Dell and Hewlett-Packard are pouring millions into a competition to win over smaller companies – and not just to sell them tech gear.
The world’s two largest PC makers have rolled out dueling initiatives to deliver a plethora of services – many of them free – to help small and midsize businesses, so-called SMBs, prosper. Smaller companies “will be the catalyst for the economy recovering,” predicts Paul-Henri Ferrand, Dell’s vice president of global strategy for SMBs.
Dell and HP ultimately hope to broker lucrative management services along with their hardware, much as IBM does with big corporations. “This is all about being more efficient and finding access to new pockets of money,” IDC analyst Ray Boggs says.
IDC defines small businesses as those with one to 100 employees; midsize ones have 101 to 999 workers. SMBs last year spent $513 billion on hardware, software and tech services, and by 2013 should spend $674 billion, IDC says.
And that gets Dell and HP excited. Sales growth of computers, monitors and printers has been slowing for several years.
So now each has made catering to SMBs the linchpin to a revamped growth strategy. “It’s a shift from a transactions model to a relationship model,” says Stephen DeWitt, HP’s senior vice president of its personal systems group.
In recent months, each has begun offering special lines of PCs, backed by zero-percent financing, for SMBs. And each has launched websites and blogs with guidance on everything from how to get started to how to connect with clients.
Dell dedicates 10,000 of its 80,000 employees to SMBs. For a subscription fee, Dell technicians will use the Internet to take over day-to-day management of a firm’s internal network. “We want to become the No. 1 IT vendor to SMBs worldwide, period,” Ferrand says.
HP has authorized independent tech resellers to bundle HP hardware in package deals with e-mail services from USA.Net, software from Microsoft, and accounting and sales management programs from NetSuite.
“If we can help deliver a sustained set of capabilities to drive growth into their businesses, then this is a good thing for our business,” DeWitt says.
The big challenge: how to meet SMBs’ diverse needs. “You just can’t put a smorgasbord out there and hope they choose something,” says Zach Nelson, CEO of NetSuite, which has catered to SMBs for a decade. “It’s the “Fortune” 5 million, not the “Fortune” 500. You have to really understand what they need.”