HP Joins the Small-Biz Gold Rush
When it comes to reaping the benefits of the tech revolution, entrepreneurs and small-business owners could be forgiven for harboring the suspicion that their needs and priorities have long been pushed to the back of the line. Yes, it's relatively easy to set up a Web site, and there is no shortage of software to take some of the pain out payroll, taxes, and inventory. But after that? Well, the pickings have been pretty slim.
Finally, that may be changing. Microsoft recently stepped up its small-business efforts with the release of Windows Small Business Server 2003, while EmergeCore's IT in a Box is taking the hardware route (see BW, 3/29/04, "Info-Tech Relief For Small Business"). Now, Hewlett-Packard (HPQ ) has joined the movement with a range of products and support services that represents the most comprehensive effort yet to tap the entrepreneurial market.
The offerings include two new ProLiant servers, one costing just $499, and extend through a variety of online consulting and maintenance options that begin with Learning Curve, a $149-a-year service that allows users of HP (HPQ ) products running Windows software to obtain unlimited advice from the company's online techies. At the other end of the scale is the $3,650-per-year ProLiant System Minder Solution, which remotely monitors and maintains HP's 300 Series servers and automatically applies patches.
Why the stepped-up emphasis on smaller businesses? Because those outfits represent a faster-growing market than larger companies, explains HP's John Brennan, senior vice-president for worldwide SMB operations, who notes that small and midsize businesses already generate some $21 billion of HP's global revenues. Brennan spoke recently with BusinessWeek Online's )Olga Kharif. Edited excerpts of their conversation follow:
Q: Which problems are you trying to solve with your new offerings? A:
Q: Which problems are you trying to solve with your new offerings?
A:Small and midsize businesses (SMBs) need to use technology as effectively as large businesses and, in some cases, even more effectively: They use it as a competitive advantage and want to have a scale beyond their number of employees. But many of them -- especially smaller companies -- don't have the inhouse IT resources that a larger business has. Even midsize businesses that have IT staff and chief information officers (CIO) don't have the breadth and the depth of the staff of a larger company.
So what we are announcing are products and expertise that help small businesses use IT more effectively and overcome these limitations. We aim to be the CIO for the SMB companies, and to build the foundation for a completely IT-enabled SMB.
Q: How will your new services help? A:
Q: How will your new services help?
A:An example: One service that we've created is the IT Professional Help Desk. A small company would sign a single support contract with us. Then, [it] can call HP and get help across a whole range of products and services -- not just HP's products, but anybody's hardware and software. We don't forward you to, say, Microsoft -- we help to answer your questions with one call.
Q: You are also coming out with a lot of new hardware. What should small businesses pay special attention to? A:
Q: You are also coming out with a lot of new hardware. What should small businesses pay special attention to?
A:We are bringing out a whole new set of products and services around file and print, communications, document management, and business continuity. These are building-block solutions that almost every small and midsize business would want to look at to make sure they make a very smart use of IT.
Q: You've recently made a lot of announcements concerning new servers. Why so much emphasis on that specific category? A:
Q: You've recently made a lot of announcements concerning new servers. Why so much emphasis on that specific category?
A:Small and medium business have not, in the past, had the benefits of some of the more advanced software for business management or business applications because they couldn't always run it on their PCs. The PC wasn't powerful enough, and the PC environment wasn't safe enough in the event of a failure.
Now, we are changing that. We have an opportunity, at a highly low-cost, highly-affordable cost level, to make sure small and midsize businesses can run the same kinds of applications, and have the same levels of reliability and performance, as larger businesses do. So servers have become a very important part of any small business's infrastructure.
Q: Are you seeing small businesses' networks becoming more complex? And if so, why? A:
Q: Are you seeing small businesses' networks becoming more complex? And if so, why?
A:Absolutely. The requirements of SMBs of technology are increasing. Part of the reason for this complexity is, they are quicker to adopt certain new technologies than larger businesses. They also now want mobility -- essentially, access to their information while they are on the road. Plus, the amount of information they are accumulating is growing -- and there's more data they need to back up and store.
Our objective is to make all this technology easier to use. You can buy a PC, a server, storage from HP -- and we are designing for it all to work more smoothly together.
Q: But are SMBs willing to spend the big bucks on all this stuff? A:
Q: But are SMBs willing to spend the big bucks on all this stuff?
A:Today, the IT market for SMB is over $500 billion worldwide. And it's projected to grow faster -- between 9% and 11% -- than the other market segments. As a percentage of revenue, small and midsize businesses spend more on IT than large businesses, in many cases.
Ideally, small businesses would have the same economies of scale in use of technology as large businesses. So we try to make sure their spending percentages are highly competitive with large businesses. We try to help them to spend those dollars in a most productive way.
Q: Why is the growth of SMBs' spending faster than larger companies? A:
Q: Why is the growth of SMBs' spending faster than larger companies?
A:Two things are driving the growth: One, there's an increased awareness among small and midsize businesses, some of which have not used technology in the past, that IT can help them be more competitive with each other and larger companies. Two, small and midsize businesses are being formed more rapidly than they have been in the past. That's in part due to changes in the regulatory environment. You go to a place like China or Eastern Europe, and you see huge changes in the political climate, and, as a result, new businesses are being formed in those regions more rapidly than ever before.
Plus, in North America, people are forming more businesses because they believe they can put up a Web site and, with solutions from the IT industry, act a lot larger and be a lot more nimble than they would have if they didn't have the advantage of the technology. >