HP, EDS Widen Customer Reach With Flexible Fees
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In an effort to broaden its appeal and gain more customers looking to outsource in this down economy, Hewlett-Packard and its Electronic Data Systems unit are both offering newer, more flexible and custom services aimed at non-traditional customers.
HP (NYSE: HPQ), which acquired EDS last August, plans to offer varying grades of service in managing customer datacenters, rather than a one-size-fits-all model. EDS, meanwhile, will break out what had been bundled services for the Fortune 500 and offer them as individual pieces to mid-sized firms that have traditionally not been EDS customers.
Similar to its announcement on Tuesday, HP's message is that you actually need to and should spend less.
"From EDS's standpoint, from the current times we're in, our budgets are constrained but the demand on tech really is growing despite the shrinking budgets," Jeff Womack, vice president of product marketing for EDS told InternetNews.com. "It's not about spending more, it's about spending smarter. We believe the better your tech strategy, the less you will spend."
In the past, customers had paid the same fee for all levels of application support. So a customer's Exchange server got the same priority as their mission critical database. EDS is breaking that up by degree of importance, so mission critical apps get top tier support for a premium price, while less vital apps get less stringent support, but cost less.
While not technically a price cut, this variable pricing could reduce overall support costs by as much as 40 percent for customers, said Womack.
EDS is also "unbundling" its IT infrastructure services which include support of servers and storage devices so they can be offered to smaller companies with as few as 100 servers. In the past, it was unthinkable for a company that small to land the services of EDS, but Womack said the firm is looking to broaden its reach.
These services include monitoring of server and storage operations, service desk, flexible computing and managed messaging. EDS will offer 24x7 remote monitoring and support using its best practices across a multi-vendor environment.
HP stratifies the datacenter
In addition to EDS's newfound flexibility, HP is changing the way it designs and supports customer datacenters to give them more choices. Data centers typically are built to one of four reliability levels, with tier 1 being the lowest level and tier 4 the highest. The higher tier the datacenter, the more redundant systems installed to prevent downtime.
HP said it's addressing a problem where a datacenter often had a mish-mash of tier 1 through tier 4 applications. If the CRM database is housed next to file and print servers, those file and print servers got tier 4 support, which they arguably didn't need, noted Flynn Maloy, director of worldwide marketing for Technology Services at HP.
"Today, the average datacenter is built to the highest tier level needed to cover their highest app. If you have one tier 4 app, you have a tier 4 datacenter," he told InternetNews.com. "That gets expensive. The cost of a tier 4 datacenter is twice that of a tier 2 datacenter."
The solution is to have multiple tiers of support within the datacenter. By adding the principal of multiple levels of available tiers into datacenters design concepts, based on needs of apps, HP can engineer out significant over-provisioning of resources, said Maloy. This can reduce capital costs by 15 to 20 percent.