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Like its CEO, HPE storage in transition phase

Meg Whitman says it’s time for “a new generation” to take over Hewlett Packard Enterprise. She was talking about the CEO change when she made that comment during the company’s earnings call last week, but she could have been talking about the HPE storage portfolio as well.

Independent of the CEO switch from Whitman to Antonio Neri that will take place in February, the HPE storage technology focus is shifting from 3PAR arrays to Nimble Storage. The 3PAR arrays still generate most of HPE’s storage revenue but Nimble is growing much faster in revenue and influence inside the company.

HPE acquired Nimble for $1.2 billion last March. Whitman said the Nimble deal “completed our storage offering from entry-level to the high-end and accelerated our transition to all flash.”

The transition is ongoing. HPE storage revenue of $871 million last quarter grew only five percent over last year, a disappointing number for the vendor considering the 2016 results did not include Nimble. But Whitman said Nimble revenue increased 80%, while 3PAR sales were “soft.”

She blamed 3PAR problems on “a tough competitive environment in the mid-range and some go-to-market challenges in America.”

HPE hasn’t given up on 3PAR, and is working on changes to give the platform new life and bolster its sales team. But those changes rely on Nimble.

They include porting Nimble’s InfoSight predictive storage analytics across all PAR arrays. “This is going to be a game-changer for our storage business,” Whitman said. “Leveraging advanced machine learning, HPE InfoSight is the next step in our vision for an autonomous data center.”

HPE is also combining the 3PAR and Nimble sales teams under Keegan Riley, who led Nimble sales before the acquisition. Riley, who worked in Hewlett Packard storage from 2008-2012, is the VP and GM of HPE’s North America Storage Business Unit. Whitman said the HPE storage unit is also hiring more field specialists to support sales.

All-flash revenue increased 16% from last year, which pales compared to HEP’s 30% year-over-year all-flash growth in the previous quarter. Both Nimble and 3PAR storage includes all-flash and hybrid arrays.

HPE gave no results for its other 2017 storage-related acquisition, SimpliVity. Whitman several times mentioned SimpliVity among HPE’s significant acquisitions but did not break out any hyper-converged results.

When asked if the HPE storage platform needed to grow by picking up new products, Whitman said HPE would be “very disciplined” about acquisitions.

“If we found something that we thought was important in the storage business … and it was priced right, we might think about doing it,” she said. “And I promise you that Antonio and [CFO] Tim [Stonesifer] will continue that disciplined approach to acquisitions. And I will be on the board to make sure they do.”

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