hosting, once again, the #1 supercomputer in the world dedicated to open science. You know very well that the last couple of years have been extremely challenging due to the pandemic, But in strong partnership with HPE and AMD, we have the dream team and we broke the exascale barrier.

Thank you. So maybe as we said, and there was the footage play in there on the screen, we have achieved something amazing. What this change?

What does it mean? Exactly. Breaking the exascale barrier means that Frontier will enable the scientific community to solve science and engineering challenges 5 to 10x faster than previously possible as well as tackle new challenges that are much more complex, 5 to 10x more complex than previously feasible. And we're talking about challenges that are extremely important for our generation and some of the critical needs that we have in the world. And clearly, the last pandemic taught us a lot of lessons. Some of these challenges involve developing solutions to manage better climate change, develop more accurate predictive models to predict extreme weather events, so we are better prepared. Discover new materials, design new energy solutions and something extremely close to my heart, understanding more deeply the origins of the universe and the principles of life because these are fundamental us to be able to develop new medical therapeutics and tackle some of the most debilitating diseases that our generation faces.

The way I think about this is that researchers have been dreaming to put all that massive amount of data, right, in memory, and be able to access all that data at once, which is one of the biggest scalability challenges that customers have been dealing with, so now this will enable, again, to you said, a new type of research. But maybe you can talk a little bit about what type of use cases you see running through the lab. I mean, what type of work researchers do with different companies, obviously?

Of course. Certainly, we see a number of use cases emerging from the domains that I described before, especially when it comes to biology, astrophysics, material science. The one area that, again, comes very close to my heart is what we can do in terms of delivering the promise of precision medicine. I'm [indiscernible] by a medical scientist, so for the past 10 years, the imagination of biomedical scientists has been captured by the promise of precision medicine, which is let's identify, let's select the right treatment for the right person at the right time. This is a huge challenge because we're talking about a -- the number of possibilities that is massive. And systems such as Frontier will help us tackle this huge combinatorial space. So what I see for the future, and I do believe this is in my lifetime, the impact of these systems in the war against diseases such as cancer and Alzheimer's will simply be extraordinary.

I think we are...

It is -- I'm sorry, and it is exactly that convergence of big data because we've seen that digital revolution in medicine, the tremendous advances in AI that we've seen in the past few years brought together with exascale computing.

Yes. And I believe we are on the verge to unlock in some of these amazing challenges and secrets that would make our life better going forward. I think the point to talk about precision medicine and be able to find the right therapy to the DNA of each individual person will make a lot better. So talk about the vision. What is coming next now you have this amazing capability as I think about operating under this new system?

Of course. So I've been at the Oak Ridge National Lab for 11 years. And certainly, the lab provides an unrivaled collaborative environment to push the boundaries of computational science, especially as we blaze the trail toward the new realms of high-performance computing. So what this means is that without HPC systems such as Frontier, the users will come, the researchers from every domain of science will come and will tackle these scientific and engineering challenges to provide new solutions for energy to provide solutions for national security and, of course, provide economic benefits to the nation. It's important to remember that these important milestones for all of us for the world are the result of very successful strategic collaboration between national labs, industry and academia, and we have proven that with Frontier. And the same spirit of collaboration, [indiscernible] it's also our user community, which is equally diverse. Our users come from the government, academic institutions and industry. I could highlight a couple of the reasons collaborations that are showing the -- what is possible in the future. In partnership with general electric aviation, they are using our systems to design high-energy energy-efficient jet engines. And in partnership with the National Cancer Institute, they're using our systems to train large-scale artificial intelligence models to help the nation with near real-time cancer surveillance as well as large-scale simulations to understand the pathways of some of the most aggressive cancers. So these are just a couple of examples. And looking into the future, we at the Oak Ridge National Lab, we're looking forward to more collaborations, more challenges and showing how Frontier can really be the catalyst for scientific innovation with long and lasting impact.

Yes. Well, thank you, Gina, for coming to the HP Discover to tell the story to enable us to do something amazing that will go in the history and the legacy of humanity. But thank you for working with us to really push the envelope because sometimes these systems, the way we envision this these innovations. It really starts with -- on a blank sheet of paper. And understanding what we can do together from data-driven at scale is such a unique space that we're really proud to work with you. So thank you very much for being with us.

Thank you, Antonio. Off to the next frontier.

So as you can see, we drive innovation across a broad set of portfolio, but our goal is to offer these capabilities to everyone, not just the Oak Ridge National Lab, but also as a Service, as a part of our experience that Brian and Fidelma showed to you. But this is a magic moment for us. It has been an incredible player to be here with you today to be back to together. Before you leave this cover, please go see our vision in action by visiting the transformation showcase, take a test drive, log on and experience it for yourself. I would like to take a moment to thank our sponsors. This year, we have some new ones, some exciting new sponsors. We could not do HPE Discover without you. So thank you. And to all our partners and customers watching today. Thank you for joining us to remind you the future of hybrid and the future of work. HPE Discover is an event for us to engage with you about where we are today, but more importantly, to look forward with all of you with an even brighter future. Today, HPE is the world's leading edge to cloud company and HPE GreenLake is our beating heart. Bringing the platform to life was a massive undertaking against the backdrop of an incredible disruption time that not only redefine HPE as a company, but change the way we do business. We are growing partner ecosystem and over $7 billion in total contract value booked to date, our momentum is undeniable. I hope you see a notable difference in HPE. We have been transforming to create a more inclusive future for all of you. And I am proud of our team members and our culture for the way we show up for you. We are positioned for the future. And with HPE GreenLake, we are positioning you to be the enterprise of the future. Instead of meeting the public cloud, what it is on its terms, we are delivering the best hybrid cloud experience, so you can digitally transform without compromises. But we are not stopping there. As a company, we will continue to look forward to continue to innovate. We will continue to reimagine the cloud in ways never thought possible so we can continue to transform the world together. Come with us, enjoy your time at HPE Discover, and I hope to see you on the show floor. Thank you very much.

