HP makes networking more accessible through their pay on use model

http://www8.hp.com/us/en/hp-news/press-release.html?id=1341189#.UOS9sKXabfY

PALO ALTO, Calif.– HP today announced the HP FlexNetwork Utility Advantage Program enabling communication service providers (CSPs) to offer managed network solutions on a pay-per-use basis,(1) creating new revenue opportunities without capital investment.

Enterprises spend more than 70 percent of their IT budget keeping the lights on, leaving less than 30 percent for innovation.(2) However, they need to invest in network upgrades that support initiatives like cloud, mobility, bring your own device (BYOD) and rich media, which drive innovation and business growth.

The HP FlexNetwork Utility Advantage Program enables CSPs, in collaboration with HP, to help enterprise customers modernize their network with standard, prepackaged networking solutions, including hardware and software, with no upfront cost. Customers then contract with the CSP for the managed network offerings they need to support initiatives that speed innovation on a pay-per-use basis.

“Our customers want to focus on running their business rather than operating networks for employee access to applications like voice and videoconferencing,” said Oliver Spring, head of Product Line Management, Swisscom. “With HP’s FlexNetwork Utility Advantage Program, we can close the gap in our managed service offerings to deliver a networking infrastructure that allows our customers to move beyond operations to innovation.”

This announcement creates opportunities for existing customers seeking to address their network capacity and management issues, with this solution customers are able to benefit from the latest HP networking technology without the required capital expenditure to do so by adopting a pay on use model per network port used.  This does sound exciting and it was interesting to hear some of the analysts questions in this space around the challenges with capex, about this new approach and how it all worked. I had lunch with a few managers and a head of operations to ask his view and he loved it “It’s great, there is no capex, but I still have requirements for 10GB Ethernet, for extra capacity and for a network architecture that will scale out and be ready for our next generation applications and services”.

We spoke with Oliver from Swisscom asking him a few questions about the concept and how it worked in reality and I can certainly see how this model could be scaled to target initially small or medium customers as well as those in the enterprise space.  It got me thinking that the pay on use model for the network port, is only a few steps away from pay on use per user, where you pay a fixed amount for the user device, the connection, the applications and file/print services all down a wire. In effect only a few steps away from a virtual IT infrastructure service down the wire.

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