HPE’s CEO has likened its new repricing policy to a “surcharge” on increased component costs, claiming its customers “all understand” the dynamic.
As exclusively revealed by IT Channel Oxygen, HPE on 5 February informed partners it had tweaked its Ts and Cs to enable price adjustments “up to the day of shipment”.
The move garnered mixed feedback among partners, with some warning that post-PO price increases may be “impossible to pass on”.
On its Q1 earnings call last night, HPE CEO Antonio Neri sought to put the move into more context, saying DRAM and NAND now make up “over half” of the bill of materials cost of a traditional server (with that share expected to rise further).
HPE has taken a “very agile posture” in response, Neri said on the call (see transcript here)
This includes “reserving the right to increase the price from the time we quoted the product to the time we ship it”.
“When I had this discussion last week with all our European customers, they all understood that dynamic,” Neri said.
“What they want is lead time transparency, clarity of the price increase.
“Think about it this way… what is the memory cost and the NAND surcharge, right? If you quoted X, now the cost is Y. What is the difference between X and Y? You are very transparent on what the surcharge for the increase is. That’s what we’re doing.”
“All of them said, ‘Okay, I understand the price increases”
HPE’s revenues for the three months to 31 January 2026 hit the high end of its outlook range as they leapt 18% year on year to $9.3bn (with the contribution of Juniper Networks thrusting networking to 30% of the total).
Although the vendor tempered its full-year outlook for server and storage growth, demand is not an issue, Neri indicated.
“I met with a lot of customers in Europe. There was not one single customer that told me, ‘I don’t want the product because now it’s too expensive or higher price than I thought’,” Neri said.
“All of them said, ‘Okay, I understand the price increases. What we can do to shape the demand; maybe a different configuration. Some may take a lower-end configuration to get the product’, but it was all about speed to get the product, not the price.”
HPE’s Q1 networking revenues leapt 152% on a reported basis to $2.7bn, while its server, storage and financial services business (now named ‘Cloud & AI’) saw revenues fall 2.7% to $6.3bn.
“We believe the customers now have the clarity [on] which path to follow between Juniper, Mist and Aruba Central,” Neri said of its networking business.
“We did a very good job laying that foundation, because we now have every possible deployment capability. In Europe, obviously, they favour more sovereign disconnected offers versus a cloud connected offer. When there is a cloud connected opportunity, we lead with Juniper Mist. When there is an on-prem virtual private cloud or disconnected requirement, we lead with Aruba Central.”
HPE expects full-year revenue to grow by 17-22%, in line with its previous outlook.