And that concludes the keynote presentation by HPE CEO, Antonio Neri, very impressive presentation, a lot to digest, a new private cloud for enterprise. There was a discussion of DEI and sustainability initiatives at team, we continue to hear out of the company. and also accolades about the fastest and the greenest supercomputer and the achievements that were done inside the organization. It really was impressive to hear how HPE has evolved over the last few years, in the last 4 years under Neri's leadership and revolutionary ideas to life and about the business case that is continuing to grow for HPE GreenLake. There is so much more to come and about that and is not so much more. So don't forget to check out all of our sessions. Visit hpe.com/dmn. Until next time, I'm Shibani Joshi. Thank you so much for joining us. [Break]

Please welcome, Keith White.

Awesome. Awesome. It's fantastic to see everyone here. Thank you so much for taking the time to be with us today. It's great to feel the energy again. I mean, for those of you that haven't met me, I should probably introduce myself first. Keith White, I run the HPE GreenLake Commercial business at Hewlett Packard Enterprise. And again, it's really a pleasure to be here today. You heard this a couple of times this morning, but this is also my first Discover. I joined the company right before the pandemic and have only seen you virtually before. So it's great to see all the happy smiling faces as well here. So thank you again for being with us on the journey. Thank you for coming today and spending the time with us. And I'm really excited to share with you the direction we're going. But I really wanted to make sure that you heard from some of our top customers and partners as well. So you'll get to hear their stories as we go through this. Now before we dive in, I was supposed to do some quick legal lease. So I'll print this out and that everyone read it at their leisure. But it basically says, hey, we're making some forward statements. We have some road map stuff in here, it might change and all that. But just know we're -- we want to give you the best and latest information that we have here. So with that, let's jump on in. And in essence, we know the pandemic really taught us a lot about how quickly things can change. And... [Audio Gap]

HPE has executed very well. And that's one of the other megatrends we are capitalizing. And the introduction of the HPE GreenLake private cloud enterprise addition is another step forward. The third piece of this obviously is data, data, data. And I have to tell you, I have already had many meetings with customers here, and that's what is top of mind, how we move forward, analyzing my data at the pace I have never thought before. And that is a lot of things, storing data, governing that data, creating the pipeline to run the right analytics, making sure there is an end-to-end visibility to that data from Edge to Cloud and so forth. And last but not least, obviously, the ability to consume everything in a more flexible way. And this is where the as-a-service consumption which is an experience driven by software and services, where infrastructure and finances come with it is a key component of what we see continue to grow. And the pandemic was one aspect of it. But I think as we think about inflation and you think about some of the challenges that we may face going forward, that, to me, is going to be a catalyst for our continuous growth. So we believe we have the right strategy that position us in growing in profitable markets because all of those markets have higher gross margins. And the stickiness of that experience is what drives gross margin going forward. I think as I think about the HPE GreenLake and talk about some of the differentiation, many of you asked me and other team members, what is the differentiation? Well the differentiation is the experience, it's the technology, it's the flexibility, is the predictability and the sustainability of the platform. Because one aspect that we've seen, and maybe we didn't thought that way originally, is that customers are actually onboarding on HPE GreenLake, many -- in many cases because of the sustainability benefit. What that means for them is that when they are in GreenLake, they consume less in terms of energy and carbon footprint, which, therefore, they actually advance their own agenda in terms of getting to that net zero carbon footprint. So -- and the other piece of this is the unification of that experience. And for us, I think that's a unique point of differentiation because of our broader portfolio from edge to cloud versus trying them to just have a hybrid experience between on-prem and off-prem. But the question is when you include the edge, that becomes even more complex. We bring all of that together into the same experience. And this is where I talk about the journey to one which is something that John Schultz brought to us because he said, in the end, that's how we think about the customer experience. But I think for you, obviously, the one aspect here from the financial perspective which I don't believe, and you know me now for several years, we are not getting enormous amount of credit yet for all of this. And second, we are not getting enough credit for the resilience of our profit pools because most of our profit pools, as you know, come from the balance sheet, which is very strong. And the services component of this is something that allows us to whether some of these ups and down cyclical situations we go through. And as we put more growth and more higher margins on the balance sheet, we believe, for '23, '24 and '25, particularly as we continue to grow ARR, which the mix now is tilting much, much faster. And everything that Fidelma and Brian showed today is all software and services. We'll continue to drive more resilience on the profit pools with higher growth and then durability of that will continue to be an important aspect. So that's why, for me, it's an exciting time to be here to tell our story, to reflect where we are, how far we have come and the innovation that we continue to drive for our customers and partners. And one of the message that we delivered to our partners, I think, is resonating and I will encourage you as you do the tour talk to some of the partners, we have been building the platform with the partners and customers at the center. Some of our competitors are actually interested enough. One of the partners told me, it looks like some of the competitors are paying us to go away. What do you mean go away? Yes. Well, they think we are not any value. Actually, we are expanding the ecosystem of partners, and it's growing very, very rapidly, so they can add their own value services. In fact, one of the European partners asked me last night, hey, Antonio, of course, you have to have the public cloud, and you see that today in the demo. But we also have our own cloud services, we want to expose to the platform. That drives a lot of loyalty and stickiness. And that's why Fidelma talk about the partnership and about how we open that with APIs and so forth. So that's the high-level story, but I'm going to pass it to Fidelma. So we can talk about a little bit more about HPE GreenLake.

