Under its Covision program, HP will bundle hardware such as servers, printers, and desktop computers; Internet-based third-party business applications; and Internet access and Web-hosting services from ISPs (Internet service providers) and systems integrators, and then sell the entire kit and caboodle for one price.
The program is targeted mostly at smaller concerns, one of the faster-growing segments in the market and the one most in need of integrated solutions. Recent studies from market research firm IDC indicate that the small business market accounted for over $44.3 billion in technology spending in 1997, a number that is expected to rise by 15 percent this year.
For these reasons, companies with less than 100 employees are fast becoming the "last frontier" market for PC companies, according to Dan Dolan, Dataquest analyst.
At the same time, small business owners say they are skeptical about investing in high-priced technology "solutions," and find purchasing decisions confusing, according to a recent study sponsored by IBM.
HP did not disclose financial terms of its initiative, but other companies that are bundling services into their hardware platform are looking at integration as a profit center.
Last week at PC Expo, Compaq announced a slew of Internet service offerings, such as Internet-based database back-up services or Net connectivity, that can be purchased as part of Compaq hardware. Under these deals, Compaq keeps a portion of the subscription fees, said Compaq executives.
Toshiba is also reportedly looking into the "extranet" business, while IBM recently announced its Small Office Solutions Initiative, a multi-tiered program to educate small business owners about technology purchases.
"There seems to be a lot of lip service to small businesses right now," Dolan said. "They're taking the burden of implementation off the end user by offering a pre-configured solution, all bundled and pre-tested. That expertise is hard to find."
Covision software partners fall into one of five categories: content, collaboration, commerce, communications, and control applications. The integrated applications will be implemented by corporate VARs (value added resellers) and systems integration firms. Covision partners include @home, Lucent, iCat, Check Point, Net Objects and US Web.
Additionally, HP has been working with venture capitalists and market analysts to "hand-pick leading Internet technology companies," according to a prepared statement from Greg Mihran, manager of Internet business development for HP's commercial channels organization.
"They picked what they consider to be 'best of breed' partners," Dolan noted. "With the HP name behind this, they can bring in their printers, the desktops, the servers, and create a one-stop-shop."