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Tech Industry

HP thinks big about small businesses

Computer giant Hewlett-Packard wants to make it easier to sell to small and medium-size companies.

Hewlett-Packard has big plans for small businesses.

At this week's TechXNY trade show in New York, the computer giant unveiled plans to build on its Smart Office initiative. Launched last year, Smart Office is an effort to capture more business by providing technology products and services to small and medium-size companies.

HP introduced several new hardware products, including a relatively inexpensive color laser printer for less than $1,000 and software packages from companies such as SAP and Intuit.

Smaller businesses represent a major opportunity for technology companies like HP. Taken together, smaller companies spend more than $80 billion on hardware products, software and services each year in the United States alone, according to IDC. Yet individual sales are often very small, as some companies consist of only one or two employees, while others have many more employees and thus many different needs.

HP already generates a sizable amount of revenue from the small and medium-size business market--the company projects SMB sales will contribute $24 billion to its coffers during its fiscal 2004, nearly a third of its revenue. But it has set out to smooth the process by which smaller companies can acquire its technology. Adding more flexibility to its SMB product line is one goal, Kevin Gilroy, general manager of HP's Small and Medium Business unit, said during an interview. Gilroy gave Wednesday's TechXNY keynote address.

"The challenge for (HP's SMB) team is to build a model that has enough flexibility for small businesses with no IT department, on up to medium-size businesses that have a fair amount of IT," he said.

Although Gilroy avoided making an HP product pitch during his keynote, he challenged companies who serve small and midsize businesses to become more proactive in dealing with those customers.

"Resellers and channel partners need to act as the (chief information officer) for small and medium businesses. They need to know what's important to the business," he said during the keynote. "The winners are those that are energized by change, not fearful of it."

To that end, HP aims to outfit smaller companies with a range of its products. It introduced a variety of printers, ranging from a $200 all-in-one inkjet for home offices to a speedy, $3,600 color laser printer that can turn out advertising collateral. It also offered up programs for data security vulnerability assessment, archiving and recovering data, and help desk support.

HP introduced a new line of thin clients, as well--desktoplike computers that operate from a central server, which stores data and hosts various applications.

Ultimately, "What HP's doing is looking to assemble all of the pieces of the mosaic--the programs and product elements--into a picture...that makes sense for the customer and makes sense for the (reseller) channel," said Ray Boggs, an analyst with IDC.

To be successful, "Everybody has to work towards that goal, and some are farther along than others in the process," Boggs said. "HP has brand awareness and a presence among (small and medium-size businesses) that is good."

Still, competition from other manufacturers will be intense. Just about every brand-name technology company, from Cisco Systems to Gateway to direct HP competitors IBM and Dell, have launched SMB efforts in recent years.

IBM, for instance, expanded its Express line of offerings for small and medium-size businesses, this month. It added new hardware in the form of special SMB versions of its IBM eServer p5 520 and p5 550 as well as new IBM eServer xSeries Express models.