Thanks, Antonio. So the first thing I wanted to say is a little bit about why I came to HPE and because -- and it's really around what I thought about the opportunity that GreenLake presents. Having been in the tech industry for a long time, I also was the CIO of a company for a couple of years. And what that showed me was that there is an opportunity in the marketplace, not just for all workloads to land on the public cloud, but for workloads to land in a place that's the right place for them. And so when you look at the GreenLake strategy and you think about workloads and workload placement, it's all about making it easy for customers to put their workloads in the right place. And a lot of times, what that means is new workloads being created at the edge and then other workloads where they may have been on-prem, some may go to the public cloud, but others because of data gravity, because of latency needs, will stay on-prem for many, many years. I think this industry, we moved quickly in some ways. And in other ways, we have a lot of latency in moving. And I think over the last number of years, what you've started to see is kind of a rebalancing of how we think about cloud. And so that's really why I came to HPE and I thought that GreenLake is such a great opportunity to solve customer needs and also to solve partners' needs where we can provide at a platform level, the capabilities that they don't have to build themselves so that they can focus on offers that go on top of the platform to bring value to their customers. So when we think about GreenLake, and we talked about it this morning, is we're building a common foundational platform. And the piece that's differentiated about it is that it's kind of location agnostic. So whether you have something at the edge, and you come on the platform, something in the data center or workload in the data center or you have services like our backup and recovery services, that also are -- they back up and recover workloads in the public cloud, you can get on to the platform and you can consume it all there. The second piece is really then around what we're doing with data. And not just on a data management perspective, but this data fabric that can connect everything from hybrid -- in a hybrid fashion from edge to cloud to -- and any place in between. So those pieces are really powerful pieces in putting together this hybrid multi-cloud solution for customers and for partners. So if we look at it then, we can say it's all great to talk about technology and platforms. But also there's always in every agenda, there's a financial aspect to it. And so the consumption model within GreenLake is very powerful on the fact that it's a pay-go model. And once -- and you can basically match your consumption to what it is that the -- to your budgets and have a much more predictable way of looking at your finances over time. And many of us know that IT budgets are -- there are very few IT budgets in infrastructure that grow. They're really trying to replace kind of Legacy systems. And with GreenLake, you can replace Legacy systems and get way more efficiency and way more cost effectiveness and also get more sustainability when you do that. So as we look at it as well and we think about things that are higher levels than the infrastructure, and we go towards kind of the PaaS layer, we are not -- I may put it a different way, we are very open about what PaaS layers we support. And so we have our own container platform. But we also have -- we also support Microsoft. We also support people like Nutanix. We support VMware. And so it's an open platform because DevOps teams and IT teams, they have tool chains that they really like to use. And by having this open platform that supports these different tool chains, it really opens up a market where we're not trying to dictate to customers, this is how you should develop your technology. We're enabling customers to develop technology with the tool chains that they have picked for themselves. So I think the other piece is we've had a lot of success over the last -- I've been here in 9 months. And what I've seen over the 9 months is the number of cloud services that we've added to the platform. We have, I think, over 18 categories of cloud services and then that's about 70 that are available on the platform. And the place that we want to focus on these services is all around workloads and data. And so when we think about the services we want to put on the platform, it's -- that's the lens that we look at them on, and that's the lens that we talk to customers about and getting their rapid feedback so that we can continue to deliver value to them, not just in the capabilities, but also from a financial perspective. So I think maybe back to you, Antonio.

Sure. Well, again, a lot of progress was made in the last 2 years about the platform. There was an interesting slide you saw the rolling of the 70 cloud services. It's fairly impressive because in the end, if you look even in the public cloud, they have maybe hundreds, if not thousands of services or probably the top 80 to 100 are the ones that make the difference. And you need the basic infrastructure services, which is all about automation and life cycle management. We have that for compute with a comms ops manager. We have that with storage. And we have that obviously with networking. But the focus, again to Fidelma's point, is the workload management and the data side of the house. And that's where today, we announced the 2 data services aspect with the data fabric and the backup recovery, complemented with some of the other ones we already have with disaster recovery and whatnot. But if you look at the cloud services, including workloads like VDI and SAP and so forth, those are the ones that customers tend to consume the most. In the end, what I say is we are making what I call disciplined investments to deliver against these compelling trends we talked before. And as you see going forward, you shouldn't see a cycle of innovation every year. You should see a cycle of innovation on our platform every 90 days. That's how fast we are going. And that's the beauty of being in the platform and transacting through the platform because that gives our customers and our partners a unique experience because the focus here is to move from a transactional value to a customer lifetime value. We talk about getting off the training and getting on the infinity loop, right? And most of those services are going to be consumed with software and services. And that's where the IP rich-oriented approach is going to play a big role. At the same time, we think about this customer-centric innovation. I'm incredibly proud of the announcement of Frontier. It's not just a financial benefit. By the way, Oak Ridge is the first one. But we have a few of them lined up to complete in the next 2 years. It takes time to build the systems, right? You should think about a system like this is basically 75 racks of infrastructure plus 25 cooling distribution units, hundreds of miles of cable and that comes together in a software that makes that so special. The magic of that is in the software, to be able to process parallel workloads, parallel computer workloads to be able to run AI at scale. But that was an example of it. But also we announced today Project Lion, which is basically, we are the first infrastructure at the lower level with an nano-based solution, which we feel that's going to be a next generation as well, which is more programmable to the way we're going to deploy cloud. And then obviously through all the other aspects of what we already talked about it. I think it's going to come down to pure execution. This is not a strategy discussion anymore. And I will say the demand is strong. The demand continues to be very, very strong. In the face of the challenges we see, the demand for our solutions could be very strong. You saw last quarter, we grew again, 20-plus percent in bookings for 4 consecutive quarters. That's why we are confident to deliver the revenue we guided you for the year. If avoidable more supply, we could do better, right? And I'm sure we're going to talk about that. But that what does is we enter 2023 with a lot of momentum on the HPE GreenLake, the platform, the services and the backlog, which has given us very good confidence and continue to drive that durable, sustainable, profitable growth. And then I said that the shift to HPE GreenLake is actually enhancing our financial architecture because of that durability of the profit pool in the balance sheet. And that's why the 30% to 40% CAGR growth on the ARR, we feel pretty good about it. When you think about $7 billion already in the balance sheet, your financials, financial analysts you know that unwinds over time, and that's just revenue and profit. That's going to show up in '23, '24 and beyond. And so when you think about that, between the as-a-service, the operational services, finance, HPFS, which obviously is the operating leases aspect of this, is providing 1/3 of the revenue. Think about 1/3 of the revenue on the balance sheet and 80-plus percent of the profit that they are recurring. And that's why I said one of my frustrations, we're not getting credit for that, okay? We are not. So I feel good about where we are. Andy, and why don't we don't open it for questions?

