Barclays Expands a Hybrid Cloud Deal with HPE

It was no surprise when the UK’s Barclays bank announced this month the extension of its contract with Hewlett Packard Enterprise (HPE). The new arrangement builds on a ten-year contract Barclays signed with HPE in 2021 for management of its multicloud and hybrid cloud estate.

So far, that agreement has helped the bank migrate 50,000 workloads HPE’s GreenLake Private Cloud, with another 50,000 expected to be shifted over within the next three years.

The announcement is significant on several fronts. First, it highlights the use of private hybrid cloud management, an ongoing trend among large enterprises intent on protecting on-premises data while tapping the strength of public cloud services. The deal is also a success story for HPE, which is banking heavily on its private cloud HCI approach via GreenLake. And given Barclay’s stated strategy to advance its data management and AI functions, it’s possible that HPE could contribute its newly released GreenLake Private Cloud AI system (a partnership with NVIDIA) to that effort.

HPE Didn’t Displace AWS

Contrary to various articles back in 2021, Barclays’ IT estate managed by HPE GreenLake Private Cloud didn’t displace the bank’s reliance on AWS cloud services. Instead, Barclays has continued to deploy those services, as well as security services from Microsoft, along with other cloud-based deployments, in conjunction with on-prem applications.

Interestingly, though, Barclays seemed to have added GreenLake after declaring an "all in" commitment to the AWS environment that had been introduced in 2018. Back then, it seemed AWS was the only game in town for Barclays. “Our challenge is going all-in on public cloud – [namely] Amazon Web Services… We are not building a broker layer – we’re giving our developers full access to Amazon. And that’s really tough to build,” Nick Funnell, then head of cloud development at Barclays, reportedly said at the time.

Barclays continues to use AWS services and technologies to manage its international banking network, though its hybrid on-prem workloads are managed by GreenLake Private Cloud. There isn’t any direct evidence that GreenLake is directly managing AWS workloads, though GreenLake is integrated with several AWS services, including AWS Elastic Kubernetes Services (EKS) Anywhere.

GreenLake Management Expanding

Management compatibility with AWS and other cloud services could expand for HPE. Last month, the company announced the acquisition of Morpheus Data, which specializes in hybrid cloud management, including FinOps management.

“With the acquisition of Morpheus Data, we will take the next major leap to make HPE GreenLake cloud the de facto platform for innovating across hybrid IT,” said Fidelma Russo, EVP and general manager, hybrid cloud and CTO at HPE, in a statement.

And here’s how HPE defines hybrid IT in the same statement:

“Based on an analysis of the hybrid cloud market and core capabilities including infrastructure (comprehensive computing, networking, storage and private cloud - both hyperconverged and disaggregated architectures), hybrid cloud management (provisioning and orchestration), network virtualization and segmentation, data mobility across private and public clouds, complete set of runtimes (VMs, containers, bare metal and AI frameworks), a unified platform-based cloud control plane, enterprise-grade services (advisory, professional, managed and financial) and multi-vendor, multicloud services for IT operations management, AIOps, observability, cyber resiliency and security, sustainability reporting and FinOps.”

Whew! That’s a tall order. At the same time, HPE is intent on expanding the remit of GreenLake, starting now. The Morpheus deal represents a longstanding relationship between the two companies, and Morpheus has claimed that integration of its wares with GreenLake has been in play since 2020. It's not clear whether Barclays has taken advantage of these offerings.

Next Moves for Barclays

So what’s all this mean for Barclays? If, as the latest press release indicates, Barclays plans to strategically focus on data management and AI, GreenLake Private Cloud for AI could be a next step.

On HPE’s latest earnings call, CEO Antonio Neri underscored the relationship of data management to AI:

“GreenLake is an important component of our AI strategy, because ultimately, we manage a lot of the deployment on-prem through enterprise customers, specifically, through HPE GreenLake. And that's an accelerator and a way to upsell, cross-sell build maybe customers' confidence and control of the data, which is the fundamental value when it comes down to AI.”

In the same earnings report on September 4, HPE reported that sales of its Hybrid Cloud segment, which contains GreenLake, were $1.3 billion, down 7% year-over-year, and up 4% sequentially. Still, HPE is betting big on this particular product group, especially in view of the enterprise move to AI. Customers like Barclays could be crucial to this strategy.