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HPE storage still on its Nimble high

Hewlett Packard Enterprise extended its impressive storage turnaround last quarter.

For the second straight quarter, HPE storage revenue increased 24% year-over-year – jumping to $912 million for the period. Now, that includes revenue from Nimble Storage that HPE didn’t own the year before, so that 24% is inflated. But HPE’s organic growth – without Nimble revenue – increased 14% from last year. That’s better than the 11% organic growth from the previous quarter well above the overall industry growth.

When the $1.2 billion Nimble deal closed in April 2017, HPE storage was at rock bottom. It declined 12% year-over-year in the first quarter of 2017 and dropped 13% year-over-year in the second quarter. All-flash sales for the HPE storage flagship 3PAR platform were below  its competitors’ all-flash growth and the company pointed to “execution” problems in the wake of the Hewlett-Packard breakup.

A year later, HPE storage is soaring. Its all-flash growth of 20% remains below rivals such as NetApp and Pure Storage, but the InfoSight storage analytics that HPE gained in the Nimble deal helps the vendor stay ahead of the rush to use artificial intelligence in IT management. HPE has extended InfoSight to 3PAR as well.

HPE CEO Antonio Neri said his company has gained market share in storage in 10 of the last 12 quarters.

“We actually executed way better than last year,” Neri said of the HPE storage team. “Last year, we had some execution challenges, particularly North America. We think we have addressed those issues. And when they think about the opportunity, the market, obviously, all-flash continue to be a significant opportunity. This quarter, we grew 20%. And we are really excited about our portfolio. With our AI technologies built into both in Nimble and 3PAR,  that is something that’s resonating with customers.”

Neri pointed out HPE storage is unlikely to increase 24% year-over-year next quarter because the third quarter will include Nimble revenue from 2017. But if it can keep going with its double-digit organic increase, HPE will almost definitely continue to take market share.

HPE stood second behind networked storage leader Dell EMC in the latest IDC numbers, from the fourth quarter of 2017. According to IDC, overall networked storage revenue grew 1.4% year-over-year in the fourth quarter of 2017 and 4.1% in the quarter before that. All-flash array revenue grew 38.1% in the third quarter and 15.1% in the fourth.

HPE also reported it more than doubled revenue from its SimpliVity hyper-converged platform, although that product was in its early days under HPE’s banner a year ago. HPE acquired SimpliVity for $650 million in Jan 2017.

Neri said last week’s Plexxi software-defined networking acquisition will help both its hyper-converged and Synergy composable infrastructure products.


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