Sure. Yes, definitely. I think to start, Antonio, I just want to kick off with a question that I get all the time from investors right now. I mean, obviously, there's a lot of turmoil in the financial markets, I mean, you've got the war, Ukraine and Russia, you've got the geopolitical environment. I mean inflation is at multi-decade highs, you've got interest rates being risen by central banks. So there's a lot of fear, I think, in the investment community around recession. So maybe just to start with, how do you see the macro environment? And how should we expect HPE to perform if we do get in a recessionary environment?

Yes. Well, when I talk to customers and this week, it's going to be another great proof point of that is that they are all -- they never confronted all these issues at once, right? So obviously, there is a social injustice and also the things that company have to deal with. The pandemic is not yet out of the equation, right. We just lift the China lockdown if you will. Supply disruption will continue to be here for a while. And now we have this cost of capital inflation that's obviously in front of us. But I will say there is a consumer view of that and there is an enterprise view of that. We are not in the consumer view, and I think that's going to be challenging. On the enterprise side, when you think about transforming everything from a digital perspective, establish this new hybrid work kind of framework for companies, accelerating that data insight, cyber, obviously, these all require quite significant amount of investments. And that's why I believe IT spend in enterprise will continue to be resilient. It will be as elevated as we see? Probably not. But the Rhetoric will be here will tell you the sea level has risen, and I think it's going to be at that level for a period of time. And that's why to me it's all about execution at this point in time. And I think HPE, again, since 80% of the profit is in the balance sheet, we think we are resilient to that. But at the same time, we're going to have these growth areas, right, with higher margins which are going to be in higher demand.

Yes. No, makes sense. And then maybe, Fidelma, one for you. I think one that I get all the time from investors is just -- and I think you've hit on a lot of it today is just around -- and maybe it's 2 parts, actually. It's one, how does the GreenLake experience compare to the public cloud? And then maybe I think the other, the flip side of it is where do we stand? How does GreenLake compare Stack Up versus our more traditional competitors like a Dell APEX for example?

So let's take the public cloud one first, and I think it's an and. And I think we have to be really explicit about that. And for us, it's all about the edge in, edge to our data centers or colos and then to the public cloud and giving people choice, okay? And so then when you look at the experience, when you look at how you engage with it, I think you will see -- what you saw today is world-class up there with the same public cloud experience. It's just a matter of where we're focused and where we want -- where we provide areas for our customers for workloads on. If we now shift to kind of more of our traditional competitors, they just don't have a platform. I mean I just -- I don't know how to...

Many of them don't have an edge.

And so -- and they don't have an edge. And so I think it's just they may be at the beginning of their journey, where taking infrastructure, putting leases around it, and that's the cloud. But we all know that the cloud vendors have shown us the operating environment. They've shown us the ease of use. They've shown us helping customers get workloads in the right place, how do you protect it. And so we're really taking a holistic view of that and in the areas where we can differentiate. And then working in close partnership with the public cloud, for instance, with our backup and recovery that we announced today, that also provides backup and recovery for AWS. Which means that as a customer, you don't have to choose. You don't have to have your backup and recovery for something that's on a GreenLake infrastructure that's on-prem and a different one for your volumes that are out on AWS, which is as a former CIO, that is like you don't want to have multiple of these things. You want to have one that does.

The other thing on that is the data egress cost, right? If you can back up and avoid the data egress cost, it's huge. I think customers are telling us the majority of the cost today as you think about the total cost of ownership is data egress, it's not the cost of compute or storing data. Obviously, it's elasticity that comes with it. But I will say from a competitive perspective, and we take all of them seriously, right, is the fact what we see today, and again, talk to customers, it is a different order experience. It's not a cloud operating model. When you talk about being in the cloud, it means you are automating everything, everything is self-serves, right? And ultimately, works in a way that is a service-oriented approach is now the financing construct. We have a benefit that HPFS give us a very key strategic lever to be able to do the financing inside the service experience is way maybe other just can't. But it's not financial construct at all. It is a service experience that we show under them.

Yes. And I think it's also very telling that, I mean, we've been sharing the financials of our GreenLake as a Service business for several years now, right? We're...

Yes, I haven't seen the disclosure. I have not seen a disclosure recently.

Anyway, well, let's open up to the floor.We ask to try to keep it to one question so we can get to as many as possible. But why don't we start with Amit here in the front row, please. Aaron, we'll get to you next.

Amit Daryanani, Evercore. Thanks a lot for the presentation and your thoughts over here. I guess I want to go back to the GreenLake discussion, and you've had a lot of announcements. I think at this point, the entire HPE portfolio is on the GreenLake platform, which is impressive. But I was wondering, as a customer, could you break down what the unit economics are what one uses Green Lake versus on-premise? And as you go down to this path of innovation, do you think you have the sales force and the channel that can scale up to the ambition you have? Or does -- do you need more investments over there?

