Data center News
HPE Financial Services’ ‘Force For Good’ Financing Program Is A Sustainability ‘Game Changer’
‘Providing the most attractive financing and the most economical financing for sustainability as HPE is doing here is a game changer,’ says Softcat Business Development Alastair Wynn. “It makes sustainability more accessible.”
Hewlett Packard Enterprise Financial Services’ new Force For Good financing program is a sustainability game changer that competitors will be forced to follow as a result of increased customer demand for sustainability and the circular IT economy, partners told CRN.
The HPE Force For Good financing offering is a breakthrough that is sure to accelerate global sustainability and reuse of IT assets with competitors following suit, said Alastair Wynn, business development director for Softcat, the largest reseller in the UK, which has invested heavily in establishing best in class sustainability initiatives and offerings.
“Providing the most attractive financing and the most economical financing for sustainability as HPE is doing here is a game changer,” said Wynn, who has worked in earnest on sustainability initiatives for Softcat for the last five years. “It makes sustainability more accessible. It takes the price and the economics out of the equation to make sure that a customer will make the right choice for what is right for their business and what is right for the planet.”
[RELATED: HPE Financial Services Is For The ‘First Time’ Ever ‘Rewarding’ Customers For Sustainability]
HPE is setting the pace with an end-to-end circular IT economy offering that other vendors will need to follow as a result of the increasing demand from customers for circular economy sustainable solutions, said Wynn. “By doing this, positive change is being influenced,” he said. “This will drive and encourage others to follow suit.”
The Force For Good financing combined with HPE’s circular economy prowess is going to propel a “paradigm shift” in the industry that will cause others to follow suit because of the more attractive financial terms associated with sustainability and green economy circularity, predicted John Mayer, vice president & global leader/ general manager of worldwide channel financing for Ingram Micro, the $55 billion distributor behemoth that has made IT asset disposition and circular economy a key tenet of its go-to-market strategy.
“This is going to put some turmoil in the industry because not all players operate like this, they still just provide financing,” said Mayer, a 42-year IT industry finance veteran who is a big proponent of the circular IT economy. “The ones that don’t have an ITAD (IT Asset Disposition) and a circular strategy tied to their financing solutions are going to have a harder time competing. HPE FS is going to have a very, very long lead because they have got all the pieces. They are doing it at the right time with the right message. This changes the industry.”
HPE’ Financial Services’ Force For Good financing program, which was announced Thursday, for the first time ever rewards HPE customers that demonstrate a commitment to sustainability. Eligibility for the new financing will be determined by Dun & Bradstreet’s ESG Intelligence’s ESG Rankings and other factors, said HPE.
The HPE Financial Services sustainability effort includes a broad based commitment to the IT circular economy with programs that allow customers to monetize digital transformation by selling older IT assets back to HPE Financial Servics for reuse with a second or even third life for older IT assets as certified preowned. The certified preowned offerings have become even more popular in the wake of the supply chain crisis sparked by the global pandemic.
“HPE is leading the way with sustainability propositions and initiatives like this,” said Wynn. “We love the fact that this is circularity in motion. It is around second use of products and the accessibility of technology. It’s good technology that closes the loop on second use, take backs and decommissioning and makes that more attractive and accessible for organizations.”
Sustainability Requirements For Purchases Are On The Rise
Customer demand for IT purchasing sustainability requirements is on the rise with one in five deals or 20 percent of IT spending led by public sector moving to a circular economy in which IT assets are reused as part of a sustainability commitment, said Wynn.
Sustainability is now part and parcel of every customer conversation whereas a few years ago it was only one or two customer conversations a week around sustainability, said Wynn. “Every conversation involves sustainability, there is not a day that goes by where I don’t talk about sustainability,” he said. “Are we there yet? Absolutely not. But uptake is growing and momentum is building.”
Wynn praised the HPE Force For Good financing as an innovative offering that goes beyond window dressing to deliver a full “net zero value chain” from the vendor to the solution provider to the customer in a circular IT economy model. “This is what customers want and are going to expect,” he said. “I commend and congratulate HPE for doing this. This is what we want and what we need and what we feel like the market requires.”
