HP unveils subscription computing service

From...

By Tom Spring

(IDG) -- Hewlett-Packard is launching a subscription computing service designed for small and mid-size businesses overwhelmed by managing their own systems and help desk services.

HP Extended Office, which is available this week, charges a base fee of $169 per PC monthly for an all-in-one service that includes an HP Vectra Pentium III PC, outsourced technical support for hardware and software, remote management of software, Internet access, and e-mail hosting.

The all-in-one rental approach is not unique. Companies such as Everdream and CenterBeam offer similar subscription services, as do computer manufacturers such as MicronPC.com. The subscription-computing model is intended to appeal to businesses that want to avoid making large capital investments on information technology hardware, services, and employees.

Buying HP by the month

HP guarantees 90-second response time for telephone support for hardware and limited software application support. It relies on a nationwide network of system integrators for on-site technical support.

IDG.net INFOCENTER PCWorld.com home Free daily newsletters PCWorld.com: Week in Reviews TechInformer Related IDG.net Stories Hewlett-Packard bolsters storage management HP to end OpenMail with next version Server, workstation shipments up in 2000 Features Top 15 notebook PCs An inside tour of the Pentium 4 Surviving a disk crash: A checklist Visit an IDG site Choose a site: IDG.net CIO Computerworld Darwin Dummies.com GamePro.com The Industry Standard ITWorld.com InfoWorld.com JavaWorld LinuxWorld Macworld Online Network World Fusion PC World Publish.com SunWorld IDG.net search

The $169 base price includes an HP Vectra equipped with a 30GB hard disk, CD-ROM drive, 8MB AGP video card, analog modem, and 17-inch monitor. HP throws in Windows 2000 and Office 2000 with its standard package, along with virus protection, system utilities, remote data backup, an e-mail account, and online tutorials. HP requires businesses sign a 36-month contract.

HP Performance Packs are also available for companies that may want to upgrade to more robust hardware and expanded software and services. For example, accounting software and Web hosting are optional.

Subscription competition

Other providers that tout similar deals are fast emerging. For $225 monthly CenterBeam will rent you a Dell 600-MHz Celeron PC with a suite of hardware and software services similar to that of HP. Everdream's monthly rate is $159 for an 866-MHz HP Vectra with similar specifications to that of HP's plan.

However, CenterBeam and Everdream are one step ahead of HP, offering network support for a company's local area network. HP doesn't offer a complete network solution but plans to add that later, a representative says.

Experts say the subscription approach is a compelling one for companies that can't swallow the high costs of a technology department.

David Tapper, a senior analyst with research firm IDC, firmly believes in what he calls the "utility model" of computing. He sees subscription services like HP's as examples of a growing trend toward application services providers (ASPs). In that model, the customer subscribes to, rather than purchases, the software it uses, and often accesses the software online.

Already, an abundance of ASP companies offer such services as electronic-commerce storefronts and human resources management, Tapper notes.

PC makers join the act

"Larger vendors are keeping a close eye on what [CenterBeam and Everdream] are doing," says John Madden, an analyst with Summit Strategies. He says the subscription model that HP and others are pushing is just a new spin on the old mandate of selling more PCs and services.

MicronPC.com comes close to HP's subscription approach. Its Subscription Computing program offers a veritable Chinese restaurant menu of system configurations and levels of services. MicronPC.com draws the line at performing complex tasks such as remote network management, data backup, and software distribution.

Gateway, meanwhile, is using its 300 Gateway Country retail outlets as regional support outposts for its business customers. Services include networking, Web and e-mail hosting, firewall protection, Internet connectivity, and application support. And as with Micron, pricing is based on an ˆ la carte suite of options, not a one-package solution.

Dell and IBM, for example, offer their services through partners. They work with third-party leasing firms to devise payment plans for PCs and technology services. And leasing companies such as Dell Financial Services (partially owned by Dell) don't claim to offer the breadth of help desk services CenterBeam and Everdream provide.

Both of those service providers have healthy partnerships among PC vendors. Everdream will handle some of HP's new services, as well as handle customers for partners Ingram Micro and Siebel Systems. Last year it received $50 million in funding from its partners.

CenterBeam has struck strategic deals with Dell and EDS, and it secured $115 million in blue-chip investment last November.

HP to end OpenMail with next version
March 2, 2001
User wish list: reliability, simplicity
March 5, 2001
HP eyes PICO system to reduce design time
January 3, 2001
Lawyer promotes passage of computer 'lemon law'
November 15, 2000
PC repair undercover
July 6, 2000

Hewlett-Packard bolsters storage management
(Network World Fusion)
HP to end OpenMail with next version
(Computerworld)
Server, workstation shipments up in 2000
(IDG.net)
HP, RealNetworks to develop home entertainment devices
(IDG.net)
HP ships Superdome server
(InfoWorld.com)
HP launches new e-services software suite
(IDG.net)
HP eyes PICO system to reduce design time
(InfoWorld.com)
Hewlett-Packard, EMusic perform a duet
(PCWorld.com)

Hewlett-Packard
Everdream
CenterBeam

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.