Yes. Well, all our products from the solution perspective are now being integrated with HPE GreenLake de platform. Whether you buy it as a service or you buy this transactional business model. So take this example of ProLiant. Obviously, everybody knows an HPE service ProLiant, right? If you buy or make the always the same, 10,000 servers and now you need to deploy, provision and life cycle manage, now you're going to subscribe to the HPE GreenLake software aspect of the ProLiant to life cycle that to what we call the compute ops manager, but it runs to GreenLake. It is a building block for us, obviously, to provide a workload optimized solution when the customers want to consume it in that way and as a service. Storage already with HPE Alletra as well as now with the storage as a service is integrated into the platform. Aruba, obviously, which is our connectivity aspect of HPE GreenLake at the edge is by default the reason why we extended the entire platform with because all the access points LAN and WAN are now on the platform. So it is what we said early on, the journey to one experience. And as more shift happens to an SLA-based model and mostly as a service model, what it changes happen is that I not need to go to the traditional way to order, I just go through the provisioning of what I need to the platform and transact to the platform, which in itself is a significant cost reduction because I want to have to have all this complexity. It's just pick the attributes. If you take, for example, the storage as a service, pick the workload, pick the capacity and pick the performance you want. Well, those are 3 attributes and you pick where you want to deploy it. That's it, I don't need to go through a bomb and this chassis, motherboard, these drives and so forth. So technically and architecturally, it is a convergence to the platform. And then you decide which path to pick and obviously, more and more is going to go to as a service. From the go-to-market, what I'm really pleased is that our partners are building their value on the platform. And on March 22, we announced 4 key distributors now on the platform, which exposed the marketplace, which actually creates more reach into the Tier 2 distribution, right, with the value of the resellers. If you look at partners like Infosys, right, we work with them and TCL and Wipro and you name it. They are adopting all HPE GreenLake as a platform to drive modernization of applications and data. And we have some very, very large deals that we closed together as a part of that. So the partner ecosystem is growing. It's growing very, very rapidly. And with the announcement we made yesterday with Fidelma about exposing more APIs particularly to the core foundation of the platform with metering and billing, they will take advantage of that. And that's why our strategy is different than our competitors. Internally, we continue to drive the shift, right? There is more automation on the traditional things we are doing. If you recall, we started our journey with next-gen IT, HPE Next, right? We finished that in March, John and team and Rashmi completed that. We built all these as a services capability on top of it. Now we're going to go to the next phase to continue to automate. Those are transactions the way we couldn't do before because we had 10 different ways to do it, now we have one. And then continue to shift the model to the right, if you will, to this new way to deliver solutions with more services and more software-driven where infrastructure comes with it. The way I think about it, at some point, hardware or infrastructure is just a cost of sales, nothing more.

Yes, Aaron, we'll go to Aaron, please. Can we get him a mic, so everyone can hear him on the webcast. Thank you.

Aaron Rakers at Wells Fargo. I'm going to ask one clarification and a question on the architecture stuff. The clarification on your commentary on the macro was well taken and stuff. I think in the last call, you explicitly noted like backlog peaking is probably late this year kind of commentary. So first of all, is that kind of the message you're sending with, hey, we're going to enter fiscal '23 backlog peaks late this year? Or do you think the peak might be pushed out because of other things going on in the market? And then real quickly on the follow-up question is, one of the areas that I think HPE has been very successful in and you see it with Frontier and some of the other platforms that you've won. Is there other opportunities that you're seeing in high-performance computing into traditional enterprise, where do you think there's just a bigger, broader opportunity to monetize that asset within HPE. Can you give any examples of that?

Yes. Yes, we still believe, Aaron, that somewhere at the end of this year, I think backlog is going to pick also because demand, again, will not continue to grow 20%, but it will be solid. And then our supply continues to improve. Obviously, we're trying to turn that backlog faster. So that's the best view we have right now at this point in time. In terms of HPC, we are very proud to have made that bet. That bet started with HPE, and I actually was running at the time, I don't know, 10 years ago, maybe the server business, I introduced HPE Apollo. I was leading the business where we did that. And we felt that AI was going to be a driving force for that. Then obviously, we completed the Cray acquisition because we saw AI at scale as a critical element of what customers need. And more and more simulation and modeling. We talk about autonomous driving analytics. We talk about health care. We believe this, what I call AI at scale would be the next big opportunity for us. And that's why some small acquisitions like the Determined AI and others will continue to be added in the portfolio, building on a unique differentiation we have, which is called the programming environment around supercomputing. Because when Fidelma talked about the tool chain, when you talk about supercomputing and AI at scale is a whole different tool chain. And that's a point of differentiation for us. So our ability to continue to innovate on that front is a way to enhance the ability for enterprises to access this in colors and the as a service where our view is that over time, the programming environment is offered in our platform as GreenLake, and then they can take where to run these things, right? And that's why the HPC as a service introduction late last year, was the first instance of it. So it's not just building big systems, it's to make HPC ubiquitous and accessible to what I call the mirror models. And then also based on the jobs that run. I just need to run that algorithm. That's it. That's all I need. Spinning off, turn it off. That's why a partnership with the[indiscernible] colors is so important.

Great. Thanks, Aaron. Can we go to Tim here in the front, please?

Tim Long at Barclays. Just wanted to go back to the GreenLake and some of the new offerings that you're talking about here, the private cloud edition and disaster recovery, et cetera. Just curious, 2 things. One, any initial feedback? I'm sure a lot of customers were kind of onboard with the progress you guys are making here, so curious on that. And then second, can you talk to us a little bit about how as you add more and more tools to the offering here, does this kind of enhance the TAM for GreenLake? Or is it another reason to go back to some folks that are on GreenLake and maybe increase deployments with them? So maybe you can talk about kind of new opportunity from some of these offerings compared to potentially extending the breadth you have with some of the customer base.

Do you want to take the first part?

Yes, so as we were designing private cloud for enterprise, PCE is the acronym internally, we spend a lot of time with customers, okay? And so -- and that's kind of what formed us. It's unique in the marketplace and that it can run a bare metal workload as well as a container workload as well as the VM workload. There is no other offering that can be delivered as a service to run these 3 different types of workloads. So -- and that was very informative feedback from customers. In addition to that, a lot of -- PCE is delivered completely as a service. And so it -- we do everything day 0, day 1, day 2, the analytics, the monitoring, the notifying, the security patches, all of those things are delivered by us. And what we did with customers again all the way through this cycle was we had a lot of -- we sent a lot of prototypes. They also worked on their workflows, making sure that they were intuitive and making sure even more importantly, that they integrate it into their IT flows. For instance, integration into ServiceNow, integration into their CMDB, so that it is a -- so that it really takes away the infrastructure management and allows customers to basically look at their applications. And so we have had great conversations here over the last day and expect to have more. So that's our view on that.

Yes. But Tim, to your question, I mean, it really enhances the TAM because we have more software into the stack because we're taking more and more aspects of what the customer is doing today. But it comes packaged in the experience, not as an add-on that customers have to do. So there is not just the infrastructure itself that maybe we are capturing from another vendor. But the elements that could add on that stack with software and services, which is what I'm really interested to. Now I will suggest you to do something, go talk to your CIO because they adopted HPE GreenLake at Barclays.

Great. Thanks, Tim. Now can we have Wamsi here in the front, please.

