HP Unveils Products with Muscle for Midsize Businesses - InformationWeek
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3/31/2008
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HP Unveils Products with Muscle for Midsize Businesses

Today, HP announced several products targeted for smaller businesses. Regardless of how these products play with the so called SMB market, the announcement indicates just how serious HP is about competing for midsize business IT dollars.

Today, HP announced several products targeted for smaller businesses. Regardless of how these products play with the so called SMB market, the announcement indicates just how serious HP is about competing for midsize business IT dollars.Today's announcements include:

--Two new servers, the HP ProLiant BL260c G5 server blade and the HP ProLiant DL120 G5. Prices start at $1,199 and $699, respectively, and smaller businesses can put them to work without hefty investments in cooling systems or shouldering crippling power costs.

--New CRM configuration options: Microsoft Dynamics CRM and Oracle's Siebel CRM Professional Edition

--Additional Linux solutions: ICE Linux (HP Insight Control Environment for Linux) for the HP SIM (Systems Insight Manager) infrastructure

There's more on the channel front and mobile security for HP too. What this adds up to is a focused small and mid-market strategy for HP. Conveniently, the research released with the product announcements, from AMI Partners, makes clear the opportunity that HP hopes to pursue.

According to the study findings:

--The amount that the almost 700,000 midsized businesses (HP defines mid-size as up to 1,000 employees) worldwide spend on technology products and services is expected to grow 7.4 percent annually for the next five years.

--Sixty percent of midsize businesses consider CRM strategically important, yet only 16 percent have a solution in place.

--For midsize businesses, servers are the biggest category for tech infrastructure spending with blades and storage growing the fastest.

--The average midsize business owns 9.4 servers and the number of units shipped is expected to increase by 30 percent over the next five years.

--Ten percent of midsize businesses plan to start using a blade in the next year.

So there's opportunity, but how does HP plan to capture the midsize market (or is this repackaging of enterprise solutions).

Urs Renggli

In a recent conversation with Urs Renggli, director, worldwide small and midmarket business, Technology Solutions Group, HP, talked about the technology issues that midsize companies face. He outlined a shift in the HP perspective for midmarket that he believes will deliver appealing, valuable solutions. After pointing out that the IT staffs of most midsize companies are fundamentally different from those in enterprises in both size -- he cited 10 as the average midsize IT staff -- and experience -- he pointed a lack of specialized knowledge -- and little margin for errors and downtime, Renggli noted the three keys to HP's midmarket approach:

1. Simplicity -- smaller solutions that are easy to implement and manage

2. Affordability -- accessible purchase prices and operating costs without additional infrastructure requirements

3. Reliability -- stable solutions that require little care and feeding (the most important demand from the midmarket according to HP customer input)

In summing up this philosophy, Renggli noted that midsize business "need to have every penny pay." With an ability to deliver end-to-end solutions, HP is hoping to grab those pennies.Today, HP announced several products targeted for smaller businesses. Regardless of how these products play with the so called SMB market, the announcement indicates just how serious HP is about competing for midsize business IT dollars.

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