HP's New Software Licensing Options For VARs

Vendor's initiative designed to reduce upfront financial risks, improve cash flow of managed services VARs.

Seeking to drive more managed services business through the channel, Hewlett-Packard is now offering what it describes as flexible software licensing options to VARs selling managed services.

“What we are doing is making it easier for VARs to better align their software services’ revenues and costs,” said Ammar Sakkal, director of HP's global partner program for HP Software and Services.

"HP's new initiative will gives us more flexibility in how we pay for software," said Dan Delano, director of Delivery at Visionary Integration Professionals, a global technology and outsourcing firm. "This will allow us to sell managed services to small and mid-sized companies on fixed budgets."

VARs can now choose from one of three licensing models – multitenant, utility and subscription, and dedicated perpetual, said Sakkal.

Multitenant allow partners to deliver service to multiple end-users through a single technology configuration, creating a repeatable solution with lower administration costs.

The utility and subscription model helps VARs to streamline services revenues and expenses through incremental billing. This model aims to make it easier for VARs to increase or decrease what they pay HP for software usage based on customer consumption.

Finally, the dedicated perpetual option gives VARs the opportunity to capitalize the purchase, which reduces administration costs and improves return on investment.

The new licensing options are designed to reduce VARs' upfront financial risks, improve their cash flow, and give them more freedom to focus on executing service, said Sakkal.

"We hope the new options will enable VARs to more easily pursue opportunities in the growing IT software services market -- such as managed services, which is one of the fastest growing areas," said Sakkal.

Sagging bottom line

VARs can offer their own branded and hosted application security managed service or project-based application performance validation service based on HP offerings, said Schlagenhauf.

HP wants to boost its own bottom-line, of which software-related revenue is considerable. HP's second-quarter revenue from its software business was $880 million, a decline of 15 percent from the same period last year. VARs account for close to half of HP's software sales.

The new licensing options are available on HP's business technology optimization and information management software. Another licensing option -- term-based software licensing -- is available for select technology optimization solutions, Brad Schlagenhauf, worldwide channel and alliance marketing manager, HP Software and Solutions.

By using products on a per-project basis to deliver shorter-term service, VARs can lower costs for their customers by offering the exact services customers need, said Schlagenhauf.

"With new project-based licensing, we can now deliver our VIP Velocity Program -- built around HP LoadRunner software -- to more companies," said Delano. "The big advantage to us is that we are renting the HP software, not buying it."

To help VARs generate new managed services opportunities, HP rolled out the HP Campaign Syndication Program, which provides a complete online toolset that allows partners to grab and personalize "ready-made" marketing materials from HP.

"With HP's new syndication service, we can take entire marketing programs from HP, personalize them and then run them," said Debbie Jolicoeur, vice president of Marketing at International Integrated Solutions Ltd. "We can focus less on creation and more on execution."

TAGS: marketing,HP,software licensing,managed services,VAR program

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