Wamsi Mohan, Bank of America. I had a question first about maybe the completeness of the solution as it pertains to GreenLake because you mentioned you're up to 70 to 80, 70, maybe running right now being offered public cloud runners having maybe a poor offering of that many and then maybe 2 or 3x that sort of in full. So as you think about the completeness of the solution, what are some of the areas that you think that maybe need incremental investing? How would that be? Would that be organic? Are you thinking about inorganic opportunities? And as you think about that, what about scaling up the stack? Because it seems to be a great solution from an infrastructure perspective. But from a PaaS perspective, you're still partnering a lot with other partners. Are there aspirations to go up that stack from a PaaS perspective? And a clarification, Antonio, to your comment earlier about increasing TAM. As if the TAM is truly greater than as we think about your long-term guide for the ARR, how should we be thinking about this in terms of the longer-term growth rate, which seems like with these new offerings, there should be incremental opportunity or more?

You want to take the first part, Fidelma? I can...

Yes. I mean -- so we look at building kind of the horizontal capability first and then going up the stack where appropriate, okay? And so -- and making sure that when we put offerings on to the platform, that they can service all the pieces of our solutions. So for instance, you don't have -- if we take something like Determined AI, okay, which is a SaaS offering on the platform that, over time, is going to integrate more tightly with the HPC piece but also potentially pieces of that technology taking us and maybe using it at the edge for more intelligent learning and kind of augmenting our capabilities for AI scale, not just in big, but also scale as in masses of distributed areas. So there's a lot more to do on the platform, even every service needs more and more enhancements as we continue to get more customers on, they get rapid feedback and push things out.

So Wamsi, you think about it this way, adding more services per se will not change dramatically things. It's make sure that whole value prop of simplicity, automation, OpEx reduction for customers and then focus on the workloads that really make the difference, right? And we have done a lot of analysis for the previous question from Tim on TAM, on specific workloads. It's not like there are hundreds. It's actually 40 in many ways. And we decided to focus on this one first. And then to Fidelma's point, keep adding more capability, keep adding more software, and then we start adding more workloads when it's the right time. We're going to pick our own domains. But as you said, right, edge, data are 2 very important aspects, security because of the more responsibility we take and more SLA driven it is, we will add more security to it. And obviously, we're going to monetize that through the offer itself. So that's how we think about it, right? And there is an enormous runway in front of us. And in terms of the growth, I will say, because this is as a service, right, if you take 3 years, is one thing, take 5, 10 years is a different thing. This takes time because you put in the balance sheet and it takes 3 years to unwind. The vast majority of the contract, which is great, by the way, are 3 years, some are 5 years. And what I love about this is that the consumption model, let's say, it was a quantity of one, the consumption is actually significantly above one. And our focus, I think, was the question before, I think from Aaron was our focus on go-to-market is not just starting with solution-oriented, verticalization and advisory and professional services. It's also the fact that we have a customer success, both introduce new way to sell because they are the ones that drive the customer relationship on a daily basis, and they are the ones that drive usage. It's activation and increased usage all the time. Now what are the things we're going to add? Listen, the edge is a huge opportunity. We have done a great job of the unification, the connectivity layer in the platform. But IoT and 5G are being added. I'm really excited about 5G. You're going to see some interesting things out there, both at the edge of 5G and other core of 5G. One of the things that people don't realize is that in our solution, we have core aspects of 5G that are necessary. And we're working with a very, very large telco that are adopting our solution for virtualization and orchestration and also consuming the virtual functions, a few of them that they need for 5G. That will come into the platform. And we have Tom Craig who runs the business with Phil Mottram on the traditional edge with Aruba and Fidelma working on that integration. And IoT is just an extension of what we do with new protocols. On the storage side, it's all about data services, right? I think we have a very robust -- traditionally, they see us as a traditional block vendor, if you will. But object and file are coming to the same platform, which means we extend the TAM. Think about the storage TAM, it's primary and secondary. Fidelma knows that market better than I do, she spent a lot of years there. In primary, I have file object and block, we have extended the time by going through the object and into the file. But again, we can do everything, and that's why one of the value prop is the openness and the choice and the flexibility and that's why these partnerships. And if you look at the show floor, go walk, Red Hat is there, AWS is there, Nutanix is there, VM is there. They all want to be in the platform, which is great.

Where are you going? Let's go to Simon.

And then we go to the left.

Yes.

Simon Leopold with Raymond James. So thinking about things you don't do, one of the categories is data center switching, which seems like it could be a logical fit. So if you could talk about why you either would enter that market in a bigger way or reasons for not doing it. But you're thinking on data center switching?

We are. But we are not in the corridor of data center switching. So we are what I call the intelligent top-of-rack switching. And you will see that portfolio as an extension of Aruba portfolio. So -- and we don't want to be another me-too. We are actually driving an intelligent software-defined fabric that is integrated into the platform. I think Brian mentioned this a little bit today in his demo, but obviously, it comes to the technical aspect of this. But think about, Simon, when I go to the edge of the data center, top of rack, you're going to see our offer there. And a customer that actually is asking us. Now when you go to the end of that row of racks or the end of the aisle, that is more complicated. And honestly, we don't see tremendous value there. I mean it is a heavy investment for not a lot of big return. And we believe that the collapsing of the stack, if you will, between networking, compute and storage to the software defined layers is a bigger opportunity for us, especially as the traffic gets driven by more of the application side, east to west versus north and south, and that's where we are. You will see that from us.

Great. Thanks, Simon.

Then we go left now.

Samik, please.

Yes. Samik from JP Morgan. Just a quick one actually. With the PCE offering for enterprises, you're obviously bringing the cloud experience to them. What gives you the confidence that as enterprises start using this offering, it doesn't sort of take them over the hurdle in terms of a lot of the hesitation of moving more close to the public cloud, and eventually, you are offering the same cloud services on a public cloud at the marketplace to enable and sort of PCE becomes a stepping stone in terms of how they move to the public cloud?

