HP has launched a new programme enabling businesses to hire network infrastructure from the company on a pay per use basis.
The FlexNetwork Utility Advantage programme will use communications service providers as partners to be the middle-man offering the services, but run on HP’s hardware and software products – namely its FlexNetwork Architecture.
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At launch, HP only announced Swisscom as a partner, which went live with the service in November, offering companies local area networking where they pay six Swiss francs – about £4.30 – for each port used.
On top of that, they can offer extra services, such as unified communications, again charging for the number of users active on the system, saving added costs of over-provisioning and the need to buy or maintain hardware.
Nick Watson, vice-president of HP Networking in Europe, said the plan was for BT to become the UK partner, with a limited number of other providers coming on board with the scheme imminently.
“I don’t want to over-distribute,” he told Computer Weekly. ”We want to have the right number of large service providers around the world for this and the right number in Europe will probably be no more than five.
"We are already talking to the five that we want it to be.”
BT taking the longest
But Watson admitted BT was taking the longest of all the European providers to sign on the dotted line.
“I think we will probably launch in some of the other European countries, as well as Switzerland. I would expect that we would conclude discussions with BT during next year, but I wouldn't want to put a date on it,” he said.
“We are at more advanced stages with some of the other, large European providers. There is no real reason for it that I can see, it is just a case of getting that connection. When people first look at this, they think it is too good to be true, so you have to get over that and the fact it is not a lease.
“I want to go with the big guys because I absolutely believe this is a compelling proposition for them and their customers and I want us to go to market in a way that is very controlled and very effective for their bottom line,” Nick Watson added.
Who is going to go to the CFO and say 'please can I have some more?'
Nick Watson, HP Networking EMEA
By making this pay per use offering, HP is clearly doing itself out of large hardware deals with companies who may find it much cheaper to pay on a monthly basis than rip and replace its infrastructure and pay for the boxes.
Adopting an austerity-friendly approach
However, in times of austerity, Watson believed HP needed to adopt this approach to keep some level of revenue coming in.
“I think people are desperate to change,” he said. “People are stuck with a network, they want to run video, they want to run latency dependent applications – they are ready to do it all. But who is going to go to the CFO and say 'please can I have some more?'
“That is the challenge they have. They would like to do it. But if you want to go for a full-scale infrastructure change, for most of these guys it is huge amounts of money.
We believe this model will enable them to do what they actually want to do anyway, but they can’t do it today. There are very few network refreshes taking place today because of the economic situation.
“The economic circumstances in almost every country across Europe mean that this is the right thing at the right time and eventually, as you go towards the cloud, this is actually the model people will have to get used to.
"Although manufacturers typically haven’t approached this model as we need to, so as we increasingly develop packaged cloud services to sell through service providers and our channel, this is the model we need to apply.”