Need Cash? Sell Your Data Center Gear to HPE and Lease It Back

The company has put together a $2 billion series of financing programs to help tide cash-strapped customers over during the pandemic.

Wylie Wong, Regular Contributor

April 9, 2020

3 Min Read
Hewlett Packard Enterprise headquarters in San Jose, California
Hewlett Packard Enterprise headquarters in San Jose, CaliforniaYevgeniy Sverdlik

Hewlett Packard Enterprise is offering its customers that are short on cash because of the COVID-19 crisis an option to sell their data center equipment back to the vendor and lease it, temporarily converting a past large capital expenditure to an incremental operating one.

The offering is one of several financing programs, worth $2 billion total, HPE introduced this week to help customers acquire – or keep – the technology they need during the crisis while preserving their cash flow.

The initiatives by HPE Financial Services (HPEFS) also include a new Payment Relief Program, which allows customers of all sizes, from small businesses to large enterprises, to buy technology and pay only 1 percent of the total contract value each month for the first eight months while deferring the rest of the payments through a normal 24-month to 60-month contract.

In addition, the company is offering a 90-day delayed payment option for new HPE hardware, software, services, and installation packages. To give customers even more options to access the technology they need, HPEFS is also selling used equipment and offering short-term rentals.

HPEFS has introduced the new initiatives (and highlighted some existing programs) to help customers alleviate some of the financial burdens caused by the pandemic, executives said.

Related:Rules Rewritten: Managing Data Centers Through the Pandemic

“Some industries are hit harder than others. Some are freezing spending, but there are other customers who are slowing down, but they have critical projects that are important to their businesses. They are mid-project and have to finish it,” Brad Shapiro, VP and managing director for HPEFS’ Americas Region, told DCK.

The financing programs are for all HPE products and solutions as well as PCs, printers, and peripherals from its sister company HP. HPEFS will also finance multi-vendor solutions that include technology from third-party vendors and partners, Shapiro said.

HPEFS’s financing programs include the ability for customers to generate cash from IT assets they already own. “This is often a hidden gem for customers that don’t think about the equity in the equipment they already own. It’s a way to monetize that,” said Michael Swan, HPEFS’s global marketing and business development director.

Customers can sell IT infrastructure that they no longer use or have overprovisioned, he said. HPE will pay the customer the value of the equipment, and if it’s equipment that the customer still wants to use, the vendor will lease it back to the customer for however long it needs to use it, Swan said.

Related:Stress Test: The Data Center Industry and the Pandemic

In that scenario, “we are effectively converting what was a capital asset to an operating expense for some period of time,” he told us.

HPEFS is also offering to sell certified, pre-owned HPE technology, including a full portfolio of data center equipment that includes everything from components, parts, and subassemblies to whole systems.

COVID-19 has impacted the IT equipment supply chain, which is causing uncertainty about ongoing availability of data center equipment, Swan said. That puts HPE customers who need additional equipment to support their businesses in a bind. By selling pre-owned HPE equipment and parts, HPEFS helps customers maintain their existing IT systems, he said.

“Our customers may defer a planned upgrade and instead look to keep existing systems operational to get them through this. So by providing them pre-owned systems, they can keep those legacy systems probably at a much lower cost than buying new equipment,” Swan said.

HPEFS is also offering customers short-term rentals of technology for three to 12 months, Shapiro said. For example, a company may need to rent notebook computers to support employees that are now working from home during the pandemic, he said.

About the Author(s)

Wylie Wong

Regular Contributor

Wylie Wong is a journalist and freelance writer specializing in technology, business and sports. He previously worked at CNET, Computerworld and CRN and loves covering and learning about the advances and ever-changing dynamics of the technology industry. On the sports front, Wylie is co-author of Giants: Where Have You Gone, a where-are-they-now book on former San Francisco Giants. He previously launched and wrote a Giants blog for the San Jose Mercury News, and in recent years, has enjoyed writing about the intersection of technology and sports.

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