HP blows hot over new Smart Office strategy

Hurricane Isabel failed to extinguish HP's enthusiasm for the SME sector at its recent launch event.

Hewlett-Packard (HP) chief executive Carly Fiorina is a force to be reckoned with in the IT industry, but even she had to admit defeat to another powerful lady, Mother Nature, when HP launched its SME strategy last week.

Against the backdrop of the US Small Business Administration's (SBA's) 50th anniversary celebrations, HP announced a £750m investment in the SME sector and launched its Smart Office strategy in Washington DC. On the same day Hurricane Isabel hit the capital.

Most of Virginia came to a complete standstill as the winds and heavy rain hit; flights were suspended and the main HP executives, including Fiorina, couldn't be there to launch the strategy. Technology came to the rescue and they made their keynote speeches via satellite link-ups.

Even President Bush, who was due to make a speech at the SBA event, was beaten by the storm and forced to retreat to Camp David. Vice President Dick Cheney took his place and spoke about the importance of SMEs in the US economy.

With the ink barely dry on its PartnerOne contracts, HP has been quick off the mark with its follow-up strategy, which is aimed at driving business through SMEs.

The vendor claims that $21bn of its sales and 50 per cent of goods and services spending worldwide last year was in the SME sector.

Using PartnerOne as a foundation, Smart Office is built on three core principles: providing the right expertise through channel partners; delivering 'better together' technology that integrates and works effectively; and ensuring that technology is easy to own.

During her keynote speech Fiorina said that HP is hoping to "extend its leadership as the preferred go-to partner and supplier of technology to SMEs".

Fiorina said that Smart Office will provide tailored support services and products, both direct and through its partner network, to help SMEs manage their business needs.

"We are a company with the widest unified partner network in the industry and we know how, when and where technology is needed the most," she said.

"Just as SMEs are the lifeblood of our economy today, technology is the lifeblood of SMEs. What they want to know is that they are buying the right technology, that it will work the way they need it to work, and that if something goes wrong it will be fixed right away.

"SMEs want to spend their working days worrying about customers, contracts, employees and payrolls, not technology."

HP also launched more then 100 products, solutions and services at the event. These included HP Care Pack services that provide application support, data back-up and recovery for SMEs; a range of new printers and projectors; and a 'Smart Finance' scheme which the company claims will simplify multi-vendor purchasing, trade-ins and recycling, either directly or through partners.

The vendor also launched a 'Mobility Now' initiative incorporating the HP Mobility Solutions Center, an online resource for wireless solutions such as hardware, software and service packages.

Resellers will also be able to sell HP-branded services to SMEs alongside their own services, according to John Brennan, senior vice president of HP's small and medium business segment operations.

"The SME sector is a very strong part of the [global] economy, worth over $460bn at present, and is predicted to grow to $660bn over the next four years," he said.

"The whole partner network plays a very important role in the SME business segment and a lot of what we are doing is trying to build on PartnerOne.

"SMEs want solutions built for them from the ground up, rather than enterprise level solutions scaled down.

"With Smart Office we can provide these solutions for SMEs through our partners. One thing is for sure: partners will play a critical role in our future strategy."

However, the initiative has received mixed reactions from channel partners. Shaune Parsons, managing director of HP Centre of Excellence Computer World Wales, said: "You can look at this in two ways. HP is either working with partners, or trying to push into the SME space itself and cutting partners out. I hope it is the first option."

Parsons added that the UK is a different market to the US and Europe, because it is a more tightly knit community.

"It is not a big enough marketplace for HP to muscle in and take away the small amount of business VARs have already. This is a worry that a lot of partners in this country have. VARs are best placed to deal with SMEs because we can deal with them on a local level," he said.

"I think there is going to be a lot of discussion to come on this, especially as a lot of partners are still trying to get their heads around PartnerOne, and find out the situation with rebates."

Another VAR, who asked to remain anonymous, said: "Technology spending is still anaemic among enterprises, but SMEs are chugging along and HP would like a piece of that. It is trying to become another Dell, and wants to decide what crumbs to pass on to resellers."

Clive Longbottom, service director at analyst Quocirca, added: "It is odd that this has been launched at the same time that Sun launches its new 'all-in-one' SME solutions.

"This is good news because vendors have been talking for years about providing solutions and then just selling components, but having 100 extra products is not the way to simplify things.

"This means we have a channel that has been provided with a whole new set of [products] that they will need to knit together to provide the solution. It's a bit like Ford sending its franchises a kit of parts that could be put together to make a car.

"Most SMEs want a specific package, such as a fully secured Wi-Fi environment or salesforce/contact management systems. This is the type of thing HP should be looking at."

But Abdul Terry, marketing manager at reseller Equanet, said: "It is too early to judge this initiative. Several vendors have been pitching new programmes targeting the SME segment in the past year or so.

"We at Equanet are very keen to understand how this latest initiative will be different; how HP has learnt from the issues with the PartnerOne launch and how it proposes to involve the channel."

Loay Lawrence, business manager at Ideal Hardware, added: "It is obvious that HP is after the SME market. I have worked with HP for a long time and it is very much in favour of involving the channel.

"Its whole infrastructure is around doing this. HP is working on a building-block basis and, now that the foundation has been set with PartnerOne, it needs to keep adding bricks to keep the momentum going."

Lawrence suggested that IT is slowly seeping into all corners of the SME sector, creating a good opportunity for the channel.

"Although there is talk of too much competition in the SME space, only HP and Fujitsu provide everything from palmtops to big business-critical servers. Vendors such as IBM and Dell don't quite cover the whole spectrum," he said.

"It is going to be an interesting market to watch, especially as SMEs continue to become more aware of the need for technology in everyday life."