HP stretches finance for storage buyers

ENSA@Work 2003: Hewlett-Packard will let users pay for storage as they use it. Anything to make the sale, say analysts

HP's financial services division has announced a deal whereby users will pay for storage as they use it -- thanks to metering on-site through the company's OpenView management software.

"Pay-per-use" storage charges the user company according to how many terabytes it uses out of the storage that is installed, according to metering. The idea is to let users pay for storage much as they might pay a mobile phone bill, according to Elke Thoma, European business development director of HP Financial Services.

The announcement is part of HP's push towards on-demand computing, which is also a reaction to a sluggish market, according to analysts. "With the economy the way it is, companies have to do something to make a sale," said Robin Burke, principal analyst at Gartner Dataquest.

With users needing encouragement before they buy more hardware, generous terms are required, so vendors with enough clout are relying more on their finance arms. HP's financial services division is one of the largest IT finance companies, and the second largest "captive" finance company dedicated to one supplier.

All HP's finance options could be sold onwards by third parties, though larger resellers are likely to have -- and prefer -- their own financing arrangements. However, the pay-per-use model, depending on HP monitoring software at the customer's premises, is less likely to be resold, and could represent HP taking more control over finance of storage.

"We have the broadest range of financing," said Thoma. Pay-per-use is one of four ways to pay for storage, the other three being more standard across the industry: paying a regular amount for a constant level of storage, "pay-by-forecast" (paying an increasing amount for storage that increases according to the user's own forecast of requirements), and "modular" payments, where the user installs new storage, and cannot predict how much will be needed, but needs financing to help pay for it.

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