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HP launches new multi-vendor financing model

HP Inc. is expanding its financing and leasing options for channel partners and customers. HP Integrated Financial Solutions will help accelerate and enhance the financing experience for customers and enable channel partners to grow their services-based businesses

As the industry increasingly moves to XaaS (Everything-as-a-Service) models, leasing and financing underpins HP’s approach to contractual selling – helping the company accelerate and augment services and solutions. In a press briefing, Deborah Baker, Head of Worldwide Leasing and Financing at HP Inc. said that the launch of the multi-vendor financing model is the next step in the company’s strategy to expand its payment solutions, including leasing and financing options for channel partners and enduser customers. To support that, the company has extended its partnership agreement with HPE Financial Services (HPEFS) and entered into a new strategic programme with global finance company DLL Group.

“As HP becomes more aggressive in its shift to a services-led model, financing is a capability we are prioritising and integrating into more of our solutions. These two relationships are going to continue to help accelerate and enhance the financing experience for the channel. And as we move to this model, that will help our channel partners secure recurring revenue, offer competitive payment options, increase the level of engagement with their customers, and really continue the ability to bundle products and maximise opportunities in the channel,” she explained.

Baker confirmed that HP also plans to extend its multi-vendor model with additional local or regional partners in 2020. “This will ensure that we do have the appropriate country coverage in particular in emerging markets, to make sure we’re satisfying partners and our end-user customers as well.”

Transactional to contractual

Financing and Leasing options
Financing and Leasing options

Speaking about the overall benefits and the value proposition of this move, Baker said: “Everything we do when it comes to a payment solution or leasing and financing, really supports the transition from transactional to contractual for HP and for channel partners as well. It creates stickiness for that end-user customer with the channel, and it’s a minimum of 24-months out to potentially a 72- or an 84-month contractual relationship with the end-user customer.”

She added: “Statistically, when a payment solution is included in a solution, the transaction size is higher, discount rates are lower, and therefore, overall margin is higher for our channel partners. It also gives us the ability to mine the install base, and to potentially interrupt a transaction, early, or at end of lease, and really ensure that next transaction or the next contractual engagement is more assured with the end-user customer, plus it provides the partner with upfront payment in full for the products that are being included in the solution.”

Another value add, according to Baker is the ability to provide a frictionless experience with the end-user customer through the ability of enhanced digital capabilities – whether that’s a partner portal, a customer portal, the ability for a complete digital solution, including instant credit decision, instant quoting, electronic signature, electronic invoicing etc.

Consume as a service
Paul Sheeran, VP and Managing Director EMEA, Worldwide Channel Leader, HPE Financial Services, said that with the trend to consume everything as a service, bringing innovative financial solutions to HP customers is very important.

“But there’s a lot more to our value proposition, yes it’s about giving customers and partners financial programmes, but more and more it’s actually helping them with the management of their IT assets. All of the customers I talk to want to transform and to embrace digital, but often they’re stuck with their legacy infrastructure and they really need a partner that can help them monetise their existing assets and help them accelerate their transformations,” he said.

Sheeran argues that delivering smart IT asset economic solutions is becoming more and more important for customers. To prove the point, he said: “HPEFS is the largest owner of HP technology in the world. In fact, we have over $13 billion in IT assets on our balance sheet – that’s a signal that we know how to manage IT assets. We operate in 52 countries around the world and we work with customers from the smallest to the largest global multinationals.”

Sheeran was quick to dispel the common belief that older technology has no remaining value when it comes to retire the assets. “That’s just not the case. We strive to be experts in helping customers to monetise their existing IT assets and free up what I call trapped capital. Last year alone we infused over $330 million back into customers’ budgets through several offerings – including asset upcycling services, and our accelerated migration offer – those offers are now also available to our partner community,” he said.

Sheeran continued: “For smaller customer engagements, we rely on a powerful network of channel partners and this is an area where we see real growth opportunities. Most if not all of the channel partners we work with are moving their customers along that IT consumption journey and need a partner who can help them embed clever financial solutions into their offerings. If you combine that with some of the attractive rewards we pay to partners, it does make HPEFS a very compelling proposition.”

Embracing the circular economy
According to Sheeran, the other burning topic for customers right now is sustainability and embracing the circular economy. “50 million tonnes of e-waste will be created this year – that’s actually four and a half thousand Eiffel Towers!” he said, adding: “The circular economy is about designing out waste and driving sustainable systems, keeping products and materials in the cycle for longer. HP is very focused on the design aspect and at HPEFS what we do is excel in keeping those assets in the circle for longer and doing the right thing for sustainability.”

HPEFS recently launched an IT platform to support an omni-channel customer and partner experience. This delivers a fully connected digital experience that allows customers and partners to engage with HPEFS in a number of ways. Customers and partners can experience a truly digitalised experience from the very start of the process, all the way through to the end of the contract.

“With the extension of our partnership agreement with HP through 2024, we look forward to continue to bring value to partners and customers, so they can achieve their goals – business and sustainability,” Sheeran concluded.

Compelling customer payment options
Rick Trobman, President of the Technology Solutions Global Business Unit at DLL said that HP´s strategy to evolve toward contractual service models fits perfectly with DLL’s lifecycle financing offers and ability to help channel partners in bundling HP products and services into customer solutions.

“Customers now expect flexible options for how they leverage technology to collaborate and make agile business decisions. Our entire business model is based on partnering directly with manufacturers distributors and resellers of products and services to make it easier for their clients to acquire and or consume the goods and services that those partners provide,” he said, adding: “We are thrilled to collaborate with HP, and to help HP’s partners deliver compelling customer payment options.”

DLL which has just celebrated its 50th anniversary has got over 1.2 million contracts under management. “Those contracts range anywhere from microticket contracts all the way up to very large Fortune 50 enterprise customers,” Trobman explained.

DLL’s business is organised around the markets that it serves. Trobman says its value proposition is focused on two key things: industry specialisation and a global footprint which positions it to help a whole variety of different partners to deliver what their customers require.

“In the last three to five years we’ve moved from a business model that was heavily dependent and reliant on data centre and software financing, to a model which is much more reliant on device cloud and service financing. We’ve deployed technologies around the management of devices, we’ve deployed API technologies that allow us to integrate into our partners’ sales cycle to make it easier for customers to be able to acquire the products that they need, and do it within a seamless landscape that references exactly what the partner is trying to deliver to that individual customer. The other thing that we brought to the market is the ability to service HP partners that are deploying global solutions for their customers through a global master lease agreement, and the ability to support customers as they roll out devices across multiple geographies. Overall, I think that the fit is perfect between what DLL has evolved to in the last number of years and where HP is taking their business right now. I’m looking
forward to the ongoing partnership,” he concluded.

Since 2015, HPEFS has been a trusted HP financing partner, and will remain so supporting HP’s direct led sales with public, corporate and enterprise business customers, its Graphics and 3D businesses globally, and its indirect MPS business in EMEA. HPEFS is also HP’s sole partner for North American and Latin American markets. The three year extension to the partnership agreement reinforces the commitment and value the two companies can provide to HP’s customers and partners.

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