HP Ramps Up Partner Financing Programs For SMBs

HP also rolled out a series of products and services Wednesday emphasizing "simplicity" in business operations, all of which bolsters the appeal of its financial program by targeting the smallest businesses -- those purchasing under $150,000 worth of products, including their first server.

"After the recession, many SMBs faced significant economic challenges. Our lineup is intended to drive out costs," Wolfe said.

The Just Right IT Portfolio, which includes the new ProLient server, is priced and designed for the smallest of SMB customers, said Lisa Wolfe, Worldwide SMB Marketing and Strategy Leader at HP. She pointed to the cost-effectiveness of the ProLient startup server, intended for businesses with less than ten clients.

A competitive financing program attracting a new kind of customer is essential. For one thing, top HP rival Cisco covers purchases from $1,000 to $250,000 as part of its own program. While both HP and Cisco now offer these services for their entire portfolio, including hardware, software and services, Cisco customers lease the products and services they buy with no interest to Cisco, and then own it.

In order to compete, HP has been focusing on advantageous pricing with its SMB financing program, first announced in January 2009. HP reviews its programs for renewal on a quarter-by-quarter basis. With the much-publicized departure of former CEO Mark Hurd raising concerns among many solution providers, this may have been a good time to expand and reiterate services aimed at solution providers.

HP may need additional incentives for SMBs in order to compete with Cisco's interest-free, flexible programs, according to previous reports. HP seems to have come to the same conclusion in its quarterly review of Just Right IT.

Aside from leasing and assets management, Wolfe stressed the presence of virtualized storage and wireless networking at speeds that HP says rival wired, landline services. In addition to providing affordable disaster recovery solutions, HP's all-in-one solution integrates storage, servers, and networking, she said.

These "bundles" of virtualized services offer a seamless, one-stop solution for VARs who can in turn provide end-to-end solutions for their clients, said Michael Cuno, a spokesperson for HP's Financial Services.

"The term 'small business' covers a large range," Cuno said, indicating that HP is not only focused on the "smallest" customers for whom the new ProLient microserver is available with "special financing." "HP mainly works through channel partners and solution providers to increase their margin and 'own' the customer by bundling services and products in one package."

HP is placing the risk on itself by promising an integrated solution. But while the solutions have changed and the pricing for the microserver has changed, HP's program already finances software as well as hardware, and networking. Furthermore, unlike Cisco, HP does charge interest depending on the program built-in to the monthly fee, Cuno said. He added that leasing is for a finite amount of time, and customers have the option of buying out the lease or waiting through the end of the leasing period.

For some solution providers, the difference in price between HP and Cisco's products and services makes up for any advantages Cisco's financing program may have. "Our experience shows that Cisco products still command premium prices, whereas HP is willing to accommodate budgetary restraints," said Stephen Allen, president of New York, N.Y.-based Integrated Technology Systems.

Allen said he has not seen any real changes in HP's financial services, but is altogether satisfied with the program as is. He credits HP's former CEO for working with the channel while cutting costs internally, making HP services more well-rounded than Cisco's, particularly with regard to integration of technology in different IT environments.

"They have the technical knowledge and the personnel to deploy those services," he said. "We haven't asked for anything that they haven't been able to deliver."