 TheCube presents HPE Discover 2022, brought to you by HPE. Welcome back to HPE Discover 2022. My name is Dave Vellantem here with my co-host, John Furrier. John, we've been watching the evolution of HP to HPE. We've seen Green Lake when Antonio Neri, I called it, I called it Burn the Boats. He goes, no, no, no, it wasn't Burn the Boats. I said, okay, burn the bridges, but it was all in on as a service on Green Lake. And we're going to talk about that. Brad Shapiro is here. He's the vice president and managing director of the enterprise business at HPE Financial Services. Brad, good to see you. Good to see you as well. Yeah, you guys got it all started when Antonio was trying to lay down the gauntlet and said, this is where we're going. Let's make it happen now. Of course, the first place he turned, I would imagine, is the financial services. He said, okay, how do we start this today? Can you help us? And they take us back to that. Yeah, sure. Yeah, HPE Financial Services, it's kind of a foundational element because when you think about it, asset management is really what we're doing here. And I know asset management's a big word, right? And it can mean lots of things to different people. In this context, we started looking at how do customers manage assets over the life cycle? And a lot of customers, while they were interested in a consumption model and looking at Green Lake for their private cloud, they were certainly looking at public cloud for certain workloads. And then maybe even traditional data center for other activities that they're running. So it's really that hybrid environment. But they were stuck going, well, hey, I'm in a CAPEX model today. How do I get out of CAPEX and really get into this hybrid model? And that's where asset management comes in. So one of the biggest initial focuses, and we continue to have that focus, we call it our accelerated migration offer. And it's really us going in and acquiring the customer assets, moving it on to HPE's balance sheet, and then figuring out what are we gonna do with those assets, which are gonna stay in use under a consumption model, which are excess, and we can put through our asset upcycling process. We monetize the majority of that, put that back into reuse, and then maybe a small amount gets recycled. So really focused on the assets and accelerating customers transition to green light. Did you see, or are you seeing a difference between traditional leasing customers who already kind of on that model, versus like what you just described as sort of the CAPEX was more complicated, you got to get, I presume, procurement involved, legal issues, and was there a lot less friction with the leasing customers? Well, you know, I look at leasing and financing very similar to CAPEX. It's a much more traditional model versus this new as a service experience. So if they were in a leasing model, we could convert those leases into GreenLake. I wouldn't say one was any more difficult than the other. They were both really traditional mindset and not really looking at a consumption model. So I think we had our fair share of both, and I think we have, and are able to address, both customers moving into a consumption model. Brett, how does this tie into sustainability because we have on one end of the spectrum the high end sustainability, the science and the behind it. Tactically speaking, companies still now want to operate in this kind of, there's a sustainable angle here. Talk about that piece of it. How does that tie in? Obviously consumption versus CAPEX, you're building, you're not building. What does that thread through the sustainability angle? Yeah, so first let me just say, sustainability is really important to our customers. And we're seeing it all over. It is real. The good thing is that you can get business value out of the solutions and have a more sustainable model. So when I think about, and I talk to customers about sustainability, there's a number of fronts they're focused on. One, their customers believe it's important. So they're focused on making sure they're driving sustainable models. I've seen an increasing number of customers, both commercial and public sector have sustainability requirements in their tenders, in their RFPs, and you have to be able to comply with those. Second, they look at it and go, how do I attract talent? It's increasingly important for them to attract talent. And then really if you- Because they want to work for a mission driven company that's sustainable. Absolutely, absolutely. And the third area is investors. The investment community is now looking at ESG in whole and certainly environmental impacts in where they're making an investment. So a quick personal story. I was talking to a friend of mine who works for a hedge fund and he was telling me over the last year they've hired a whole team that's focused on just doing analysis of companies ESG initiatives, determining where they're going to invest their money. So it's a Wall Street thing now. So this is real from a number of angles where sustainability has an impact. Now, how we play in that, clearly when you go to a Green Lake consumption model, the idea is improving utilization of the asset. So driving higher utilization means you need less assets. Over time, the secret is we're going to sell you less. You're going to have less assets but you're going to have higher utilization. That's good for the environment. Where HPFS comes in is when those assets are done, we put those assets back into reuse. So we have remarketing facilities, one in Andovermass, one in Erskine, Scotland and then we have 80 different facilities. We have partnerships around the world and our focus is how do we drive more reuse? 