So let me take that. So I think we've spent -- that's always the first reaction of people is like if I give someone a cloud experience and I'm connected to the public cloud, then it's a 1 half, 2 half answer. And so I think some of it is about not refactoring your applications, okay, and running them as is. So first of all, easy migration, better TCO because you're not moving the data and not moving the application and integration into current workflows. It takes a long time within any organization to rip out applications, refactor them and move them to the public cloud. So that's kind of one piece. I think the second piece is as you start to embrace people using their current tool chains, that actually makes application development, stickier on PCE -- and so -- and it's harder than to move off again. But if it's the right thing to move, then people will move. But we don't actually see that happening. And because the other thing is if you take an application and you move it to a private cloud, the next thing is like, that's big planning for an IT organization. That's the next phase and this is the next phase of the life of this application. And in general, it will be the next 4 to 5 years before people think about moving their applications again. And at that time, we should have -- like we'll have other services that keep them there. So I think that's part of it. And the other piece of it is as we move more towards colos, now we'll have more multi-tenancy for customers where they can put more applications on there and be able to share in a better fashion.

Great. Thanks, Samik. We go to Kyle here on the end.

Kyle McNealy of Jefferies. Thanks so much for hosting us. It's clear through the demos, you put a lot of effort into the features and the software as a foundation of the GreenLake platform. Can you talk a little bit about how much of the software is priced on a stand-alone basis? If not now, what are your plans for the future? And for the software that's tied to the hardware, what are you doing to kind of enhance the monetization of that when customers are thinking about TCO and may think of it as a hardware and service subscription other than outside of software?

Yes. Great question, Kyle. So everything that we offer in the software space that kind of stand-alone is a SaaS offer. We are not in the license term model. It's a SaaS subscription. And that's why with John and the team have been working so hard to build both the subscription and a consumption. Consumption, obviously, is everything. Subscription is the SaaS subscription. And then for the software like, for example, for Lion, right, there is a price for the, call it, the infrastructure and the subscription to the software to run that infrastructure. And that's -- it might be a pure gross margin right. That's the simple answer. Now some of the software gets bundled, right, in the full combined rollout optimization. Therefore, the pricing gets sold bundled into one. But if you buy a server with a subscription to run the server, you buy this SaaS subscription, which, by the way, has a component of point XOS attached to it because you have to maintain that, right? So this is where the opportunity to expand the margin is pretty significant as we disaggregate that, price infrastructure, and we add the SaaS on top of it. But it's all SaaS.

Great. Thanks, Kyle. So we'll work our way back, we'll go to Sidney and then Meta, please.

Yes. And there's one on the far corner.

Right at the end there, yes.

Sidney Ho with Deutsche Bank. A question I have is on the partner program. And Antonio, you mentioned that a little bit earlier. I'm hoping that you can double-click on that a little bit. How do you think about the addressable market that the new program creates as compared to the old program? And how quickly do you think the uptake of that program is? And then maybe a clarification. On the stage, you talked about the Frontier thing. Is that an indication that the customers have signed off on the deal finally? And is that something that...

I can't comment on that, I can tell you right now because we are in the quiet period, I can't talk to you about that. And by the way, there are many deals in that phase, right? So we talked about that in the last quarter. But on the other question related to the topic you raised, I think there is several aspects of this, right? So I think about the journey we are on, right? And then how we're going to get there. In my view, we're still in phase in that transition as we go forward. And then ask me, again, the other piece of that, you were asking in the beginning?

Partner program.

So we have a, what I call an industry-leading partner program. It's called Partner 1 Ready Program. And what we announced today is the extension through what we call Partner 1 Ready Advantage. But it's one program. So you as a partner, you're a distributor, value-added reseller, solution integrator, you pick which part of the journey you're on. And the economics change, right? But the fundamental with 3 principles is part of the partner program. One is the build, right, which basically you sell a solution. One is the resell which means you can resell just HPE GreenLake or one is the service side, the managed services side, which you build your own services on top of our HPE GreenLake and you add your value on it. So at any point in time, they can monetize, they can decide in their own terms where to play and what value to bring. And we get one integrated partner program. We are the only one. Because in general, that we have a partner program for that, a partner program for that and then gets confusing. We give them the choice to decide where to play in this journey. We want them to come on to the other end, right, which is the as-a-service piece of it because in the end, it's a matter of relevancy. It's not just about, okay, if I'm a distributor, I want to make whatever, 2, 3 points, whatever the points to make they're going to decide that themselves. But if I want to add more value, and I want to add my own services, they can do that and they get paid for that. And that to me is very revolutionary because it's going to accelerate the question that Aaron asked earlier, which is explosion of the partners come into the platform. But they get one program with simple terms. Simple, simple terms. I think Rob was there.

Yes, we have Meta and then we'll finish off with Rod over there.

Okay.

Great. Meta Marshall from Morgan Stanley. You spoke a lot about kind of the partners and the openness of the ecosystem, which is obviously a great kind of attractiveness of the GreenLake platform. How does that alter how you think about other services and software to offer? Like the ability to not want to step on their toes and their opportunity but to still build your kind of software and services revenue base?

I don't think it creates a challenge. I mean we offer them. Again, in this context of what we said before, not every partner is created equally, not every partner has the ability to do those types of services, including by the way, the advisory and professional services side. It is a big cost of capital that you have to maintain. Obviously, there is shortage of talent. So we give them the ability to mix and match what they have, what we have and build an entire solution for the customers. They can decide whether to do it on our paper or on their paper, they can use our expertise or their expertise. And that's the beauty to your question about the Partner 1 Ready program. You decide how to build the offer from the menu of both companies. And you get paid, rewarded, if you will, for a base of what you choose. This is simple. We don't see conflict. We see complementary.

Makes sense. Rod and we have one more from. Rod, please.

I wanted to go back to the I guess what you've commented on, on the SAM slides and then the ongoing ARR growth. And this idea that the investors should give more credit for that, which is reasonable, I think. The question I have though, and I think one of the reasons people don't -- aren't giving you credit for it, there are 2 things. One, quantitative disclosure of those numbers, the revenue number so we can actually see what's happening there. . But two, the margins. When I look at your gross margins, they're still bouncing around in the low 30s. It's come up a little bit. But then we can explain those gross margin movements more by mix and what's been going on, we know in some of the end markets. We have a harder time clearly seeing anyway and that may be there the contribution margin from that ARR. And so I guess that's the question, what should we expect to see there on margins as we move the next couple of years that ARR continues to grow or the revenue contribution continues to grow?

