HP works with telcos to sell LANs on a pay-per-use basis

Instead of over provisioning networks, HP's new program allows enterprises to only pay for the ports they use

Hewlett-Packard will allow enterprises to pay for managed LAN offerings based on usage, in much the same way they pay for cloud services, through a partnership with telecom service providers.

HP's FlexNetwork Utility Advantage Program will allow enterprises to pay a monthly fee for their networking equipment, based on the number of ports used, for example.

Until now, enterprises have had to make big upfront investments or lease the equipment such as switches, and buy networking hardware based on expected future demands, which has often resulted in over provisioning.

On average, only 60 percent of the capacity of networking equipment installed in an enterprise LAN is used, according to Mike Banic, vice president of marketing at HP Networking.

The FlexNetwork Utility Advantage Program will be available worldwide through authorized operators and cover both wired and wireless networks.

The first operator to get onboard is Swisscom, which is offering HP's switches for 6 Swiss francs (US$6.50) per month per Gigabit Ethernet port, according to Oliver Spring, head of product line management at Swisscom.

So far, Swisscom is only selling switches for wired networks, but the plan is to launch a wireless offering next year. The operator still hasn't decided how it will charge for that, Spring said.

Options include something as simple as charging per user, in an effort to make it as easy to understand as possible, according to Matt Greenly, vice president, finance at HP Networking.

HP is currently in discussions with several other operators, but isn't ready to announce any other partners besides Swisscom.

"We are looking at limiting it to a few partners in each region ... We want to make sure we don't cause conflicts," Greenly said.

HP is also hoping the change will allow more enterprises to upgrade their networks, which, like other internal IT investments, have been affected by the economic downturn.

During the third quarter, enterprises spent less on lower-speed Ethernet switches that are typically used to connect users, according to recent report from Dell'Oro Group. However, spending on higher-speed switches used to connect hardware in the data center remained quite robust, it said.

At the same time, the wireless LAN market posted record revenues in the third quarter, thanks to 19 percent revenue growth over the same period last year, Dell'Oro said.

HP is convinced that as more applications are moved to the cloud, hardware vendors increasingly have to adopt the same pricing model, and it wants to be at the forefront of that trend.

Send news tips and comments to mikael_ricknas@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags NetworkingLANHewlett-Packardswitchesnetworking hardware

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Mikael Ricknäs

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?