HP Inc. to Offer Personal Computers as a Service

By Don Clark 

HP Inc. on Thursday said it plans to provide companies with personal computers and other devices as part of a service, the latest example of shifting business models as PC makers grapple with weak demand and other pressures.

Separately, HP said it is buying the German companies David Vision Systems GmbH and David 3D Solutions, which make 3-D scanning technology. Financial terms weren't disclosed. HP previously announced plans to sell 3-D printers as well as a device called Sprout that can be used as a 3-D scanner.

Corporate customers of HP's new service will be able to pay a fixed monthly fee per employee for computing equipment, HP said, eliminating the need to pay upfront for hardware and letting companies shift capital spending to other purposes.

But HP stressed other attractions beyond that selling point, which has long been available through computer rentals. HP said it would use software to manage how devices are deployed and used, helping customers make sure employees have sufficient processing power or data-storage capacity -- or don't have more sophisticated hardware than they need. The company also expects to monitor the health of components in the devices, so it can, for instance, provide replacement batteries before older ones wear out, HP said.

Patrick Moorhead, an analyst with Moor Insights & Strategy, said the analytical capabilities are a key element of HP's plans. "That's the biggest thing that separates them" from existing computer-leasing and service offerings, he said.

Bill Avey, general manager and global head of personal systems, said one inspiration for the program came from young workers who sometimes choose employers based on the quality of hardware they provide and the flexibility they allow in using it. In many cases, he said, such employees tend to shift work to their personal devices if they don't like what their company supplies.

"That completely circumvents security," Mr. Avey said.

HP said it would ensure that all data is erased from devices that go out of service and that hardware is recycled, something that analysts say often doesn't happen when companies buy or rent gear, risking the loss of sensitive information.

"You have all this data sitting on a PC in the drawer of the previous manager," said Crawford Del Prete, an analyst at International Data Corp.

HP didn't disclose the pricing of the service, which Mr. Avey said will vary among customers based on their needs.

The company, the No. 2 PC maker after Lenovo Group Ltd., experienced an 11% decline in PC shipments in the first quarter, IDC estimated. Chief Executive Dione Weisler has said the company is focusing less on bolstering shipments than addressing profitable market niches.

It is far from the first hardware company to experiment with ways to ease the cost of buying PCs. A startup called Free-PC.com gave away free PCs to people who agreed to share personal data and view internet advertising. That company was sold in 1999.

The trend toward services has been a mainstay for years in high-end computing, where many enterprises pay by subscription for computing power from companies such as Amazon.com Inc. rather than buy their own server systems. International Business Machines Corp. and others already offer services to help companies buy, deploy and manage devices like smartphones.

HP plans to extend the service beyond PCs to tablets and its Elite X3, a big-screen smartphone that can operate like a PC when it is plugged into a cradle and connected to a keyboard and display. It doesn't plan to provide other smartphones but could, in some cases, manage them, Mr. Avey said.

HP, the PC and printer operations that were part of Hewlett-Packard Co. until November, has offered printers for a monthly fee, and made its debut its new service in Asia last year. The company said Thursday it will begin offering the service globally, working typically through its dealer channel.

Write to Don Clark at [e-mail]

(END) Dow Jones Newswires

June 30, 2016 17:53 ET (21:53 GMT)

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