Giant targets small firms to win the PC vote


One only has to look at the effort political parties are putting into capturing the small business vote to see how important this sector of the market has become. So it is only fitting that one of the world's leading information technology companies should be focusing on it.

Computer makers are already actively concentrating on the increasing numbers of small enterprises, of course.

But Hewlett-Packard believes they are missing out on potential sales by not making it easy for people who are generally short of time and often technophobic.

Its answer, just being launched in Britain, is to run a chain of dealerships aimed specifically at this sector (though prepared to deal with individuals looking to work from home, too). The idea is that they will offer "solutions" rather than sell pieces of equipment and then leave it to customers to work out how to put them together.

However, in an attempt to convince the market that the centres will represent their customers effectively when dealing with HP, the company has set up the operation as a separate concern, called Netfire.

Although run by John Mostyn, a former HP manager, it is at arm's length from the US manufacturer and will operate the office centres under a franchise. This is the first time that the company has gone into franchising and John Golding, chairman and managing director of HP's UK operation, acknowledges that this poses a potential risk for one of the world's most highly regarded brands. But he says: "It has got to be a huge competitive edge to approach the whole market. We have every interest in the world to want to make this work."

Aware that he will be under the gaze of people throughout the HP empire, which last year achieved revenues of $36bn (pounds 22bn) , Mr Mostyn argues that the initiative he has been put in charge of could set the scene for future developments. As a producer of about a quarter of a million products in computing and other areas of electronics, HP is organised vertically - and for this venture to succeed it needs to be able to work across those divisions in order to service end users, or customers.

Both Mr Mostyn and Mr Golding stress that the company is putting enough resources behind it to make the venture successful. But they are not trying to push the pace too much.

The project was actually started last year, with research into reactions to the idea. The positive response that came back was largely based on the strength of the brand and the fact that the huge product range made franchising a suitable approach.

Even so, the operation now being rolled out around the country, with the aim of setting up 350 franchises in the first year, is moving cautiously. The first year is being treated as a development year, with total start- up costs to the franchisee amounting to about pounds 8,000, largely made up of a pounds 5,000 fee and the cost of buying a demonstration model and promotional unit.

It is envisaged that typical franchisees will already be in the computer dealership market, with turnover of between pounds 1m and pounds 3m. Initially, they are likely to devote only a part of their premises to the HP Office Centre, though it is hoped that many will become dedicated to the initiative. And the rewards? "You have to sell one office solution a week to cover your costs," says Mr Mostyn. "If you sell five to six you will be very successful."

He sees customer service as being a key factor. Research undertaken on behalf of the company shows that technical support, unit cost and manufacturer's reputation are the most important influences on choice of IT equipment, and HP is already renowned for the strength of its help desk.

But in an attempt to strengthen that image and build a significant bridgehead, Mr Mostyn says he and his team will be going further. Dedicated account managers within HP will be ensuring that the centres get the products they need when they need them, while Netfire will be making great efforts to escape from the confines of the specialist IT market and "go to the consumer".

Start your day with The Independent, sign up for daily news emails
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...

Reach Volunteering: Trustees with Finance, Fundraising and IT skills

Voluntary and unpaid, reasonable expenses reimbursable: Reach Volunteering: St...

Day In a Page

Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
Transfer window: Ten things we learnt

Ten things we learnt from the transfer window

Record-breaking spending shows FFP restraint no longer applies
Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent