How HP Plans To Rule The SMB World

Vowing to overcome past problems, HP unveils its latest not-so-secret plan for worldwide SMB domination. There's lots to like, but low prices don't seem to be the company's top priority.
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High On Verticals
While SMBs are a big market in aggregate, DeWitt noted, they're hard to reach without a wholistic ecosystem of products and fully integrated services, what HP calls its Total Care Strategy. To make that happen, HP is ramping up its "vertically centric" offerings targeted at specific industries:

  1. Healthcare
  2. (Including in-room and back-end systems.)
  3. Financial Services
  4. (Solutions for local banks and branches.)
  5. Manufacturing
  6. (For some reason, HP's manufacturing vertical also includes retail. It's not clear that retailers would appreciate being lumped in that group.)
  7. Real Estate
  8. (Especally mobile solutions.)

But verticals aren't the only ways to focus. HP is also trying to address what it sees as key SMB pain points:

  • Getting and retaining customers
  • Cash flow
  • Streamlining business processes
  • Security and business continuity.

The biggest effort there is HP's decision to extend the company's 0% financing offers -- and to lower the minimum from $5,000 to $1,500. Lisa Wolfe, worldwide small and midsize business leader, HP Enterprise Business, claimed that the new $1,500 minimum has led to a doubling in the number of SMBs taking advantage of the financing offers.

With the recent bankruptcy of small business lending giant CIT, affordable financing will be critical to enabling SMB sales, and HP has the cash to make that possible where competitors might not. "Eliminating the financing barrier is huge," DeWitt said, "and we've effectively wiped it out."

What About Price?
Low-priced financing isn't the same as low prices, though, and HP talked less about those. "It's not just about delivering the cheapest price in the market," DeWitt claimed, although he acknowledged "that's part of it." And he added that HP has spent a lot of money to drive out costs from its business processes.

But there's little reason to think HP has any intention of sacrificing its margins to be the low price leader. In fact, all of these other strategies add up to an attempt to define value in any other way except price.

The strategy makes sense, and there is value in many of the company's efforts. But in this economy (ITE), price has a tendency to outweigh almost anything else. Price pressure is acute in just about every industry right now, and as SMBs are forced to drop their own prices, you can bet they're looking for deals on what they buy as well.

How that will affect HP's move toward worldwide SMB domination will depend partly on how well the company executes on its plan, and also on whether or not we really are poised for an economic recovery.

Don't Miss: To Fight The Recession, HP Introduces Lots Of SMB Products

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