Softcat, for its part, has made a broad and deep commitment to sustainability, achieving its commitment to become a carbon neutral organization in 2021, a year ahead of schedule. Softcat also was the first FTSE 250 index company on the London Stock Exchange to commit to the UN’s Sustainable Development Goals and receive a five-star rating.
Softcat has also committed to a carbon net zero value chain by 2040. “That is a monumental challenge, one that we can not solve alone,” said Wynn. “That is why we require the action,intent and momentum from partners like HPE and others to drive change… We need things like this to allow us to deliver that net zero value chain.”
The HPE circular economy effort is opening the door for more companies to reuse or dispose of IT assets in a responsible and sustainable way, said Wynn, who only last week visited the HPE Technology Renewal Centre in Erskine Scotland with a Softcat team. The HPE program “eliminates” any obstacles associated with the reuse of IT assets with a “proven and scalable partner,” he said.
“There is not enough of this being done across the market today, there are not enough end to end services like this with take back, decommissioning and redeployment of gear,” said Wynn. “HPE here is putting in place a model to combat that problem.”
More customers are opting for certified preowned and refurbished IT equipment in the wake of sustainability concerns and the shortage of newer products sparked by the pandemic driven supply chain crisis, said Wynn. “The customer really wants peace of mind knowing the vendor is going to back it and endorse it,” he said. “HPE is doing that with certified preowned. This gives the customer the ability to make an informed choice.”
Adding Nimble Gen 5 all flash arrays to the the HPE Certified Preowned Portfolio is another “huge” step forward for the reuse of IT assets, said Wynn.
Mayer said he sees HPE FS as the undisputed “leader” in the global ITAD, sustainability and circular economy just as customers are looking for sustainability solutions. “What HPE FS is doing is they are bringing ITAD into the financing solution in such an integrated, dove-tailed way that it is good for the customer,” he said. “Customers are now buying not just on better rates and the solution but what are you doing for the world, the environment, circular economy and sustainability.”
Pandemic Has Acclerated Move To IT Circular Economy
The pandemic has accelerated the move to the circular economy with more customers embracing second and third life of IT assets that were in short supply because of the supply chain crisis, said Mayer. “ITAD really came into its own during the pandemic,” he said.
Ingram Micro’s highly regarded ITAD and circular economy business soared as much as 35 to 50 percent in volume with the pandemic, said Mayer. “The pandemic helped the circular economy story line because customers were using assets longer and using more remarketed IT assets,” he said.
With interest rates on the rise, ITAD, circular economy and financing are key to success in midst of the current economic headwinds, said Mayer.
As rates rise, customers from small and medium busineses to large enterprises are increasingly looking for innovative financing and circular IT economy offerings, said Mayer. In fact, he said, the current environment is driving an exponential increase in circular economy financing solutions.
“With the circular economy, companies are looking for solutions where they can have the hardware, software and services with financing,” he said. “They don’t want to own the asset. They don’t want to bring an asset on their books. They want a solution. They want to pay for a solution like going to the cloud. That is where everything in our industry is going. Financing companies have struggled because if you are going to offer a circular solution you need to have a really strong ITAD capability.”
Mayer predicted that companies providing just financing are going to struggle without a robust circular economy offering that includes IT Asset Disposition. “There is going to be a lot of fallout in the finance industry for companies that haven’t jumped on where things are headed with a circular as a service solution,” he said.
Circular economy, in fact, is becoming as important as cash flow for companies making IT purchases, said Mayer. “Customers are going to start buying and actually paying a higher rate for a company that has an ITAD and circular economy strategy versus just IT financing,” he said.
Ultimately, the Ingram Micro and HPE Financial Services’ circular economy offerings are going to end up being a significant “differentiator” for solution providers, said Mayer. “This is going to wind up being something that partners can market to differentiate themselves in a massively competitive environment,” he said.