HP Expanding Into Service Industry

 

April 26,2005--In an interview with Inc. this morning, Hewlett-Packard said it will expand into services for the small-business sector. The plans are still sketchy, and won't be finalized until fall; however, this is the first time HP's commented about the strategy.

The idea, says Kevin Gilroy, Hewlett-Packard's senior vice president of small and medium businesses, is to "aggregate the buying power of SMBs." Hewlett-Packard will approach major providers of credit cards, factoring, loans, waste disposal, and health insurance, among other services, to "negotiate favorable rates" for its small-business clients.

The model isn't final yet. Hewlett-Packard says it likely won't be a retail setup, like Charles Schwab or banks. Instead, it's leaning toward online delivery of quotes and paperwork. The firm hasn't decided yet whether it will act as agent/broker, or simply offer the services of its partners directly. It does say, however, that the services will be free for small and medium businesses. "There will be no fee to access the network; it will be what they get for being a part of the HP family," Gilroy says.

Gilroy says the company will announce definitive plans this fall. Look for the service offerings to be grouped under its Smart Office product suite.

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