85% of the assets we get back go into reuse and when you look at servers and PCs and things like that, it's over 95% go into reuse. So a real focus on reuse is good for the environment as well. And then needless to say the new technology that goes into a Green Lake deal, we're seeing like 30% energy savings coming out of those environments. So all really good stuff related to this thing. It's interesting, I mean a couple of points there is one is, you know, Benioff kind of got it all started. Pre-pandemic, he was out talking about, you know, sustainability and ESG and a lot of people were like, no way, it's all about bottom line profits. So he was ahead of that and I guess, you know, back to Lisa, you were always in the residual value game but now it's a little different, isn't it? Yes, you got to figure out what the value of that asset's going to be but also there's a sustainability aspect of it as well. Yeah, absolutely and the pretty cool thing here is while you drive sustainability, we're also seeing customers that go into Green Lake. We had a good example with Kern County, a 42% savings over their capex environment when they moved to Green Lake. So it was better for the environment and significant savings. So you can have, kind of like have your cake and eat it too. You get better environmental impacts and you're getting better bottom line performance. There's a business case there too. Now, we kind of, I was talking up front about the early days of Green Lake it was a financial model and now it's evolving to actually a technology model. We heard Fidelma with the platform. How has that, or has that changed the way that financial services, your group, approaches the market? Yeah, so it's a great point. When people talk about Green Lake, they think about the old days and look, I've been around a while, I remember the flex capacity. Yeah, of course. This isn't flex capacity. I mean, the platform's amazing and it really starts to bring to life the whole thought when we talk about hybrid. There are workloads, sure they might belong best in the public cloud. There are workloads that belong best in the private cloud under the HPE Green Lake model and there are still workloads that customers may say, hey, look, I've got legacy applications. I'm going to continue to run them in a traditional data center. And so from an HPEFS perspective, we look at this not as a leasing and financing company, we're looking at this on how do we leverage the customer's existing assets? How do we create incremental budget using those existing assets? And then what kind of model best serves that workload and then how do you optimize the capacity and the spend on that? So, you know, an interesting note, in the past year, we put $500 million back into customer budgets by just leveraging their existing IT estate and it's not all HPE product. You know, we're monetizing third party products in the data center, in the network, in the workplace. So we can really look at, we call it any tech, any time, anywhere. We look at all the technology and really assess what's the best way to leverage that investment and get the most out of it. Yeah, I mean, it's really evolved from just recycling assets for profit, but integrating the business model into the value proposition, the core value proposition in GreenLeg. That's great innovation and congratulations on that. My question for you is more kind of zooming out at the market. From your perspective in financial services at HPE, what has the pandemic proven to you guys? How has it changed how you guys work and how has it changed the customer environment? Because you mentioned assets, I think real estate. Oh, no one's going back to work. No one's been in the office. How has the market changed with hybrids as a steady state now coming out of the pandemic? What are customers doing with the assets? What are some of the trends that you're seeing in the customer base? Yeah, so look, I'll give you my personal perspective of what I think about as a business leader. And when I talk to customers, I think we're all thinking about the same thing. So I start with experience. What experience do I want to create for my customers and very closely linked to that, my colleagues, right? So the people working in our organization, what experience am I creating for them so they can in turn create that experience for partners and customers externally? So experience is one thing. The second is innovation, right? We spend a lot of time thinking about what's next, where do we want to go? What's the innovation? And more and more that innovation is all digital, right? So digital transformation is huge within my organization and it's huge within all of our customers. Dave, I think the last time we talked, I was in my living room on a little laptop screen in Zoom and I think I used the analogy, every business is now a digital business, even my pizza shop in Jersey, right? I mean, everything was online, curbside pickup. So what I'm finding is the trends in terms of how to leverage technology is how do you create that customer experience and then how does digital now blend as we're coming out of the pandemic and you're now able to go into restaurants and stores? How do you blend digital with that in-person experience and maybe leverage the best of both, right? And how do you do that in a seamless way to really give customers choice and give them that smooth, seamless experience? So that's what I see happening and what we're trying to do with our asset management plays with the financial modeling we do is how do we get more of that spend going to innovation versus maintenance? And that's a big key because you have to be fast. So I talk about innovation, I talk about customer experience, speed to market. I mean, in the bar keeps getting higher, right? It's like, as soon as you think you're fast, you're slow because you have to keep, the ball keeps rolling. We heard yesterday on theCUBE from one of the HP Point Next executives said, you got to perform and transform. At the same time. At the same time and you got to know where the people are going to land and how the assets are going to be distributed. And to your point, Brad, from our virtual interview, you're so right. I mean, every business has to be a digital business and my personal story, and John, you know my brother, Rich, he was the executive chef at Legal Seafood, right, pandemic, so then that was a place, you wanted to go to that restaurant, the famous restaurant in Boston when they reopened, they weren't ready, right? They didn't have the digital story together. They ended up having us, we were just at Smith and Walensky's. They end up selling to Smith and Walensky's and you drive around, you see, a lot of these retail businesses are shut down, right? And so, okay, so they weren't able to get through that, cross that chasm and digital transformation. A lot of businesses were able to and make it a tailwind. Yeah, and look, the other thing I think all businesses are focused on right now with the labor market is talent. And so, when you think about all of these things tying together, you want to drive, you know, innovation, you want to drive your digital transformation, you want to make that environmentally sustainable and I think all of that, if you start putting all that together, those are the companies that are going to attract the talent in the marketplace and really there's a battle for talent. And you want to make it profitable. Of course. Brad Shapiro, thanks so much for coming. Thank you. Great to see you face to face. Yeah, likewise. Thanks. All right, keep it right there. John and I will be back. We're wrapping up day three of HPE Discover 2022. You're watching theCUBE.