HP Device As A Service Is 'Scaling Rapidly,' Partners See It As Channel Game-Changer

HP Device as a Service
NWN Founder Mont Phelps,
HP Personal Systems President
Ron Coughlin and NWN CEO
Skip Tappen.

HP's big bet on device as a service is starting to take hold in the channel with a rapidly growing sales pipeline.

HP Personal Systems President Ron Coughlin told CRN the company's device as a service business is "scaling rapidly," with the sales pipeline hitting a clip that could move the financial needle for HP's $30 billion Personal Systems business.

"The pipeline is now at scale and is significant enough that it could move the entire financial picture for HP's Personal Systems business," Coughlin said in an interview at the HP Executive Forum at the Boca Raton Resort and Club. "From a total device as a service perspective, we are ahead of where I expected us to be."

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Coughlin said there is growing interest among commercial customers, with 50 percent of customers interested in or actively deploying device as a service, up from 40 percent last year and 20 percent two years ago. "The shift is massive," he said. "It feels similar to what we saw in print when the market just started tipping to managed services."

The good news for HP is that it has built a wealth of intellectual property in the as-a-service market from its successful 10-year-old managed print services business, where partner-led managed print services growth recently hit 39 percent.

"We have infrastructure as well as know-how on how to run an as-a-service business that we believe puts us in an advantageous position versus the rest of the PC competitors," said Coughlin.

That is helping HP knock out other devices in accounts including a recent take-out of Lenovo at a European manufacturing company, said Coughlin.

Besides PCs and mobile devices, HP is aggressively selling its thin clients and retail point-of-sale systems as a service. "Anything we sell, we will sell in an as-a-service motion," said Coughlin. In the future, HP even plans to add 3-D printing as a service.

The device as a service discussion has moved from questions about the new sales model one year ago to deploying and building significant sales pipeline, said Coughlin. "It's a very different discussion than it was a year ago," he said. "It is now about how fast do they start closing deals."

HP Global Head of Personal Systems Services Bill Avey, who helped build HP's formidable managed print services business and is now driving the device as a service charge, said the key to success is a program built from the ground up for and by partners.

HP, in fact, has completed more than 50 workshops with partners on device as a service. "We are constantly refining that model," said Avey. "A big part of what we are doing this week is getting feedback from partners on the things they like about it and the things they would like to see improved. Universally what we are hearing from partners is they are on board and it is all about how do we figure out how to do this together."

NWN, one of HP's top partners and No. 68 on the 2016 CRN Solution Provider 500, was singled out at the Executive Forum for closing the first channel-led device as a service win.

NWN CEO Skip Tappen said HP is well ahead of its competitors in working with partners to capture the growing device as a service opportunity. "They have led this market with managed print services," he said. "They are years ahead of everybody else in terms of how to crack the code."

Tappen said NWN's device as a service sales pipeline has more than doubled over the last year. "There is a lot of upside," he said. "The real differentiator is the services and how do you take a great product and make it really easy for the customer to consume it. It is all about ease of consumption. More and more customers don't want to own the product, they just want to consume it -- especially millennials. They just want outcomes. They don't care about owning a car or a PC. They just want a great product and have it work when they want it."

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