HP unites on SMB strategy

Article

HP unites on SMB strategy

Kate Evans-Correia, Senior Director, News
BOSTON -- Hewlett-Packard Co.'s (HP) foray into the small to medium-sized business (SMB) market is hardly a secret. The Palo Alto, Calif.-based company is already a dominant player in that space, with its Proliant servers and its line of printers. But the SMB market is practically sizzling in terms of vendor opportunity, and like all other major server vendors, HP is setting an aggressive strategy to get a bigger piece of that SMB pie.

    Requires Free Membership to View

    Login

    When you register you’ll also receive the latest news, advice and technical tips designed specifically for midmarket IT leaders like yourself. Our award-winning editorial team will give you immediate access to emerging business and technology trends.

    Scot Petersen, Editorial Director, SearchCIO-Midmarket

    By submitting your registration information to SearchCIO-MidMarket.com you agree to receive email communications from TechTarget and TechTarget partners. We encourage you to read our Privacy Policy which contains important disclosures about how we collect and use your registration and other information. If you reside outside of the United States, by submitting this registration information you consent to having your personal data transferred to and processed in the United States. Your use of SearchCIO-MidMarket.com is governed by our Terms of Use. You may contact us at webmaster@TechTarget.com.

The design principle is affordability.
Urs Renggli
director TSG small and midmarketHewlett-Packard Co.
It's basically getting its act together in terms of putting out a unified message, said Mary Johnston Turner, an analyst at Ovum Summit in Winchester, Mass. HP has always had products for the midmarket, but now it has to pull that all together and solidify a strategy it can bring to customers. "They're getting the word out."

HP faces stiff competition from the likes of EMC Corp., IBM and even Dell Inc., all of which have been coveting this market for some time. But with IDC predicting the market will reach $5.7 billion by 2010, the market is ripe for the taking.

The company is well-positioned to do it, Turner said. For one, HP earnings are strong -- it has outpaced rival Dell in personal computer sales in the first quarter, marking the second straight quarter it grabbed market share from its struggling rival. And despite a decline in overall profit margin, which slipped to 7.3%, down from 7.7% in the previous quarter, analysts say HP's mix of products should help it maintain its market growth -- at least long enough to gain solid ground.

Today, about a third of HP's revenue comes from SMBs -- about $30 billion. Executives expect to see continued "healthy growth" in that area and suggest that at some point, its SMB business could equal that of its enterprise business. "You might see a slight shift," said Urs Renggli, director TSG small and midmarket at HP, during a press briefing Tuesday. "But it won't be dramatic."

Renggli said HP has a "good understanding of what the [SMB] market is looking for," and its product strategy is reflecting that. Instead of offering a dumbed-down version of an enterprise product, HP is building products for SMBs from the ground up.

SMBs are very different from enterprises, Renggli said, and when HP approaches midmarket companies it does so with three basic philosophies: They have limited IT resources, they need it simple and they want solid, reliable products.

"The design principle is affordability," he said.

In the past several months, HP has pushed out an array of products designed specifically for the small to midsized markets. Last week it announced HP StorageWorks D2D Backup System, a disk-based backup and recovery system that simplifies data protection and disaster recovery. The new storage system has been designed for business continuity, a top concern for SMBs.

In a recent study by Framingham, Mass.-based IDC of IT decision makers at small and midsized firms, more than 50% cited data protection, disaster recovery and storage as their top business priorities.

More on HP
HP redefines storage simplicity with All-in-One device

HP beats Dell (again) at its own game
In September, HP introduced HP StorageWorks All-in-One, a system that takes an integrated, application-centric approach to storage by combining network-attached storage, an iSCSI storage area network, data protection and storage management. The systems are specifically designed for managing storage in Microsoft environments only, with point-and-click tools for working with SQL, as well as Exchange.

Channel partners will play a key role in pushing out HP's SMB strategy, Turner said. HP has about 167,000 channel partners worldwide, with a huge percentage focused on SMBs, Renggli said.

Although Renggli was not specific about future plans, he did say HP would soon announce news about its partnerships with its top five global independent software vendors, including Microsoft and Oracle Corp.

Let us know what you think about the story; email: Kate Evans-Correia, Senior Director, News