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New HP mission critical services target VARs, smaller accounts

Barb Darrow

Hewlett-Packard Co. is packaging more of its own "mission-critical" services at a price that could help partners resell them into midmarket accounts.

A new program, HP Proactive Select, lets customers

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purchase credits to be used for services over the next one or more years, depending on the length of the deal. HP partners can resell these services, which are sold on a "coffee card" model. The end-user customers can use the credits to cover services related to blade servers, virtualization and security software as needed and when needed. HP partners should work with and counsel their customers regarding what services they might need from HP versus what the partner itself could provide, an HP executive said.

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Affiliated VARs can use HP Proactive Select services to backstop or augment their own service offerings, Gerald Nolan, worldwide director of HP Mission Critical Services told SearchITChannel.com.

HP's giant service organization has offered various mission-critical services for some time, but the services were directed at big, global 2000-type companies and were typically sold direct. Now the vendor has broken them down into smaller, more flexible packages starting at $10,000, which should make them applicable to smaller companies and the HP partners that work with them, Nolan said.

Proactive Select breaks apart some services that were previously part of bigger, pricier packages. The new bundles don't include traditional around-the-clock "break/fix" support, which is one reason they're more affordable, according to HP. The average entry price for one of HP's traditional packaged services, including break/fix support for two or three servers, would be about $30,000.

Paul Shoberg, sales manager for HP partner Works Computing LLC, based in Bloomington, Minn., said the flexibility and pricing of the program are both attractive incentives and could help HP partners do more business.

For one thing, partners who concentrate on break-fix services could use HP Proactive Select to get into more preventive and consultative services with existing customers.

HP, like rival IBM, fields a huge services arm -- especially since acquiring Electronic Data Systems Corp. (EDS) last year -- and must walk a fine line between working with its own service partners and competing with them. Nolan said this effort takes HP's own intellectual property and methodologies and makes them available for use by partners. HP started down this path last April when it began offering backup and recovery services and managed services expertise to its partners.

For the fourth quarter ending Oct. 31, 2008, HP Services revenue soared a whopping 99% year-over-year, from $3.9 billion to $8.6 billion, fueled by the EDS buy. Excluding EDS, services revenue would have grown a more earthbound 10% year-over-year. Profit was $920 million, up from $515 million for the last-year period.


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