HPE Financial Services Mounts $2B Coronavirus ‘Payment Relief’ Program
‘The economic impact on customers and partners from this program is going to be substantial,’ says HPE Financial Services President and CEO Irv Rothman. ‘This is an allocation of funds that we have set aside to specifically help customers with financial challenges coming from the crises including cash flow and liquidity.’
Hewlett Packard Enterprise Financial Services (HPEFS) is mounting a massive coronavirus relief effort with $2 billion in financing largely for a blockbuster payment relief program.
The Payment Relief Program allows customers to defer over 90 percent of the total contract value of products and services until 2021. The terms allow customers to pay just one percent of total contract value each month for the first eight months.
The $2 billion initiative is aimed squarely at helping customers and partners get through the “unprecedented” financial fallout from the coronavirus pandemic, said HPE Financial Services President and CEO Irv Rothman.
“The economic impact on customers and partners from this program is going to be substantial,” said Rothman in an interview with CRN. “This is an allocation of funds that we have set aside to specifically help customers with financial challenges coming from the crises including cash flow and liquidity. This allocation is intended to show our continued commitment to our customers and partners to help them navigate through this challenging time.”
Besides the Payment Relief program, HPE is also proactively working with customers hit hard by the crises with “forebearance” programs. Those programs- which allows customers to temporarily stop making payments – will be implemented over the next 90 days, said Rothman.
“If we have customers who can’t pay the bill, we are going to give them some extended forebearance because we don’t want them to go out of business,” he said. “We need to take care of our customers and work with them so that when the recovery does begin they have the opportunity to get healthy again.”
The forebearance effort – along with new financing offerings like the Payment Relief program- are the kinds of financial assistance that save jobs in a financial downturn, said Rothman.
“The idea of providing forebearance and extended payment terms for customers will hopefully preserve jobs much like the federal government is doing with the stimulus program,” said Rothman. “This gives customers room to breathe and room to operate. It gives them an opportunity to get through these next few months and prepare for when things improve.”
Rothman, a 47-year financing veteran who has navigated multiple crises such as the 2008 financial meltdown and the Sept. 11 terrorist attacks, said the coronavirus pandemic has created a financial crises of epic proportions.
“This came from out of the blue,” he said.”The severity is unprecedented.”
The digital transformation that will be fueled by the HPE Financial Services investments is going to allow many companies to rebound once the pandemic is over, said Rothman.
“I don’t know the shape of the recovery or when it is going to come, but there is going to be a recovery,” he said. “Customers need information technology infrastructure. The time to be investing for the recovery is actually now.”
Rothman advised partners interested in taking advantage of the payment relief or forebearance programs to get in touch with their HPEFS sales reps.
HPE partners said the HPEFS payment relief program is a financial lifeline that is going to save jobs and fuel IT investments.
Dan Molina, chief technology officer Nth Generation, San Diego, one of HPE's top enterprise partners and No. 354 on the CRN SP500, said he expects the HPEFS Payment Relief program to provide much needed financial relief for customers.
“This is a very significant relief offering by HPE Financial Services at a time when revenue flow into many organizations is highly constrained or has stopped completely,” he said. “We think we can help many of our customers get through this crises with this payment relief program. The flexibility to acquire needed technology without a major capital outlay is going to be very welcomed by our customers.”
The payment relief program is going to accelerate work at home initiatives that likely would have been unable to get off the ground without HPEFS assistance, said Molina.
“The bottom line is many organizations were not properly set up to work from home,” he said. “That has created an urgent need for the right infrastructure and architecture to enable remote work. This is going to allow companies to comply with social distancing and maintain business productivity with the right work at home solutions. Ultimately, this is helping the country to maintain social distancing which is saving lives. At the same time, we are doing our part to help our clients stay productive and keep the economy going.”
HPE Financial Services is a storied institution that is more critical than ever before especially as HPE and partners pivot to the HPE GreenLake pay per use model, said Molina. In fact, he said the HPE FS payment relief and GreenLake is a one-two punch that will help partners through the coronavirus crises. “We have a very rich HPEFS portfolio of financial options for our clients to continue to sustain business, stay productive and safely shelter in place with technology,” he said.
Chris Case, CEO of Sequel Data Systems, an Austin, Texas-based HPE partner, said he is glad to see HPE and HPEFS stepping up to help customers through the crises. He applauded HPE for being a steady and trusted partner in both good and bad times.
Sequel has seen an uptick in work at home initiatives and its VMware business remain robust in the wake of the coronavirus pandemic but Case is worried about the impact in the second half of the year.
“These HPE Financial Services are going to be a great tool to move companies forward with IT projects,” he said.“My fear is that in the commercial space there is going to be some paralysis as companies evaluate the damage, figure out what they can and can’t do. I think you are going to see a lot of companies reevaluate their entire IT plan over the next 12 months.”
Paul Cohen, vice president of sales for New York-based PKA Technologies, one of HPE's top Platinum partners, commended HPEFS for being “sympathetic and customer friendly during these uncertain times.”
In fact, Cohen said the payment relief offer is another sign that HPE and HPEFS are “constantly thinking about the financial health” of their customers and partners.
“For those organizations struggling to meet payroll,maintain business continuity and meet business priorities this flexible and generous financing model is a good solution,” he said. “Historically HPE Financial Services has always been a good partner. They have always been creative in crafting deals that make sense for customers and us.”
HPE GreenLake pay per use is another critical option for customers in the wake of the coronavirus crises, Cohen said. “GreenLake preserves cash and enables customers to go forward with their digital transformation and IT strategies,” he said. “Now more than ever GreenLake is a game changer for customers.”
Rothman said he sees HPEFS as more critical than ever with HPE pledging to offer its entire portfolio as a service by 2022.
“We have a unique ability to integrate financing and asset management solutions,” said Rothman. “I think we have the best platform in the world. This is to the advantage of our customers and partners. Today, customers and the partners taking care of them need operating flexibility. You can’t have operating flexibility unless you can manage asset risk and nobody is better at it than we are.”