HP to begin charging for firmware updates and service packs for servers

February 9, 2014: Updated to include additional details of IBM and Cisco server update policies.

If you own an HP server, be prepared to keep your support agreement up to date. Or else.

Beginning this month, HP is restricting access to firmware updates and service packs for its entire ProLiant server line, a product category that spans a wide range of products, from low-cost small business servers like the ProLiant MicroServer (starting price $359) all the way up to enterprise-class boxes that cost tens of thousands of dollars.

Here's an example of what customers see when they visit the HP Support Center:

Previously, that firmware upgrade was available to anyone, regardless of the server's warranty status or whether it was under a support agreement.

The new policy was announced by HP’s Mary McCoy, whose title is listed as Vice President, HP Servers – Support Technology Services. In a blog post strangely titled “Customers for life,” McCoy, a 30-year HP veteran, explained:

This week, HP announced that effective February 19, 2014, we will provide firmware updates through the HP Support Center only to customers with a valid warranty, Care Pack Service or support agreement. 

This decision reinforces our goal to provide access to the latest HP firmware, which is valuable intellectual property, for our customers who have chosen to maximize and protect their IT investments.  We know this is a change from how we’ve done business in the past; however, this aligns with industry best practices and is the right decision for our customers and partners.

McCoy explained that customers with servers still under warranty will not need to pay for firmware access. And, she added, somewhat defensively, “we are in no way trying to force customers into purchasing extended coverage.  That is, and always will be, a customer’s choice.”

Most enterprise customers are already accustomed to purchasing extended support contracts; for them, this change probably won’t have a serious impact. The new policy will have its biggest impact on the low end of HP’s line, which is popular among small businesses and enthusiasts. It will also negatively impact values of HP server products on the resale market and potentially have a devastating impact on third-party support firms.

The HP ProLiant MicroServer N40L, for example (shown here), was available for sale in 2012 at heavily discounted prices from online sellers, typically under $300. But this widely used server, which contains four drive bays in a compact box that is well under 1 cubic foot, wouldn’t run Windows Server 2012 R2 (or, for that matter, Windows 8.1) for months after their release to manufacturing. Windows Server 2012 R2 was released to MSDN and TechNet subscribers in September 2013 and was generally available in October 2013. But trying to install that OS on a ProLiant MicroServer resulted in a series of errors, with the system hanging at boot. The only workaround was to disable the built-in Gigabit Ethernet controller, a serious limitation for a server.

HP released a firmware fix for the issue in mid-November, 2013. The ProLiant MicroServer N54L, a later version of the N40L with a beefier processor in the same enclosure, suffered from the same flaw, fixed with a firmware update at the same time.

But the MicroServer’s hardware warranty is one year, and the warranty for software is only 90 days after purchase; under the new policy, access to the firmware after the warranty expires would require the purchase of an HP Care Pack, at current prices of between $126 and $200, at least half the cost of the original hardware. That’s a hefty price to pay to fix what is arguably a defect in the original product.

End users who buy from resellers may find their warranties reduced without their knowledge. This server, for example, was purchased in August 2012, but the warranty clock started ticking when the reseller purchased the hardware from HP the previous month. It would not have been eligible for the firmware update that enabled an OS upgrade just over a year later unless the owner paid for an extended service agreement.

For other models, the cost of a Care Pack is even higher. For midrange ProLiant models, a single year’s extended coverage under the Care Pack program can cost well over $1,000.

The issues with the MicroServer aren’t isolated examples. A few years back, HP released an urgent firmware update for some of its blade server models. “Without this critical fix,” the company said, the affected models, “after being in service for an extended period of time, could potentially fail to complete the POST process during any event that causes a power disruption to occur (such as power-cycle, cold boot, or power outage). If the failure occurs and the server cannot complete the boot process, the blade system board must be replaced.”

Another issue affected some ProLiant server models in 2011. Without a required firmware update, which HP characterized as “a critical fix,” the use of certain SATA hard drives could cause data transfer errors. The advisory warned: “Neglecting to perform the required action could leave the server in an unstable condition, which could potentially result in sub-optimal server performance or data corruption or loss. By disregarding this notification and not performing the recommended resolution, the customer accepts the risk of incurring future related errors.” Although this appears to be a defect in HP’s original software design, the new policy would shift the cost of the fix to customers.

HP’s insistence that the new policy “aligns with industry best practices” is inaccurate, at least for server products aimed at smaller businesses. The company’s archrival, Dell, offers unrestricted access to BIOS and software updates for its entire server, storage, and networking line. Several readers have pointed to Cisco as a counter-example. It's true that updates for Cisco routers and switches require a valid service contract. But downloads for Cisco servers (the Cisco Unified Computing System, or UCS, line) require registration but not a service contract. (Thanks to Bill Shields for the pointer, via Twitter.)

And as networking consultant Lindsay Hill points out in a recent blog post, IBM also requires "entitlement validation" for "select software products and updates and for Machine Code (also known as firmware or microcode)."

The IBM policy was announced last summer. Currently, visitors to IBM Fix Central see this announcement:

Fix Central Machine Code updates are available only for IBM machines that are under warranty or an IBM hardware maintenance service agreement. Code for operating systems or other software products is available only where entitled under the applicable software warranty or IBM software maintenance agreement.

HP’s move looks like a way to bolster margins in a market segment that is historically not accustomed to paying for extended service. The more likely result is that it will drive away those price-sensitive customers.