Initiative includes financing options to ease burden on struggling companies
Hewlett Packard Enterprise is wielding its financial services arm, setting aside more than $2 billion to help businesses struggling with the economic fallout of the COVID-19 pandemic.
The Lowdown: The IT giant said Wednesday that HPE Financial Services also is rolling out such initiatives as a Payment Relief Program that will enable organizations to buy new technology without putting an undue financial burden on them.
The Details: Through the Payment Relief Program, businesses buying new technology pay 1% of the total contract value each month for the first eight months, deferring more than 90% of the cost until 2021. Beginning next year, each payment would equal about 3.3% of the total contract value.
Other initiatives include:
> Assets to capital: Companies can convert their own existing IT assets into capital that can be used to help buy new technology. In addition, HPE Financial Services (HPEFS) also can buy back newer technology that no longer is needed by customers. This program has been used to put more than $642 million back into customers’ budgets.
> Easing expenses: Beyond the Payment Relief Program, HPE also is offering a 90-day delayed payment option for new hardware and select software, installation packages, and services purchases.
> Phased deployment: HPE will enable enterprises to acquire compute and storage capacity now and configure, test, and stand up systems before paying, giving companies the ability to continue to run their business without further hurting their budgets. The deployment schedule can extend as far as 12 months.
> Pre-owned technology: Businesses can buy pre-owned HPE data center equipment, including everything from entire systems to components, parts, subassemblies, and feature upgrades, either off-the-shelf or custom-configured. The technology comes with a 30-day warranty and is eligible for HPE maintenance and support.
> Short-term rentals: HPE is helping companies adjust to new ways of working by allowing them to rent pre-owned technology from three to 12 months and new PCs for 12 months.
The Impact: The rapid changes brought on by the COVID-19 crisis and the harsh economic fallout has left many businesses scrambling to stay afloat, putting many of their futures into question. HPE and other tech firms are offering a range of financing offerings to ease the financial burden on companies trying to adapt to new ways of working, including having most of their employees working from home. Gartner analysts say that 88% of businesses worldwide are either recommending or requiring employees to work from home.
Background: Lat month, HPE rolled out new virtual desktop infrastructure (VDI) solutions, preconfigured offerings, and flexible financing to address challenges facing enterprises and SMBs needing to grow their remote workforce capabilities.
The Buzz: “This is a challenging time to lead a business. Today more than ever, IT leaders and CFOs play a central role in ensuring financial health while continuing operations”, said Irv Rothman, president and CEO of HPE Financial Services. “At HPE Financial Services, we are committed to helping businesses align their priorities from an IT economics perspective and provide them with concrete solutions so they can move forward.”
“Almost every organization is looking for help right now. Now more than ever, capacity and remote worker access are of paramount importance,” said Ashley Penner, CEO of Powerland. “By utilizing HPEFS’ certified pre-owned tech, Powerland is able to quickly provide much-needed technology to our healthcare and education customers. The partnership with HPEFS is invaluable.”
“During this crisis, businesses need help regardless of size of company or industry vertical. IDC recommends that organizations focus on two immediate needs: conserving capital and utilizing flexible payment options like leasing or as-a-service to meet urgent capacity requirement with limited financial impact,” said Susan Middleton, IDC’s research director for flexible consumption and financing strategies for IT Infrastructure. “By dedicating $2 billion in financing and leveraging its broad portfolio of flexible payment solutions, HPEFS will help business leaders navigate through the impact of COVID-19 on their markets.”