HP's new SMB strategy: services

HO CHI MINH CITY, VIETNAM: The flavor was clear from HP’s ‘SMB World’ launch event on Thursday 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 has 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 bottom line--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, according to Dataquest estimates.

Fee and Free

Take the new Enterprise Mobility Suite launched on Thursday, with services for over-the-air device management, setup, 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 is the Total Care SMB services, to which HP added 26 new offerings yesterday. Half of them remain free, such as a ‘help me choose’ service. But what is new are the paid services, such as an email filter.

The new service, in partnership with Symantec, lets business customers point their email (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 email to go out from a registered laptop each time it is 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 users 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 users can pay and order a new logo online, for a fee of $299 upward. There are also professional online templates, some free for download.

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 widescreen 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 LaserJet ever, with a new toner type for better quality and speed, a USB-to-network printshare device, a 24 ppm 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,” says Singapore-based Raju Chellam, vice president (APAC) for AMI Partners, and a Dataquest columnist. “HP has a full suite of solutions (in this space).”

An AMI Partners report puts the SMB market at 64 per cent of the Asia Pacific and Japan IT market of $210 billion in 2006; this is up from 58 per cent in 2005. HP’s SMB sales growth has been at over 60 per cent in Q2 2007.