HP's New SMB Strategy: Services

HP has outlined its new SMB strategy, and it's spelt services. The flavor was
clear from its 'SMB World' launch event at Vietnam's business capital, Ho Chi
Minh City. As Saigon went from sun to rain, storm, and back, HP launched a
portfolio of products for SMBs in Asia-Pacific. But supporting those products
was a common theme: services.

HP plans to use these services both to enhance sales to and stickiness of SMB
customers, and to generate revenues and margins from a new business line.

Secular services?

The US-based global IT leader has had services for the SMB before, but only
those connected with its product offerings. Such as its Total Care packages
('get service, advice, learning and support whether for your HP products'). For
the first time, the services are independent-and not restricted to customers of
HP's products.

Services as a business stream isn't new. HP's been focusing on driving up
enterprise services (and thus revenues and margins) for years. That is
substantial, but not huge: in the India market, for instance, services make up a
tenth of HP's revenues. But then, HP has an ultra-wide product portfolio to sell
(unlike IBM, the company that led the game in a near-complete shift from
products to services). And services are a key contributor to the bottomline-along
with consumables and supplies. The latter brought in another tenth of the global
IT giant's Rs 9,663 crore ($1.8 billion) revenues in India in 2006-07 (Dataquest
estimates).

Adrian Koch (left), Senior VP, HP, explains the new services for the SMB. The simulated TV newsroom was the theme throughout the SMB launch event in Vietnam

Fee and free

Take the new 'Enterprise Mobility Suite', with services for over-the-air
device management, set-up, diagnostics and security. Comprising software on a
server and on the smartphone, this suite is available not just for HP iPAQ
handhelds but also for competing smartphones running Symbian (Nokia and Sony
Ericsson), PalmOS or Windows mobile.

Then there's the Total Care SMB services, to which HP added 26 new offerings.
Half of them remain free, such as a 'help me choose' service. But what's new are
the paid services, such as an e-mail filter. The new service, in partnership
with Symantec, let's business customers point their e-mail (MX records) to the
HP/Symantec servers, where spam and viruses are discarded, and the clean mail is
redirected back to the customer. For an annual fee of roughly $30 per user, the
service kills spam and viruses for SMBs, also reducing bandwidth use.

Another paid service available to non-HP product customers is notebook
tracing, to be introduced first in India in December, ahead of the rest of the
APJ region. The service allows an automatic e-mail to go out from a registered
laptop each time it's connected to the Internet, listing the IP address. It also
allows for remote data destruction, if the laptop is stolen.

Other Total Care services include a dashboard for PC users, and a PC health
check with options for self-help as well as remote diagnostics.

The third range of services launched is around what HP calls Print 2.0. These
are focused around the needs of a Web 2.0 world. 'Smart Web' printing software,
shipping with new HP printers and downloadable for older ones, lets users
auto-format Web pages to avoid printing problems such as a cut-off right hand
side, and lets you combine sections from multiple websites into one printed page
or PDF. A fee-based Print 2.0 service is logo design, offered through HP's
acquisition of logoworks.com-where you can pay and order a new logo online, for
a fee of $299 upward. There are also professional online templates, some free
for download.

One of the SMB products launched at Vietnam for Asia Pacific: a 'zero footprint' low-power ultra-slim desktop

Small biz products

HP also launched a spectrum of products for the SMB market. These included a
range of notebooks, including five with 64GB solid-state flash-based hard drives
(each drive adds $999 to the cost of a notebook); five iPAQ handhelds from $299
to $599, including a Travel Companion with a 4.3” a wide screen display sans
phone (similar to Nokia's Linux-powered 770 Internet Tablet); and several PCs
including an ultra-slim desktop PC with a tiny footprint and based on a
low-power mobile processor and components. Also launched were the smallest
lLaserJet ever, with a new toner type for better quality and speed, a
USB-to-network printshare device, a 24ppm mono laser printer for SMBs, a range
of OfficeJet all-in-ones with fax, and a range of other products.

The APJ SMB market is clearly crucial for HP, and the company has been faring
well there according to analyst reports. “HP has one of the most complete and
compelling lines of PC products aimed at SMBs,” said Singapore-based Raju
Chellam, VP-APAC for AMI Partners, and a Dataquest columnist. “HP has a full
suite of solutions .” An AMI-Partners reports puts the SMB market
at 64 percent of the Asia Pacific and Japan IT market of $210 billion in 2006;
this is up from 58 percent in 2005. HP's SMB sales growth has been at over 60
percent in Q2 2007.

Prasanto K Roy

pkr@cybermedia.co.in

(The author was hosted by HP in Ho Chi Minh City)