HP rolls out packaged IT services for the channel 10 February, 2009 By Paul Weinberg

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"It is commodifying [sic] mission-critical and professional services to some degree, yes," observed Ron Silliman, principal analyst for infrastructure support services at Gartner.

He described HP's move as a response to an increasing tendency by end-user customers to focus on saving money in IT and curtail among other things expenditures for excessive hardware and software.

Under HP's Proactive Select, customers purchase "credits" to gain access to services from a menu of 85 offerings, involving such areas as blades, virtualization, networks, security, software and facilities. A 30 credit bundle is priced, for example, at $9,480 (US).

The HP program attaches a number of credits for individual items like a training class or a virtualization assessment. Each service in the Proactive Select menu will require a different amount of time and various levels of expertise.

"Customers can purchase 30, 60 or 180 credit [bundles] with a validity of up to five years. Organizations that choose to purchase 30 credits can expect to pay about $9,480," stated Gerard Nolan, worldwide director for HP Mission Critical Services.

Customers can change their minds along the way about what is required for their IT infrastructure, he continued.

"Traditionally, mission critical services would be more aligned to the higher end enterprise customers as we call them, the big large data center customers. But this new offering and the changes that we are introducing extends the mission critical experience to a much broader type of customer."

HP is responding to a trend in the market where customers are moving key applications to a more modular bladed virtualized environment, Nolan explained.

Under HP's Proactive Select, the authorized reseller can have access to an HP account support manager on the selection of services, the overseeing of projects and advice on further steps.

"Channel partners would like something that is easy to sell. They are looking for lower price points and they want more access to services to help with new technology like blades, virtualization and security."

Silliman stated that HP is the first major global vendor to introduce packages of mission critical services for SMB.

"This takes a leaf out of Michael Dell's approach to the market which is to be disruptive by expanding services at the low end rather than at the high end."

Meanwhile, another industry analyst, Michelle Warren, suggested that the commoditization of professional services by HP will benefit resellers over the long haul in strengthening their ties to customers.

But she also warned that the move in the short term could also cut into value added services revenues, a major source of income for the channel.

Warren predicted that services will initially drop from 30 per cent of the channel sales to about 10 per cent.

"It is a shift and it is difficult for the channel partners; I am not saying this is easy."

On the brighter side, more and more standardized and easier-to-install services are coming down the pipeline from the vendors to channel partners, predicted Warren, the principal at MW Research &Consulting,.

"Depending on the relationship [the reseller] can take four different packages and add on their own individual customized services to it, custom design it for the particular customer. But [the resellers] have a starting point that is very straightforward."