Yes. You want?

Yes. So happy to take that, Rod. So you're right. So I think, well, number one, I mean, when you look at the as-a-service business, it is definitely very accretive to the overall company gross margins. And then what we started doing last year, to give you some more incremental disclosure was we started giving you the breakdown of what is in that ARR. So we give you sort of the mix of software and services versus the hardware versus the financing component. And so there's a slide in our earnings presentation that will break that down over the last 5 quarters. And if you look at the most recent quarter, the mix of software and services, as we've been adding more and more capabilities to the platform, has increased by 5 points. And as you can imagine, we're adding more and more software. We're talking software like gross margins 90% plus. That improves the overall margin mix. And so that's something we're also looking at longer term is what can we do from a disclosure perspective but we do provide that so you can get a sense of how that's performing overtime.

[indiscernible]

Sorry, can you give him the mic, sorry.

We looked at that slide and we do that math, and you're on track for, let's say, 7% of revenue that's ARR contributed this year. And if we were to put 90% margin on it, we could isolate that margin contribution, but we can equally calculate the margin trajectory by just looking at the mix of revenues and the fact that compute is a little bit lower in the mix. And so it's really still very difficult to see -- to prove what you're saying, even though I hear what you're saying.

Yes. I mean I think the -- when you look at the margin trend over time, which I think we have made substantial strides, I mean we went from kind of low 30s to we're now at 34%. And it's both a mix amongst the segments itself. So when you look at the higher growth segments like the Intelligent Edge or like our storage business, for example, those are growing faster. But then there's also a mix within each one of those segments that's getting richer. So like within storage, our owned IP products are growing faster. Those are obviously quite a bit richer than the third-party resell that we're doing. It's the same thing within the GreenLake as a Service business. That's obviously accretive to our overall company gross margins, but that business itself is becoming more -- the mix is getting more favorable to software and services. So you've got sort of a dual benefit of mix within a mix that's growing. And so I think you can expect to see that continue over time.

But Rod, I think we will continue to look at that and see what else we can provide as we continue to transform the business model, right? And I will say, Tarek has done a great job with the team and given more visibility and more disclosure than ever before. If you recall 2 years ago, we implemented the segmented view with a fully loaded P&L, right? This is why last quarter, we show the numbers with compute, more profitable than any other competitor I can see combined. But as we go forward and the mix keeps shifting, of course, we want to make sure you understand that mix. But again, if you have an ARR, which is approaching that $1 billion or so, with 2/3 being software and services, you can see what's going forward. And then you have these other pieces that may be more cyclical or compute going up and down. And that's why that 34% is incremental as we go forward, right? And to me, that's just the forest and the trees, as I call it. Well, I want to make sure I keep growing the healthy trees, which are the ones that are going to be long term, durable with higher margins.

Yes, one last one here.

One last one here.

[indiscernible] from Bloomberg Intelligence. So what does GreenLake fit in to the CIO, CTO, IT road maps over the next 3 to 5 years? And then it sounds -- also GreenLake also sounds like a land -- a closet land and expand type of strategy.

Yes.

How do I think about -- or how should investors think about it for the early insertion points to the land before you start expanding to the other platforms?

Yes, well, we want to think about this way. We want HPE GreenLake to be the beating heart of the strategy, right, where they get on the platform, they get all the services to run and innovate as they go forward. And once we landed the platform, it's all about driving consumption. And we see that those customers who are already on the platform are consuming more. And now they start consuming all the services from the ones they originally got from the platform. that may start with Aruba on the connectivity side. Now they need a VDI, they may need some ML Ops, they need backup recovery or it just happens I need to have a disaster recovery too. So that's the land-and-expand. But to end this point, the land doesn't come at a lower margin, actually came at a higher margin and accretive to the overall margins. With Fidelma, our focus is where we can add IP and monetize it. That give us differentiation and continue to work with our broader ecosystem that everybody asks and make sure we get them access, flexibility and control. And then ultimately, there is a monetization aspect to that as well. So for us, it's the beating heart of our strategy, right? And then from there, making sure they love the experience, no different how many times you go to Amazon is buy stuff you don't need. But the point is what problems we are solving for them. And that's where with Fidelma we are really focused on. And as we take that input, we'll continue to add more services and then expand the consumption.

[indiscernible]

Yes, absolutely. All of that. All of that, I mean, some of the examples are on the stage. But if you talk to customers here, they said, we are so excited to continue to consume more because now I'm refocusing my staff from brand and infrastructure to innovate on the data. That, to me, is magic because that means that they are actually transforming themselves, and we are more relevant to them than ever before.

Great. Thanks, Jim. So that's about all the time we have. Just want to thank everybody in the audience for joining today.

Yes, and thank you to the people online.

Antonio, any closing remarks?

Yes. No, I mean, I will say exciting time to be back together I really appreciate you making the effort to travel to see us. I think the best is yet to come. Just go see the demos, the show floor, talk to the people, so you get a better perspective. But as the CEO, I now haven't seen it all in the last 40 years. I mean it's just remarkable, all the challenges we have to deal with, natural disaster, geopolitical tensions, war, global pandemic, social injustice, supply disruption. By the way, the supply to me is a demand issue, it's not a capacity issue. I think that's where people don't get confused. Capacity has not gone down. Actually, capacity has gone up and increased slowly up. But the problem, it's a good problem. Demand has outpaced the capacity by a factor, 10x, if you will, right? And that's a good problem to have. However, obviously, we need to fulfill that. And I think things generally will stabilize and all settle. But what I'm really excited is that we have momentum, it's undeniable and customers are voting with their workloads and data on the platform. And that's why I'm excited about it. And the culture of this company is amazing. And you will see on the floor with the people. So thank you very much, and thank you for the people who joined online.

All right. Great. Thank you, everybody.

Thank you.