HP Offers To Finance $100,000+ Software Deals - InformationWeek

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12/9/2008
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HP Offers To Finance $100,000+ Software Deals

Extending credit in hard times would allow a customer who might otherwise turn away to become an HP software user.

At its HP Software Universe user group meeting in Vienna, Austria, Hewlett-Packard announced Tuesday that it is offering to finance software purchases amounting to $100,000 or more.

It's making its business technology optimization suite and information management products available with 0% financing through HP Financial Services, its leasing and financing arm.

Business technology optimization includes such HP products as Network Node Manager (formerly known as OpenView) and Operations Manager. HP information management includes HP Neoview Enterprise Data Warehouse, Database Archiving for Microsoft SQL Server and Email Archiving for Microsoft Exchange.

The financing is available for deals in the United States, Canada, and much of Europe. "This brilliant move makes it possible for IT organizations, who may otherwise be unable to continue projects, to secure financing," wrote Theresa Lanowitz, analyst with Voke, a software analyst firm. She predicted that additional large vendors will have to finance their customers' purchases through a downturn in the economy.

HP's announcement of the approach, however, said it's only available through Jan. 31, 2009.

Lanowitz predicted it may become a staple of how large software vendors do business. "Watch larger software vendors to see the evolution of their partner programs, customer loyalty, etc.," she wrote. Extending credit in hard times would allow a customer who might otherwise turn away to become an HP software user and create a tie that binds the customer to the company in better times, she suggested.

Both Sun and HP financed customer purchases in the dot-com phase of the economy by taking equity stakes in some of the young companies they were selling to. Advancing the customer credit to make major purchases in the current downturn would entail risks as well as rewards, just as that earlier form of financing did. If a customer goes out of business, HP would become one of many creditors seeking payment from the assets of the company.

HP officials saw the move as a way for customers to ensure their own survival. "HP Business Technology Optimization software has a strong track record of helping CIOs deliver more business value and cost saving," said Robin Purohit, VP and general manager, software products, in a prepared statement.

In addition to customer financing, HP announced upgrades to two major products.

HP Quality Center 10.0 can be used to prioritize projects and make sure in-house application development stays on track. Quality Center 10.0 has been integrated with HP Project and Portfolio Management software to help identify lower-priority projects and track development in high-priority projects.

In addition, HP Universal Configuration Management Database 8.0 has been integrated with 17 products in HP's Business Service Management suite, such as HP Business Availability Center 8.0, HP Service Manager 7.1, and HP Operations Manager for the IBM i-Series servers. The integrations allow customers to prioritize a service downtime incident or system failure and help trouble shooters to get to the root of the problem.

HP also announced it would make its business technology optimization products available as software as a service, backed by around-the-clock support. HP's entry into the software as a service field will be known as QuickStart. It provides a technical account manager and ongoing mentoring to train customers in the use of the software at lower initial costs than purchasing a license, an HP spokesman said.

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